Three Month Results
- Net revenue increased 4.7% to $350.7
million
- Adjusted EBITDA increased 3.7% to
$159.0 million
Three Month Pro Forma Results
- Pro forma adjusted net revenue
increased 1.8%
- Pro forma adjusted EBITDA increased
2.5%
Lamar Advertising Company (Nasdaq:LAMR), a leading owner and
operator of outdoor advertising and logo sign displays, announces
the Company's operating results for the third quarter ended
September 30, 2015.
"I am very pleased with our third-quarter revenue growth,
particularly given the strong third quarter we had a year ago. AFFO
growth is strong and our expectation is that we will exceed the
high end of our AFFO guidance for the full year of 2015," said
Lamar chief executive, Sean Reilly.
Third Quarter Highlights
- AFFO increased 12.0%
- Pro forma direct and G&A
operating expense growth held to 1.4%
- Corporate expenses declined
2.2%
Third Quarter Results
Lamar reported net revenues of $350.7 million for the third
quarter of 2015 versus $335.0 million for the third quarter of
2014, a 4.7% increase. Operating income for the third quarter of
2015 was $111.6 million as compared to $86.0 million for the same
period in 2014. Lamar recognized net income of $86.0 million for
the third quarter of 2015 compared to net income of $35.1 million
for same period in 2014. Net income per basic and diluted share was
$0.89 per share and $0.37 per share for the three months ended
September 30, 2015 and 2014, respectively.
Adjusted EBITDA for the third quarter of 2015 was $159.0 million
versus $153.4 million for the third quarter of 2014, a 3.7%
increase.
Free Cash Flow for the third quarter of 2015 was $108.7 million
as compared to $101.1 million for the same period in 2014, a 7.5%
increase.
For the third quarter of 2015, Funds From Operations, or FFO,
was $123.5 million versus $93.5 million for the same period in
2014, an increase of 32.0%. Adjusted Funds From Operations, or
AFFO, for the third quarter of 2015 was $122.6 million compared to
$109.5 million for the same period in 2014, a 12.0%
increase. Diluted AFFO per share was $1.27 and $1.14 for the
three months ended September 30, 2015 and 2014, respectively, which
was an increase of 11.4%.
Q3 Pro Forma Three Months Results
Pro forma adjusted net revenue for the third quarter of 2015
increased 1.8% over pro forma adjusted net revenue for the third
quarter of 2014. Pro forma adjusted EBITDA increased 2.5% as
compared to pro forma adjusted EBITDA for the third quarter of
2014. Pro forma adjusted net revenue and pro forma adjusted
EBITDA include adjustments to the 2014 period for acquisitions and
divestitures for the same time frame as actually owned in the 2015
period. See "Reconciliation of Reported Basis to Pro Forma
Basis", which provides reconciliations to GAAP for adjusted and pro
forma measures.
Q3 Nine Months Results
Lamar reported net revenues of $997.4 million for the nine
months ended September 30, 2015 versus $950.4 million for the same
period in 2014, a 5.0% increase. Operating income for the nine
months ended September 30, 2015 was $278.2 million as compared to
$190.2 million for the same period in 2014. Adjusted EBITDA
for the nine months ended September 30, 2015 increased 6.3% to
$432.9 million versus $407.4 million for the same period in
2014. In addition, Lamar recognized net income of $186.0
million for the nine months ended September 30, 2015 as compared to
net income of $45.6 million for the same period in 2014. Net
income per basic and diluted share was $1.93 per share and $0.48
per share for the nine months ended September 30, 2015 and 2014,
respectively.
Free Cash Flow for the nine months ended September 30, 2015
increased 14.9% to $272.7 million as compared to $237.5 million for
the same period in 2014.
For the nine months ended September 30, 2015, FFO was $312.5
million versus $235.9 million for the same period of 2014, a
32.5% increase. AFFO for the nine months ended September
30, 2015 was $319.5 million compared to $271.2 million for the same
period in 2014, a 17.8% increase. Diluted AFFO per share
increased 16.9% to $3.32 as compared to $2.84 in the comparable
period in 2014.
Distributions
On September 30, 2015, Lamar made a dividend distribution of
$0.69 per share, or a total of approximately $66.6 million, to
common stockholders of record on September 16, 2015.
Liquidity
As of September 30, 2015, Lamar had $275.4 million in total
liquidity that consisted of $246.3 million available for borrowing
under its revolving senior credit facility and approximately $29.1
million in cash and cash equivalents.
Forward Looking Statements
This press release contains forward-looking statements,
including statements regarding guidance for fiscal 2015. These
statements are subject to risks and uncertainties that could cause
actual results to differ materially from those projected in these
forward-looking statements. These risks and uncertainties
include, among others: (1) our significant indebtedness; (2) the
state of the economy and financial markets generally and the effect
of the broader economy on the demand for advertising; (3) the
continued popularity of outdoor advertising as an advertising
medium; (4) our need for and ability to obtain additional funding
for operations, capital expenditures, debt refinancing or
acquisitions; (5) our ability to continue to qualify as a REIT and
maintain our status as a REIT; (6) the regulation of the outdoor
advertising industry by federal, state and local governments; (7)
the integration of companies that we acquire and our ability to
recognize cost savings or operating efficiencies as a result of
these acquisitions; (8) changes in accounting principles, policies
or guidelines; (9) changes in tax laws applicable to REITs or in
the interpretation of those laws; (10) our ability to renew
expiring contracts at favorable rates; (11) our ability to
successfully implement our digital deployment strategy; and (12)
the market for our Class A common stock. For additional
information regarding factors that may cause actual results to
differ materially from those indicated in our forward-looking
statements, we refer you to the risk factors included in Item 1A of
our Annual Report on Form 10-K for the year ended December 31,
2014, as supplemented by any risk factors contained in our
Quarterly Reports on Form 10-Q. We caution investors not to
place undue reliance on the forward-looking statements contained in
this document. These statements speak only as of the date of
this document, and we undertake no obligation to update or revise
the statements, except as may be required by law.
Use of Non-GAAP Financial Measures
The Company has presented the following measures that are not
measures of performance under accounting principles generally
accepted in the United States of America (GAAP): Adjusted
EBITDA, Free Cash Flow, Funds From Operations (FFO), Adjusted Funds
From Operations, (AFFO), Diluted AFFO per share, adjusted pro forma
results and outdoor operating income. Adjusted EBITDA is
defined as net income before income tax expense (benefit), interest
expense (income), gain (loss) on extinguishment of debt and
investments, stock-based compensation, depreciation and
amortization and gain or loss on disposition of assets and
investments. Free Cash Flow is defined as Adjusted EBITDA less
interest, net of interest income and amortization of financing
costs, current taxes, preferred stock dividends and total capital
expenditures. Funds From Operations is defined as net income
before real estate depreciation and amortization, gains or loss
from disposition of real estate assets and investments and an
adjustment to eliminate non‑controlling interest, which is the
definition used by the National Association of Real Estate
Investment Trusts (NAREIT). Adjusted Funds From Operations is
defined as Funds From Operations adjusted for straight‑line
(revenue) expense, stock‑based compensation expense, non‑cash tax
expense (benefit), non‑real estate related depreciation and
amortization, amortization of deferred financing and debt issuance
costs, loss on extinguishment of debt, non-recurring, infrequent or
unusual losses (gains), less maintenance capital expenditures and
an adjustment for non‑controlling interest. Diluted AFFO per
share is defined as AFFO divided by the weighted average diluted
common shares outstanding. Outdoor operating income is defined
as operating income before corporate expenses, stock-based
compensation, depreciation and amortization and gain on disposition
of assets. These measures are not intended to replace
financial performance measures determined in accordance with GAAP
and should not be considered alternatives to operating income, net
income, cash flows from operating activities, or other GAAP figures
as indicators of the Company's financial performance or
liquidity. The Company's management believes that Adjusted
EBITDA, Free Cash Flow, Funds From Operations, Adjusted Funds From
Operations, Diluted AFFO per share, adjusted pro forma results and
outdoor operating income are useful in evaluating the Company's
performance and provide investors and financial analysts a better
understanding of the Company's core operating results. The pro
forma acquisition adjustments are intended to provide information
that may be useful for investors when assessing period to period
results. Our presentation of these non-GAAP measures,
including AFFO and FFO, may not be comparable to similarly titled
measures used by similarly situated companies. See "Supplemental
Schedules—Unaudited Reconciliations of Non-GAAP Measures" and
"Supplemental Schedules—Unaudited REIT Measures and Reconciliations
to GAAP Measures", which provides a reconciliation of each of these
measures to the most directly comparable GAAP measure.
Conference Call Information
A conference call will be held to discuss the Company's
operating results on Thursday, November 5, 2015 at 8:00 a.m.
central time. Instructions for the conference call and Webcast
are provided below:
Conference Call |
|
All Callers: |
1-334-323-0520 or
1-334-323-9871 |
Pass Code: |
Lamar |
|
|
Replay: |
1-334-323-0140 or
1-877-919-4059 |
Pass Code: |
38281338 |
|
Available through Thursday, November 12, 2015
at 11:59 p.m. eastern time |
|
|
Live Webcast: |
www.lamar.com |
|
|
Webcast Replay: |
www.lamar.com |
|
Available through Thursday, November 12, 2015
at 11:59 p.m. eastern time |
|
|
Company Contact: |
Buster Kantrow |
|
Director of Investor Relations |
|
(225) 926-1000 |
|
bkantrow@lamar.com |
General Information
Founded in 1902, Lamar Advertising (Nasdaq:LAMR) is one of the
largest outdoor advertising companies in North America, with more
than 318,000 displays across the United States, Canada and Puerto
Rico. Lamar offers advertisers a variety of billboard, interstate
logo and transit advertising formats, helping both local businesses
and national brands reach broad audiences every day. In addition to
its more traditional out-of-home inventory, Lamar is proud to offer
its customers the largest network of digital billboards in the
United States with over 2,200 displays.
|
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(UNAUDITED) |
(IN THOUSANDS, EXCEPT SHARE AND
PER SHARE DATA) |
|
|
Three months
ended September 30, |
Nine months ended
September 30, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Net revenues |
$ 350,701 |
$ 334,998 |
$ 997,427 |
$ 950,364 |
|
|
|
|
|
|
|
|
|
|
Operating expenses (income) |
|
|
|
|
Direct advertising
expenses |
121,676 |
112,388 |
350,859 |
338,173 |
General and administrative
expenses |
57,096 |
56,000 |
171,239 |
164,217 |
Corporate expenses |
12,926 |
13,212 |
42,411 |
40,532 |
Stock-based compensation |
6,121 |
5,474 |
17,508 |
15,987 |
Depreciation and
amortization |
46,441 |
62,675 |
144,396 |
203,250 |
Gain on disposition of
assets |
(5,203) |
(775) |
(7,230) |
(2,001) |
|
239,057 |
248,974 |
719,183 |
760,158 |
Operating income |
111,644 |
86,024 |
278,244 |
190,206 |
|
|
|
|
|
Other (income) expense |
|
|
|
|
Interest income |
(2) |
(11) |
(28) |
(99) |
Loss on extinguishment of
debt |
— |
— |
— |
26,023 |
Other-than-temporary impairment
of investment |
— |
— |
— |
4,069 |
Interest expense |
24,709 |
24,418 |
73,953 |
80,772 |
|
24,707 |
24,407 |
73,925 |
110,765 |
|
|
|
|
|
Income before income tax expense |
86,937 |
61,617 |
204,319 |
79,441 |
Income tax expense |
972 |
26,567 |
18,278 |
33,806 |
|
|
|
|
|
Net income |
85,965 |
35,050 |
186,041 |
45,635 |
Preferred stock dividends |
91 |
91 |
273 |
273 |
Net income applicable to common stock |
$ 85,874 |
$ 34,959 |
$ 185,768 |
$ 45,362 |
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
Basic earnings per
share |
$ 0.89 |
$ 0.37 |
$ 1.93 |
$ 0.48 |
Diluted earnings per
share |
$ 0.89 |
$ 0.37 |
$ 1.93 |
$ 0.48 |
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
- basic |
96,541,766 |
95,330,141 |
96,220,306 |
95,138,504 |
- diluted |
96,602,429 |
95,753,522 |
96,284,482 |
95,548,098 |
OTHER DATA |
|
|
|
|
Free Cash Flow Computation: |
|
|
|
|
Adjusted EBITDA |
$ 159,003 |
$ 153,398 |
$ 432,918 |
$ 407,442 |
Interest, net |
(23,533) |
(23,235) |
(70,427) |
(77,050) |
Current tax (expense) benefit |
(2,278) |
690 |
(8,706) |
(8,764) |
Preferred stock dividends |
(91) |
(91) |
(273) |
(273) |
Total capital expenditures |
(24,399) |
(29,621) |
(80,764) |
(83,876) |
Free cash flow |
$ 108,702 |
$ 101,141 |
$ 272,748 |
$ 237,479 |
|
|
|
|
|
|
|
|
|
|
OTHER DATA
(continued): |
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
December 31, |
Selected Balance Sheet Data: |
|
|
2015 |
2014 |
Cash and cash equivalents |
|
|
$ 29,078 |
$ 26,035 |
Working capital |
|
|
$ 88,600 |
$ 47,803 |
Total assets |
|
|
$ 3,416,400 |
$ 3,318,818 |
Total debt (including current
maturities) |
|
|
$ 1,968,435 |
$ 1,899,895 |
Total stockholders' equity |
|
|
$ 1,005,860 |
$ 981,466 |
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30, |
Nine months ended
September 30, |
|
2015 |
2014 |
2015 |
2014 |
Selected Cash Flow Data: |
|
|
|
|
Cash flows provided by operating
activities |
$ 125,253 |
$ 129,772 |
$ 313,470 |
$ 303,204 |
Cash flows used in investing activities |
$
(85,637) |
$ (73,627) |
$ (195,714) |
$ (130,936) |
Cash flows used in financing activities |
$ (36,797) |
$ (62,045) |
$ (112,677) |
$ (176,786) |
|
|
|
|
|
|
|
SUPPLEMENTAL SCHEDULES |
UNAUDITED RECONCILIATIONS OF
NON-GAAP MEASURES |
(IN THOUSANDS) |
|
|
Three months ended |
Nine months ended |
|
September 30, |
September 30, |
|
2015 |
2014 |
2015 |
2014 |
Reconciliation of Free Cash Flow to Cash
Flows Provided by |
|
|
|
|
Operating Activities: |
|
|
|
|
Cash flows provided by operating
activities |
$ 125,253 |
$ 129,772 |
$ 313,470 |
$ 303,204 |
Changes in operating assets and
liabilities |
8,798 |
2,788 |
45,160 |
22,881 |
Total capital expenditures |
(24,399) |
(29,621) |
(80,764) |
(83,876) |
Preferred stock dividends |
(91) |
(91) |
(273) |
(273) |
Other |
(859) |
(1,707) |
(4,845) |
(4,457) |
Free cash flow |
$ 108,702 |
$ 101,141 |
$ 272,748 |
$ 237,479 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to
Net Income: |
|
|
|
|
Adjusted EBITDA |
$ 159,003 |
$ 153,398 |
$ 432,918 |
$ 407,442 |
Less: |
|
|
|
|
Stock-based compensation |
6,121 |
5,474 |
17,508 |
15,987 |
Depreciation and
amortization |
46,441 |
62,675 |
144,396 |
203,250 |
Gain on disposition of
assets |
(5,203) |
(775) |
(7,230) |
(2,001) |
Operating Income |
111,644 |
86,024 |
278,244 |
190,206 |
|
|
|
|
|
|
|
|
|
|
Less: |
|
|
|
|
Interest income |
(2) |
(11) |
(28) |
(99) |
Loss on extinguishment of
debt |
— |
— |
— |
26,023 |
Other-than-temporary impairment
of investment |
— |
— |
— |
4,069 |
Interest expense |
24,709 |
24,418 |
73,953 |
80,772 |
Income tax expense |
972 |
26,567 |
18,278 |
33,806 |
Net income |
$ 85,965 |
$ 35,050 |
$ 186,041 |
$ 45,635 |
|
|
|
|
|
|
|
|
|
|
Capital expenditure detail by category: |
|
|
|
|
Billboards - traditional |
$ 8,939 |
$ 7,862 |
$ 21,628 |
$ 19,064 |
Billboards - digital |
9,864 |
13,952 |
40,002 |
41,810 |
Logo |
2,112 |
3,675 |
7,159 |
7,545 |
Transit |
84 |
41 |
246 |
309 |
Land and buildings |
1,706 |
1,800 |
5,845 |
7,502 |
Operating equipment |
1,694 |
2,291 |
5,884 |
7,646 |
Total capital expenditures |
$ 24,399 |
$ 29,621 |
$ 80,764 |
$ 83,876 |
|
|
|
|
|
|
|
SUPPLEMENTAL SCHEDULES |
UNAUDITED RECONCILIATIONS OF
NON-GAAP MEASURES |
(IN THOUSANDS) |
|
|
Three months ended
September 30, |
|
|
2015 |
2014 |
% Change |
Reconciliation of Reported Basis to Pro
Forma(a) Basis: |
|
|
|
Net revenue |
$ 350,701 |
$ 334,998 |
4.7% |
Acquisitions and divestitures |
— |
9,574 |
|
Pro forma adjusted net revenue |
$ 350,701 |
$ 344,572 |
1.8% |
|
|
|
|
Reported direct advertising and G&A
expenses |
$ 178,772 |
$ 168,388 |
6.2% |
Acquisitions and divestitures |
— |
7,851 |
|
Pro forma direct advertising and G&A
expenses |
$ 178,772 |
$ 176,239 |
1.4% |
|
|
|
|
Outdoor operating income |
$ 171,929 |
$ 166,610 |
3.2% |
Acquisitions and divestitures |
— |
1,723 |
|
Pro forma adjusted outdoor operating
income |
$ 171,929 |
$ 168,333 |
2.1% |
|
|
|
|
Reported corporate expenses |
$ 12,926 |
$ 13,212 |
(2.2)% |
Acquisitions and divestitures |
— |
— |
|
Pro forma corporate expenses |
$ 12,926 |
$ 13,212 |
(2.2)% |
|
|
|
|
Adjusted EBITDA |
$ 159,003 |
$ 153,398 |
3.7% |
Acquisitions and divestitures |
— |
1,723 |
|
Pro forma adjusted EBITDA |
$ 159,003 |
$ 155,121 |
2.5% |
|
|
|
|
(a) Pro forma adjusted net
revenue, direct advertising and general and administrative
expenses, outdoor operating income, corporate expenses and Adjusted
EBITDA include adjustments to 2014 for acquisitions and
divestitures for the same time frame as actually owned in
2015. |
|
Three months ended
September 30, |
|
2015 |
2014 |
Reconciliation of Outdoor Operating Income to
Operating Income: |
|
|
Outdoor operating income |
$ 171,929 |
$ 166,610 |
Less: Corporate expenses |
12,926 |
13,212 |
Stock-based
compensation |
6,121 |
5,474 |
Depreciation and
amortization |
46,441 |
62,675 |
Plus: Gain on disposition of assets |
5,203 |
775 |
Operating income |
$ 111,644 |
$ 86,024 |
|
|
SUPPLEMENTAL SCHEDULES |
UNAUDITED REIT MEASURES |
AND RECONCILIATIONS TO GAAP
MEASURES |
(IN THOUSANDS, EXCEPT SHARE AND
PER SHARE DATA) |
|
Adjusted Funds From Operations:
|
|
|
|
|
Three months ended |
Nine months ended |
|
September
30, |
September
30, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Net income |
$ 85,965 |
$ 35,050 |
$ 186,041 |
$ 45,635 |
Depreciation and amortization
related to real estate |
42,554 |
58,690 |
132,931 |
190,761 |
Gain from disposition of real
estate assets |
(5,125) |
(324) |
(6,924) |
(919) |
Adjustment for non-controlling
interest |
96 |
132 |
446 |
431 |
Funds From Operations |
$ 123,490 |
$ 93,548 |
$ 312,494 |
$ 235,908 |
|
|
|
|
|
Straight-line expense
(income) |
(22) |
(141) |
181 |
(369) |
Stock-based compensation
expense |
6,121 |
5,474 |
17,508 |
15,987 |
Non-cash tax expense
(benefit) |
(1,306) |
22,017 |
9,572 |
25,042 |
Non-real estate related
depreciation and amortization |
3,887 |
3,985 |
11,465 |
12,489 |
Amortization of deferred
financing and debt issuance costs |
1,174 |
1,172 |
3,498 |
3,623 |
Loss on extinguishment of
debt |
— |
— |
— |
26,023 |
Loss from other-than-temporary
impairment of investment |
— |
— |
— |
4,069 |
Capitalized
expenditures—maintenance |
(10,610) |
(16,465) |
(34,746) |
(51,162) |
Adjustment for non-controlling
interest |
(96) |
(132) |
(446) |
(431) |
|
|
|
|
|
Adjusted Funds From Operations |
$ 122,638 |
$ 109,458 |
$ 319,526 |
$ 271,179 |
|
|
|
|
|
Divided by weighted average
diluted shares outstanding |
96,602,429 |
95,753,522 |
96,284,482 |
95,548,098 |
Diluted AFFO per share |
$ 1.27 |
$ 1.14 |
$ 3.32 |
$ 2.84 |
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