Three Month Results
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 first quarter ended March
31, 2016.
"We are pleased with the strength of our core
business, particularly on the local sales side, and our continued
discipline on expenses," said Lamar Chief Executive Officer, Sean
Reilly. “Consequently, we continue to track toward the upper
end of our full year AFFO guidance. Meanwhile, our
integration of the assets we acquired from Clear Channel is
proceeding to plan. As we expected, the new markets are
proving to be a great fit.”
First Quarter Highlights
- Same unit digital revenue increased 3.4%
- Diluted AFFO per share increased 15.9%
- Free cash flow increased 24.6%
First Quarter ResultsLamar
reported net revenues of $338.5 million for the first quarter of
2016 versus $302.5 million for the first quarter of 2015, an 11.9%
increase. Operating income for the first quarter of 2016 was
$86.8 million as compared to $67.3 million for the same period in
2015. Lamar recognized net income of $51.3 million for the
first quarter of 2016 compared to net income of $40.7 million for
same period in 2015. Net income per basic and diluted share
was $0.53 per share and $0.42 per share for the three months ended
March 31, 2016 and 2015, respectively.
Adjusted EBITDA for the first quarter of 2016
was $130.2 million versus $118.5 million for the first quarter of
2015, a 9.8% increase.
Free Cash Flow for the first quarter of 2016 was
$78.3 million as compared to $62.9 million for the same period in
2015, a 24.6% increase.
For the first quarter of 2016, Funds From
Operations, or FFO, was $87.9 million versus $84.6 million for the
same period in 2015, an increase of 4.0%. Adjusted Funds From
Operations, or AFFO, for the first quarter of 2016 was $92.3
million compared to $78.9 million for the same period in 2015, a
17.1% increase. Diluted AFFO per share increased 15.9% to
$0.95 per share for the three months ended March 31, 2016 as
compared to $0.82 per share for the same period in 2015.
Q1 Pro Forma Results Pro forma
adjusted net revenue for the first quarter of 2016 increased 2.6%
over pro forma adjusted net revenue for the first quarter of
2015. Pro forma adjusted EBITDA increased 3.1% as compared to
pro forma adjusted EBITDA for the first quarter of 2015. Pro
forma adjusted net revenue and pro forma adjusted EBITDA include
adjustments to the 2015 period for acquisitions and divestitures
for the same time frame as actually owned in the 2016 period.
See “Reconciliation of Reported Basis to Pro Forma Basis”, which
provides reconciliations to GAAP for adjusted and pro forma
measures.
LiquidityAs of March 31, 2016,
Lamar had $164.5 million in total liquidity that consisted of
$136.1 million available for borrowing under its revolving senior
credit facility and approximately $28.4 million in cash and cash
equivalents.
Recent
EventsDistributions. On March 31, 2016, Lamar made a
quarterly dividend distribution of $0.75 per share, or a total cash
distribution of approximately $72.7 million, to common stockholders
of record on March 16, 2016.
Acquisitions. On January 7, 2016, Lamar
acquired certain assets of Clear Channel Outdoor Holdings, Inc. in
five U.S. markets for an aggregate cash purchase price of $458.5
million. Lamar financed the acquisition using $160 million of
revolver borrowings and a $300 million term loan provided by
JPMorgan Chase Bank, N.A.
Senior Note Offering. On January 28, 2016,
Lamar Media Corp., Lamar’s wholly owned subsidiary, issued $400
million in aggregate principal amount of 5 3/4% Senior Notes due
2026 through an institutional private placement. The
proceeds, after payment of fees and expenses, were used to repay
the $300 million term loan and a portion of borrowings outstanding
under the revolving credit facility that were used to finance the
asset acquisition noted above.
Forward Looking StatementsThis
press release contains forward-looking statements, including
statements regarding financial guidance for the 2016 fiscal year,
sales trends and the integration of acquired assets. 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 Real
Estate Investment Trust (“REIT”) and maintain our status as a REIT;
(6) the regulation of the outdoor advertising industry by federal,
state and local governments; (7) our ability to successfully
integrate assets that we acquire and our ability to recognize cost
savings or operating efficiencies as a result of these
acquisitions; in particular, our ability to successfully integrate
the assets acquired in January 2016 which could have a material
effect on our 2016 financial results; (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, 2015, 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, Adjusted Funds From Operations, 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 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 related depreciation and amortization, gains or
losses from disposition of real estate assets and investments and
an adjustment to eliminate unconsolidated affiliates and
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 provision, non‑real
estate related depreciation and amortization, amortization of
deferred financing costs, loss on extinguishment of debt,
non-recurring, infrequent or unusual losses (gains), less
maintenance capital expenditures and an adjustment for
unconsolidated affiliates and 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 or liquidity 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 InformationA
conference call will be held to discuss the Company’s operating
results on Thursday, May 5, 2016 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: |
|
23524494 |
|
|
Available through Thursday, May 12, 2016 at 11:59
p.m. eastern time |
|
|
|
Live
Webcast: |
|
www.lamar.com |
Webcast
Replay: |
|
www.lamar.com |
|
|
Available through
Thursday, May 12, 2016 at 11:59 p.m. eastern time |
|
|
|
Company Contact: |
|
Buster Kantrow |
|
|
Director of Investor Relations |
|
|
(225) 926-1000 |
|
|
bkantrow@lamar.com |
|
|
|
General InformationFounded in 1902, Lamar
Advertising Company is one of the largest outdoor advertising
companies in North America, with more than 325,000 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 2,400 displays.
|
LAMAR ADVERTISING COMPANY AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(UNAUDITED) |
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) |
|
|
|
|
Three months ended March 31, |
|
|
|
|
|
2016 |
|
|
|
|
2015 |
|
|
|
|
|
|
Net revenues |
|
$ |
|
338,533 |
|
|
$ |
|
302,477 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses (income) |
|
|
|
|
|
|
|
|
|
|
|
Direct advertising expenses |
|
|
|
128,725 |
|
|
|
|
113,232 |
|
|
General and administrative expenses |
|
|
|
64,430 |
|
|
|
|
56,527 |
|
|
Corporate expenses |
|
|
|
15,187 |
|
|
|
|
14,169 |
|
|
Stock-based compensation |
|
|
|
3,199 |
|
|
|
|
3,901 |
|
|
Depreciation and amortization |
|
|
|
51,489 |
|
|
|
|
49,230 |
|
|
Gain on disposition of assets |
|
|
|
(11,327 |
) |
|
|
|
(1,836 |
) |
|
|
|
|
|
251,703 |
|
|
|
|
235,223 |
|
|
Operating income |
|
|
|
86,830 |
|
|
|
|
67,254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
(income) expense |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
(1 |
) |
|
|
|
(2 |
) |
|
Loss on extinguishment
of debt |
|
|
|
3,142 |
|
|
|
|
— |
|
|
Interest expense |
|
|
|
30,068 |
|
|
|
|
24,532 |
|
|
|
|
|
|
33,209 |
|
|
|
|
24,530 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income tax expense |
|
|
|
53,621 |
|
|
|
|
42,724 |
|
Income tax
expense |
|
|
|
2,307 |
|
|
|
|
2,008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
|
51,314 |
|
|
|
|
40,716 |
|
Preferred
stock dividends |
|
|
|
91 |
|
|
|
|
91 |
|
Net income
applicable to common stock |
|
$ |
|
51,223 |
|
|
$ |
|
40,625 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share: |
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
|
$ |
|
0.53 |
|
|
$ |
|
0.42 |
|
Diluted earnings per
share |
|
$ |
|
0.53 |
|
|
$ |
|
0.42 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
- basic |
|
|
|
96,793,244 |
|
|
|
|
95,704,850 |
|
- diluted |
|
|
|
97,378,135 |
|
|
|
|
95,742,148 |
|
|
|
|
|
|
|
|
|
|
|
|
OTHER DATA |
|
|
|
|
|
|
|
|
|
|
Free Cash
Flow Computation: |
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
|
$ |
|
130,191 |
|
|
$ |
|
118,549 |
|
Interest,
net |
|
|
|
(28,685 |
) |
|
|
|
(23,372 |
) |
Current tax
expense |
|
|
|
(2,489 |
) |
|
|
|
(3,195 |
) |
Preferred
stock dividends |
|
|
|
(91 |
) |
|
|
|
(91 |
) |
Total
capital expenditures |
|
|
|
(20,619 |
) |
|
|
|
(29,041 |
) |
Free cash flow |
|
$ |
|
78,307 |
|
|
$ |
|
62,850 |
|
|
|
|
|
|
OTHER DATA
(continued): |
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
Selected Balance Sheet
Data: |
|
|
2016 |
|
|
|
2015 |
|
Cash and cash
equivalents |
|
$ |
28,420 |
|
|
$ |
22,327 |
|
Working capital |
|
$ |
110,248 |
|
|
$ |
44,902 |
|
Total assets |
|
$ |
3,894,512 |
|
|
$ |
3,363,744 |
|
Total debt, net of
deferred financing costs (including current maturities) |
|
$ |
2,438,150 |
|
|
$ |
1,891,450 |
|
Total stockholders’
equity |
|
$ |
1,020,983 |
|
|
$ |
1,021,059 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2016 |
|
|
|
2015 |
|
Selected Cash Flow
Data: |
|
|
|
|
Cash flows provided by
operating activities |
|
$ |
51,537 |
|
|
$ |
54,731 |
|
Cash flows used in
investing activities |
|
$ |
(517,553 |
) |
|
$ |
(44,270 |
) |
Cash flows provided by
(used in) financing activities |
|
$ |
471,003 |
|
|
$ |
(2,819 |
) |
|
|
|
|
|
|
SUPPLEMENTAL SCHEDULES |
UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES |
(IN THOUSANDS) |
|
|
Three months ended |
|
March 31, |
|
|
2016 |
|
|
|
2015 |
|
Reconciliation of Free
Cash Flow to Cash Flows Provided by |
|
|
|
Operating Activities: |
|
|
|
Cash flows provided by
operating activities |
$ |
51,537 |
|
|
$ |
54,731 |
|
Changes in operating
assets and liabilities |
|
49,189 |
|
|
|
38,923 |
|
Total capital
expenditures |
|
(20,619 |
) |
|
|
(29,041 |
) |
Preferred stock
dividends |
|
(91 |
) |
|
|
(91 |
) |
Other |
|
(1,709 |
) |
|
|
(1,672 |
) |
Free cash flow |
$ |
78,307 |
|
|
$ |
62,850 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net
Income: |
|
|
|
Adjusted EBITDA |
$ |
130,191 |
|
|
$ |
118,549 |
|
Less: |
|
|
|
Stock-based compensation |
|
3,199 |
|
|
|
3,901 |
|
Depreciation and amortization |
|
51,489 |
|
|
|
49,230 |
|
Gain on disposition of assets |
|
(11,327 |
) |
|
|
(1,836 |
) |
Operating Income |
|
86,830 |
|
|
|
67,254 |
|
|
|
|
|
|
|
|
|
Less other (income)
expense: |
|
|
|
Interest income |
|
(1 |
) |
|
|
(2 |
) |
Loss on extinguishment of debt |
|
3,142 |
|
|
|
— |
|
Interest expense |
|
30,068 |
|
|
|
24,532 |
|
Income tax expense |
|
2,307 |
|
|
|
2,008 |
|
Net income |
$ |
51,314 |
|
|
$ |
40,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditure
detail by category: |
|
|
|
Billboards - traditional |
$ |
6,874 |
|
|
$ |
5,809 |
|
Billboards - digital |
|
6,548 |
|
|
|
14,262 |
|
Logo |
|
1,431 |
|
|
|
2,942 |
|
Transit |
|
130 |
|
|
|
130 |
|
Land and buildings |
|
3,893 |
|
|
|
3,171 |
|
Operating equipment |
|
1,743 |
|
|
|
2,727 |
|
Total capital expenditures |
$ |
20,619 |
|
|
$ |
29,041 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL SCHEDULES |
UNAUDITED RECONCILIATIONS OF NON-GAAP MEASURES |
(IN THOUSANDS) |
|
|
Three months ended March 31, |
|
|
2016 |
|
2015 |
|
% Change |
Reconciliation of
Reported Basis to Pro Forma(a) Basis: |
|
|
|
|
|
Net revenue |
$ |
338,533 |
|
$ |
302,477 |
|
|
11.9 |
% |
Acquisitions and
divestitures |
|
— |
|
|
27,426 |
|
|
Pro forma adjusted net
revenue |
$ |
338,533 |
|
$ |
329,903 |
|
|
2.6 |
% |
|
|
|
|
|
|
|
Reported direct
advertising and G&A expenses |
$ |
193,155 |
|
$ |
169,759 |
|
|
13.8 |
% |
Acquisitions and
divestitures |
|
— |
|
|
19,664 |
|
|
Pro forma direct
advertising and G&A expenses |
$ |
193,155 |
|
$ |
189,423 |
|
|
2.0 |
% |
|
|
|
|
|
|
|
Outdoor operating
income |
$ |
145,378 |
|
$ |
132,718 |
|
|
9.5 |
% |
Acquisitions and
divestitures |
|
— |
|
|
7,762 |
|
|
Pro forma adjusted
outdoor operating income |
$ |
145,378 |
|
$ |
140,480 |
|
|
3.5 |
% |
|
|
|
|
|
|
|
Reported corporate
expenses |
$ |
15,187 |
|
$ |
14,169 |
|
|
7.2 |
% |
Acquisitions and
divestitures |
|
— |
|
|
72 |
|
|
Pro forma corporate
expenses |
$ |
15,187 |
|
$ |
14,241 |
|
|
6.6 |
% |
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
130,191 |
|
$ |
118,549 |
|
|
9.8 |
% |
Acquisitions and
divestitures |
|
— |
|
|
7,690 |
|
|
Pro forma adjusted
EBITDA |
$ |
130,191 |
|
$ |
126,239 |
|
|
3.1 |
% |
|
|
|
|
|
|
|
|
(a) |
Pro forma adjusted net revenue, direct
advertising and general and administrative expenses, outdoor
operating income, corporate expenses and Adjusted EBITDA include
adjustments to 2015 for acquisitions and divestitures for the same
time frame as actually owned in 2016. |
|
|
|
|
|
|
Three months ended March 31, |
|
|
|
2016 |
|
|
|
2015 |
|
Reconciliation of
Outdoor Operating Income to Operating Income: |
|
|
|
|
Outdoor operating
income |
|
$ |
145,378 |
|
|
$ |
132,718 |
|
Less: Corporate
expenses |
|
|
15,187 |
|
|
|
14,169 |
|
Stock-based
compensation |
|
|
3,199 |
|
|
|
3,901 |
|
Depreciation and
amortization |
|
|
51,489 |
|
|
|
49,230 |
|
Plus: Gain on
disposition of assets |
|
|
11,327 |
|
|
|
1,836 |
|
Operating
income |
|
$ |
86,830 |
|
|
$ |
67,254 |
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
March 31, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
Net income |
|
$ |
51,314 |
|
|
$ |
40,716 |
|
Depreciation and amortization
related to real estate |
|
|
47,767 |
|
|
|
45,414 |
|
Gain from disposition of real
estate assets and investments |
|
|
(11,267 |
) |
|
|
(1,742 |
) |
Adjustment for unconsolidated
affiliates and non-controlling interest |
|
|
96 |
|
|
|
167 |
|
Funds From Operations |
|
$ |
87,910 |
|
|
$ |
84,555 |
|
|
|
|
|
|
|
|
|
|
|
Straight-line expense (income) |
|
|
(50 |
) |
|
|
(36 |
) |
Stock-based compensation
expense |
|
|
3,199 |
|
|
|
3,901 |
|
Non-cash portion of tax
provision |
|
|
(182 |
) |
|
|
(1,187 |
) |
Non-real estate related
depreciation and amortization |
|
|
3,722 |
|
|
|
3,816 |
|
Amortization of deferred financing
costs |
|
|
1,382 |
|
|
|
1,158 |
|
Loss on extinguishment of debt |
|
|
3,142 |
|
|
|
|
— |
|
Capitalized
expenditures—maintenance |
|
|
(6,692 |
) |
|
|
(13,156 |
) |
Adjustment for unconsolidated
affiliates and non-controlling interest |
|
|
(96 |
) |
|
|
(167 |
) |
|
|
|
|
|
|
|
|
|
|
Adjusted Funds From Operations |
|
$ |
92,335 |
|
|
$ |
78,884 |
|
|
|
|
|
|
|
|
|
|
|
Divided by weighted average diluted
shares outstanding |
|
|
97,378,135 |
|
|
|
95,742,148 |
|
Diluted AFFO per share |
|
$ |
0.95 |
|
|
$ |
0.82 |
|
Lamar Advertising (NASDAQ:LAMR)
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