Lamar Advertising Company Announces Fourth Quarter and Year End 2013 Operating Results

Lamar Advertising Company Announces Fourth Quarter and Year End 2013 Operating
Results

BATON ROUGE, La., Feb. 27, 2014 (GLOBE NEWSWIRE) -- 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 fourth
quarter ended December 31, 2013.

Fourth Quarter Results

Lamar reported net revenues of $320.4 million for the fourth quarter of 2013
versus $306.6 million for the fourth quarter of 2012, a 4.5% increase. See
"Immaterial Correction of Prior Period Amounts" below. Operating income for
the fourth quarter of 2013 was $63.8 million as compared to $65.1 million for
the same period in 2012. Lamar recognized $10.2 million in net income for the
fourth quarter of 2013 compared to net income of $7.9 million for the fourth
quarter of 2012.

Adjusted EBITDA (defined as operating income before non-cash compensation,
depreciation and amortization and gain on disposition of assets) for the
fourth quarter of 2013 was $145.0 million versus $136.9 million for the fourth
quarter of 2012, a 5.9% increase.

Free Cash Flow (defined as Adjusted EBITDA less interest, net of interest
income and amortization of financing costs, current taxes, preferred stock
dividends and total capital expenditures) for the fourth quarter of 2013 was
$85.0 million as compared to $73.1 million for the same period in 2012, a
16.3% increase.

Pro forma net revenue for the fourth quarter of 2013 increased 0.3% and pro
forma Adjusted EBITDA decreased 0.9% as compared to the fourth quarter of
2012. Pro forma net revenue and pro forma Adjusted EBITDA include adjustments
to the 2012 period for acquisitions and divestitures for the same time frame
as actually owned in the 2013 period. Pro forma net revenue, pro forma
Adjusted EBITDA and pro forma outdoor operating income have also been adjusted
to eliminate the effect of the immaterial correction in both the 2012 and 2013
periods.^1 See "Immaterial Correction of Prior Period Amounts" below.

                                       
^1 Adjusted EBITDA, free cash flow, pro forma results and outdoor operating
income are non-GAAP Financial Measures.Please see "Use of Non-GAAP Measures"
and 'Supplemental Schedules—Reconciliations of non-GAAP Financial Measures"
below on pages 6-8.

Twelve Months Results

Lamar reported net revenues of $1.25 billion for the twelve months ended
December 31, 2013 versus $1.18 billion for the same period in 2012, a 5.6%
increase.Operating income for the twelve months ended December 31, 2013 was
$223.4 million as compared to $214.5 million for the same period in
2012.Adjusted EBITDA increased 6.6% for the twelve months ended December 31,
2013 to $545.1 million from $511.3 million for the same period in 2012.There
was net income of $40.1 million for the twelve months ended December 31, 2013
as compared to net income of $7.9 million for the same period in 2012.

Free Cash Flow for the twelve months ended December 31, 2013 increased 14.8%
to $303.6 million as compared to $264.4 million for the same period in 2012.

Immaterial Correction of Prior Period Amounts

The Company has historically recognized revenue on a monthly basis over the
term of each advertising contract which produced results that were consistent
with generally accepted accounting principles in all material
respects.Commencing with the fourth quarter of 2013, revenue is recognized on
a daily basis and will be going forward.An example that illustrates monthly
versus daily revenue recognition is included on page 8. The Company evaluated
the effect of this correction under Staff Accounting Bulletin Nos. 99 and 108
and concluded that it is immaterial to the current and prior periods.Actual
reported revenue for the fourth quarter and all prior periods presented in
this earnings release have been adjusted to reflect this immaterial
correction.In line with its historical practice, the Company will continue to
present pro forma results and quarterly guidance based on monthly revenue
recognition.See "Reconciliation of Reported Basis to Pro Forma Basis" on page
7 of this release, which presents pro forma net revenue after acquisition
adjustments and prior to the correction.As noted in this schedule, pro forma
net revenue on a monthly basis for the fourth quarter of 2013 is $313.3
million, a 0.3% increase over the fourth quarter of 2012.A schedule comparing
net revenue recognized on a monthly basis to net revenue recognized on a daily
basis for the years ended December 31, 2013, 2012 and 2011 is also included in
the release. See "Revenue Comparison Monthly vs Daily" on page 8.

Guidance

For the first quarter of 2014, the Company expects net revenue as recognized
on a monthly basis without giving effect to the correction to be approximately
$290 million to $293 million.On a pro forma basis this represents an increase
of approximately 1% to 2%.The Company will continue to provide net revenue
guidance for 2014 based on monthly revenue recognition consistent with past
practice.

Liquidity

As of December 31, 2013, Lamar had $126.2 million in total liquidity that
consists of $93.0 million available for borrowing under its then-existing $250
million revolving senior credit facility and approximately $33.2 million in
cash and cash equivalents.Currently, Lamar has approximately $243 million
available for borrowing under its revolving senior credit facility.See
"Recent Transactions—Senior Credit Facility" below.

Recent Transactions

Senior Credit Facility. On February 3, 2014, the senior credit facility of
Lamar's wholly owned subsidiary, Lamar Media Corp., was amended to increase
the revolving credit facility from $250 million to $400 million and extend its
maturity date to February 2, 2019.The incremental facility was also increased
from $300 million to $500 million.In addition, the senior credit facility was
amended to include provisions that would allow Lamar Media to conduct its
affairs in a manner that would allow Lamar Advertising to qualify and remain
qualified as a real estate investment trust (REIT).

Notes Offering.On January 10, 2014, Lamar Media Corp., closed a private
placement of $510 million in aggregate principal amount of 5 3/8% Senior Notes
due 2024, which resulted in net proceeds to Lamar Media of approximately $502
million.Lamar Media used the proceeds of the offering to pay off all loan
balances outstanding under its senior credit facility.

Early Extinguishment of Debt.On December 4, 2013, Lamar Media redeemed in
full all its outstanding 9 3/4% Senior Notes due 2014 at a redemption price
equal to 100% of the aggregate principal amount of outstanding Notes plus a
make whole amount and accrued and unpaid interest up to but not including the
applicable redemption date for an aggregate redemption price of approximately
$366.4 million. The redemption was funded using cash on hand of $182.4
million and borrowings under Lamar Media's revolving credit facility of $184
million.In connection with the redemption, the Company recorded a loss on
early extinguishment of debt of $14.3 million for the fourth quarter of 2013,
of which $3.9 million related to the write off of previously capitalized and
unamortized debt issuance fees.

Real Estate Investment Trust Update

As previously announced, Lamar is actively considering an election to convert
to a REIT status. In conjunction with this review, Lamar submitted a private
letter ruling request to the U.S. Internal Revenue Service (the "IRS") in
November of 2012 addressing certain matters relevant to its contemplated
qualification as a REIT. After a delay caused by internal IRS procedures and
considerations, in November 2013 Lamar was advised by the IRS that it will
resume issuing private letter rulings regarding the REIT provisions of the
Internal Revenue Code of 1986, as amended, and that the IRS is actively
working on Lamar's private letter ruling request.Based on current
information, Lamar believes that it will be in a position to convert to a REIT
effective January 1, 2014.

Lamar's decision to proceed with a REIT election is subject to the approval of
its board of directors.A favorable IRS ruling, if received, does not
guarantee that Lamar would succeed in qualifying as a REIT and there is no
certainty as to the timing of a REIT election.Lamar may not ultimately pursue
a conversion to a REIT, and it can provide no assurance that a REIT
conversion, if completed, will be successfully implemented or achieve the
intended benefits.

Forward Looking Statements

This press release contains forward-looking statements, including the
statements regarding guidance for the first quarter of 2014; consideration of
an election to real estate investment trust status; and the ability to
complete the REIT conversion effective for the taxable year beginning January
1, 2014 and remain qualified as a REIT assuming a conversion is successfully
completed.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, debt refinancing or acquisitions; (5) our ability to
qualify as a REIT and maintain our status as a REIT assuming we successfully
qualify; (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, 2013, 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 Measures

Adjusted EBITDA, Free Cash Flow, pro forma results and outdoor operating
income are not measures of performance under accounting principles generally
accepted in the United States of America ("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, 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.Management also deems the presentation of the effect of the
correction in its method of revenue recognition useful to allow investors to
see the impact of the correction and to provide pro forma results that are
comparable with prior periods and in line with the Company's presentation of
market guidance.Our presentations of these measures may not be comparable to
similarly titled measures used by other companies.See "Supplemental
Schedules—Reconciliations of Non-GAAP Measures," which provides
reconciliations 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, February 27, 2014 at 10:00 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
Pass Code:                94615468
                         
Available through Thursday, March 6, 2014 at 11:59 p.m. eastern time
                         
Live Webcast:             www.lamar.com
                         
Webcast Replay:           www.lamar.com
Available through Thursday, March 6, 2014 at 11:59 p.m. eastern time

General Information

Lamar Advertising Company is a leading outdoor advertising company currently
operating over 150 outdoor advertising companies in 44 states, Canada and
Puerto Rico, logo businesses in 22 states and the province of Ontario, Canada
and over 60 transit advertising franchises in the United States, Canada and
Puerto Rico.

LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
                                                              
                              Three months ended   Twelve months ended
                              December 31,         December 31,
                              2013       2012       2013         2012
                                                              
Net revenues                   $320,352 $306,639 $1,245,842 $1,179,736
                                                              
Operating expenses (income)                                    
Direct advertising expenses   109,962    106,199    436,844      418,538
General and administrative     52,880     51,994     213,087      203,065
expenses
Corporate expenses            12,468     11,537     50,763       46,875
Non-cash compensation          1,829      3,564      24,936       14,466
Depreciation and amortization  81,087     76,800     300,579      296,083
Gain on disposition of assets  (1,710)    (8,508)    (3,804)      (13,817)
                              256,516    241,586    1,022,405    965,210
Operating income              63,836     65,053     223,437      214,526
                                                              
Other expense (income)                                         
Loss on extinguishment of debt 14,345     9,676      14,345       41,632
Interest income                (44)       (61)       (165)        (331)
Interest expense               34,013     40,012     146,277      157,093
                              48,314     49,627     160,457      198,394
                                                              
Income before income tax      15,522     15,426     62,980       16,132
Income tax expense            5,336      7,515      22,841       8,242
                                                              
Net income                     10,186     7,911      40,139       7,890
Preferred stock dividends      92         92         365          365
Net income applicable to       $10,094  $7,819   $39,774    $7,525
common stock
                                                              
Earnings per share:                                            
Basic income per share         $0.11    $0.08    $0.42      $0.08
                                                              
Diluted income per share       $0.11    $0.08    $0.42      $0.08
                                                              
Weighted average common shares                                 
outstanding:
- basic                       94,697,622 93,717,650 94,387,230   93,379,246
- diluted                     95,091,780 94,075,642 94,745,515   93,666,641
                                                              
OTHER DATA                                                    
Free Cash Flow Computation:                                    
Adjusted EBITDA                $145,042 $136,909 $545,148   $511,258
Interest, net                  (30,656)   (35,311)   (131,445)    (139,021)
Current tax expense           (1,339)    (622)      (4,092)      (1,926)
Preferred stock dividends      (92)       (92)       (365)        (365)
Total capital expenditures    (27,973)   (27,823)   (105,650)    (105,570)
Free cash flow                 $84,982  $73,061  $ 303,596   $264,376

                                                             
                                                             
OTHER DATA (continued):                         December 31, December 31,
Selected Balance Sheet                          2013           2012
Data:
                                                             
Cash and cash equivalents                      $33,212      $58,911
Working capital                                 36,705         82,127
Total assets                                    3,401,618      3,514,030
Total debt (including                           1,938,802      2,160,854
current maturities)
Total stockholders' equity                      $932,946     $861,625
                                                             
                                                             
                           Three months ended   Twelve months ended
                           December 31,         December 31,
                           2013       2012       2013           2012
                                                             
Selected Cash Flow Data:                                      
Cash flows provided by      $100,021 $122,560 $394,705     $375,909
operating activities
Cash flows used in          (34,826)   (176,055)  (191,869)      (303,399)
investing activities
Cash flows (used in)
provided by financing       (213,902)  74,165     (227,195)      (47,417)
activities
                                                             
                                                             
Reconciliation ofFree Cash
Flow to Cash                                                  
FlowsProvided by Operating
Activities
Cash flows provided by      $ 100,021  $ 122,560  $ 394,705      $ 375,909
operating activities
Changes in operating assets 14,111     (20,408)   20,940         (114)
and liabilities
Total capital expenditures  (27,973)   (27,823)   (105,650)      (105,570)
Preferred stock dividends   (92)       (92)       (365)          (365)
Other                       (1,085)    (1,176)    (6,034)        (5,484)
Free cash flow              $84,982  $73,061  $303,596     $264,376



SUPPLEMENTAL SCHEDULES—RECONCILIATIONS OF NON-GAAP MEASURES
(IN THOUSANDS)

                       Three months ended         Twelve months ended
                       December 31,               December 31,
                       2013          2012          2013          2012
Reconciliation
ofAdjusted EBITDA to                                          
Net income:
Adjusted EBITDA         $145,042    $136,909    $545,148    $511,258
Less:                                                          
Non-cash compensation   1,829         3,564         24,936        14,466
Depreciation and        81,087        76,800        300,579       296,083
amortization
Gain on disposition of  (1,710)       (8,508)       (3,804)       (13,817)
assets
Operating Income        63,836        65,053        223,437       214,526
                                                              
Less:                                                          
Interest income         (44)          (61)          (165)         (331)
Loss on extinguishment  14,345        9,676         14,345        41,632
of debt
Interest expense        34,013        40,012        146,277       157,093
Income tax expense     5,336         7,515         22,841        8,242
Net income              $10,186     $7,911      $40,139     $7,890
                                                              
                                                              
                                                              
Capital expenditure                                            
detail by category
Billboards -            $2,024      $8,123      $21,295     $29,061
traditional
Billboards - digital    15,268        9,800         50,233        42,134
Logo                    4,025         3,157         11,182        8,704
Transit                 114           149           168           259
Land and buildings      3,435         3,396         9,471         12,797
Operating Equipment     3,107         3,198         13,301        12,615
Total capital           $27,973     $27,823     $105,650    $105,570
expenditures
                                                               
                       Three months ended                      
                       December 31,                           
                       2013          2012          % Change     
Reconciliation of
Reported Basis to Pro                                          
Forma (a) Basis:
Net revenue (daily      $320,352    $306,639    4.5%          
basis)
Adjustment for          (7,005)       (1,134)                    
immaterial correction
Adjusted net revenue,
prior to immaterial     313,347       305,505       2.6%          
correction
Acquisitions and        —            6,845                      
divestitures
Pro forma net revenue   $313,347    $312,350    0.3%          
(monthly basis)
                                                              
Reported direct
advertising and G&A     $162,842    $158,193    2.9%          
expenses
Acquisitions and        —            3,304                      
divestitures
Pro forma direct
advertising and G&A     $162,842    $161,497    0.8%          
expenses
                                                              
Outdoor operating       $157,510    $148,446    6.1%          
income (daily basis)
Adjustment for          (7,005)       (1,134)                    
immaterial correction
Adjusted outdoor
operating income, prior 150,505       147,312       2.2%          
to immaterial
correction
Acquisitions and        —            3,541                      
divestitures
Pro forma outdoor
operating income        $150,505    $150,853    (0.2)%        
(monthly basis)
                                                              
Reported corporate      $12,468     $11,537     8.1%          
expenses
Acquisitions and        —            —                         
divestitures
Pro forma corporate     $12,468     $11,537     8.1%          
expenses
                                                              
Adjusted EBITDA (daily  $145,042    $136,909    5.9%          
basis)
Adjustment for          (7,005)       (1,134)                    
immaterial correction
Adjusted EBITDA, prior
to immaterial           138,037       135,775       1.7%          
correction
Acquisitions and        —            3,541                      
divestitures
Pro forma Adjusted      $138,037    $139,316    (0.9)%        
EBITDA (monthly basis)
                                                              
(a)Pro forma net revenue, direct advertising and general and administrative
expenses, outdoor operating income, corporate expenses and Adjusted EBITDA
include adjustments to 2012 for acquisitions and divestitures for the same
time frame as actually owned in 2013.Pro forma net revenue, outdoor operating
income and Adjusted EBITDA have also been adjusted to eliminate the effect of
the immaterial correction in both the 2012 and 2013 periods.

                                                 Three months ended
                                                 December 31,
                                                 2013          2012
Reconciliation of
Outdoor Operating                                              
Income to Operating
Income:
Outdoor operating                                 $157,510    $148,446
income
Less: Corporate                                   12,468        11,537
expenses
Non-cash compensation                            1,829         3,564
Depreciation and                                 81,087        76,800
amortization
Plus: Gain on                                    1,710         8,508
disposition of assets
Operating income                                  $63,836     $65,053



REVENUE COMPARISON-MONTHLY VS DAILY
2013, 2012 AND 2011
QUARTERLY AND FYE


2013  Actual 2013                 Actual 2013                     
     (prior to correction)       (after correction)              
                                                               + (-)
     Monthly Recognition   %      Converted to Daily        %      Difference
                                   Recognition
                                                               
Q1    283,479               22.8%  276,605                   22.2%  (6,874)
Q2    324,684               26.0%  327,744                   26.3%  3,060
Q3    323,184               26.0%  321,141                   25.8%  (2,043)
Q4    313,347               25.2%  320,352                   25.7%  7,005
Total 1,244,694             100.0% 1,245,842                 100.0% 1,148
                                                               

                                                               
2012  Actual 2012                 Actual 2012                     
     (prior to correction)       (after correction)              
                                                               + (-)
     Monthly Recognition   %      Converted to Daily        %      Difference
                                   Recognition
                                                               
Q1    266,238               22.5%  262,465                   22.3%  (3,773)
Q2    304,872               25.8%  301,106                   25.5%  (3,766)
Q3    306,286               25.9%  309,526                   26.2%  3,240
Q4    305,505               25.8%  306,639                   26.0%  1,134
Total 1,182,901             100.0% 1,179,736                 100.0% (3,165)
                                                               

                                                               
2011  Actual 2011                 Actual 2011                     
     (prior to correction)       (after correction)              
                                                               + (-)
     Monthly Recognition   %      Converted to Daily        %      Difference
                                   Recognition
                                                               
Q1    255,202               22.5%  250,546                   22.2%  (4,656)
Q2    293,345               25.9%  289,367                   25.6%  (3,978)
Q3    296,701               26.2%  296,568                   26.2%  (133)
Q4    288,239               25.4%  294,233                   26.0%  5,994
Total 1,133,487             100.0% 1,130,714                 100.0% (2,773)




EXAMPLE: MONTHLY VS DAILY BILLING RECOGNITION
                                    
Contract Amount:             $3,100   
Contract Period:             31 days  
Contract Start Date:         March 15 
Invoice Date:                March 15 
                                    
                                    
                                     Revenue Recognized
                                    March       April
                                            
Revenue Recognition, monthly         $3,100   $0
Revenue Recognition, daily          $1,700   $1,400

CONTACT: Keith A. Istre
         Chief Financial Officer
         (225) 926-1000
         KI@lamar.com
 
Press spacebar to pause and continue. Press esc to stop.