Lamar Advertising Company Announces First Quarter 2014 Operating Results

Lamar Advertising Company Announces First Quarter 2014 Operating Results

BATON ROUGE, La., May 7, 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 first quarter
ended March 31, 2014.

First Quarter Results

Lamar reported net revenues of $284.9 million for the first quarter of 2014
versus $276.6 million for the first quarter of 2013, a 3.0% increase.
Operating income for the first quarter of 2014 was $31.1 million as compared
to $19.1 million for the same period in 2013. Lamar recognized a net loss of
$4.8 million for the first quarter of 2014 compared to a net loss of $10.3
million for same period in 2013.

Adjusted EBITDA (defined as operating income before non-cash compensation,
depreciation and amortization and gain on disposition of assets) for the first
quarter of 2014 was $104.4 million versus $103.1 million for the first quarter
of 2013, a 1.2% 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 first quarter of 2014 was
$51.1 million as compared to $43.1 million for the same period in 2013, a
18.6% increase.

Pro forma adjusted net revenue for the first quarter of 2014 increased 1.9%
and pro forma Adjusted EBITDA increased 0.4% as compared to the first quarter
of 2013. Pro forma adjusted net revenue and pro forma Adjusted EBITDA include
adjustments to the 2013 period for acquisitions and divestitures for the same
time frame as actually owned in the 2014 period. Pro forma adjusted net
revenue, pro forma Adjusted EBITDA and pro forma adjusted outdoor operating
income in the 2013 and 2014 periods have also been adjusted to reflect revenue
recognition on a monthly basis over the term of each advertising contract.
Commencing with the fourth quarter of 2013, the Company is recognizing revenue
on a daily basis. See "Reconciliation of Reported Basis to Pro Forma Basis" on
page 7 of this release, which presents pro forma adjusted net revenue after
acquisition adjustments and without giving effect to the change to daily
revenue recognition.

The Company is introducing the following metrics, which are widely recognized
by REIT investors: Funds From Operations (FFO) and Adjusted Funds From
Operations (AFFO). For the first quarter of 2014, FFO was $60.4 million versus
$59.3 million for the first quarter of 2013, a 1.8% increase. AFFO for the
first quarter of 2014 was $58.8 million compared to $50.2 million for the same
period in 2013, a 17.2% increase.^1 Our calculations of FFO and AFFO have not
been adjusted to reflect changes to our tax expense that will be made if we
qualify and elect to be taxed as a REIT. In which case, our tax expense would
be lower than our historical effective tax rates.

^1 See "Use of Non‑GAAP Financial Measures" below for additional information
and the Company's definitions of FFO and AFFO.

Guidance

For the second quarter of 2014, the Company expects adjusted net revenue
(recognized on a monthly basis) to be approximately $331 million to $334
million. On a pro forma adjusted basis this represents an increase of
approximately 1% to 2%. The Company will continue to provide adjusted net
revenue guidance for 2014 based on monthly revenue recognition consistent with
past practice.

Liquidity

As of March 31, 2014, Lamar had $461.7 million in total liquidity that
consists of $393.0 million available for borrowing under its revolving senior
credit facility and approximately $68.7 million in cash and cash equivalents.

Recent Transactions

Term A Loans and Note Redemption. On April 18, 2014, the senior credit
facility of Lamar's wholly owned subsidiary, Lamar Media Corp., was amended to
create a new $300 million Term A Loan facility. Lamar Media borrowed all $300
million in Term A loans on April 18, 2014 and the net loan proceeds, together
with borrowings under the revolving portion of its senior credit facility and
cash on hand, were used to fund the redemption of all $400 million in
aggregate principal amount of Lamar Media's 7 7/8% Senior Subordinated Notes
due 2018 on April 21, 2014.

Forward Looking Statements

This press release contains forward-looking statements, including the
statements regarding guidance for the second quarter of 2014. 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 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, adjusted pro forma results and
outdoor operating income. The Company defines Funds From Operations as net
income before real estate depreciation and amortization, gains on loss from
disposition of real estate assets and investments and an adjustment to
eliminate non‑controlling interest. The Company defines Adjusted Funds From
Operations as Funds From Operations before 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. 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, 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. Management also deems the presentation of
monthly revenue recognition useful to allow investors to see the impact of an
immaterial change to its revenue recognition policy and to provide pro forma
results that are comparable with prior periods and in line with the Company's
presentation of market guidance. Our presentation 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
Wednesday, May 7, 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:       39098824
                Available through Wednesday, May 14, 2014 at 11:59 p.m.
                 eastern time
                
Live Webcast:    www.lamar.com
                
Webcast Replay:  www.lamar.com
                Available through Wednesday, May 14, 2014 at 11:59 p.m.
                 eastern time
                
Company Contact: Buster Kantrow
                Director of Investor Relations
                (225) 926-1000
                bkantrow@lamar.com
                

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 23 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 endedMarch 31,
                                             2014           2013
                                                           
Net revenues                                  $284,933     $276,605
                                                           
                                                           
Operating expenses (income)                                 
Direct advertising expenses                   111,508       106,519
General and administrative expenses           54,949        54,262
Corporate expenses                           14,100        12,701
Non-cash compensation                         3,912         10,773
Depreciation and amortization                 69,526        73,901
Gain on disposition of assets                 (206)       (606)
                                             253,789       257,550
Operating income                              31,144        19,055
                                                           
                                                           
Other expense (income)                                      
Interest income                               (45)    (28)
Loss on extinguishment of debt                5,176       —
Other-than-temporary impairment of investment 4,069       —
Interest expense                              30,268      36,700
                                             39,468     36,672
Loss before income tax benefit                (8,324)       (17,617)
Income tax benefit                            (3,487)       (7,354)
                                                           
                                                           
Net loss                                      (4,837)      (10,263)
Preferred stock dividends                     91           91
Net loss applicable to common stock           $(4,928)   $ (10,354)
                                                           
                                                           
Earnings per share:                                         
Basic loss per share                          $ (0.05)       $ (0.11)
Diluted loss per share                        $ (0.05)      $ (0.11)
                                                           
Weighted average common shares outstanding:                 
- basic                                       94,906,018     93,974,956
- diluted                                     95,368,995     94,350,240
                                                           
OTHER DATA                                                 
Free Cash Flow Computation:                                 
Adjusted EBITDA                               $ 104,376      $ 103,123
Interest, net                                 (28,940)       (33,766)
Current tax expense                          (1,878)        (413)
Preferred stock dividends                     (91)           (91)
Total capital expenditures                    (22,398)    (25,788)
Free cash flow                                $ 51,069     $ 43,065

                                                       
                                                       
OTHER DATA (continued):                                
                                                       
                                           March 31,    December 31,
Selected Balance Sheet Data:               2014         2013
Cash and cash equivalents                   $68,741    $33,212
Working capital                             $140,503   $36,705
Total assets                                $3,426,578 $3,401,618
Total debt (including current maturities)   $1,946,761  $1,938,802
Total stockholders' equity                  $ 942,058   $ 932,946
                                                       
                                                       
                                           Three months ended
                                            March 31,
                                           2014         2013
Selected Cash Flow Data:                                
Cash flows provided by operating activities $ 62,584 $51,721
Cash flows used in investing activities     $(25,772)  $(29,355)
Cash flows used in financing activities     $(637)     $(5,451)
                                                       



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

                                                         Three months ended
                                                          March 31,
Reconciliation ofFree Cash Flow to Cash Flows Provided   2014      2013
by Operating Activities:
Cash flows provided by operating activities               $62,584  $51,721
Changes in operating assets and liabilities               12,574    18,500
Total capital expenditures                                (22,398)  (25,788)
Preferred stock dividends                                 (91)      (91)
Other                                                     (1,600)   (1,277)
Free cash flow                                            $51,069  $43,065
                                                                  
                                                                  
Reconciliation ofAdjusted EBITDA to Net Loss:                     
Adjusted EBITDA                                           $104,376 $103,123
Less:                                                              
Non-cash compensation                                     3,912     10,773
Depreciation and amortization                             69,526    73,901
Gain on disposition of assets                             (206)     (606)
Operating Income                                          31,144    19,055
                                                                  
                                                                  
Less:                                                              
Interest income                                           (45)      (28)
Loss on extinguishment of debt                            5,176     —
Other-than-temporary impairment of investment             4,069     —
Interest expense                                          30,268    36,700
Income tax benefit                                        (3,487)  (7,354)
Net loss                                                  $(4,837) $(10,263)
                                                                  
                                                                  
Capital expenditure detail by category:                            
Billboards - traditional                                  $4,618   $6,218
Billboards - digital                                      9,798     11,623
Logo                                                      1,868     1,863
Transit                                                   90        20
Land and buildings                                        3,301     2,784
Operating Equipment                                       2,723     3,280
Total capital expenditures                                $22,398  $25,788
                                                                  



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

                                             Three months ended      
                                              March 31,
                                             2014       2013         % Change
Reconciliation of Reported Basis to Pro                             
Forma^(a) Basis:
Net revenue (daily basis)                     $284,933 $276,605   3.0%
Conversion from daily to monthly              7,841     6,874       
Adjusted net revenue                          $292,774 $283,479   3.3%
Acquisitions and divestitures                 —         3,957       
Pro forma adjusted net revenue (monthly       $292,774 $287,436   1.9%
basis)
                                                                   
Reported direct advertising and G&A expenses  $166,457 $160,781   3.5%
Acquisitions and divestitures                 —      2,219      
Pro forma direct advertising and G&A expenses $166,457 $163,000   2.1%
                                                                   
Outdoor operating income (daily basis)        $118,476 $115,824   2.3%
Conversion from daily to monthly              7,841     6,874       
Adjusted outdoor operating income             $126,317 $122,698   2.9%
Acquisitions and divestitures                 —         1,738       
Pro forma adjusted outdoor operating income   $126,317 $124,436  1.5%
(monthly basis)
                                                                   
Reported corporate expenses                   $14,100  $12,701    11.0%
Acquisitions and divestitures                 —         —           
Pro forma corporate expenses                  $14,100  $12,701    11.0%
                                                                   
Adjusted EBITDA (daily basis)                 $104,376 $103,123   1.2%
Conversion from daily to monthly              7,841     6,874      
Adjusted EBITDA                               $112,217 $ 109,997   2.0%
Acquisitions and divestitures                 —         1,738       
Pro forma Adjusted EBITDA (monthly basis)     $ 112,217 $ 111,735 0.4%
                                                                   

(a)Pro forma adjusted net revenue, direct advertising and general and
administrative expenses, outdoor operating income, corporate expenses and
Adjusted EBITDA include adjustments to 2013 for acquisitions and divestitures
for the same time frame as actually owned in 2014.Pro forma adjusted net
revenue, outdoor operating income and Adjusted EBITDA have also been adjusted
to reflect revenue recognition on a monthly basis (eliminating the effect of
an immaterial correction) in both the 2013 and 2014 periods.

                                                          Three months ended
                                                           March 31,
                                                          2014      2013
Reconciliation of Outdoor Operating Income to Operating             
Income:
Outdoor operating income                                   $ 118,476 $ 115,824
Less:Corporate expenses                                   14,100    12,701
Non-cash compensation                                     3,912     10,773
Depreciation and amortization                             69,526    73,901
Plus:Gain on disposition of assets                        206       606
Operating income                                           $ 31,144  $ 19,055



UNAUDITED PRO FORMA REIT MEASURES
AND RECONCILIATIONS TO GAAP MEASURES
(IN THOUSANDS)


                                                        Three months ended
                                                        March 31,
                                                        2014       2013
                                                                  
Net loss                                                $ (4,837) $ (10,263)
Depreciation and amortization related to advertising     65,175    69,882
structures
Gain from disposition of real estate assets              (24)       (518)
Adjustment for minority interest – consolidated          77        221
affiliates
Funds From Operations                                    $60,391  $59,322
Non-cash effect of straight-line rent                    (52)       (136)
Stock-based compensation expense                         3,912     10,773
Non-cash tax benefit                                     (5,365)   (7,767)
Non-real estate related depreciation and amortization    4,351     4,019
Amortization of deferred financing and debt issuance     1,283     2,906
costs
Loss on extinguishment of debt                           5,176     —
Loss from other-than-temporary impairment of investment  4,069     —
Capitalized expenditures—maintenance                     (14,874)  (18,706)
Adjustment for minority interest – consolidated          (77)       (221)
affiliates
                                                                  
Adjusted Funds From Operations                           $58,814  $50,190
                                                                  

Given the Company's preparation for potential election of REIT status for the
taxable year beginning January 1, 2014, two widely recognized metrics of
operating performance for REITs, Funds From Operations (FFO) and Adjusted
Funds From Operations (AFFO), are presented above.The calculation of FFO is
based on the definition as set forth by the National Association of Real
Estate Investment Trusts (NAREIT).A reconciliation of net income to FFO and
the calculation of AFFO, which are non‑GAAP financial measures, are also
presented above.The measures of FFO and AFFO may not be comparable to those
reported by REITs that do not compute these measures in accordance with the
NAREIT definitions, or that interpret those definitions differently than the
Company does.Our net loss reflects our current status as a regular domestic C
Corporation for U.S. Federal Income Tax purposes.If we qualify and elect to
be taxed as a REIT, our tax expense would be lower than our historical
effective tax rates.
 
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