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Lamar Advertising Company Announces Fourth Quarter And Year End 2012 Operating Results

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 (loss), 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. Our management believes that excluding the operating results related to the Next markets from our pro forma results is useful to investors during the initial integration. Our presentations of these measures may not be comparable to similarly titled measures used by other companies. Reconciliations of these measures to GAAP are included at the end of this release.

Conference Call Information

A conference call will be held to discuss the Company's operating results on Wednesday, February 27, 2013 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: 1-334-323-7226
Pass Code: 20435467
  Available through Monday, March 4, 2013 at 11:59 p.m. eastern time
   
Live Webcast: www.lamar.com
   
Webcast Replay: www.lamar.com
  Available through Monday, March 4, 2013 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,
  2012 2011 2012 2011
         
Net revenues $ 305,505 $ 288,239 $ 1,182,901 $ 1,133,487
         
Operating expenses (income)        
Direct advertising expenses  106,199 103,243 418,538 409,052
General and administrative expenses  51,994 48,495 203,065 193,854
Corporate expenses  11,537 10,662 46,875 43,466
Non-cash compensation 3,564 4,312 14,466 11,650
Depreciation and amortization 76,800 78,185 296,083 299,639
Gain on disposition of assets (8,508) (2,581) (13,817) (10,548)
  241,586 242,316 965,210 947,113
Operating income  63,919 45,923 217,691 186,374
         
Other expense (income)        
Loss on extinguishment of debt 9,676 226 41,632 677
Interest income (61) (58) (331) (569)
Interest expense 40,012 41,636 157,093 171,093
  49,627 41,804 198,394 171,201
         
Income before income tax  14,292 4,119 19,297 15,173
Income tax expense (benefit)  7,073 (2,253) 9,476 6,623
         
Net income 7,219 6,372 9,821 8,550
Preferred stock dividends 92 92 365 365
Net income applicable to common stock $ 7,127 $ 6,280 $ 9,456 $ 8,185
         
Earnings per share:        
 Basic income per share $ 0.08 $ 0.07 $ 0.10 $ 0.09
 Diluted income per share $ 0.08 $ 0.07 $ 0.10 $ 0.09
         
         
Weighted average common shares outstanding: 93,717,650 92,976,771  93,379,246 92,851,067
 - basic 94,075,642 93,171,888 93,666,641 93,173,785
 - diluted        
         
OTHER DATA         
Free Cash Flow Computation:        
Adjusted EBITDA $ 135,775 $ 125,839 $ 514,423 $ 487,115
Interest, net (35,311) (36,881) (139,021) (152,007)
Current tax expense  (622) (1,072) (1,926) (2,921)
Preferred stock dividends (92) (92) (365) (365)
Total capital expenditures (1) (27,823) (23,888) (105,570) (107,070)
Free cash flow $ 71,927 $ 63,906 $ 267,541 $ 224,752
(1)See the capital expenditures detail included          
below for a breakdown by category.        
      December 31,  December 31,
      2012 2011
Selected Balance Sheet Data:        
Cash and cash equivalents     $ 58,911 $ 33,503
Working capital     103,778 95,281
Total assets     3,514,030 3,427,353
Total debt (including current maturities)     2,160,854 2,158,528
Total stockholders' equity     874,833 838,998
     
     
  Three months ended Twelve months ended
   December 31,     December 31,
  2012  2011 2012  2011
         
Other Data:        
Cash flows provided by operating activities $ 122,560 $ 96,116 $ 375,909 $ 318,821
Cash flows used in investing activities 176,055 29,263 303,399 117,255
Cash flows provided by (used in) financing activities 74,165 (75,015) (47,417) (259,442)
         
         
Reconciliation of Free Cash Flow to Cash Flows Provided by Operating Activities:        
Cash flows provided by operating activities $ 122,560 $ 96,116 $ 375,909 $ 318,821
Changes in operating assets and liabilities (21,542) (5,185) 3,051 20,957
Total capital expenditures (27,823) (23,888) (105,570) (107,070)
Preferred stock dividends (92) (92) (365) (365)
Other (1,176) (3,045) (5,484) (7,591)
Free cash flow $ 71,927 $ 63,906 $ 267,541 $ 224,752
         
         
Reconciliation of Adjusted EBITDA to Net income (loss):        
Adjusted EBITDA $ 135,775 $ 125,839 $ 514,423 $ 487,115
Less:        
Non-cash compensation 3,564 4,312 14,466 11,650
Depreciation and amortization 76,800 78,185 296,083 299,639
Gain on disposition of assets (8,508) (2,581) (13,817) (10,548)
Operating Income 63,919 45,923 217,691 186,374
         
Less:        
Interest income (61) (58) (331) (569)
Loss on extinguishment of debt 9,676 226 41,632 677
Interest expense 40,012 41,636 157,093 171,093
Income tax expense (benefit) 7,073 (2,253) 9,476 6,623
Net income $ 7,219 $ 6,372 $ 9,821 $ 8,550
         
       
  Three months ended    
  December 31,    
  2012 2011 % Change
Reconciliation of Reported Basis to Pro Forma (a) Basis:      
Reported net revenue $ 305,505 $ 288,239 6.0%
Acquisitions and divestitures, excluding the Next markets 4,517  
Less net revenue – Next markets 5,156  
Pro forma net revenue, excluding the Next markets $ 300,349 $ 292,756  2.6%
       
Reported direct advertising and G&A expenses $ 158,193 $ 151,738 4.3%
Acquisitions and divestitures, excluding the Next markets 2,734  
Less direct advertising and G&A expenses – Next markets 1,546  
Pro forma direct advertising and G&A expenses, excluding the Next markets $ 156,647 $ 154,472 1.4%
       
Reported outdoor operating income $ 147,312 $ 136,501 7.9%
Acquisitions and divestitures, excluding the Next markets 1,783  
Less outdoor operating income – Next markets 3,610  
Pro forma outdoor operating income, excluding the Next markets $ 143,702 $ 138,284 3.9%
       
Reported corporate expenses $ 11,537 $ 10,662 8.2%
Acquisitions and divestitures, excluding the Next markets  
Pro forma corporate expenses, excluding the Next markets $ 11,537 $ 10,662 8.2%
       
Reported Adjusted EBITDA $ 135,775 $ 125,839 7.9%
Acquisitions and divestitures, excluding the Next markets 1,783  
Less EBITDA – Next markets 3,610  
Pro forma Adjusted EBITDA, excluding the Next markets $ 132,165 $ 127,622 3.6%
       
(a) Pro forma net revenues, direct advertising and general and administrative expenses, outdoor operating income, corporate expenses and Adjusted EBITDA include adjustments to 2011 for acquisitions and divestitures for the same time frame as actually owned in 2012, excluding the operating results of the Next markets. As a result, our pro forma results for the 2012 period  excludes the operating results from the Next markets and no adjustment has been made to the 2011 period with respect to the acquisition of the Next markets.
   
      Three months ended
     December 31, 
     2012    2011
Reconciliation of Outdoor Operating Income to Operating Income:    
Outdoor operating income $ 147,312 $ 136,501
Less: Corporate expenses 11,537 10,662
Non-cash compensation 3,564 4,312
Depreciation and amortization 76,800 78,185
Plus: Gain on disposition of assets 8,508 2,581
Operating income $ 63,919 $ 45,923
     
  Three months ended    Twelve months ended
      December 31,  December 31, 
  2012   2011 2012 2011
Capital expenditure detail by category        
Billboards - traditional $ 8,123 $ 9,514 $ 29,061  $  34,425
Billboards - digital 9,800 9,169 42,134   41,250
Logo 3,157 2,684 8,704 10,141
Transit 149 177 259 817
Land and buildings 3,396 663 12,797 4,501
Operating equipment 3,198 1,681 12,615 15,936
Total capital expenditures $ 27,823 $ 23,888 $ 105,570  $ 107,070
CONTACT: Keith A. Istre
         Chief Financial Officer
         (225) 926-1000
         KI@lamar.com

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