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» Lamar Advertising's CEO Discusses Q2 2011 Results - Earnings Call Transcript
Kevin ReillyThank you, Jeff. I want to welcome all our shareholders and friends for our Q2 call. As it is our custom, I'll make a few comments and then turn the call over to Sean and Keith, for some color. I guess the first item to cover is the REIT concept. As the company continues to generate more cash flow, than it needs we’re obligated to explore different ways to return capital to our share holders and the REIT construct is one possible avenue. We intend to seek a private letter ruling, we hope that the time frame on that would be a Q1 host 2013 event and was thinking that if everything goes right we would make the election in January 1, 2014. The PLR seeks to answer a lot of questions, and since we’re in the middle of the year process, its not that we don’t want to be forward coming, it’s just we don’t have the answers to those questions. So as you think about what assets are admissible and what asset are not, we just don’t simply – recently don’t have the answers to those questions at this time. So you won’t get them. With that, I’d like to go head and turn the call over to Keith to walk us through that. Keith Istre Just to zip through the press release, real quick on the pro forma results. As you noted, the pro forma revenue came in at 3.6% that was slightly ahead our guidance of 3%, that was a total increase of about $10.5 million. Consolidated expenses were 3.6%. I had on the last call mentioned that we thought that it would come in around 4%, so we were slightly under on that metric. Let me point out on the corporate overhead, you may have noticed that those expenses were up about 16% for the quarter and that’s a blip not a trend. We had some difficult comps to contend with in the second quarter of last year when we saw that we were not going to hit our incentive bonus performance goals.
We reduced the bonus accruals in the second quarter at corporate to the tune of about 800,000. So that’s 800000 less in experiences last second quarter that we don’t have, that we do have in the second quarter. So I think you’ll see that flatten out.On a consolidated expense basis, for the third quarter we think that the expense will come in somewhere in the 2% range, which going forward was up for this year at about as what we guided to at the beginning of the year. One other quick note you saw that we had called approximately 123 million of senior subordinated high yield notes due 2015. Several people called and I’d liked to know how that redemption was going to be structured. And as of right now we anticipate having approximately $90 million in cash on hand at the end of August when these notes are due and we will draw the remainder from our banks revolving credit facility to take those out and that will leave about $137 million of that issue still outstanding that we would like to address before the end of this year. With that Sean? Sean Reilly Sure, thank you. Let me walk though some of the specifics that typical color on the call and you will open it up for questions. First account of digital units and this is going to be as of yesterday, sort of call and this will include the 30 digital bulleting phases that we purchased in Phoenix during the course of the last quarter. So as of today we have 1564 digital units in the air, 852 bulletin and 712 were posters and again that includes the recent acquisition in Phoenix which by the way we feel very good about it. If you look at the performance of our digital platform, our large amount of digital platform has been our best performer, markets that we're current markets that we are currently in such as Chicago, Atlanta, and the like doing very well. It's clear that we're building something of interest in national advertisers and national digital book with us almost 20% in the second quarter. So we feel good about that. Read the rest of this transcript for free on seekingalpha.com