<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
September 30, 1997
ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Commission File No. 333-3338
Minnesota 41-1540241
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
--------------------
ADAMS OUTDOOR ADVERTISING, INC.
(Exact name of registrant as specified in its charter)
Commission File No. 333-3338-01
Minnesota 41-1540245
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1380 West Paces Ferry Road, N.W.
Suite 170, South Wing
Atlanta, GA 30327
(Address of principal executive offices)
(404) 233-1366
(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
None.
Securities Registered Pursuant to Section 12(g) of the Act:
10 3/4% Senior Notes Due 2006
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
-- --
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. (Applicable only to Adams
Outdoor Advertising, Inc.)
<TABLE>
<CAPTION>
Class Outstanding as of November 14, 1997
- ----- -----------------------------------
<S> <C>
Common Stock,
$.001 par value 10,000
</TABLE>
<PAGE>
ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
ADAMS OUTDOOR ADVERTISING, INC.
Securities and Exchange Commission Form 10-Q
for the Third Quarter Ended September 30, 1997
INDEX
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets of Adams Outdoor
Advertising Limited Partnership as of
September 30, 1997 and December 31, 1996 (unaudited) ...................... 1
Consolidated Statements of Operations of Adams Outdoor
Advertising Limited Partnership for the quarters and nine
months ended September 30, 1997
and September 30, 1996 (unaudited)......................................... 2
Consolidated Statements of Cash Flows of
Adams Outdoor Advertising Limited Partnership
for the nine months ended September 30, 1997
and September 30, 1996 (unaudited)......................................... 3
Notes to Interim Consolidated Financial Statements of
Adams Outdoor Advertising Limited Partnership (unaudited).................. 4
Balance Sheets of Adams Outdoor
Advertising, Inc. as of September 30, 1997 and
December 31, 1996 (unaudited).............................................. 5
Statements of Operations of
Adams Outdoor Advertising, Inc. for the quarters and
nine months ended September 30, 1997 and
September 30, 1996 (unaudited)............................................. 6
Statements of Cash Flows of
Adams Outdoor Advertising, Inc. for the
nine months ended September 30, 1997 and
September 30, 1996 (unaudited)............................................. 7
Notes to Interim Financial Statements of
Adams Outdoor Advertising, Inc. (unaudited)................................ 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................................ 9
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.......................................................... 14
Item 2. Changes in Securities...................................................... 14
Item 3. Defaults Upon Senior Securities............................................ 14
Item 4. Submission of Matters to a Vote of Security Holders........................ 14
Item 5. Other Information.......................................................... 14
Item 6. Exhibits and Reports on Form 8-K........................................... 14
SIGNATURES................................................................................... 15
</TABLE>
ii
<PAGE>
ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1997 1996
--------- ---------
<S> <C> <C>
Cash and cash equivalents $ 2,169 $ 3,533
Investments 932 348
Accounts receivable, less allowance for doubtful accounts
of $785 and $696 at September 30, 1997 and December 31, 1996,
respectively 8,089 6,729
Accounts receivable from related parties 191 209
Receivables from employees 71 25
Inventories 188 217
Prepaid rent 2,580 2,129
Prepaid expenses 815 952
--------- ---------
Total current assets 15,036 14,142
Property, plant and equipment, net 50,850 51,040
Intangible assets, net 10,784 11,862
Other assets 207 70
--------- ---------
$ 76,877 $ 77,114
========= =========
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
Current liabilities:
Current note payable 231 231
Accounts payable 617 441
Interest payable 984 3,640
Accrued expenses and other liabilities 2,224 2,963
Deferred compensation 1,587 1,899
--------- ---------
Total current liabilities 5,643 9,174
Long-term debt 137,434 133,189
Deferred compensation 2,651 3,089
Other liabilities 51 106
--------- ---------
Total liabilities 145,779 145,558
Partners' equity (deficit):
General partners' deficit (67,829) (67,829)
Limited partners' deficit (1,073) (615)
--------- ---------
Total partners' deficit (68,903) (68,444)
Commitments and contingencies
$ 76,877 $ 77,114
========= =========
</TABLE>
See accompanying notes to unaudited interim consolidated financial statements.
1
<PAGE>
ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Gross Revenues $ 16,635 $ 13,590 $ 46,851 $ 38,671
Less agency commissions 1,632 1,426 4,430 3,864
-------- -------- -------- --------
Net outdoor advertising revenue 15,003 12,164 42,420 34,807
Operating expenses:
Direct advertising expenses 7,480 5,320 21,833 16,297
Corporate general and administrative 716 375 1,973 1,320
Depreciation and amortization 1,987 1,448 5,960 4,339
Deferred compensation 256 150 778 550
-------- -------- -------- --------
Total operating expenses 10,439 7,293 30,545 22,506
-------- -------- -------- --------
Operating income 4,564 4,871 11,875 12,301
-------- -------- -------- --------
Other expenses (income):
Interest expense 3,616 3,026 10,894 8,835
Interest expense - related parties 0 22 14 344
Other expenses (income), net (14) 3 (24) (10)
(Gain) loss on disposals of property, plant
and equipment, net 1 (12) (48) (19)
-------- -------- -------- --------
Total other expenses 3,604 3,039 10,835 9,150
-------- -------- -------- --------
Net income (loss) $ 960 $ 1,832 $ 1,040 $ 3,151
======== ======== ======== ========
</TABLE>
See accompanying notes to unaudited interim financial statements.
2
<PAGE>
ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1997 1996
--------- ---------
Cash flows from operating activities:
<S> <C> <C>
Net Income $ 1,040 $ 3,151
Adjustments to reconcile net income to cash (used in)
provided by operating activities:
Depreciation 5,321 4,159
Amortization of intangible assets 1,079 645
Deferred compensation expense 950 550
Payments of Deferred Compensation (1,700) (1,227)
Barter loss 62 93
Gain on disposals of property, plant and
equipment, net (48) (19)
Purchases of investments (585)
Changes in assets and liabilities:
Increase in accounts receivable, net (1,486) (1,205)
Decrease in inventories 28 61
Decrease (increase) in prepaid rent and other prepaid expenses (313) 168
(Increase) decrease in other assets (136) 5
(Decrease) increase in accounts payable and accrued expenses (562) 231
Decrease in interest payable (2,657) (432)
Decrease in other liabilities - long term (55) (94)
--------- ---------
Net cash provided by operating activities 938 6,086
Cash flows from investing activities:
Additions to property, plant and equipment (5,108) (3,184)
Proceeds from sale of property, plant
and equipment 61,273 38
--------- ---------
Net cash used in investing activities (5,047) (3,146)
Cash flows from financing activities:
Debt financing costs (1) (4,498)
Proceeds from Senior Notes 105,000
Payments on long-term debt (7,793) (107,211)
Advances on revolving line of credit 12,038 8,839
Distributions to partners (1,498) (3,134)
--------- ---------
Net cash provided by (used in) financing activities 2,745 (1,004)
--------- ---------
Net (decrease) increase in cash and cash equivalents (1,364) 1,936
Cash and cash equivalents at beginning of period 3,533 2,131
--------- ---------
Cash and cash equivalents at end of period $ 2,169 $ 4,067
========= =========
</TABLE>
See accompanying notes to unaudited interim consolidated financial statements.
3
<PAGE>
ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
(1) Basis of Presentation
The accompanying unaudited consolidated financial statements included herein
have been prepared by Adams Outdoor Advertising Limited Partnership (the
"Company") in accordance with the instructions for Form 10-Q and therefore, do
not include all information and footnotes necessary for a fair presentation of
financial position, results of operations, and cash flows in conformity with
generally accepted accounting principles. All adjustments consist of normal
recurring accruals, which are necessary for a fair presentation of the
information for the periods described. Certain information and footnote
disclosures normally included in consolidated financial statements prepared in
accordance with generally accepted accounting principles have been considered or
omitted pursuant to such rules and regulations. Although the Company believes
that the disclosures are adequate to make the information presented not
misleading, it is suggested that these consolidated financial statements be read
in conjunction with the Company's 1996 Annual Report on Form 10-K.
(2) Refinancing
On March 12, 1996, the Company refinanced (the "Refinancing") its debt structure
by issuing $105 million of 10 3/4%, Senior Notes due 2006 ("Senior Notes") under
an Indenture (the "Indenture"), and entered into a $15 million revolving line of
credit (the "New Credit Facility"). On December 2, 1996 the New Credit Facility
was increased to allow borrowings of up to $35 million on a revolving basis.
Substantially all of the assets of the Company are pledged to secure
indebtedness of up to $35.0 million (of which approximately $32.4 million was
outstanding as of September 30, 1997) under the New Credit Facility and,
accordingly, the lenders thereunder will have a prior claim on those assets.
Permitted borrowings under the New Credit Facility are subject to various
conditions. In addition, the availability of borrowings are subject to
compliance with certain financial covenants. Scheduled reductions in the banks'
commitments under the New Credit Facility will commence in 1998. The agreement
governing the New Credit Facility contains a number of covenants that are more
restrictive than those contained in the Indenture, including covenants requiring
the Company to maintain certain financial ratios that become more restrictive
over time. Adverse operating results could cause noncompliance with one or more
of these covenants, reducing the Company's borrowing availability, and, in
certain circumstances, entitling the lenders to accelerate the maturity of
outstanding borrowings.
4
<PAGE>
ADAMS OUTDOOR ADVERTISING, INC.
BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1997 1996
------ ---- ----
<S> <C> <C>
Investment................................................................ $ 40 $ 40
====== =====
STOCKHOLDER'S EQUITY
--------------------
Preferred stock, $0.001 par value
Authorized 800,000 shares; no shares issued and outstanding........ $ -- $ --
Common stock, $0.001 par value
Authorized 200,000 shares; 10,000 shares issued and outstanding..... 100 100
Additional paid-in capital................................................ 900 900
Common stock subscribed
(960) (960)
------ -----
$ 40 $ 40
====== =====
</TABLE>
See accompanying notes to unaudited interim financial statements
5
<PAGE>
ADAMS OUTDOOR ADVERTISING, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
-------------- --------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues.............................. $ -- $ -- $ -- $ --
Expenses.............................. -- -- -- --
------ ------ ------ ------
Net income (loss).................... $ -- $ -- $ -- $ --
======= ====== ====== =======
</TABLE>
See accompanying notes to unaudited interim financial statements
6
<PAGE>
ADAMS OUTDOOR ADVERTISING, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities........................ $ -- $ --
Cash flows from investing activities........................ -- --
Cash flows from financing activities........................ -- --
----- -----
Net change in cash..................................... -- --
Cash at beginning of period................................. -- --
----- -----
Cash at end of period....................................... $ -- $ --
===== =====
</TABLE>
See accompanying notes to unaudited interim financial statements
7
<PAGE>
ADAMS OUTDOOR ADVERTISING, INC.
NOTES TO INTERIM FINANCIAL STATEMENTS
September 30, 1997
(Unaudited)
(1) Basis of Presentation
The accompanying unaudited financial statements included herein have been
prepared by Adams Outdoor Advertising, Inc. ("AOAI") in accordance with the
instructions for Form 10-Q and, therefore, do not include all information and
footnotes necessary for a fair presentation of financial position, results of
operations, and cash flow in conformity with generally accepted accounting
principles. All adjustments consist of normal recurring accruals, which are
necessary for a fair presentation of the information for the periods described.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been considered or omitted pursuant to such rules and regulations. Although
AOAI believes that the disclosures are adequate to make the information
presented not misleading, it is suggested that these financial statements be
read in conjunction with AOAI's 1996 audited financial statements and notes
thereto.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Except for its interests and activities as managing general partner of Adams
Outdoor Advertising Limited Partnership (the "Company"), Adams Outdoor
Advertising, Inc. ("AOAI") has nominal assets and does not conduct any
operations. Accordingly, the following "Management's Discussion and Analysis of
Financial Condition and Results of Operations" relate to the Company and the
consolidated financial statements of the Company included in this filing.
Certain matters discussed in this Quarterly Report on Form 10-Q are
"forward-looking statements" intended to qualify for the safe harbors from
liability established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such because the
context of the statement will include forward-looking terminology such as
"believes," "anticipates," "expects," "would," "estimate," "continue," or the
negative thereof or variations thereon or comparable terminology. Similarly,
statements that describe the Company's future plans, objectives or goals are
also forward-looking statements. Such forward-looking statements are subject to
certain risks and uncertainties which could cause actual results to differ
materially from those anticipated as of the date of this report. Certain of such
risks and uncertainties are described in close proximity to such forward-looking
statements. Other factors that could effect such results, performance or
achievement are set forth in "Risk Factors" in Amendment No. 3 to the Company's
Registration Statement on Form S-4 (Registration No. 333-03338) as updated by
the Company's Annual Report on Form 10-K for the year ended December 31, 1996
including those risks to the Company presented by financial leverage, government
regulation with respect to zoning, restrictions on outdoor advertising by the
tobacco industry, competition and general economic conditions.
Results of Operations
Quarter Ended September 30, 1997 Compared With Quarter Ended September 30, 1996
- -------------------------------------------------------------------------------
Net revenues (gross revenues net of agency commissions) for the quarter ended
September 30, 1997 of $15.0 million increased by 23.3% from $12.2 million for
the comparable period in 1996. This increase resulted from higher advertising
rates and an increase in the number of displays sold as well as the increased
net revenue of $1.9 million from assets in South Carolina and Northeast
Pennsylvania which were acquired in the fourth quarter of 1996.
It has been reported that certain cigarette manufacturers who are defendants in
numerous class-action suits throughout the United States have reached agreement
with the Attorneys General of various states for an out of court settlement with
respect to such suits. The settlement is subject to various conditions including
approval and implementing legislation by the United States Congress. A reduction
in outdoor advertising by the tobacco industry would cause an immediate
reduction in the Company's direct revenue from such advertisers at least in the
immediate term following the imposition of such ban while alternate sources of
advertising are secured. Such ban would also increase the available space on the
existing inventory of billboards in the outdoor advertising industry. This could
in turn result in a reduction of outdoor advertising rates in each of the
Company's outdoor advertising markets or limit the ability of industry
participants to
9
<PAGE>
increase rates for some period of time. Accordingly, there can be no assurance
that the Company will immediately replace tobacco industry advertising revenue
in the event of a total ban of tobacco advertising on outdoor billboards and
signs and the consequences of such ban could have a material adverse affect on
the Company. Furthermore, even in the event the advertising ban does not take
place, state and local governments have recently proposed and some have enacted
regulations restricting or banning outdoor advertising of tobaccos in certain
jurisdictions.
Direct advertising expenses for the quarter ended September 30, 1997 of $7.5
million increased by 40.6% from $5.3 million for the comparable period in 1996.
The increase was attributable to direct costs associated with increased sales
from new displays and an increase in sales commissions due to higher average
rates as well as $1.4 million in additional direct costs associated with the
acquisitions of South Carolina and Northeast Pennsylvania.
Corporate, general and administrative expenses for the quarter ended September
30, 1997 of $716,000 increased by 91.0% from $375,000 for the comparable period
in 1996. This increase was attributable to increased professional fees, travel
expenses, relocation expenses and directors' fees.
Depreciation and amortization for the quarter ended September 30, 1997 of $2.0
million increased by 37.3% from $1.4 million for the comparable period in 1996.
Depreciation expense increased as a result of additions to property, plant and
equipment during 1996 and early 1997 from acquisitions and building of new
structures.
Deferred compensation expense for the quarter ended September 30, 1997 of
$256,000 increased by 70.4% from $150,000 for the comparable period in 1996
primarily due to increased vesting and funding of the Non-Qualified Retirement
Plan.
Interest expense for the quarter ended September 30, 1997 of $3.6 million
increased 18.6% from $3.0 million for the comparable period in 1996. This
increase was due to a higher level of outstanding debt as a result of the
acquisitions in the fourth quarter of 1996. For the quarters ended September 30,
1997 and September 30, 1996, the effective interest rates were 10.3% and 10.6%,
respectively, on average outstanding balances of $135.1 million and $109.5
million, respectively.
Net income for the quarter ended September 30, 1997 decreased to $960,000 from
$1.8 million for the comparable period in 1996 as a result of the items
discussed above.
Nine Months Ended September 30, 1997 Compared With Nine Months Ended September
- ------------------------------------------------------------------------------
30, 1996
- --------
Net revenues (gross revenues net of agency commissions) for the nine months
ended September 30, 1997 of $42.4 million increased by 21.9% from $34.8 million
for the comparable period in 1996. This increase resulted from higher
advertising rates and an increase in the number of displays sold as well as the
increased net revenue of $5.2 million from assets in South Carolina and
Northeast Pennsylvania which were acquired in the fourth quarter of 1996.
10
<PAGE>
Direct advertising expenses for the nine months ended September 30, 1997 of
$21.8 million increased by 34.0% from $16.3 million for the comparable period in
1996. The increase was attributable to direct costs associated with increased
sales from new displays and an increase in sales commissions due to higher
average rates as well as $4.0 million in additional direct costs associated with
the acquisitions of South Carolina and Northeast Pennsylvania.
Corporate, general and administrative expenses for the nine months ended
September 30, 1997 of $2.0 million increased by 49.5% from $1.3 million for the
comparable period in 1996. This increase was attributable to increased
professional fees, travel expenses, relocation expenses and directors' fees.
Depreciation and amortization for the nine months ended September 30, 1997 of
$6.0 million increased by 37.4% from $4.3 million for the comparable period in
1996 primarily as a result of additions to property, plant and equipment during
1996 and early 1997.
Deferred compensation expense for the nine months ended September 30, 1997 of
$778,000 increased by 41.5% from $550,000 for the comparable period in 1996
primarily due to vesting and funding of the Non-Qualified Retirement Plan.
Interest expense for the nine months ended September 30, 1997 of $10.9 million
increased by 18.8% from $9.2 million for the comparable period in 1996. This
increase was due to a higher level of outstanding debt. For the nine months
ended September 30, 1997 and September 30, 1996, the effective interest rates
were 10.3% and 10.3%, respectively, on average outstanding balances of $135.4
million and $109.7 million, respectively. In addition, amortization of loan
costs are included in interest expense, but are not included in the calculation
of the effective interest rate.
Net income for the nine months ended September 30, 1997 decreased by 67.0% to
$1.0 million from $3.2 million for the comparable period in 1996 primarily as a
result of the items discussed above.
Operating Cash Flow is defined as operating income (loss) before (i)
depreciation and amortization expenses and (ii) deferred compensation expense.
As a partnership the Company is not subject to federal corporate income tax.
Operating Cash Flow is not intended to represent net cash provided by operating
activities as defined by generally accepted accounting principles and should not
be considered as an alternative to net income or loss as an indicator of the
Company's operating performance or to net cash provided by operating, investing
and financing activities as a measure of liquidity or ability to meet cash
needs. The Company believes Operating Cash Flow is a measure commonly reported
and widely used by analysts, investors and other interested parties in the media
industry. Accordingly, this information is disclosed herein to permit a more
complete comparative analysis of the Company's performance relative to other
companies in the media industry. Operating Cash Flow for the nine months ended
September 30, 1997 of $18.6 million increased by 8.3% from $17.2 million for the
comparable period in 1996. For the quarter ended September 30, 1997, Operating
Cash Flow of $6.8 million increased by 5.2% from $6.5 million for the comparable
period in 1996.
11
<PAGE>
Liquidity and Capital Resources
On March 12, 1996 the Company, together with its managing general partner, AOAI
privately placed $105,000,000 of their 10 3/4% Senior Notes due 2006 issued
under an indenture (the "Indenture") and entered into a new credit facility (the
"New Credit Facility") pursuant to which it may borrow up to $15 million on a
revolving basis (the "Refinancing"). As part of the Refinancing, substantially
all of the Company's outstanding debt was refinanced. As a result of the
Refinancing, the average maturities of the Company's debt at December 31, 1996
were extended from one year to approximately nine years. On December 2, 1996 the
New Credit Facility was increased to allow borrowings of up to $35 million on a
revolving basis.
Historically, the Company's cash needs have arisen from operating expenses
(primarily direct advertising expenses and corporate general and administrative
expenses), debt service, capital expenditures and deferred compensation payments
under phantom stock agreements. As a result of the Refinancing, the Company's
interest expense has increased due to the higher weighted average interest rate.
The Company's primary sources of cash are net cash generated from operating
activities and borrowings under the New Credit Facility. The Company's net cash
provided from operations decreased significantly to $938,000 for the nine months
ended September 30, 1997 from $6.1 million for the nine months ended September
30, 1996.
The Company expects that its capital expenditures during 1997 will be
approximately $5.5 million and will be primarily for new billboard construction,
the upgrading of existing displays and the research and development of new
advertising media. The Company made capital expenditures of $5.1 million during
the nine months ended September 30, 1997 compared to $2.6 million during the
nine months ended September 30, 1996.
At December 31, 1996, the Company's accrued liability for deferred compensation
payable under phantom stock agreements with key employees was $5.0 million in
the aggregate. The Company's previous debt agreements limited payments of
deferred compensation to no more than $250,000 per year. The New Credit Facility
and the Indenture permit the payment of the deferred compensation. Such payments
are scheduled to be paid during the 1996 through 2002 period. During the nine
months ended September 30, 1997, payments of deferred compensation totaled $1.7
million.
The New Credit Facility is a revolving credit facility of up to $35.0 million.
At September 30, 1997, the outstanding borrowings under the New Credit Facility
were $32.4 million. Substantially all of the assets of the Company are pledged
to secure indebtedness under the New Credit Facility. Permitted borrowings under
the New Credit Facility are subject to various conditions, including the
attainment of certain performance measures by the Company. Scheduled reductions
in the lenders' commitments under the New Credit Facility will commence in 1998.
The agreement governing the New Credit Facility contains a number of covenants
that are more restrictive than those contained in the Indenture, including
covenants requiring the Company to maintain certain financial ratios that become
more restrictive over time. Adverse
12
<PAGE>
operating results could cause noncompliance with one or more of these covenants,
reducing the Company's borrowing availability and, in certain circumstances,
entitling the lenders to accelerate the maturity of outstanding borrowings.
The Company believes that net cash provided from operations and available credit
under the New Credit Facility will be sufficient to meet its cash needs for its
current operations, required debt payments, anticipated capital expenditures and
the deferred compensation payments for the next twelve months.
Impact of Inflation
Through increases in operating costs could adversely affect the Company's
operations, management does not believe that inflation has had a material effect
on operating profit during the past several years.
Seasonality
Although revenues during the first and fourth quarters are slightly lower than
the other quarters, management does not believe that seasonality has a
significant impact on the operations or cash flow of the Company.
Information contained in this 10-Q including, without limitation, in the
foregoing Management's Discussion and Analysis of Financial Condition and
Results of Operations may contain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995, which can be
identified by the use of forward-looking terminology as "may," "will," "would,"
"expect," "anticipate," "estimate," or "continue" or the negative thereof or
other variations thereon or comparable terminology. Certain factors, including
financial leverage, government regulation with respect to zoning and
restrictions on outdoor advertising by the tobacco industry, competition and
general economic condition could cause actual results to differ materially from
those in such forward-looking statements.
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
During the period covered by this Report, the constituent instruments
defining the rights of the holders of registered securities were not materially
modified, nor were the rights evidenced by the registered securities limited or
qualified by the issuance or modification of any other class of securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
During the period covered by this Report, there has been no material
default with respect to any indebtedness of the Registrants.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are included herein:
(27) Financial data schedule
(b) No reports on Form 8-K have been filed during the quarter for
which the report is filed.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrants have duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: November 14, 1997 ADAMS OUTDOOR ADVERTISING
LIMITED PARTNERSHIP
By Adams Outdoor Advertising, Inc.
Its General Partner
By /s/ J. Kevin Gleason
------------------------
J. Kevin Gleason
President and Chief Executive Officer
By /s/ Abe Levine
------------------------
Abe Levine
Chief Financial Officer
(Principal Financial and Accounting Officer)
ADAMS OUTDOOR ADVERTISING, INC.
By /s/ J. Kevin Gleason
------------------------
J. Kevin Gleason
President and Chief Executive Officer
By /s/ Abe Levine
------------------------
Abe Levine
Chief Financial Officer
(Principal Financial and Accounting Officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF ADAMS OUTDOOR ADVERTISING, INC. AS OF SEPTEMBER 30, 1997 AND THE
RELATED STATEMENTS OF OPERATIONS AND CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001011976
<NAME> ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 0
<SECURITIES> 40
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 40
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> (60)
<TOTAL-LIABILITY-AND-EQUITY> 40
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF ADAMS OUTDOOR ADVERTISING LIMITED PARTNERSHIP AS OF SEPTEMBER 30, 1997
AND THE RELATED STATEMENTS OF OPERATIONS AND CASH FLOWS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001011977
<NAME> ADAMS OUTDOOR ADVERTISING, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,169
<SECURITIES> 0
<RECEIVABLES> 9,136
<ALLOWANCES> (785)
<INVENTORY> 188
<CURRENT-ASSETS> 15,036
<PP&E> 107,451
<DEPRECIATION> (56,601)
<TOTAL-ASSETS> 76,877
<CURRENT-LIABILITIES> 5,643
<BONDS> 137,434
0
0
<COMMON> 0
<OTHER-SE> (68,903)
<TOTAL-LIABILITY-AND-EQUITY> 76,877
<SALES> 15,003
<TOTAL-REVENUES> 15,003
<CGS> 0
<TOTAL-COSTS> 8,452
<OTHER-EXPENSES> 1,987
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,616
<INCOME-PRETAX> 960
<INCOME-TAX> 0
<INCOME-CONTINUING> 960
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 960
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
