<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended September 30, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________________ to __________________
Commission file number 333-16631-01
MINNESOTA LOGOS, A PARTNERSHIP
(Exact name of registrant as specified in its charter)
Minnesota 41-1804634
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
5551 Corporate Blvd.,
Baton Rouge, LA 70808
(Address of principal (Zip Code)
executive officers)
Registrant's telephone number, including area code (504) 926-1000
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
<PAGE> 2
CONTENTS
Page
----
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Balance Sheets as of October 31, 1996
and December 31, 1996 and September 30,
1997 1
Condensed Statement of Operations for the Three
Months Ended September 30, 1996, and September 30,
1997 and the Nine Months Ended September 30,1996
and September 30, 1997 2
Condensed Statement of Cash Flows for the
Nine Months Ended Septmeber 30, 1996 and
September 30, 1997 3
Notes to Condensed Financial Statements 4
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 5 - 6
ITEM 3. Quantitative and Qualitative Disclosures
About Market Risks 6
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
Signatures 7
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
MINNESOTA LOGOS, A PARTNERSHIP
CONDENSED BALANCE SHEETS
OCTOBER 31, 1996, DECEMBER 31, 1996, and September 30, 1997
<TABLE>
<CAPTION>
October 31, December 31, September 30,
1996 1996 1997
---- (unaudited) (unaudited)
----------- -----------
ASSETS
<S> <C> <C> <C>
Current assets:
Cash $ 2,500 $ 2,500 $ 2,500
Accounts receivable 50,707 123,375 93,870
Other current assets -- -- 1,523
----------- ----------- -----------
Total current assets 53,207 125,875 97,893
----------- ----------- -----------
Plant and equipment 1,959,015 1,934,146 2,254,362
Less accumulated
depreciation (171,026) (191,217) (337,767)
----------- ----------- -----------
1,787,989 1,742,929 1,916,595
----------- ----------- -----------
Other assets net of
accumulated amortization
of $41,388 in October 1996,
$45,875 in December 1996,
and $66,987 in
September 1997 98,239 93,752 72,640
----------- ----------- -----------
$ 1,939,435 $ 1,962,556 $ 2,087,128
=========== =========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Trade accounts payable 2,327 35,715 10,703
Accrued expenses 5,121 6,860 5,387
Deferred income 264,498 298,182 329,455
Advances from affiliates 1,494,844 1,380,792 1,187,661
----------- ----------- -----------
Total current liabilities 1,766,790 1,721,549 1,533,206
----------- ----------- -----------
Partners' capital 172,645 241,007 553,922
----------- ----------- -----------
Total liabilities and
partners' capital $ 1,939,435 $ 1,962,556 $ 2,087,128
=========== =========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
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MINNESOTA LOGOS, A PARTNERSHIP
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30, September 30, September 30,
1996 1997 1996 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Logo sign revenue $232,450 $257,624 $657,451 $771,625
Operating expenses:
Direct expenses 29,577 25,327 166,650 147,716
General and administrative
expenses 48,900 39,903 157,478 142,771
Depreciation 42,913 44,724 109,414 146,671
Amortization 6,731 7,150 20,693 21,112
-------- -------- -------- --------
128,121 117,104 454,235 458,270
-------- -------- -------- --------
Operating income 104,329 140,520 203,216 313,355
Loss on disposition of
assets -- -- 81,857 440
-------- -------- -------- --------
Net income 104,329 140,520 121,359 312,915
======== ======== ======== ========
</TABLE>
See accompanying notes to condensed financial statements.
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<PAGE> 5
MINNESOTA LOGOS, A PARTNERSHIP
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1996 1997
--------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 121,359 312,915
Adjustments to reconcile net income
to net cash provided by
operating activities:
Depreciation and amortization 130,107 167,783
Loss on disposition of assets 81,857 440
Changes in assets and liabilities:
Decrease (increase) in assets
Accounts receivable 486 29,505
Other current assets 4,665 (1,523)
Increase (decrease) in liabilities
Trade accounts payable -- (25,012)
Accrued expenses (7,131) (1,473)
Deferred income 47,850 31,273
--------- --------
Net cash provided by
operating activities 379,193 513,908
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (400,891) (320,777)
--------- --------
Net cash used in investing
activities (400,891) (320,777)
CASH FLOWS PROVIDED BY (USED IN)
FINANCING ACTIVITIES
Advances from affiliates 21,698 (193,131)
--------- --------
Net cash provided by (used in)
financing activities 21,698 (193,131)
--------- --------
Net increase in cash -- --
Cash, beginning of period 2,500 2,500
--------- --------
Cash, end of period 2,500 2,500
========= ========
</TABLE>
See accompanying notes to condensed financial statements.
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<PAGE> 6
MINNESOTA LOGOS, A PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The information included in the foregoing interim financial statements is
unaudited. In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of financial position
and results of operations for the interim periods presented have been reflected
herein. The results of operations for interim periods are not necessarily
indicative of the results to be expected for the entire year. These condensed
financial statements should be read in conjunction with the financial
statements, of Minnesota Logos, a Partnership (the Partnership) and the notes
thereto included in the Partnership's annual report on Form 10-K for the year
ended October 31, 1996.
Organization
The Partnership is 95% owned by Minnesota Logos, Inc., whose ultimate parent is
Lamar Advertising Company ("LAC"). Global Contracting, L.L.P. owns the remaining
5% of the Partnership.
The Partnership was awarded the Minnesota state logo sign franchise effective
August 1995. Its principal service is to provide interstate logo advertising in
the state of Minnesota.
Change of Fiscal Year End
On December 17, 1996, the General Partner of the Partnership determined to
change the Partnership's fiscal year such that the Partnership's fiscal year
shall end on December 31 of each year. The Partnership's last fiscal year ended
on October 31, 1996. The two-month period from November 1, 1996 to December 31,
1996 was treated as a transition period that was not a part of fiscal year 1996
or fiscal year 1997, and was reported on Form 10-Q/T.
Affiliates
The Partnership is affiliated through common ownership, directorate control and
common management with LAC, The Lamar Corporation and their subsidiaries.
Commitments and Other Contingencies
The Partnership is a guarantor, jointly and severally with other affiliated
companies, of the payment of approximately $455,000,000 in senior subordinated
notes issued by its parent, LAC.
The Partnerships employees are covered by LAC's self-insured group health
program. Coverage is available to all employees who work in excess of 30 hours
per week. The Partnership and/or parent is obligated to pay all claims on these
policies which are in excess of premiums up to policy limits of $150,000 per
employee, per claim, per year, at which point reinsurance pays any additional
charges. The Partnership is also self-insured with respect to its income
disability benefits and against casualty losses on logo sign structures.
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<PAGE> 7
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Partnership's net cash provided by operating activities was $513,908 for the
nine months ended September 30, 1997, which consists of the Partnership's net
income of $314,948, non-cash items of $168,223, a net decrease in assets of
$27,982 and net increase in liabilities of $2,755. Net cash used in investing
activities is $320,777. Cash flows used in financing activities were $193,131
entirely from advances from affiliates. As a result of the above factors, there
is no change in cash for the nine months ended September 30, 1997.
RESULTS OF OPERATIONS
Nine months ended September 30, 1996 as compared to nine months ended September
30, 1997
Revenues for the nine months ended September 30, 1997 increased $114,174 to
$771,625 from $657,451 for the same period in 1996. This increase was due to the
continued development of the logo sign program.
Operating expenses exclusive of depreciation and amortization for the nine
months ended September 30, 1997 decreased $33,641 to $290,487 from $324,128 for
the same period in 1996 due to operating efficiencies generated as a result of
the continued development of the program.
Depreciation and amortization expense for the nine months ended September 30,
1997 increased $37,676 as compared to the same period in 1996.
Due to the above factors operating income for the nine months ended September
30, 1997 increased $110,139 to $313,355 from $203,216 for the same period in
1996.
As a result of the foregoing factors net earnings for the nine months ended
September 30, 1997 increased $191,556 to $312,915 from a net income of $121,359
for the same period in 1996.
Three months ended September 30, 1996, as compared to three months ended
September 30, 1997
Revenues for the three months ended September 30, 1997 increased $25,174 to
$257,624 from $232,450 for the same period in 1996. This increase was due to the
continued development of the logo sign program.
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<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operating expenses exclusive of depreciation and amortization for the three
months ended September 30, 1997 decreased $13,247 to $65,230 from $78,477 for
the same period in 1996 due to operating efficiencies generated as a result of
the continued development of the program.
Depreciation and amortization for the three months ended September 30, 1997
increased $2,230 as compared to the same period in 1996.
Due to the above factors operating income for the three months ended September
30, 1997 increased $36,191 to $140,520 from $104,329 for the same period in
1996.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISKS
Not applicable.
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<PAGE> 9
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibits 27.1 Financial Data Schedule.
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
MINNESOTA LOGOS, A PARTNERSHIP,
(Registrant) BY MINNESOTA LOGOS, INC.,
ITS GENERAL PARTNER
November 14, 1997 /s/ KEITH A. ISTRE
- ----------------------------- ---------------------------------
Date Keith A. Istre
Chief Financial and Accounting
Officer and Director
-7-
<PAGE> 10
INDEX TO EXHIBITS
EXHIBIT
NUMBER DEFINITION
- ------ ----------
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,500
<SECURITIES> 0
<RECEIVABLES> 93,870
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 97,893
<PP&E> 2,254,362
<DEPRECIATION> 337,767
<TOTAL-ASSETS> 2,087,128
<CURRENT-LIABILITIES> 1,533,206
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 553,922
<TOTAL-LIABILITY-AND-EQUITY> 2,087,128
<SALES> 771,625
<TOTAL-REVENUES> 771,625
<CGS> 0
<TOTAL-COSTS> 290,487
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 312,915
<INCOME-TAX> 0
<INCOME-CONTINUING> 312,915
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 312,915
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
