<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
[ X ] Amendment No. 1 to Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended September 30, 1999
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from
Commission file number 0-30242
LAMAR ADVERTISING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 72-1449411
(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 (225) 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
Outstanding as of
Class November 10, 1999
----- -----------------
<S> <C>
Class A Common Stock,$ .001 par value 70,400,889
Class B Common Stock,$ .001 par value 17,449,997
</TABLE>
<PAGE> 2
This Amendment No. 1 to Quarterly Report on Form 10-Q/A is being filed solely
for the purpose of amending Part I, Item 1 in the Company's Quarterly Report of
Form 10-Q for the period ended September 30, 1999, which was filed with the
Securities and Exchange Commission on November 12, 1999 (the "September 30
10-Q") to correct typographical errors in footnote 2 "Acquisitions" contained
therein. Item I "Financial statements" set forth in the September 30, 10Q is
hereby deleted in its entirety and the following is substituted therefor.
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1.- FINANCIAL STATEMENTS
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------ -----------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 10,778 $ 128,597
Receivables, net 84,294 40,380
Prepaid expenses 22,235 12,346
Other current assets 18,431 1,736
----------- -----------
Total current assets 135,738 183,059
----------- -----------
Property, plant and equipment 1,410,561 661,324
Less accumulated depreciation and amortization (215,240) (153,972)
----------- -----------
Net property, plant and equipment 1,195,321 507,352
----------- -----------
Intangible assets 1,881,450 705,934
Other assets - non-current 18,034 17,032
----------- -----------
Total assets 3,230,543 1,413,377
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $ 9,806 $ 4,258
Accrued expenses 70,608 25,912
Current maturities of long-term debt 4,670 49,079
Deferred income 13,178 9,589
----------- -----------
Total current liabilities 98,262 88,838
Long-term debt 1,593,690 827,453
Deferred tax liability 124,364 25,613
Deferred income 1,224 1,293
Other liabilities 4,732 3,401
----------- -----------
Total liabilities 1,822,272 946,598
----------- -----------
Series AA preferred stock, par value $.001, $63.80 cumulative dividends,
authorized 1,000,000 shares; 5,719.49 shares issued and outstanding at
September 30, 1999 -- --
Class A preferred stock, par value $638, $63.80 cumulative dividends, authorized
10,000 shares; 0 and 5,719.49 shares issued and outstanding at September
30, 1999, and December 31, 1998, respectively -- 3,649
Class A common stock, $.001 par value, authorized
125,000,000 shares; issued and outstanding
70,365,850 shares and 43,392,876 shares at
September 30, 1999, and December 31, 1998,
respectively 70 43
Class B common stock, $.001 par value, authorized
37,500,000 shares; issued and outstanding
17,449,997 and 17,699,997 shares at September
30, 1999, and December 31, 1998, respectively 18 18
Additional paid-in capital 1,470,291 505,644
Accumulated deficit (62,108) (42,575)
----------- -----------
Stockholders' equity 1,408,271 466,779
----------- -----------
Total liabilities and stockholders' equity $ 3,230,543 $ 1,413,377
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements
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<PAGE> 4
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net revenues $ 111,039 $ 73,528 $ 294,614 $ 201,600
------------ ------------ ------------ ------------
Operating expenses
Direct advertising expenses 33,236 22,257 93,481 64,696
Selling, general and administrative expenses 23,172 14,954 64,025 43,178
Depreciation and amortization 40,738 20,375 104,951 57,471
------------ ------------ ------------ ------------
97,146 57,586 262,457 165,345
------------ ------------ ------------ ------------
Operating income 13,893 15,942 32,157 36,255
------------ ------------ ------------ ------------
Other expense (income)
Interest income (112) (123) (1,067) (359)
Interest expense 21,092 12,116 57,471 39,357
(Gain) loss on disposition of assets (5,189) 81 (5,666) 473
------------ ------------ ------------ ------------
15,791 12,074 50,738 39,471
------------ ------------ ------------ ------------
Earnings (loss) before income taxes, extraordinary
item and cumulative effect of a change in
accounting principle (1,898) 3,868 (18,581) (3,216)
Income tax expense (benefit) 1,404 2,239 (362) 816
------------ ------------ ------------ ------------
Earnings (loss) before extraordinary item and
cumulative effect of a change in accounting
principle (3,302) 1,629 (18,219) (4,032)
------------ ------------ ------------ ------------
Extraordinary item - loss on debt extinguishment
net of tax benefit of $117 (182) -- (182) --
------------ ------------ ------------ ------------
Earnings (loss) before cumulative effect of a
change in accounting principle (3,484) 1,629 (18,401) (4,032)
------------ ------------ ------------ ------------
Cumulative effect of a change in accounting
principle -- -- (767) --
------------ ------------ ------------ ------------
Net earnings (loss) (3,484) 1,629 (19,168) (4,032)
Preferred stock dividends 91 91 365 365
------------ ------------ ------------ ------------
Net earnings (loss) applicable to common stock $ (3,575) $ 1,538 $ (19,533) $ (4,397)
============ ============ ============ ============
Earnings (loss) per common share - basic and diluted:
Earnings (loss) before extraordinary item and
accounting change $ (.05) $ .03 $ (.30) $ (.09)
Extraordinary Item - loss on debt extinguishment -- -- -- --
Cumulative effect of a change in accounting
principle -- -- (.01) --
------------ ------------ ------------ ------------
Net earnings (loss) $ (.05) $ .03 $ (.31) $ (.09)
============ ============ ============ ============
Weighted average common shares outstanding 65,953,441 54,005,114 62,792,352 50,076,742
Incremental common shares from dilutive stock
options -- 596,604 -- --
Incremental common shares from convertible debt -- --
------------ ------------ ------------ ------------
Weighted average common shares assuming dilution 65,953,441 54,601,718 62,792,352 50,076,742
============ ============ ============ ============
</TABLE>
See accompanying notes to condensed consolidated financial statements
-2-
<PAGE> 5
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
---------- -------- -------- ----------
<S> <C> <C> <C> <C>
Net earnings (loss) applicable to
common stock $ (3,575) $ 1,538 $(19,533) $ (4,397)
Other comprehensive income (loss)
unrealized loss on investment
securities (net of deferred
tax benefit of $217 for the nine
months ended September 30, 1998) -- -- -- 354
---------- -------- -------- ----------
Comprehensive income (loss) $ (3,575) $ 1,538 $(19,533) $ (4,043)
========== ======== ======== ==========
</TABLE>
See accompanying notes to condensed consolidated financial statements
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<PAGE> 6
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1999 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (19,168) $ (4,032)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 104,951 57,471
Cumulative effect of a change in accounting
principle 767 --
(Gain) loss on disposition of assets (5,666) 473
Deferred taxes (9,765) (2,548)
Provision for doubtful accounts 2,114 1,265
Changes in operating assets and liabilities:
Decrease (Increase) in:
Receivables (8,866) (1,520)
Prepaid expenses 445 (714)
Other assets 3,558 978
Increase (Decrease) in:
Trade accounts payable 2,022 770
Accrued expenses 149 1,288
Other liabilities 18 (144)
Deferred income (5,248) 2,252
--------- ---------
Net cash provided by operating
activities 65,311 55,539
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable (1,587) (280)
Acquisition of new markets (831,681) (220,780)
Capital expenditures (53,435) (40,420)
Proceeds from disposition of assets 3,943 1,419
--------- ---------
Net cash used in investing activities (882,760) (260,061)
</TABLE>
(continued)
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<PAGE> 7
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1999 1998
--------- ---------
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt issuance costs (12,507) (2,503)
Net proceeds from issuance of common stock 3,948 181,450
Proceeds from issuance of notes payable -- 70
Principal payments on long-term debt (78,040) (4,152)
Net proceeds from note offering 279,594 --
Net borrowings under credit agreements 507,000 29,000
Dividends (365) (365)
--------- ---------
Net cash provided by financing activities 699,630 203,500
Net decrease in cash and cash equivalents (117,819) (1,022)
Cash and cash equivalents at beginning
of period 128,597 7,246
--------- ---------
Cash and cash equivalents at end of period $ 10,778 $ 6,224
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 56,183 $ 37,328
========= =========
Cash paid for state and federal income taxes $ 6,500 $ 6,129
========= =========
Common stock issuance related to acquisitions $ 952,255 $ 2,505
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements
-5-
<PAGE> 8
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1. Significant Accounting Policies
General
Lamar Advertising Company is principally a holding company ("Holdings") and
conducts its operations principally through its wholly-owned subsidiary Lamar
Media Corp. ("Lamar Media"). Holdings was incorporated in July, 1999 and became
the parent of Lamar Media pursuant to the reorganization described in Note 5.
References herein to the "Company" refer to Holdings and its subsidiaries, with
respect to periods following the reorganization and to Lamar Media, (formerly
known as Lamar Advertising Company) and its subsidiaries, with respect to
periods prior to the reorganization. Prior to the formation of Holdings, the
consolidated financial statements of the Company represented accounts of Lamar
Media and its subsidiaries.
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 the Company's
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 consolidated financial statements should be read in conjunction
with the Company's consolidated financial statements and the notes thereto
included in the Company's Annual Report on Form 10-K.
Earnings Per Share
Earnings per share are computed in accordance with SFAS No. 128, "Earnings Per
Share." The calculations of basic earnings per share excludes dilution and is
computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding for the period. Diluted earnings per
share reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock
that then shared in the earnings of the Company. The following adjustments were
excluded from the calculation of diluted earnings per share because of their
anti-dilutive effect:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
---------- -------- ---------- ----------
<S> <C> <C> <C> <C>
Income impact of convertible securities $ 1,261 $ -- $ 1,261 $ --
========== ======== ========== ==========
Incremental shares from stock options 689,430 -- 558,280 564,937
Incremental shares from convertible debt 3,378,375 -- 1,138,500 --
---------- -------- ---------- ----------
Dilutive potential common shares 4,067,805 -- 1,696,780 564,937
========== ======== ========== ==========
</TABLE>
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<PAGE> 9
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Reclassifications
Certain amounts in the prior year's consolidated financial statements have been
reclassified to conform with the current year presentation. These
reclassifications had no effect on previously reported net earnings.
New Accounting Pronouncements
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-5, Reporting on the Costs of Start-Up
Activities. SOP 98-5 is effective for financial statements for fiscal years
beginning after December 15, 1998, and requires that the costs of start-up
activities, including organizational costs, be expensed as incurred. The effect
of SOP 98-5 is recorded as a cumulative effect of a change in accounting
principle as described in Accounting Principles Board Opinion No. 20 "Accounting
Changes".
2. Acquisitions
On January 5, 1999, the Company purchased all of the outdoor advertising assets
of American Displays, Inc. for a cash purchase price of approximately $14,500.
On February 1, 1999, the Company purchased all of the outdoor advertising assets
of KJS, LLC for a cash purchase price of $40,500.
On April 1, 1999, the Company purchased all of the assets of Frank Hardie, Inc.
for a cash purchase price of approximately $20,300.
On June 1, 1999, the Company purchased the assets of Vivid, Inc. for a cash
purchase price of approximately $22,100.
On September 15, 1999, Lamar Media Corp. purchased the capital stock of
Chancellor Media Outdoor Corporation and Chancellor Media Whiteco Outdoor
Corporation, ("Chancellor Outdoor") for a combination of approximately $700,000
in cash and 26,227,273 shares of Class A common stock valued at approximately
$947,000. The stock purchase agreement also contains a post-closing adjustment
in the event that the net working capital of Chancellor Outdoor as shown on the
closing balance sheet is greater or less than $12,000. As of September 30, 1999,
the estimated working capital adjustment to be paid by the Company is $33,053.
During the nine months ended September 30, 1999, the company completed 45
additional acquisitions of outdoor advertising and transit assets for an
aggregate cash purchase price of approximately $61,000 and the issuance of
135,734 shares of Class A common stock valued at approximately $5,300.
-7-
<PAGE> 10
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
Each of these acquisitions were accounted for under the purchase method of
accounting, and, accordingly, the accompanying financial statements include the
results of operations of each acquired entity from the date of acquisition. The
purchase price has been allocated to assets acquired and liabilities assumed
based on fair market value at the dates of acquisition. The following is a
summary of the allocation of the purchase price in the above transactions.
<TABLE>
<CAPTION>
Property
Current Plant & Other Other Current Long-term
Assets Equipment Goodwill Intangibles Assets Liabilities Liabilities
-------- --------- -------- ----------- ------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
American Displays 87 899 10,532 3,277 -- (284) --
KJS, LLC 46 9,468 30,543 4,489 -- (2,079) (1,921)
Frank Hardie 187 6,595 10,451 3,630 -- (525) --
Vivid, Inc. 357 8,402 9,830 4,085 -- (593)
Chancellor 55,997 642,210 298,486 779,775 169 (19,829) (106,102)
Other 265 16,098 48,172 6,472 -- (1,271) (3,217)
------ ------- ------- ------- --- ------- --------
56,939 683,672 408,014 801,728 169 (24,581) (111,240)
====== ======= ======= ======= === ======= ========
</TABLE>
Summarized below are certain unaudited pro forma statements of operations data
as if each of the above acquisitions and the acquisitions occurring in 1998,
which were fully described in the Company's December 31, 1998 Annual Report on
Form 10-K, had been consummated as of January 1, 1998. This pro forma
information does not purport to represent what the Company's results of
operations actually would have been had such transactions occurred on the date
specified or to project the Company's results of operations for any future
periods.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues, net $ 156,025 $ 146,722 $ 452,063 $ 429,994
========= ========= ========= =========
Loss before extraordinary items $ (17,481) $ (21,683) $ (67,602) $ (70,580)
========= ========= ========= =========
Net loss applicable to
common stock $ (17,754) $ (21,774) $ (68,916) $ (70,945)
========= ========= ========= =========
Net loss per common share - basic $ (0.20) $ (0.40) $ (0.79) $ (1.41)
========= ========= ========= =========
Net loss per common share - diluted $ (0.20) $ (0.40) $ (0.79) $ (1.41)
========= ========= ========= =========
</TABLE>
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<PAGE> 11
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
3. Long-term debt
In August 1999, the Company replaced its existing bank credit facility with a
new bank credit facility under which The Chase Manhattan Bank serves as
administrative agent. The new $1,000,000 bank credit facility consists of (1) a
$350,000 revolving bank credit facility and (2) a $650,000 term facility with
two tranches, a $450,000 Term A facility and a $200,000 Term B facility. As a
result of the holding company reorganization completed on July 20, 1999 and
explained in footnote 5, the existing bank credit facility and the new bank
credit facility are obligations of Lamar Media Corp., a wholly owned subsidiary,
and not Lamar Advertising Company. As of September 30, 1999, the Company had
borrowings under this agreement of $757,000.
On August 10, 1999, Lamar Advertising Company, the new holding company,
completed an offering of $287,500 5 1/4% Convertible Notes due 2006. The net
proceeds of approximately $279,594 of the convertible notes were used to pay
down existing bank debt.
In connection with the reorganization of Lamar Advertising Company into a new
holding company structure, Lamar Media Corp. (formerly known as Lamar
Advertising Company) made a change of control tender offer to the holders of its
9 1/4% Senior Subordinated Notes due 2007 in aggregate principal amount of
approximately $103,900. Pursuant to the change of control tender offer and in
accordance with the Indenture, Lamar Media Corp. offered to repurchase the Notes
for 101% of the principal amount plus accrued interest. A total of $29,876
aggregate principal amount of Notes were tendered for payment on August 19,
1999, and the related 1% prepayment penalty is reflected as an extraordinary
item in the Company's income statement, net of tax.
The Company's obligations with respect to its publicly issued notes are not
guaranteed by the Company's direct or indirect wholly-owned subsidiaries.
Certain obligations of the Company's wholly-owned subsidiary, Lamar Media Corp.
are guaranteed by its subsidiaries. For a detailed description of these
guarantees see Lamar Media Corp.'s quarterly report on Form 10-Q.
4. Preferred Stock
On July 16, 1999, the Board of Directors amended the Preferred Stock of the
Company by designating 5,720 shares of the 1,000,000 shares of previously
undesignated Preferred Stock, par value $.001 as "Series AA Preferred Stock".
The previously issued Class A Preferred Stock par value $638 was exchanged for
the new Series AA Preferred Stock. The new Series AA Preferred Stock have the
same liquidation preferences, dividends and other rights as the previously
issued Class A Preferred Stock. The new shares of Series AA Preferred Stock,
however, are entitled to one vote per share.
5. New Holding Company
On July 20, 1999, the Company reorganized into a new holding company structure.
As a result of this reorganization (1) the former Lamar Advertising Company
became a wholly owned subsidiary of a newly formed holding company, (2) the name
of the former Lamar Advertising Company was changed to Lamar Media Corp., (3)
the name of the new holding company became Lamar Advertising Company, (4) the
outstanding shares of capital stock of the former Lamar Advertising Company,
including the Class A common
-9-
<PAGE> 12
LAMAR ADVERTISING COMPANY AND
SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
stock, were automatically converted, on a share for share basis, into identical
shares of capital stock of the new holding company and (5) the Class A common
stock of the new holding company commenced trading on the Nasdaq National Market
under the symbol "LAMR" instead of the Class A common stock of the former Lamar
Advertising Company. In addition, following the holding company reorganization,
substantially all of the former Lamar Advertising Company's debt obligations,
including the bank credit facility and other long-term debt remained the
obligations of Lamar Media Corp. Under Delaware law, the reorganization did not
require the approval of the stockholders of the former Lamar Advertising
Company. The purpose of the reorganization was to provide Lamar Advertising
Company with a more flexible capital structure and to enhance its financing
options. The business operations of the former Lamar Advertising Company and its
subsidiaries will not change as a result of the reorganization.
-10-
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
LAMAR ADVERTISING COMPANY
DATED: December 28, 1999 BY: /s/ Keith Istre
---------------------------------
Keith A. Istre
Chief Financial and Accounting
Officer and Director
-11-
