UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended January 31, 1996
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 33-59624
LAMAR ADVERTISING COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 72-1205791
(State or other jurisdiction (I.R.S. Employer of
incorporation) Identification No.)
5551 Corporate Blvd.,
Baton Rouge, LA 70808 70806
(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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding as of
Class March 15, 1996
Voting Class A Common Stock,
no par value 31,432.46
CONTENTS
Page
PART I - FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
January 31, 1996 (unaudited) and October
31, 1995 1 - 2
Condensed Consolidated Statements of Earnings
Three Months ending January 31, 1996 and
1995 (unaudited) 3
Condensed Consolidated Statements of Cash Flows
Three Months ending January 31, 1996 and 1995
(unaudited) 4 - 5
Notes to Condensed Consolidated Financial
Statements 6 - 7
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8 - 9
PART II - OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders 10
ITEM 6. Exhibits and Reports on Form 8-K 10
Signatures 10
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1. - FINANCIAL STATEMENTS
LAMAR ADVERTISING COMPANY AND
SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<CAPTION>
January 31, October 31,
1996 1995
(Unaudited)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 1,800 5,886
Receivables
Trade accounts 13,587 11,292
Affiliates, related parties
and employees 666 583
Other 114 109
Less allowance for doubtful accounts ( 734) ( 551)
Net receivables 13,633 11,433
Prepaid expenses 1,153 1,247
Other current assets 2,741 1,266
Total current assets 19,327 19,832
Property, plant and equipment 178,001 168,402
Less accumulated depreciation
and amortization ( 79,554) ( 77,524)
Net property, plant and equipment 98,447 90,878
Intangible assets 14,466 13,406
Receivables 885 918
Deferred taxes 5,365 5,951
Other assets 3,317 2,900
$141,807 133,885
======= =======
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' DEFICIT
<S> <C> <C>
Current liabilities:
Trade accounts payable $ 2,177 2,435
Accrued expenses 4,292 9,733
Current maturities of long- term
debt 4,154 3,479
Deferred income 3,205 2,448
Total current liabilities 13,828 18,095
Long term debt 153,480 142,572
Deferred income 748 749
Other liabilities 1,119 623
Total liabilities 169,175 162,039
- 1 -
</TABLE>
<TABLE>
LAMAR ADVERTISING COMPANY AND
SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<CAPTION>
January 31, October 31,
1996 1995
(unaudited)
STOCKHOLDERS' DEFICIT
<S> <C> <C>
Class A preferred stock, par value $638,
$63.80 Cumulative, Authorized 10,000
shares; issued and outstanding 5,719.49
shares and 0 shares at January 31,
1996 and October 31, 1995,
respectively 3,649 0
Class A common stock, no par
value, $10 stated value.
Authorized 100,000 shares;
issued and outstanding 35,879.87
shares and 41,599.36
shares at January 31, 1996
and October 31, 1995, respectively 359 416
Class B common stock, no par
value, $10 stated value.
Authorized 100,000 shares;
issued and outstanding 198 shares
January 31, 1996 and October 31, 1995 2 2
Accumulated deficit ( 31,378) ( 28,572)
Stockholders' Deficit ( 27,368) ( 28,154)
Total liabilities and
stockholders' deficit $141,807 133,885
======= =======
</TABLE>
- 2 -
<TABLE>
LAMAR ADVERTISING COMPANY AND
SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<CAPTION>
Three Months
Ending January 31,
1996 1995
<S> <C> <C>
Revenues
Outdoor advertising $27,664 25,444
Logo advertising 2,426 1,460
Management fees 15 8
Rental income 174 144
Transit advertising 100 0
30,379 27,056
Operating expenses
Outdoor advertising:
Agency commissions 2,766 2,608
Direct advertising
expenses 10,057 8,898
Logo expenses 1,400 491
Transit expenses 111 0
Selling, general and
administrative expenses 6,712 6,328
Depreciation and amortization 3,387 3,159
24,433 21,484
Operating income 5,946 5,572
Non-operating income
(expense):
Interest income 53 41
Interest expense ( 3,827) ( 3,900)
Gain (Loss) on disposition
of assets 49 ( 181)
Other expenses ( 545) ( 272)
( 4,270) ( 4,312)
Earnings before income taxes 1,676 1,260
Income tax (expense) benefit ( 675) 1,016
Net earnings $ 1,001 2,276
======= =======
Preferred stock dividends ( 91) 0
======= =======
Net income applicable to common stock 910 2,276
======= =======
Earnings per common share $ 22.86 52.48
======= =======
Weighted average common
shares outstanding 39,808 43,364
======= =======
- 3 -
</TABLE>
<TABLE>
LAMAR ADVERTISING COMPANY AND
SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<CAPTION>
Three Months Ending
January 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings: $ 1,001 2,276
Adjustments to reconcile net earnings
to net cash provided by
operating activities:
Depreciation and amortization 3,387 3,159
(Gain)Loss on disposition of assets ( 49) 181
Decrease (Increase) in deferred taxes 586 ( 1,104)
Provision for doubtful accounts 302 115
Increase in receivables ( 2,472) ( 1,034)
(Increase) Decrease in prepaid
expenses 96 ( 23)
Increase in other assets ( 1,881) ( 398)
Increase (decrease) in trade
accounts payable ( 257) 1
Decrease in accrued expenses ( 5,020) ( 5,236)
Increase in deferred income 756 676
Net cash used in operating
activities ( 3,551) ( 1,387)
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in notes receivable 0 ( 4)
Outdoor acquisitions ( 5,452) ( 1,742)
Capital expenditures ( 5,029) ( 2,537)
Proceeds from disposition of assets 218 200
Purchase of intangible assets ( 653) ( 120)
Investments in and advances to
affiliated companies 75 ( 7)
Net cash used in investing
activities ($10,841) ($ 4,210)
- 4 -
</TABLE>
<TABLE>
LAMAR ADVERTISING COMPANY AND
SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<CAPTION>
Three Months Ending
January 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term debt ($ 978) ( 1,796)
Proceeds from issuance of notes
payable to banks 12,500 1,000
Principal payments on notes payable to
banks ( 1,000) 0
Dividends ( 216) ( 125)
Net cash provided by (used in)
financing activities 10,306 ( 921)
Net decrease in cash
and cash equivalents ( 4,086) ( 6,518)
Cash and cash equivalents at beginning
of year 5,886 8,016
Cash and cash equivalents at end of
period $ 1,800 1,498
======== =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 6,735 6,693
======== =======
Cash paid for state and
federal income taxes $ 305 209
======== =======
- 5 -
</TABLE>
LAMAR ADVERTISING COMPANY AND
SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE DATA)
1. ACCOUNTING POLICY
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.
Certain amounts in the prior years consolidated financial statements have
been reclassified to conform with the current year presentation. These
reclassifications had no effect on previously reported net earnings.
Separate financial statements of the guarantor subsidiaries are not included
because such subsidiaries are jointly and severally liable, and that the
aggregate assets, liabilities, earnings and equity of the guarantor subsidiaries
are substantially equivalent to the assets, liabilities, earnings and equity of
the parent on a consolidated basis.
2. INCOME TAXES
Lamar Advertising Comany files a consolidated Federal income tax return
which includes all of its qualifying subsidiaries. Income tax expense for the
period is based on estimates of the Company's annual effective tax rate.
- 6 -
LAMAR ADVERTISING COMPANY AND
SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
3. STOCK CONVERSION
On December 30, 1995, the Certificate of Incorporation of the Company was
amended to authorize 10,000 shares of Class A preferred stock with a par value
of $638 and no voting rights. The Class A preferred stock dividends are
cumulative and are priority to Class A and Class B common stock dividends at the
rate of $15.95 per share per quarter.
As of January 31, 1996, 5,719.49 shares of Class A common stock with a $10
per share stated value were converted into 5,719.49 shares of Class A preferred
stock with a $638 per share par value. This conversion resulted in a $3.6
million charge to accumulated deficit.
4. SUBSEQUENT EVENTS
On March 1, 1996, the Company redeemed 4,447.41 shares of Class A common
stock and 198 shares of Class B common stock at a price of $638 per share.
- 7 -
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital surplus at January 31, 1996 was $5.5 million
compared to a surplus of $1.7 million at October 31,1995. Several factors
combined to produce this result. There was a decrease in cash and cash
equivalents of $4.1 million due to the interest payment of $5.5 million for the
$100 million fixed rate Senior Secured notes which was offset by working capital
line borrowing of $8.5 million used for approximately $6.6 million in
acquisitions of outdoor advertising assets and other capital expenditures
yielding the net decrease. The cash decrease was offset by a $2.3 million
increase in trade accounts receivable due to a 12% increase in advertising
revenue over the same period in 1995 and a $1.5 million increase in other
current assets due to refundable deposits made to enable the Company to
pursue additional acquisitions.
The Company entered into a new $15 million reducing credit line with its
Bank group dated December 22, 1995. This line may only be used to finance the
cost of new logo franchises awarded to the Company. As of January 31, 1996 the
Company had borrowed approximately $3 million to fund the development of
additional logo advertising markets in Georgia, Minnesota, South Carolina and
Virginia.
The Company expects to have sufficient funds going forward to cover all
debt service and capital expenditure requirements.
There was a decrease in accrued expenses of $5.4 million consisting of a
$2.9 million decrease in accrued interest due to the timing difference on the
$100 million fixed rate Senior Secured notes and a $.7 million decrease due to
the accrual of only one quarter of certain year end liabilities and a decrease
of $1.5 million in accrued payroll due to the first quarter payment of year end
bonuses. The accrued expenses decrease was offset by a $0.7 million increase in
current maturities of long-term debt due primarily to the increased quarterly
amortization under the term loan of the Bank Agreement and a $0.8 million
increase in the current portion of deferred income due to the increase in logo
sales in the first quarter.
- 8 -
RESULTS OF OPERATIONS
Three Months Ended January 31, 1996 Compared to Three Months Ended January 31,
1995
Revenues for the three months ended January 31, 1996 increased $3.3 million
or $12.3% to $30.4 million compared to $27.1 million for the same period in
1995. Outdoor advertising revenues accounted for $2.2 million of this
increase. There were approximately $7 million of outdoor asset acquisitions
during the three months ended January 31, 1996. These acquisitions
contributed $0.4 million of the revenue increase. The remaining $1.8 million
increase was realized throughout all the profit centers from a varying mix of
customers. Logo advertising increased $1.0 million due to the continued
development of that program.
Operating expenses exclusive of deprecation and amortization for the three
months ended January 31, 1996 increased $2.7 million or 14.8% over the same
period in 1995. This increase is the result of an increase in agency
commissions, health insurance rates, increases in personnel costs, sign site
rent, graphics expense, other costs related to the increase in revenue and
additional operating expenses related to outdoor asset acquisitions.
Due to the above factors, operating income before deprecation and
amortization, increased $0.6 million or 6.9% to $9.3 million compared to $8.7
million for the same period in 1995.
Income tax expense for the period increased $1.7 million over the same
period in 1995. During the fiscal year ending October 31, 1996 the net
operating loss carryforwards will be exhausted; therefore, provision for
income tax consists of federal and state income tax expense based on net book
income and an estimated effective rate.
As a result of the foregoing factors, net earnings for the three months
ended January 31, 1996 decreased $1.3 million as compared to the same period in
1995.
- 9 -
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Resolutions adopted by the Board of Directors of Lamar Advertising Company
dated December 13, 1995 and a unanimous written consent of action in lieu of a
special meeting of the shareholders of Lamar Advertising Company executed on
December 30, 1995 approved an amendment to the certificate of incorporation of
Lamar Advertising Company. This action created ten thousand (10,000) shares of
Class A preferred stock having a par value of $638 per share with no voting
rights. This action did not change the authorized number of shares or voting
rights of previously authorized capital stock. The payment of Class A preferred
dividends are cumulative and in priority to Class A and Class B common stock
dividends. In addition, the case of voluntary dissolution or liquidation of the
corporation the holders of Class A preferred stock are entitled to receive the
sum of par value of their shares plus a further amount equal to any accrued and
unpaid dividends to date before any payment shall be made to the holders of
Class A and Class B common stock. As of the most recent information
available, 5,719 shares of Class A common stock were converted to Class A
preferred stock.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: None
(b) Reports on 8-K: No reports on Form 8-K were filed during the period
ended January 31, 1996
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.
LAMAR ADVERTISING COMPANY
DATED: May 15, 1996 BY
Keith A. Istre
Vice President and Chief
Financial Officer, Treasurer
and Assistant Secretary
(Principal Financial Officer)
- 10 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> JAN-31-1996
<CASH> 1800
<SECURITIES> 0
<RECEIVABLES> 14367
<ALLOWANCES> 734
<INVENTORY> 4053
<CURRENT-ASSETS> 19327
<PP&E> 173948
<DEPRECIATION> 79554
<TOTAL-ASSETS> 141807
<CURRENT-LIABILITIES> 13828
<BONDS> 100000
0
3649
<COMMON> 361
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 141807
<SALES> 30190
<TOTAL-REVENUES> 30379
<CGS> 0
<TOTAL-COSTS> 14334
<OTHER-EXPENSES> 10099
<LOSS-PROVISION> 302
<INTEREST-EXPENSE> 3827
<INCOME-PRETAX> 1676
<INCOME-TAX> 675
<INCOME-CONTINUING> 1001
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1001
<EPS-PRIMARY> 22.86
<EPS-DILUTED> 0
</TABLE>
