Lamar Advertising Company (LAMR) filed Quarterly Report for the period ended 2009-09-30.
Lamar Advertising Company is one of the largest and most experienced owners and operators of outdoor advertising structures in the United States. They also operate the largest logo sign business in the United States and transit advertising displays on bus shelters bus benches and buses in several markets. Logo signs are signs located near highway exits which deliver brand name information on available gas food lodging and camping services. Lamar Advertising Company has a market cap of $2.64 billion; its shares were traded at around $28.8 with and P/S ratio of 2.2. Lamar Advertising Company had an annual average earning growth of 9.2% over the past 10 years. GuruFocus rated Lamar Advertising Company the business predictability rank of 5-star.
Highlight of Business Operations:
Net revenues decreased $125.3 million or 13.6% to $793.8 million for the nine months ended September 30, 2009 from $919.1 million for the same period in 2008. This decrease was attributable primarily to a decrease in billboard net revenues of $115.2 million or 13.8% over the prior period, a decrease in logo sign revenue of $0.4 million, which represents a decrease of 1.2% over the prior period, and a $9.7 million decrease in transit revenue, which represents a decrease of 20.6% over the prior period.
For the nine months ended September 30, 2009, there was a $139.0 million decrease in net revenues as compared to acquisition-adjusted net revenue for the nine months ended September 30, 2008. The $139.0 million decrease in revenue primarily consists of a $130.3 million decrease in billboard revenue and a $9.4 million decrease in transit revenue offset by a $0.7 million increase in logo revenue over the acquisition-adjusted net revenue for the comparable period in 2008. This $139.0 million decrease in revenue represents a decrease of 14.9% over the comparable period in 2008 and is attributable to the continuation of the general economic downturn which began in the fourth quarter of 2008. See “Reconciliations” below.
For the three months ended September 30, 2009, there was a $40.3 million decrease in net revenues as compared to acquisition-adjusted net revenue for the three months ended September 30, 2008. The $40.3 million decrease in revenue primarily consists of a $39.1 million decrease in billboard revenue and a $2.3 million decrease in transit revenue offset by a $1.1 million increase in logo revenue over the acquisition-adjusted net revenue for the comparable period in 2008. This $40.3 million decrease in revenue represents a decrease of 12.9% over the comparable period in 2008 and is attributable to the continuation of the general economic downturn which began in the fourth quarter of 2008. See “Reconciliations” below.
Cash Generated by Operations. For the nine months ended September 30, 2009 and 2008 our cash provided by operating activities was $191.4 million and $237.7 million, respectively. While our net loss was approximately $38.4 million for the nine months ended September 30, 2009, we generated cash from operating activities of $191.4 million during that same period, primarily due to non-cash adjustments needed to reconcile net loss to cash provided by operating activities of $266.8 million, which primarily consisted of depreciation and amortization of $252.8 million and amortization included in interest expense of $15.7 million. In addition, there was an increase in working capital of $37.0 million. We expect to generate cash flows from operations during 2009 in excess of our cash needs for operations and capital expenditures as described herein. We expect to use the excess cash generated principally for reducing outstanding indebtedness.
Credit Facilities. As of September 30, 2009, Lamar Media had approximately $188.1 million of unused capacity under the revolving credit facility included in its senior credit facility. The senior credit facility was effective September 30, 2005 and was comprised of a $400.0 million revolving senior credit facility and a $400.0 million term facility. We have also borrowed $789.0 million in term loans as a result of incremental borrowings (Series A through Series F) during 2006 and 2007 under the incremental facility included in our senior credit facility. In addition to those incremental borrowings, the existing incremental facility permitted Lamar Media to request that its lenders enter into commitments to make additional term loans, up to a maximum aggregate amount of $500.0 million. The aggregate balance outstanding under our senior credit facility September 30, 2009 was $1.12 billion.
For the nine months ended September 30, 2009, there was a $139.0 million decrease in net revenues as compared to acquisition-adjusted net revenue for the nine months ended September 30, 2008. The $139.0 million decrease in revenue primarily consists of a $130.3 million decrease in billboard revenue and a $9.4 million decrease in transit revenue offset by a $0.7 million increase in logo revenue over the acquisition-adjusted net revenue for the comparable period in 2008. This $139.0 million decrease in revenue represents a decrease of 14.9% over the comparable period in 2008 and is attributable to the continuation of the general economic downturn which began in the fourth quarter of 2008. See “Reconciliations” below.
LAMR is in the portfolios of Chuck Akre of Akre Capital Management, LLC, Ron Baron of Baron Funds.
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