Lamar Advertising swings to Q4 net income of US$6.4M from loss of US$7.1M in year-ago period; net sales up 4.6% to US$288.2M

Kendall Sinclair

BATON ROUGE, Louisiana , February 22, 2012 (press release) – Lamar Advertising Company (Nasdaq:LAMR - News), a leading owner and operator of outdoor advertising and logo sign displays, announces the Company's operating results for the fourth quarter ended December 31, 2011.

Fourth Quarter Results

Lamar reported net revenues of $288.2 million for the fourth quarter of 2011 versus $275.7 million for the fourth quarter of 2010, a 4.6% increase. Operating income for the fourth quarter of 2011 was $45.9 million as compared to $32.8 million for the same period in 2010. Lamar recognized $6.4 million in net income for the fourth quarter of 2011 compared to a net loss of $7.1 million for the fourth quarter of 2010.

Adjusted EBITDA, (defined as operating income before non-cash compensation, depreciation and amortization and gain on disposition of assets - see reconciliation to net income (loss) at the end of this release) for the fourth quarter of 2011 was $125.8 million versus $115.4 million for the fourth quarter of 2010, a 9.1% increase.

Free cash flow (defined as Adjusted EBITDA less interest, net of interest income and amortization of financing costs, current taxes, preferred stock dividends and total capital expenditures - see reconciliation to cash flows provided by operating activities at the end of this release) for the fourth quarter of 2011 was $63.9 million as compared to $59.2 million for the same period in 2010, a 7.9% increase.

Pro forma net revenue for the fourth quarter of 2011 increased 4.0% and pro forma Adjusted EBITDA increased 8.5% as compared to the fourth quarter of 2010. Pro forma net revenue and Adjusted EBITDA include adjustments to the 2010 period for acquisitions and divestitures for the same time frame as actually owned in the 2011 period. Tables that reconcile reported results to pro forma results and operating income to outdoor operating income are included at the end of this release.

Twelve Months Results

Lamar reported net revenues of $1,133.5 million for the twelve months ended December 31, 2011 versus $1,092.3 million for the same period in 2010, a 3.8% increase. Operating income for the twelve months ended December 31, 2011 was $186.4 million as compared to $139.5 million for the same period in 2010. Adjusted EBITDA for the twelve months ended December 31, 2011 was $487.1 million versus $465.2 million for the same period in 2010. There was net income of $8.6 million for the twelve months ended December 31, 2011 as compared to a net loss of $40.1 million for the same period in 2010.

Free Cash Flow for the twelve months ended December 31, 2011 decreased 10.6% to $224.8 million as compared to $251.5 million for the same period in 2010, primarily due to the increase in capital expenditures of $63.6 million over the comparable period in 2010.

Liquidity

As of December 31, 2011, Lamar had $274.1 million in total liquidity that consists of $240.6 million available for borrowing under its revolving senior credit facility and approximately $33.5 million in cash and cash equivalents.

Recent Significant Transactions

Notes Offering. On February 9, 2012, Lamar's wholly owned subsidiary, Lamar Media Corp., closed a private placement of $500 million in aggregate principal amount of 5 7/8% Senior Subordinated Notes due 2022, which resulted in net proceeds to Lamar Media of approximately $489 million.

Tender Offer. Also, on February 9, 2012, Lamar Media announced the results of the early settlement of its tender offer to purchase, for cash, up to $700 million of its outstanding 6 5/8% Senior Subordinated Notes due 2015, 6 5/8% Senior Subordinated Notes due 2015--Series B and 6 5/8% Senior Subordinated Notes due 2015--Series C (collectively, the "6 5/8% Notes"). As of February 8, 2012, the early settlement date of the tender offer, Lamar Media received tenders in respect of $582.9 million aggregate principal amount of 6 5/8% Notes, $483.7 million of which were accepted for purchase on February 9, 2012 by Lamar Media for a total cash payment (including accrued and unpaid interest up to but excluding February 9, 2012) of $511.6 million. The tender offer will expire at midnight, New York City time, on February 24, 2012, unless extended or earlier terminated.

Guidance

For the first quarter of 2012 the Company expects net revenue to be approximately $264 million. On a pro forma basis this represents an increase of approximately 3%.

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