UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
☒ |
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended
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 1-36756
Lamar Advertising Company
Commission File Number 1-12407
Lamar Media Corp.
(Exact name of registrants as specified in their charters)
Delaware |
|
72-1449411 |
Delaware |
|
72-1205791 |
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S Employer Identification No.) |
|
|
|
5321 Corporate Blvd., Baton Rouge, LA |
|
70808 |
(Address of principal executive offices) |
|
(Zip Code) |
Registrants’ telephone number, including area code: (225) 926-1000
Securities registered pursuant to Section 12(b) of the Act:
Indicate by check mark whether each 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 ☒ No ☐
Indicate by check mark whether each registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether Lamar Advertising Company is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☒ |
|
Accelerated filer |
☐ |
Non-accelerated filer |
☐ |
|
Smaller reporting company |
☐ |
Emerging growth company |
☐ |
If an emerging growth company, indicate by check mark if Lamar Advertising Company has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether Lamar Media Corp. is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
☐ |
|
Accelerated filer |
☐ |
Non-accelerated filer |
☒ |
|
Smaller reporting company |
☐ |
Emerging growth company |
☐ |
If an emerging growth company, indicate by check mark if Lamar Media Corp. has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether Lamar Advertising Company is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
Indicate by check mark whether Lamar Media Corp. is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Class A common stock, $0.001 par value |
LAMR |
The NASDAQ Stock Market, LLC |
The number of shares of Lamar Advertising Company’s Class A common stock outstanding as of April 25, 2019:
The number of shares of the Lamar Advertising Company’s Class B common stock outstanding as of April 25, 2019:
The number of shares of Lamar Media Corp. common stock outstanding as of April 25, 2019:
This combined Form 10-Q is separately filed by (i) Lamar Advertising Company and (ii) Lamar Media Corp. (which is a wholly owned subsidiary of Lamar Advertising Company). Lamar Media Corp. meets the conditions set forth in general instruction H(1) (a) and (b) of Form 10-Q and is, therefore, filing this form with the reduced disclosure format permitted by such instruction.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information included in this report is forward-looking in nature within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. This report uses terminology such as “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” “may,” “will,” “should,” “estimates,” “predicts,” “potential,” “continue” and similar expressions to identify forward-looking statements. Examples of forward-looking statements in this report include statements about:
|
• |
our future financial performance and condition; |
|
• |
our business plans, objectives, prospects, growth and operating strategies; |
|
• |
our future capital expenditures and level of acquisition activity; |
|
• |
market opportunities and competitive positions; |
|
• |
our future cash flows and expected cash requirements; |
|
• |
estimated risks; |
|
• |
our ability to maintain compliance with applicable covenants and restrictions included in Lamar Media’s senior credit facility and the indentures relating to its outstanding notes; |
|
• |
stock price; |
|
• |
estimated future dividend distributions; and |
|
• |
our ability to remain qualified as a Real Estate Investment Trust (“REIT”). |
Forward-looking statements are subject to known and unknown risks, uncertainties and other important factors, including but not limited to the following, any of which may cause the actual results, performance or achievements of Lamar Advertising Company (referred to herein as the “Company” or “Lamar Advertising”) or Lamar Media Corp. (referred to herein as “Lamar Media”) to differ materially from those expressed or implied by the forward-looking statements:
|
• |
the state of the economy and financial markets generally and their effects on the markets in which we operate and the broader demand for advertising; |
|
• |
the levels of expenditures on advertising in general and outdoor advertising in particular; |
|
• |
risks and uncertainties relating to our significant indebtedness; |
|
• |
the demand for outdoor advertising and its continued popularity as an advertising medium; |
|
• |
our need for, and ability to obtain, additional funding for acquisitions, operations and debt refinancing; |
|
• |
increased competition within the outdoor advertising industry; |
|
• |
the regulation of the outdoor advertising industry by federal, state and local governments; |
|
• |
our ability to renew expiring contracts at favorable rates; |
|
• |
the integration of businesses and assets that we acquire and our ability to recognize cost savings and operating efficiencies as a result of these acquisitions; |
|
• |
our ability to successfully implement our digital deployment strategy; |
|
• |
the market for our Class A common stock; |
|
• |
changes in accounting principles, policies or guidelines; |
|
• |
our ability to effectively mitigate the threat of and damages caused by hurricanes and other kinds of severe weather; |
|
• |
our ability to qualify as a REIT and maintain our status as a REIT; and |
|
• |
changes in tax laws applicable to REIT’s or in the interpretation of those laws. |
The forward-looking statements in this report are based on our current good faith beliefs, however, actual results may differ due to inaccurate assumptions, the factors listed above or other foreseeable or unforeseeable factors. Consequently, we cannot guarantee that any of the forward-looking statements will prove to be accurate. The forward-looking statements in this report speak only as of the date of this report, and Lamar Advertising and Lamar Media expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained in this report, except as required by law.
2
For a further description of these and other risks and uncertainties, the Company encourages you to read carefully Item 1A to the combined Annual Report on Form 10-K/A for the year ended December 31, 2018 of the Company and Lamar Media (the “2018 Combined Form 10-K/A”), filed on February 26, 2019 and as such risk factors may be updated or supplemented, from time to time, in our combined Quarterly Reports on Form 10-Q.
3
CONTENTS
4
PART I — FINANCIAL INFORMATION
ITEM 1. — FINANCIAL STATEMENTS
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
|
|
March 31, 2019 |
|
|
December 31, 2018 |
|
||
|
|
(Unaudited) |
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
|
|
|
$ |
|
|
Receivables, net of allowance for doubtful accounts of $ 2018, respectively |
|
|
|
|
|
|
|
|
Prepaid lease and contract expenses |
|
|
— |
|
|
|
|
|
Other current assets |
|
|
|
|
|
|
|
|
Total current assets |
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
|
|
|
|
|
|
Less accumulated depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
Net property, plant and equipment |
|
|
|
|
|
|
|
|
Operating lease right of use assets |
|
|
|
|
|
|
— |
|
Goodwill |
|
|
|
|
|
|
|
|
Intangible assets |
|
|
|
|
|
|
|
|
Other assets |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
|
|
|
$ |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Trade accounts payable |
|
$ |
|
|
|
$ |
|
|
Current maturities of long-term debt, net of deferred financing costs of $ in 2019 and 2018, respectively |
|
|
|
|
|
|
|
|
Current operating lease liabilities |
|
|
|
|
|
|
— |
|
Accrued expenses |
|
|
|
|
|
|
|
|
Deferred income |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
|
|
|
|
|
|
Long-term debt, net of deferred financing costs of $ respectively |
|
|
|
|
|
|
|
|
Operating lease liabilities |
|
|
|
|
|
|
— |
|
Deferred income tax liabilities |
|
|
|
|
|
|
|
|
Asset retirement obligation |
|
|
|
|
|
|
|
|
Other liabilities |
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
Series AA preferred stock, par value $ |
|
|
|
|
|
|
|
|
Class A common stock, par value $ outstanding at 2019 and 2018, respectively |
|
|
|
|
|
|
|
|
Class B common stock, par value $ |
|
|
|
|
|
|
|
|
Additional paid-in capital |
|
|
|
|
|
|
|
|
Accumulated comprehensive income |
|
|
|
|
|
|
|
|
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Cost of shares held in treasury, respectively |
|
|
( |
) |
|
|
( |
) |
Stockholders’ equity |
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
$ |
|
|
|
$ |
|
|
See accompanying notes to condensed consolidated financial statements.
5
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Condensed Consolidated Statements of Income and Comprehensive Income
(Unaudited)
(In thousands, except share and per share data)
|
|
Three months ended March 31, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Statements of Income |
|
|
|
|
|
|
|
|
Net revenues |
|
$ |
|
|
|
$ |
|
|
Operating expenses (income) |
|
|
|
|
|
|
|
|
Direct advertising expenses (exclusive of depreciation and amortization) |
|
|
|
|
|
|
|
|
General and administrative expenses (exclusive of depreciation and amortization) |
|
|
|
|
|
|
|
|
Corporate expenses (exclusive of depreciation and amortization) |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
(Gain) loss on disposition of assets |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
|
|
|
|
|
|
Other expense (income) |
|
|
|
|
|
|
|
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
|
|
Interest income |
|
|
( |
) |
|
|
( |
) |
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income tax expense |
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
Cash dividends declared and paid on preferred stock |
|
|
|
|
|
|
|
|
Net income applicable to common stock |
|
$ |
|
|
|
$ |
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
|
|
|
$ |
|
|
Diluted earnings per share |
|
$ |
|
|
|
$ |
|
|
Cash dividends declared per share of common stock |
|
$ |
|
|
|
$ |
|
|
Weighted average common shares used in computing earnings per share: |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding basic |
|
|
|
|
|
|
|
|
Weighted average common shares outstanding diluted |
|
|
|
|
|
|
|
|
Statements of Comprehensive Income |
|
|
|
|
|
|
|
|
Net income |
|
$ |
|
|
|
$ |
|
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
|
|
|
|
( |
) |
Comprehensive income |
|
$ |
|
|
|
$ |
|
|
See accompanying notes to condensed consolidated financial statements.
6
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except share and per share data)
|
|
Series AA PREF Stock |
|
|
Class A CMN Stock |
|
|
Class B CMN Stock |
|
|
Treasury Stock |
|
|
Add’l Paid in Capital |
|
|
Accumulated Comprehensive Income |
|
|
Accumulated Deficit |
|
|
Total |
|
||||||||
Balance, December 31, 2018 |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Non-cash compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Exercise of options |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Issuance of shares of common stock through employee purchase plan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Purchase of treasury stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
Dividends/distributions to common shareholders ($ share) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends ($ share) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance, March 31, 2019 |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
Series AA PREF Stock |
|
|
Class A CMN Stock |
|
|
Class B CMN Stock |
|
|
Treasury Stock |
|
|
Add’l Paid in Capital |
|
|
Accumulated Comprehensive Income (Loss) |
|
|
Accumulated Deficit |
|
|
Total |
|
||||||||
Balance, December 31, 2017 |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
Non-cash compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Exercise of options |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Issuance of shares of common stock through employee purchase plan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
Purchase of treasury stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Foreign currency translation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
Dividends/distributions to common shareholders ($ share) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends ($ share) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance, March 31, 2018 |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
7
LAMAR ADVERTISING COMPANY
AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
|
|
Three months ended March 31, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
|
|
|
$ |
|
|
Adjustments to reconcile net income to net cash provided by operating activities |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
Stock-based compensation |
|
|
|
|
|
|
|
|
Amortization included in interest expense |
|
|
|
|
|
|
|
|
(Gain) loss on disposition of assets and investments |
|
|
( |
) |
|
|
|
|
Loss on extinguishment of debt |
|
|
— |
|
|
|
|
|
Deferred tax expense (benefit) |
|
|
|
|
|
|
( |
) |
Provision for doubtful accounts |
|
|
|
|
|
|
|
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
|
|
Decrease (increase) in: |
|
|
|
|
|
|
|
|
Receivables |
|
|
|
|
|
|
( |
) |
Prepaid expenses |
|
|
|
|
|
|
( |
) |
Other assets |
|
|
( |
) |
|
|
( |
) |
Increase (decrease) in: |
|
|
|
|
|
|
|
|
Trade accounts payable |
|
|
|
|
|
|
|
|
Accrued expenses |
|
|
( |
) |
|
|
( |
) |
Operating lease liabilities |
|
|
( |
) |
|
|
— |
|
Other liabilities |
|
|
( |
) |
|
|
|
|
Net cash provided by operating activities |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Acquisitions |
|
|
( |
) |
|
|
( |
) |
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Proceeds received from insurance claims |
|
|
— |
|
|
|
|
|
Proceeds from disposition of assets and investments |
|
|
|
|
|
|
|
|
Decrease in notes receivable |
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Cash used for purchase of treasury stock |
|
|
( |
) |
|
|
( |
) |
Net proceeds from issuance of common stock |
|
|
|
|
|
|
|
|
Principal payments on long term debt |
|
|
( |
) |
|
|
( |
) |
Payments on revolving credit facility |
|
|
( |
) |
|
|
( |
) |
Proceeds received from revolving credit facility |
|
|
|
|
|
|
|
|
Proceeds received from note offering |
|
|
|
|
|
|
— |
|
Redemption of senior subordinated notes |
|
|
— |
|
|
|
( |
) |
Proceeds received from senior credit facility Term B loan |
|
|
— |
|