Lamar Advertising Co.
) reported lackluster first-quarter 2014 results with a loss of
$4.9 million or loss of 5 cents per share compared with a loss of
$10.3 million or loss of 11 cents per share in the year-earlier
quarter. Although loss for the reported quarter improved year over
year, it miserably failed to meet the Zacks Consensus Estimate of
an earnings of 7 cents.
Net revenues for the reported quarter increased to $284.9
million from $276.6 million a year ago. The quarterly revenues for
first-quarter 2014 missed the Zacks Consensus Estimate of $291
million. Despite top-line growth, the quarterly loss is primarily
attributable to debt extinguishment and impairment charges, and
high interest burden.
Operating income increased to $31.1 million from $19.1 million in
the prior-year quarter. Adjusted earnings before interest, taxes,
depreciation and amortization (EBITDA) for the reported quarter
were $104.4 million, up from $103.1 million in the comparable
period last year.
During the quarter, Lamar received the approval from the Internal
Revenue Service (IRS) for REIT (real estate investment trust)
conversion. Consequently, the company reported FFO (funds from
operations) and AFFO (adjusted funds from operations) figures for
the quarter along with the press release.
FFO, a widely used metric to gauge the performance of REITs, is
obtained after adding depreciation and amortization and other
non-cash expenses to net income. In the reported quarter, FFO
increased 1.8% year over year to $60.4 million. AFFO for the first
quarter of 2014 were up 17.2% to $58.8 million.
Cash Flow & Balance Sheet
Lamar had liquidity of $461.7 million at quarter end, of which
$393.0 million was available under its $400 million revolving
senior credit facility and $68.7 million in cash and cash
equivalents. Lamar had a long-term debt of approximately $1.9
billion including current maturities.
Free cash flow in the reported quarter improved 18.6% year over
year to $51.1 million. Lamar defines free cash flow as adjusted
EBITDA less interest, net of interest income and amortization of
financing costs, current taxes, preferred stock dividends and total
For the second quarter of 2014, management expects adjusted net
revenue in the range of $331 million to $334 million, rising 1% to
2% on a pro-forma adjusted basis.
Lamar currently has a Zacks Rank #3 (Hold). Other players in the
industry worth considering include
The Interpublic Group of Companies, Inc.
Publicis Groupe SA
), each carrying a Zacks Rank #2 (Buy).
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