LAMR

Lamar Advertising Company (LAMR)

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]

Lamar Advertising Company. (LAMR)

Q4 2008 Earnings Call

February 26, 2009, 11:00 am ET

Executives

Kevin Reilly - CEO

Keith Istre - CFO

Sean Reilly - President and COO

Analysts

Mark Wienkes - Goldman Sachs

Alexia Quadrani - JPMorgan

Jason Helfstein - Oppenheimer

Marci Ryvicker - Wachovia

James Dix -Wedbush Morgan

Bishop Cheen - Wachovia

James Marsh - Piper Jaffray

Presentation

Operator

Excuse me, everyone. We now have Kevin Reilly, Sean Reilly, and Keith Istre in conference. Please be aware that each of your lines is in a listen-only mode. At the conclusion of the company's presentation, we will open the floor for questions. (Operator Instructions).

In the course of this discussion, Lamar may make forward-looking statements regarding the company, including statements about its future financial performance, strategic goals and plans.

Lamar has identified important factors that could cause actual results to differ materially from those discussed in this call in the company's reports on forms 10-K and 10-Q, and the registration statements that Lamar files with the SEC from time-to-time. Lamar refers you to those documents.

Lamar's fourth quarter and year end 2008 earnings release, which contains the information required by Regulation G was furnished with the SEC on a Form 8-K this morning, and is available on Lamar's website, www.lamar.com.

I would now like to turn the conference over to Kevin Reilly. Mr. Reilly, you may begin.

Kevin Reilly

Thank you, [Gene]. As is our custom, we will lead off with some brief remarks and then go ahead and turn the call over for questions. I want to thank all our friends and shareholders and analysts for tuning in.

As you can see from our fourth quarter revenue performance and Q1 guidance, the bottom dropped down with sales in December and January. And we are seeing more vitality than usual in our bookings, which naturally lead to less visibility.

Needless to say, this is a very challenging environment. And in this environment in addition to trying to maximize revenue, it's all about expense management, controlling CapEx and free cash flow generation.

So during this call, we want you to be aware of what management is doing in these areas especially expense management, because we have had to cut the cloth to fit pattern. And all of our cuts by the way in, both in CapEx and in expenses are sustainable and they will not damage our franchise.

Of course in the past, we have give expense growth guidance. But in 2009, there will be a significant reduction in expenses over 2008. Sean will give you more color on what the company has done to-date and what the company did in the fourth quarter of '08.

On an encouraging note, sales trends for Lamar are playing to our strengths, national business is weaker than local, discounting is primarily confined to the larger markets and more centered around national cross market buyers.

This relative strength in local sales leaks me to believe that outdoor over the years, we will continue to get a larger share of local ad spend. And we will garner that ad spend, primarily at the expense of newspaper, radio and TV.

Before I turn the call over to Keith and Sean, I'll be remiss if I didn't thank all of our employees especially our managers who have responded quickly to make the necessary expense adjustments required by the current ad climate.

With that I would like to turn the call over to Keith Istre.

Keith Istre

Good morning, everybody. Just a little color on Q4 and the year as you saw from our pro forma numbers. For Q4, we came in at down a 11.7%, and revenue for the quarter our guidance had been for '09 to kind of give you a breakdown by month how that came about the 11.7%.

We generally don't get into the monthly numbers, we just talk about the quarter. But at the end of October, our revenues were down 9% over October '08. November, we were down 9% over November of '08. And then in December, the bottom as Kevin said fell out we were down 16% over December of '07.

The good news is that the expenses came in way under our normal growth of between 4% and 6%. Actually consolidated expenses, which are outdoor operating and corporate overhead were down minus 4.4% for the quarter.

We don't generally post the annual revenue EBITDA and expense growth in our press release, but just to give it you, revenue for the year was down 3.2%, EBITDA was down 9.1% and our consolidated expense growth for the year was 1.2%. Again, well below the 4% to 6% that we normally experienced.

With that I would just like to make a couple of comments on our capital structure. In our third quarter press release in November of last year, we put in an indebtedness section that among other things included the schedule of maturities by year of all of our debts, so the market knew exactly what was coming due and when. If anyone on the call hasn’t seen that, you can call up the press release from the third quarter, if you have forgotten about it, it's out there.

On the last call, the two predominant questions will the company needed amendment to its bank credit agreement increasing its debt-to-EBITDA ratio and what does the company plan to do about the converts that are coming due in December 2010. Obviously those questions continue to be asked and the answer today is the same as on the last call.

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