http://www.morningstar.com/earnings/44882427-lamar-advertising-co-class-a-lamr-q3-2012.aspx

Lamar Advertising Co Class A LAMR
Q3 2012 Earnings Call Transcript

Transcript Call Date 11/07/2012

Operator: Good morning. 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.

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 and 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 third quarter 2012 earnings release, which contains the information required by Regulation G, was furnished to 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 this conference over to Kevin Reilly. Mr. Reilly, you may begin.

Kevin P. Reilly, Jr. - President and Chairman: Thank you, Shantelle. I want to welcome everyone to our Q3 earnings call. As you can see from the press release, we are managing our expenses in a low growth environment, not very sexy but necessary. And in addition, we are proceeding according to plan regarding our REIT efforts and when there is a meaningful milestone, we will certainly report that to you.

As is our custom, we will turn the call over to Keith for some Q3 color and then Sean will give you some operating details and then we'll open up the call for Q&A. So, Keith?

Keith A. Istre - CFO: Good. Thank you. Good morning everybody. Just to recap Q3 real quick, you saw our pro forma revenue was up 2%. You recall we guided to approximately 1% to 2% for the quarter, so we came in at the top end of the range.

Our consolidated expense guidance for the quarter was for approximately 2% and obviously, we did much better than that coming in at minus four-tenths of a point on the consolidated expenses. Part of the reason for this was timing issues. You may or may not recall, but we settled two lawsuits in Q3 last year that had to do with patent infringement and that was approximately $2 million that hit our Q3 expenses last year that (fill in) this year. From an operating side, we had two five-week hourly pay periods in the third quarter last year. We only had one this year in Q3 and that resulted in a $1 million decline in our direct labor cost.

In addition, we did have some pickup or some reductions in some of our operating expenses. One of them our illumination costs was down $0.5 million. We've introduced a new form of energy-saving lighting and illumination monitoring system and it's saving between $200,000 and $300,000 a month. Going down EBITDA was up 4.9%. The margin was 45.9%, that's the highest quality EBITDA margin we've generated since Q2 of 2008.

As far as Q4 guidance, revenue guidance as you saw in the press release, which were up 2% to 3%. As we noted, this does not include revenue from the NextMedia acquisition that closed on October 31. We didn't feel comfortable with giving that guidance being that it was such a newly acquired asset but we will provide the Next revenue numbers in our Q1 '13 guidance. For modeling purposes, on an actual basis we expect that acquisition for the months of November and December combined to generate approximately $5 million in revenue.

Read our Earnings Call Transcript disclaimer.
Add a Comment
E-mail me new replies.