Lamar Advertising down 16% in December


Outdoor ad giant, Baton Rouge-based Lamar Advertising, said last week that the "bottom dropped out" of its sales in December as the declining national economy forced advertisers to cut back dramatically. The company’s revenue fell 16% in December compared with 12/07. COO Sean Reilly, in a Q4 conference call with analysts, called the month of December a period of "unprecedented rapid deterioration in our business."

Reilly said his company has taken a number of steps to curtail its expenses, including laying off about 10% of its workforce, discontinuing its 401k match program and taking down billboards that are unproductive.

McDonald’s, Verizon, Cracker Barrel and AT&T were among Lamar’s largest customers in 2008, and each of those companies is holding strong this year, reported The Louisiana Times-Picayune. But the struggling automotive industry accounts for roughly 7% of Lamar’s business. "Clearly local auto dealers are under a great deal of stress and strain," Reilly said.

Lamar reported a Q4 net loss of $6.8 million, or 8 cents per share, compared with net earnings of $4.5 million, or 5 cents per share, during the same period a year earlier. FY 2008, Lamar had net income of $9.7 million, compared with net income of $46.2 million during 2007. Lamar’s revenue was $1.2 billion during 2008, compared with $1.21 billion in 2007.

Said Wachovia media analyst Marci Ryvicker regarding Lamar’s Q4: “Q4 surprisingly missed guidance for the first time that we can remember. Q4 rev was -12% (PF) vs. guidance and our expectation of -9%. The miss was due to a significant fall-off in December (-16% vs. -9% in Oct./Nov.) across the entire platform. National and digital had the worst performance, at -17% and ~ -25%, respectively.  Despite the revenue miss, LAMR cut expenses a lot more than expected (-4%), which resulted in EBITDA of $114m (-20%) vs. our $112m (-22%) est.  FCF/share was $0.56 vs. our $0.32 est. due to lower capex and cash taxes; while EPS were -$0.08 vs. our -$0.06 — the miss was due to higher [depreciation and amortization].”