Lamar optimistic despite loss

• By CHAD CALDER
• Advocate business writer
• Published: Nov 6, 2009 - Page: 6B

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Lamar Advertising Co. reported a third-quarter loss Thursday of $4.8 million, compared to net income of $1.8 million for the third quarter of 2008.

The Baton Rouge billboard operator said net revenue was $271.8 million, down 13 percent from $312.5 million the same quarter last year.

Chief Operating Officer Sean Reilly said Lamar is optimistic about its prospects going forward and that signs of a recovery are showing in its ad sales, particularly following a national downturn that was “the severest we’ve ever seen.”

Operating income for the third quarter of 2009 was $39.3 million, 26 percent less than $53.2 million for the same period in 2008.

Adjusted EBITDA, a measure of operating income without noncash compensation, depreciation and amortization of assets commonly used to assess the success of media companies, was $122.5 million, down 9 percent from $134.5 million for the third quarter of 2008.

Free cash flow, however, was $83.0 million, up 93 percent from $42.9 million for the same period in 2008.

“The folks in the field feel that the worst is behind us,” Reilly said. “Our customers are doing better and that’s showing up in ad spend(ing).”

Reilly said telecommunications, health care, insurance and financial sectors are enjoying a slightly stronger recovery, but “what we’re sensing is a broad base recovery across the board.”

Reilly said Lamar’s digital billboards — it has 1,135 in 138 markets — are recovering faster than traditional billboards.

Reilly noted the company is leaner than it was a year ago, having laid off 300 employees and eliminated another 200 jobs through attrition a couple of quarters ago.

Spokesman Buster Kantrow said those layoffs, which were previously reported, were mostly in other markets.

Reilly said Lamar has also saved $3 million by doing its digital maintenance in-house, and is emerging as a stronger company, having learned how to weather the downturn.

“Quite simply, we’ve learned new and better ways to run our business,” he said.