Lamar Advertising Company (LAMR - Analyst Report) recently announced its intention to redeem $66.1 million worth of 6 5/8% Senior Subordinated Notes due in 2015. The notes will be redeemed on November 8, 2012, by Lamar Media Corp.
The redemption price has been fixed at 101.104% of principal amount. Interest accrued will be paid for notes surrendered on the redemption date.
The notes under consideration will include $36.1 million worth of 6 5/8% Senior Subordinated Notes due in 2015—Series B, and $30.0 million worth of 6 5/8% Senior Subordinated Notes maturing in 2015—Series C.
Prior to this redemption announcement, in July 2012, the company made similar efforts for reducing its debt balance by redeeming $122.8 million principal amount of 6 5/8% Senior Subordinated Notes.
Upon completion of the current redemption in November, approximately $71.2 million worth of Series C 6 5/8% Senior Subordinated Notes due in 2015, will be outstanding while there will be no Series B of similar notes outstanding in Lamar’s balance sheet.
Lamar is a Louisiana-based leading owner and operator of outdoor advertising structures in the U.S. Exiting the second quarter 2012, total debt, including current maturities stood at $2.2 billion in the company’s balance sheet. Interest expense in the quarter totaled $38.6 million, representing a decline of 11% year over year.
The company is scheduled to release its third quarter 2012 financial results on November 7. The Zacks Consensus Estimate for the third quarter stands at 14 cents, representing a year-over-year growth of 261.4%. Estimates for 2012 and 2013 are 14 cents and 58 cents, reflecting annual growth of 577.3% and 327.0%, respectively.
We currently maintain a Neutral recommendation on Lamar. The stock also bears a Zacks #3 Rank, translating into a short-term (1-3 months) Hold rating. Its prime competitor Clear Channel Outdoor Holdings Inc. (CCO - Snapshot Report) holds a Zacks #5 (Strong Sell) Rank.