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LAMR $48-$47.25 (billboards , PE 135<g>) recommended Dec 7, med-high short interest 8%/float ..6 days to cov

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Lamar Advertising Company Announces Third Quarter 2005 Operating Results and $250 Million Stock Repurchase Program
Lamar Advertising Company (Nasdaq:LAMR), a leading owner and operator of outdoor advertising and logo sign displays, announces the Company's operating results for the third quarter ended September 30, 2005.

Third Quarter Results

Lamar reported net revenues of $265.6 million for the third quarter of 2005 versus $231.6 million for the third quarter of 2004, a 14.7% increase. Operating income for the third quarter of 2005 was $48.7 million as compared to $33.2 million for the same period in 2004. There were net earnings of $12.1 million for the third quarter of 2005 compared to net earnings of $8.3 million for the third quarter of 2004.

Adjusted EBITDA, which we refer to herein as EBITDA (defined as operating income before depreciation and amortization and (gain) loss on disposition of assets - see reconciliation to net income at the end of this release), for the third quarter of 2005 was $122.8 million versus $107.9 million for the third quarter of 2004, a 13.8% increase.

As a result of refinancing activity during the third quarter, the Company recorded a loss on debt extinguishment of $4.0 million associated with previously capitalized debt issuance costs.

Free cash flow (defined as EBITDA less interest, net of interest income and amortization of financing costs, current taxes, preferred stock dividends and total capital expenditures - see reconciliation to cash flows provided by operating activities at the end of this release) for the third quarter of 2005 was $74.4 million as compared to $66.7 million for the same period in 2004, an 11.5% increase.

Pro forma net revenue for the third quarter of 2005 increased 5.9% and pro forma EBITDA increased 7.8% as compared to the third quarter of 2004. Pro forma net revenue and EBITDA include adjustments to the 2004 period for acquisitions and divestitures for the same time frame as actually owned in the 2005 period, excluding new markets acquired as a result of the acquisition of Obie Media Corporation (the "Obie markets"), which closed on January 18, 2005. As a result, our pro forma results for the 2005 period exclude the operating results from the Obie markets, and no adjustment has been made to the 2004 period with respect to the acquisition of the Obie markets. Tables that reconcile reported results to pro forma results and operating income to outdoor operating income are included at the end of this release.

Nine Months Results

Lamar reported net revenues of $763.2 million for the nine months ended September 30, 2005 versus $659.5 million for the same period in 2004, a 15.7% increase. Operating income for the nine months ended September 30, 2005 was $131.7 million as compared to $77.1 million for the same period in 2004. EBITDA increased 16.2% to $344.6 million for the nine months ended September 30, 2005 versus $296.6 million for the same period in 2004. There was net income of $35.9 million for the nine months ended September 30, 2005 as compared to net income of $12.3 million for the same period in 2004.

Free Cash Flow for the nine months ended September 30, 2005 was $203.2 million as compared to $185.0 million for the same period in 2004, a 9.8% increase.

Gulf Coast Hurricanes

On August 29, 2005 Hurricane Katrina made landfall in the Biloxi, Mississippi area causing severe damage to Lamar's inventory. Other markets in the area where the Company sustained damage, but to a lesser degree, include the following: New Orleans and Hammond, Louisiana; Jackson, Meridian and Hattiesburg, Mississippi; and Mobile, Alabama.

On September 24, 2005 Hurricane Rita made landfall on the southern border between Louisiana and Texas inflicting heavy damage in two Lamar markets - Lake Charles, Louisiana and Beaumont, Texas.

Due to the physical damage incurred by the Company and the business interruption to our customers, the revenue lost in the third quarter was approximately $1.6 million. It is anticipated that the revenue loss in the fourth quarter will be approximately $2.0 million.

The Company's cost to replace affected inventory will be approximately $15.0 million. This additional capital outlay will increase the Company's 2005 estimated capital expenditures to approximately $100.0 million. It is anticipated that all reconstruction in the affected areas will be complete by the beginning of 2006. In addition, the Company took an unexpected expense included in deprecation and amortization of approximately $3.5 million in the third quarter for the remaining net book value of destroyed structures.

Stock Repurchase Program

In addition, Lamar further announces that its Board of Directors has authorized the repurchase of up to $250 million of the Company's Class A Common Stock from time to time over a period not to exceed 18 months. The share repurchases may be made on the open market or in privately negotiated transactions.

The timing and amount of any shares repurchased will be determined by Lamar's management based on its evaluation of market conditions and other factors. The repurchase program may be suspended or discontinued at any time. Any repurchased shares will be available for future use for general corporate and other purposes. The repurchase program will be funded using working capital, availability under the Company's revolving credit facility and future cash flows.

Lamar Advertising Company had approximately 90 million shares of Class A Common Stock and 16 million shares of Class B Common Stock, which is convertible into Class A Common Stock on a one-for-one-basis at the option of its holder, outstanding as of November 1, 2005.

Guidance

For the fourth quarter of 2005 the Company expects net revenue to be approximately $242 million, excluding expected net revenue from the Obie markets. On a pro forma basis this represents an increase of approximately 5% over the same period in 2004.

The Company estimates the net revenue from the Obie markets will be approximately $9 million for the fourth quarter of 2005. The Company intends to provide separate guidance for the Obie markets until it has owned and operated them for 12 months.

Forward Looking Statements

This press release contains forward