<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q



[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1998


                                       or


[ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______


Commission file number 1-13275


                              OUTDOOR SYSTEMS, INC.
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                              <C>       
                  DELAWARE                                    86-0736400
 (State or other jurisdiction of incorporation)  (I.R.S. Employer Identification No.)
</TABLE>


  2502 N. BLACK CANYON HIGHWAY, PHOENIX, ARIZONA                     85009
     (Address of principal executive offices)                      (Zip code)


Registrant's telephone number, including area code (602) 246-9569


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                  Yes   X   No

Number of Common Shares outstanding at August 14, 1998: 184,307,007 SHARES.
<PAGE>   2
                                    CONTENTS

<TABLE>
<CAPTION>
                                                                                                           PAGE
                                                                                                           ----
<S>                                                                                                        <C>
PART I - FINANCIAL INFORMATION

      ITEM 1.  UNAUDITED FINANCIAL STATEMENTS

         Condensed Consolidated Balance Sheets June 30, 1998 and
               December 31, 1997..........................................................................    1

         Condensed Consolidated Statements of Operations for the Three and Six Months ended
               June 30, 1998 and 1997.....................................................................    2

         Condensed Consolidated Statements of Cash Flows Six Months ended
               June 30, 1998 and 1997.....................................................................    3

         Notes to Condensed Consolidated Financial Statements.............................................    4


      ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                     CONDITION AND RESULTS OF OPERATIONS..................................................    5


      ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                     MARKET RISK..........................................................................    8



PART II - OTHER INFORMATION

      ITEM 1.  LEGAL PROCEEDINGS..........................................................................    9

      ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS..................................................    9

      ITEM 3.  DEFAULT UPON SENIOR SECURITIES.............................................................    9

      ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS........................................    9

      ITEM 5.  OTHER INFORMATION..........................................................................    9

      ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K...........................................................    9

      SIGNATURES..........................................................................................   10
</TABLE>
<PAGE>   3
                                     PART I

                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                              OUTDOOR SYSTEMS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                       JUNE 30,          DECEMBER 31,
                                                                         1998               1997
                                                                      -----------        -----------
<S>                                                                   <C>                <C>
ASSETS
      Current Assets:
         Cash and cash equivalents                                    $     8,320        $     5,897
         Accounts receivable, net                                         134,271            119,745
         Prepaid land leases                                               27,937             28,659
         Other current assets                                              24,835             22,600
                                                                      -----------        -----------
             Total current assets                                         195,363            176,901
                                                                      -----------        -----------

      Property and Equipment, net                                       1,645,891          1,598,011
      Prepaid Land Leases and Other                                        13,729             13,565
      Deferred Financing Costs                                             37,533             40,520
      Goodwill, net                                                       459,134            400,160
                                                                      -----------        -----------
                                                                      $ 2,351,650        $ 2,229,157
                                                                      ===========        ===========

LIABILITIES AND STOCKHOLDERS' CAPITAL DEFICIENCY
      Current Liabilities:
         Accounts payable                                             $    12,122        $    11,454
         Accrued interest                                                   8,684              8,940
         Accrued expenses and other liabilities                            32,706             44,678
         Current maturities of long-term debt                              50,600             50,600
                                                                      -----------        -----------
             Total current liabilities                                    104,112            115,672

      Long-term Debt                                                    1,425,581          1,393,550
      Other Long-term Obligations                                           4,682              4,327
      Deferred Income Taxes                                                54,282             20,137
                                                                      -----------        -----------
             Total liabilities                                          1,588,657          1,533,686
                                                                      -----------        -----------

      Common Stockholders' Equity:
         Common stock, $.01 par value - authorized, 600,000,000
             shares; issued and outstanding 184,307,007 and
             181,684,733 shares                                             1,843              1,211
         Additional paid-in capital                                       762,653            709,730
         Accumulated earnings (deficit)                                     4,945             (9,837)
         Treasury stock at cost - 36,235,206 shares                        (3,794)            (4,053)
         Foreign currency translation adjustment                           (2,654)            (1,580)
                                                                      -----------        -----------
             Total common stockholders' equity                            762,993            695,471
                                                                      -----------        -----------
                                                                      $ 2,351,650        $ 2,229,157
                                                                      ===========        ===========
</TABLE>


            See notes to condensed consolidated financial statements.


                                        1
<PAGE>   4
                              OUTDOOR SYSTEMS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                (IN THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                           THREE MONTHS                               SIX MONTHS
                                                              ENDED                                     ENDED
                                                             JUNE 30,                                  JUNE 30,
                                                ----------------------------------        ---------------------------------
                                                    1998                 1997                 1998                1997
                                                -------------        -------------        -------------       -------------
<S>                                             <C>                  <C>                  <C>                 <C> 
REVENUES:
    Outdoor advertising                         $     193,998        $     110,520        $     357,740       $     200,233
    Less agency commissions and discounts              25,700               15,471               46,838              27,968
                                                -------------        -------------        -------------       -------------
                                                      168,298               95,049              310,902             172,265
    Other income                                        5,531                4,515                9,649               7,379
                                                -------------        -------------        -------------       -------------
        Net Revenues                                  173,829               99,564              320,551             179,644
                                                -------------        -------------        -------------       -------------


OPERATING EXPENSES:
    Direct advertising                                 81,169               52,901              156,043              97,516
    General and administrative                          8,605                6,167               17,158              12,884
    Depreciation and amortization                      27,812               13,529               54,848              25,164
                                                -------------        -------------        -------------       -------------
                                                      117,586               72,597              228,049             135,564
                                                -------------        -------------        -------------       -------------

    Operating income                                   56,243               26,967               92,502              44,080

OTHER:
    Foreign currency translation loss                   2,324                    4                1,844                 335
    Interest expense                                   32,393               16,102               64,260              31,694
                                                -------------        -------------        -------------       -------------
INCOME BEFORE ITEMS SET FORTH BELOW                    21,526               10,861               26,398              12,051
    Income tax provision                                9,472                4,501               11,615               5,001
                                                -------------        -------------        -------------       -------------
INCOME BEFORE EXTRAORDINARY LOSS                       12,054                6,360               14,783               7,050
    Extraordinary loss                                                       6,773                                    6,773
                                                -------------        -------------        -------------       -------------

NET INCOME (LOSS)                               $      12,054        $        (413)       $      14,783       $         277
                                                =============        =============        =============       =============


BASIC AND DILUTED INCOME PER SHARE:
    Basic:
        Income before extraordinary loss        $         .07        $         .04        $         .08       $         .05
        Extraordinary loss                                                    (.04)                                    (.05)
                                                -------------        -------------        -------------       -------------
        Net income (loss)                       $         .07        $         .00        $         .08       $         .00
                                                =============        =============        =============       =============
        Weighted average number of shares         182,926,049          148,494,288          182,332,099         142,045,567
                                                =============        =============        =============       =============

    Diluted:
        Income before extraordinary loss        $         .06        $         .04        $         .07       $         .04
        Extraordinary loss                                                    (.04)                                    (.04)
                                                -------------        -------------        -------------       -------------
        Net income (loss)                       $         .06        $         .00        $         .07       $         .00
                                                =============        =============        =============       =============
        Weighted average number of shares         203,600,759          168,483,413          202,861,251         161,986,676
                                                =============        =============        =============       =============
</TABLE>



            See notes to condensed consolidated financial statements.


                                        2
<PAGE>   5
                              OUTDOOR SYSTEMS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)



<TABLE>
<CAPTION>
                                                                                                     SIX MONTHS
                                                                                                        ENDED
                                                                                                       JUNE 30,
                                                                                              --------------------------
                                                                                                 1998             1997
                                                                                              ---------        ---------
<S>                                                                                           <C>              <C>
OPERATING ACTIVITIES:
    Net income                                                                                $  14,783        $     277
    Extraordinary loss                                                                                            11,288
    Increase (decrease) in deferred taxes                                                         8,521           (5,002)
    Depreciation and amortization                                                                54,848           25,164
    Loss on currency adjustment                                                                   1,844
    Other                                                                                           466              597
    Changes in assets and liabilities:
        Increase in accounts receivable, net                                                    (13,602)          (9,856)
        (Increase) decrease in prepaids and other                                                (6,429)           1,859
        Decrease in accrued interest                                                               (242)            (950)
        (Decrease) increase in accounts payable, accrued expenses and other liabilities          (8,088)           5,908
                                                                                              ---------        ---------
           Net Cash Provided by Operating Activities                                             52,101           29,285
                                                                                              ---------        ---------


INVESTING ACTIVITIES:
    Acquisitions of outdoor advertising assets                                                  (70,449)        (313,737)
    Capital expenditures                                                                        (16,512)          (9,697)
                                                                                              ---------        ---------
           Net Cash Used in Investing Activities                                                (86,961)        (323,434)
                                                                                              ---------        ---------


FINANCING ACTIVITIES:
    Proceeds from Senior Credit Facility                                                         98,383          331,348
    Proceeds from 8 7/8% Senior Subordinated Notes, net                                                          485,795
    Principal payments on long-term debt and capital leases                                     (60,500)        (587,265)
    Increase in deferred financing costs                                                           (537)         (23,636)
    Stock split                                                                                      (7)
    Issuance of common stock, net                                                                    (4)         394,547
                                                                                              ---------        ---------
           Net Cash Provided by Financing Activities                                             37,335          600,789
                                                                                              ---------        ---------

Effect of exchange rate changes on cash                                                             (52)             (97)
                                                                                              ---------        ---------

NET INCREASE IN CASH AND CASH
    EQUIVALENTS                                                                                   2,423          306,543

CASH AND CASH EQUIVALENTS - BEGINNING                                                             5,897           11,887
                                                                                              ---------        ---------

CASH AND CASH EQUIVALENTS - ENDING                                                            $   8,320        $ 318,430
                                                                                              =========        =========
</TABLE>


            See notes to condensed consolidated financial statements.


                                        3
<PAGE>   6
                              OUTDOOR SYSTEMS, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

    The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q of
Regulation S-X. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments and
reclassifications considered necessary for a fair and comparable presentation
have been included and are of a normal recurring nature. Operating results for
the three and six months ended June 30, 1998, are not necessarily indicative of
the results that may be expected for the year ending December 31, 1998. The
enclosed financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
Form 10-K filed with the Securities and Exchange Commission on March 18, 1998.

NOTE 2 - INCOME PER SHARE

    Basic net income per share is computed based on the weighted average number
of common shares outstanding during each period. Diluted net income per share is
computed based on the weighted average number of common and common equivalent
shares outstanding during each period and includes shares issuable upon exercise
of stock options except in those circumstances where such options would be
anti-dilutive.

The following is a reconciliation of basic and diluted weighted average shares.

<TABLE>
<CAPTION>
                                                     Three Months                         Six Months
                                                    Ended June 30,                      Ended June 30,
                                           -----------------------------       -----------------------------
                                               1998              1997              1998              1997
                                           -----------       -----------       -----------       -----------
<S>                                        <C>               <C>               <C>               <C>        
Basic weighted average shares              182,926,049       148,494,288       182,332,099       142,045,567
Add:
    Shares issuable upon exercise of
    stock options                           20,674,710        19,989,125        20,529,152        19,941,112
                                           -----------       -----------       -----------       -----------

Diluted weighted average shares            203,600,759       168,483,413       202,861,251       161,986,679
                                           ===========       ===========       ===========       ===========
</TABLE>


NOTE 3 - NEW ACCOUNTING PRONOUNCEMENTS

    The Financial Accounting Standards Board issued SFAS No. 130, Reporting
Comprehensive Income ("SFAS No. 130") and SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information ("SFAS No. 131"). SFAS No. 130
and 131 are effective for fiscal years beginning after December 15, 1997. SFAS
No. 130 changes the reporting of certain items currently reported in the equity
section of the balance sheet. The unrealized foreign currency adjustment is the
only addition to net income in arriving at comprehensive income for the Company.
Comprehensive income for the three and six months ended June 30, 1998 and 1997,
was $10.6 and $13.7 million, and $(0.3) and $(0.1) million, respectively. SFAS
No. 131 requires that public companies report certain information about
operating segments in their financial statements. It also establishes related
disclosures about products and services, geographic areas, and major customers.
The Company adopted SFAS 131 effective January 1, 1998; however, disclosure is
not required on an interim basis.

NOTE 4 - STOCK SPLIT

    On May 29, 1998, the Company completed a three-for-two stock split to
stockholders of record May 19, 1998. Historical share and per share amounts have
been adjusted for the stock split.


                                        4
<PAGE>   7
NOTE 5 - SUBSEQUENT EVENT

    Mexico Acquisitions - On July 1, 1998, pursuant to an Asset Purchase and
Assignment Agreement, dated June 4, 1998, the Company completed the acquisition
of substantially all of the assets of Vendor, S.A. de C.V., the outdoor
advertising subsidiary of Televisa, S.A. de C.V. for approximately US$216.0
million. In addition, pursuant to an Asset Purchase and Assignment Agreement,
dated June 4, 1998, the Company completed the acquisition of substantially all
of the outdoor advertising assets of MM Billboard, S.A. de C.V., an outdoor
advertising company in northern Mexico, for approximately US$21.9 million.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

RESULTS OF OPERATIONS

    Operating results for the three and six months ended June 30, 1998 include
the operations of Van Wagner Communications, Inc., the acquisition of which was
completed May 22, 1997, the outdoor advertising operations of Minnesota Mining
and Manufacturing Company, the acquisition of which was completed August 15,
1997, and the several other acquisitions completed during 1997 (collectively,
the "1997 Acquisitions").

COMPARISON OF THREE MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997

    Gross revenues increased 75.5% to $194.0 million during the second quarter
of 1998 compared to $110.5 million in the second quarter of 1997. Gross revenues
increased approximately 12.7% during the second quarter of 1998 compared to the
second quarter of 1997 for markets where the Company operated both in the 1998
and 1997 periods. The balance of the increased revenues were a result of the
1997 Acquisitions.

    Agency commissions were 13.2% and 14.0% of gross revenues in the second
quarter of 1998 and the second quarter of 1997, respectively. The decrease in
agency commissions as a percentage of gross revenues was primarily a result of a
slightly lower proportion of revenues generated through advertising agencies in
the 1998 period.

    Net revenues increased by 74.6% to $173.8 million in the second quarter of
1998 compared to $99.6 million in the second quarter of 1997, primarily as a
result of the increase in gross revenues combined with an increase of $1.0
million of other income. Other income increased primarily due to the inclusion
of license fee revenue from perpetual easements acquired in the second quarter
of 1997.

    Direct advertising expenses increased to $81.2 million in the second quarter
of 1998 compared to $52.9 million in the second quarter of 1997. This was
primarily a result of the 1997 Acquisitions. As a percentage of net revenues,
direct advertising expenses were approximately 46.7% in the second quarter of
1998 compared to 53.1% in the second quarter of 1997 because of efficiencies
realized from economies of scale.

    General and administrative expenses increased to $8.6 million in the second
quarter of 1998 compared to $6.2 million in the second quarter of 1997. This was
primarily a result of the 1997 Acquisitions. As a percentage of net revenues,
general and administrative expenses decreased to approximately 5.0% in the
second quarter of 1998 from 6.2% in the second quarter of 1997 because of
efficiencies realized from economies of scale.

    As a result of the above factors, EBITDA increased by 107.6% to $84.1
million in the second quarter of 1998 from $40.5 million in the second quarter
of 1997. The performance of an outdoor advertising business, such as the
Company, is measured by its ability to generate EBITDA. EBITDA is defined as
operating income (loss) before interest, taxes, depreciation, amortization and
foreign currency translation loss. EBITDA is not a measure of performance
calculated in accordance with generally accepted accounting principles, the
Company believes that EBITDA is accepted by the outdoor advertising industry as
a generally recognized measure of performance and is used by analysts who report
publicly on the performance of outdoor advertising companies. Nevertheless, this
measure should not be considered in isolation or as a substitute for operating
income, net income, net cash provided by operating activities or any other
measure for determining the Company's operating performance or liquidity which
is calculated in accordance with generally accepted accounting principles.


                                        5
<PAGE>   8
    Depreciation and amortization expense increased to $27.8 million for the
second quarter of 1998 compared to $13.5 million in the second quarter of 1997,
primarily due to the 1997 Acquisitions, offset in part by certain assets
becoming fully depreciated during the second quarter of 1998. As a percentage of
net revenues, depreciation and amortization expense increased to 16.0% from
13.6% in the second quarter of 1998 compared to the second quarter of 1997.

    Interest expense increased to $32.4 million in the second quarter of 1998
compared to $16.1 million in the second quarter of 1997, as a result of interest
expense related to the obligations incurred in connection with the 1997
Acquisitions. As a percentage of net revenues, interest expense increased to
18.6% for the second quarter of 1998 compared to 16.2% for the second quarter of
1997.

    The Company recorded an income tax provision of approximately $9.5 million
in the second quarter of 1998 compared to $4.5 million in the second quarter of
1997. The Company reported a $6.8 million extraordinary loss, net of $4.5
million tax benefit, in the second quarter of 1997 resulting from one time
bridge loan commitment costs in connection with one of the 1997 Acquisitions.

COMPARISON OF SIX MONTHS ENDED JUNE 30, 1998 AND JUNE 30, 1997

    Gross revenues increased by 78.7% to $357.7 million during the first six
months of 1998 compared to $200.2 million in the first six months of 1997. Gross
revenues increased approximately 12.8% during the first six months of 1998
compared to the first six months of 1997 for markets where the Company operated
both in the 1998 and 1997 periods. The balance of the increased revenues were a
result of the 1997 Acquisitions.

    Agency commissions were 13.1% and 14.0% of gross revenues in the first six
months of 1998 and the first six months of 1997, respectively. The decrease in
agency commissions as a percentage of gross revenues was primarily a result of a
slightly lower proportion of revenues generated through advertising agencies in
the 1998 period.

    Net revenues increased by 78.4% to $320.6 million in the first six months of
1998 compared to $179.6 million in the first six months of 1997, primarily as a
result of the increase in gross revenues combined with an increase of $2.3
million of other income. Other income increased primarily due to the inclusion
of license fee revenue from perpetual easements acquired in the second quarter
of 1997.

    Direct advertising expenses increased to $156.0 million in the first six
months of 1998 compared to $97.5 million in the first six months of 1997. This
was primarily a result of the 1997 Acquisitions. As a percentage of net
revenues, direct advertising expenses were approximately 48.7% in the first six
months of 1998 compared to 54.3% in the first six months of 1997 because of
efficiencies realized from economies of scale.

    General and administrative expenses increased to $17.2 million in the first
six months of 1998 compared to $12.9 million in the first six months of 1997.
This was primarily a result of the 1997 Acquisitions. As a percentage of net
revenues, general and administrative expenses decreased to approximately 5.4% in
the first six months of 1998 from 7.2% in the first six months of 1997 because
of efficiencies realized from economies of scale.

    As a result of the above factors, EBITDA increased by 112.8% to $147.4
million in the first six months of 1998 from $69.2 million in the first six
months of 1997.

    Depreciation and amortization expense increased to $54.9 million in the
first six months of 1998 compared to $25.2 million in the first six months of
1997, primarily due to the 1997 Acquisitions, offset in part by certain assets
becoming fully depreciated during the first six months of 1998. As a percentage
of net revenues, depreciation and amortization expense increased to 17.1% from
14.0% in the first six months of 1998 compared to the first six months of 1997.

    Interest expense increased to $64.3 million in the first six months of 1998
from $31.7 million in the first six months of 1997, as a result of interest
expense related to the obligations incurred in connection with the 1997


                                        6
<PAGE>   9
Acquisitions. As a percentage of net revenues, interest expense increased to
20.1% for the first six months of 1998 compared to 17.6% for the first six
months of 1997.

    The Company recorded an income tax provision of approximately $11.6 million
in the first six months of 1998 compared to $5.0 million in the first six months
of 1997. The Company reported a $6.8 million extraordinary loss, net of $4.5
million tax benefit, in the first six months of 1997 resulting from one time
bridge loan commitment costs in connection with one of the 1997 Acquisitions.


LIQUIDITY AND CAPITAL RESOURCES

    The Company's working capital increased to $91.3 million at June 30, 1998
compared to $61.2 million at December 31, 1997. This increase resulted primarily
from the increase in accounts receivable and the decrease in accrued expenses.

    Net cash provided by operating activities increased by $22.8 million to
$52.1 million for the six months ended June 30, 1998, compared to $29.3 million
for the six months ended June 30, 1997, primarily due to the increase in net
income, changes in working capital accounts and the effect of a larger
depreciation and amortization expense as a component of net income offset in
part by the extraordinary loss in 1997. Net cash used in investing activities
decreased to $87.0 million in the first six months of 1998 from $323.4 million
in the first six months of 1997, primarily because of the 1997 Acquisitions. Net
cash provided by financing activities decreased to $37.3 million for the first
six months of 1998 compared to $600.8 million for the first six months of 1997,
primarily because of borrowings under the senior credit facility used for the
1997 Acquisitions.

    The Company made approximately $16.5 million of capital expenditures during
the first six months of 1998, an increase from approximately $9.7 million during
the first six months of 1997. Currently, the Company has no material commitments
for capital expenditures, although it anticipates ongoing capital expenditures
in the ordinary course of business, other than for acquisitions, will be
approximately $30.0 million to $35.0 million in each of the next two years.

    The Company believes that internally generated funds and available
borrowings under the senior credit facility will be sufficient to satisfy its
operating cash requirements for at least the next twelve to twenty-four months.
The Company may, however, require additional capital to consummate significant
acquisitions in the future and there can be no assurance that such capital will
be available.

    The Company recognizes the need to ensure that its operations will not be
adversely impacted by Year 2000 software failures. The Company has identified
all significant applications that will require modification to ensure Year 2000
compliance ("Year 2000 Compliance"). Internal and external resources are being
used to make the required modifications and test Year 2000 Compliance. The
Company plans on completing the testing process of all significant applications
by December 31, 1998.

    In addition, the Company has communicated with others with whom it does
significant business to determine their Year 2000 Compliance readiness and the
extent to which the Company is vulnerable to any third party Year 2000 issues.
However, there can be no guarantee that the systems of other companies on which
the Company's systems rely will be timely converted, or that a failure to
convert by another company, or a conversion that is incompatible with the
Company's systems, would not have a material adverse effect on the Company.

    The total cost to the Company of these Year 2000 Compliance activities has
not been and is not anticipated to be material to its financial position or
results of operations in any given year. These costs and the date on which the
Company plans to complete the Year 2000 modification and testing processes are
based on management's best estimates, which were derived utilizing numerous
assumptions of future events including the continued availability of certain
resources, third party modification plans and other factors. However, there can
be no guarantee that these estimates will be achieved and actual results could
differ from those plans.

    Mexico Acquisitions - On July 1, 1998, pursuant to an Asset Purchase and
Assignment Agreement, dated June 4, 1998, the Company completed the acquisition
of substantially all of the assets of Vendor, S.A. de C.V., the


                                        7
<PAGE>   10
outdoor advertising subsidiary of Televisa, S.A. de C.V. for approximately
US$216.0 million. In addition, pursuant to an Asset Purchase and Assignment
Agreement, dated June 4, 1998, the Company completed the acquisition of
substantially all of the outdoor advertising assets of MM Billboard, S.A. de
C.V., an outdoor advertising company in northern Mexico, for approximately
US$21.9 million. The Company financed the purchase price of these acquisitions
with borrowings under the Company's senior credit facility.

FORWARD-LOOKING STATEMENTS

    This report contains certain statements that are "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
When used in this report, the words "estimate", "expect", "anticipate",
"believe" and similar expressions are intended to identify forward-looking
statements. The Company cautions that reliance on any forward-looking statement
involves risk and uncertainties, and that although the Company believes that the
assumptions on which the forward-looking statements contained herein are based
are reasonable, any of those assumptions could prove to be inaccurate, and as a
result, the forward-looking statements based on those assumptions also could be
incorrect. The uncertainties in this regard include, but are not limited to,
those identified in the risk factors discussed under "Risk Factors" in the
Company's Prospectus dated July 24, 1997 included in the Company's Registration
Statement on Form S-4 (Reg. No. 333-30957).


ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Not applicable.


                                        8
<PAGE>   11
                                     PART II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         Not applicable.

ITEM 3.  DEFAULT UPON SENIOR SECURITIES

         None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         The Annual Meeting of Stockholders of the Company was held on May 21,
1998. The following matters were submitted to a vote at the meeting:

         (1) A proposal to elect one Class II director to the Board of Directors
             to serve for a term of three years. The results of the voting with
             respect to the election were as follows:

             Nominee                     For               Authority Withheld
             Brian J. O'Connor           107,260,341       439,739

         The directors whose terms of office continued after the 1998 Annual
Meeting of Stockholders are William S. Levine and Arturo R. Moreno (terms
expiring 1999) and Stephen F. Butterfield (term expiring 2000).

         (2) A proposal to amend the Certificate of Incorporation of the Company
             to increase the number of authorized shares of Common Stock from
             200,000,000 to 600,000,000 shares. The results of the voting on
             this matter were as follows:

             For              Against           Abstain    Broker Non-Votes
             86,971,598       20,694,511        27,937     6,054

         The proxy or proxies designated by the Company will have discretionary
authority to vote on any matter properly presented by a shareholder for
consideration at the 1999 Annual Meeting of Shareholders but not submitted for
inclusion in the proxy materials for such meeting unless notice of the matter is
received by the Company at its principal executive office not later than March
9, 1999 and certain other conditions of the applicable rules of the Securities
and Exchange Commission are satisfied.

ITEM 5.  OTHER INFORMATION

         None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      The following exhibits are filed herewith:

              Exhibit No.  Document

                27         Financial Data Schedule

(b)      Reports on Form 8-K.

         Form 8-K filed July 16, 1998 reporting the completion of the
         acquisition of Vendor, S.A. de C.V.


                                        9
<PAGE>   12
                                   SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                               OUTDOOR SYSTEMS, INC.



DATED: August 14, 1998         By           /S/ Bill Beverage
                                 ------------------------------------------
                                   Bill Beverage, Chief Financial Officer,
                                   Secretary/Treasurer
                                        (Principal Accounting Officer)


                                       10
<PAGE>   13
                                  EXHIBIT INDEX


          Exhibit No.                      Description

             27                          Financial Data Schedule