MONTREAL, Aug. 9, 2018 /CNW Telbec/ - Yellow Pages Limited
(TSX: Y) (the "Company"), a leading Canadian digital media and
marketing company, released its operational and financial results
today for the quarter and six months ended June 30, 2018.
Financial
Highlights
|
|
|
|
(In thousands of
Canadian dollars, except percentage, per share and customer count
information)
|
|
For the
three-month periods
ended June 30,
|
For the
six-month periods
ended June 30,
|
Yellow Pages
Limited
|
2018
|
2017
|
2018
|
2017
|
Revenues
|
$163,212
|
$193,515
|
$322,526
|
$373,723
|
Adjusted
EBITDA1
|
$57,222
|
$49,942
|
$105,155
|
$91,476
|
Adjusted
EBITDA1 margin
|
35.1%
|
25.8%
|
32.6%
|
24,5%
|
Net earnings
(loss)
|
$16,646
|
$2,388
|
$15,727
|
$(2,699)
|
Basic earnings (loss)
per share
|
$0.63
|
$0.09
|
$0.60
|
$(0.10)
|
Diluted earnings
(loss) per share
|
$0.56
|
$0.09
|
$0.57
|
$(0.10)
|
CAPEX1
|
$416
|
$11,885
|
$5,811
|
$26,743
|
Adjusted EBITDA less
CAPEX1
|
$56,806
|
$38,057
|
$99,344
|
$64,733
|
Cash flow from
operating activities
|
$25,571
|
$38,647
|
$56,982
|
$54,627
|
Customer
count2
|
209,100
|
236,500
|
209,100
|
236,500
|
"This quarter's financial results reflect our emphasis on
aligning our spending with the realities of our revenue, shedding
unprofitable or non-synergistic businesses and revenues, and
setting the stage for profitable growth in the future. As a result,
Adjusted EBITDA less CAPEX was 49% higher than last year. We
are gratified that this is the first time in at least 6 years that
our Company has reported increased Adjusted EBITDA less CAPEX for 2
quarters in a row," said David A.
Eckert, President and CEO of Yellow Pages Limited. "We will
keep stakeholders up to date as we continue making the improvements
to our Company that are necessary to build long-term value for all
concerned."
Second Quarter of 2018 Results
- Adjusted EBITDA less CAPEX1 increased by
$18.7 million to $56.8 million despite a $30.3 million revenue decline relative to the
second quarter of 2017.
- Net earnings increased by $14.2
million to $16.6 million, or
$0.56 per diluted share.
Segmented Information
The Company's operations are divided into the following four
segments:
- YP – digital and traditional marketing solutions, including
owned and operated media, provided to small and medium sized
enterprises ("SMEs")
- Agency – national advertising services to brands and
publishers, primarily through Mediative and Juice, as well as Totem
until its divestiture as of May 31,
2018.
- Real Estate – media and expertise to help Canadians buy and
sell their homes. Fully divested in July
2018: ComFree/DuProprio (CFDP) as of July 6, 2018 for cash consideration of
$51 million on a cash free debt free
basis, subject to a working capital adjustment, and Yellow Pages
NextHome as of July 23, 2018.
- Other – 411.ca. and included local lifestyles magazines
specific to the Western Canadian market until the divestiture of
Western Media Group as of May 31,
2018.
An overview of each segment and the performance of each segment
for the three and six-month periods ended June 30, 2018 can be found in the August 9, 2018 Management's Discussion and
Analysis.
Financial Results for the Second Quarter of 2018
Total revenues for the three-month period ended June 30, 2018 decreased by $30.3 million or 15.7% year-over-year and
amounted to $163.2 million as
compared to $193.5 million for the
same period last year. The decline in total revenues for the
three-month period ended June 30,
2018 was due mainly to both digital and print revenue
declines in all segments, with the exception of the Real Estate
segment which gained 3.6% in the second quarter of 2018 and was
stable over the six-month period.
Adjusted EBITDA increased by $7.3
million or 14.6% to $57.2
million during the second quarter of 2018, compared to
$49.9 million during the second
quarter of 2017. Our Adjusted EBITDA margin for the second quarter
of 2018 was 35.1% compared to 25.8% for the second quarter of 2017.
The increase in Adjusted EBITDA and Adjusted EBITDA margin for the
second quarter ended June 30, 2018
was mainly the result of reductions in our cost structure including
reductions in our workforce and associated employee costs,
reductions in the Company's office space footprint, and other
spending reductions across the Company.
The Company recorded net earnings of $16.6 million during the second quarter of 2018
as compared to net earnings of $2.4
million during the second quarter of 2017. The improvement
in net earnings is mainly due to higher Adjusted EBITDA, decreased
depreciation and amortization expenses, and increased income taxes
associated with the improvement in pre-tax earnings.
Adjusted EBITDA less CAPEX1 increased by $18.8 million or 49.3% to $56.8 million during the second quarter of 2018,
compared to $38.1 million during the
second quarter of 2017. The increase in Adjusted EBITDA less
CAPEX1 for the three-month period ended June 30, 2018 was mainly impacted by the result
of higher Adjusted EBITDA1 and decreased spending on
software development, office and computer equipment and leasehold
improvements associated with office relocations.
Cash flows from operating activities decreased by $13.1 million to $25.6
million from $38.6 million for
the second quarter period ended June 30,
2018 mainly due to higher interest paid of $10.0 million, increased payments for
restructuring and other charges of $3.4
million, and lower change in operating assets and
liabilities of $6.4 million,
partially offset by higher Adjusted EBITDA of $7.3 million. The higher interest paid is mainly
due to the fact that the Company's 10.00% Senior Secured Notes
interest payments are semi-annual in the second and fourth quarter
of 2017 whereas the 9.25% Senior Secured Notes they replaced had
quarterly interest payments.
Conference Call & Webcast
Yellow Pages Limited will hold an analyst and media call and
simultaneous webcast at 8:30 a.m. (Eastern
Time) on August 9, 2018 to
discuss second quarter 2018 results. The call may be accessed by
dialing 416-340-2216 within the Toronto area, or 1-800-478-9326 outside of
Toronto, with both the password
#4291216. Be prepared to join the conference at least 5
minutes prior to the conference start time.
The call will be simultaneously webcast on the Company's website
at: https://corporate.yp.ca/en/investors/financial-reports/
The conference call will be archived in the Investors section of
the site at:
https://corporate.yp.ca/en/investors/financial-events-presentations/
About Yellow Pages Limited
Yellow Pages Limited (TSX:
Y) is a Canadian digital media and marketing company that creates
opportunities for buyers and sellers to interact and transact in
the local economy. Yellow Pages holds some of Canada's leading local online properties
including YP.ca, RedFlagDeals.com, Canada411.ca, 411.ca and
Bookenda.com. The Company also holds the YP, YP Shopwise,
YP Dine, RedFlagDeals, Canada411, 411, Bookenda, and mobile
applications and Yellow Pages print directories. In addition,
Yellow Pages is a leader in national advertising through its
businesses devoted to servicing the marketing needs of large North
American brands, including Mediative and JUICE. For more
information visit www.corporate.yp.ca.
Caution Concerning Forward-Looking Statements
This
press release contains forward-looking statements about the
objectives, strategies, financial conditions, results of operations
and businesses of the Company. These statements are forward-looking
as they are based on our current expectations, as at August 9, 2018, about our business and the
markets we operate in, and on various estimates and assumptions.
Our actual results could materially differ from our expectations if
known or unknown risks affect our business, or if our estimates or
assumptions turn out to be inaccurate. As a result, there is no
assurance that any forward-looking statements will materialize.
Risks that could cause our results to differ materially from our
current expectations are discussed in section 5 of our August 9, 2018 Management's Discussion and
Analysis. We disclaim any intention or obligation to update any
forward-looking statements, except as required by law, even if new
information becomes available, as a result of future events or for
any other reason.
1 Non-IFRS Measures
In order to
provide a better understanding of the results, the Company uses the
terms Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA
is defined as income from operations before depreciation and
amortization, impairment of intangible assets and goodwill, and
restructuring and other charges (recovery), or revenues less
operating costs, as shown in Yellow Pages Limited's interim
condensed consolidated statements of income (loss). Adjusted EBITDA
margin is defined as the percentage of Adjusted EBITDA to revenues.
Adjusted EBITDA and Adjusted EBITDA are not performance measures
defined under IFRS and are not considered an alternative to income
from operations or net earnings in the context of measuring Yellow
Pages performance. Adjusted EBITDA and Adjusted EBITDA margin do
not have a standardized meaning and are therefore not likely to be
comparable to similar measures used by other publicly traded
companies. Management uses Adjusted EBITDA and Adjusted EBITDA
margin to evaluate the performance of its business as it reflects
its ongoing profitability. Management believes that certain
investors and analysts use Adjusted EBITDA and Adjusted EBITDA
margin to measure a company's ability to service debt and to meet
other payment obligations or to value companies in the media and
marketing solutions industry as well as to evaluate the performance
of a business.
The Company also uses Adjusted EBITDA less CAPEX, which is
defined as Adjusted EBITDA, or revenues less operating costs, as
shown in Yellow Pages Limited's consolidated statements of income
(loss), less CAPEX which we define as additions to intangible
assets and additions to property and equipment less lease
incentives received all as reported in the Investing Activities
section of the Company's interim condensed consolidated statements
of cash flows. Adjusted EBITDA less CAPEX is a non-IFRS financial
measure and does not have any standardized meaning under IFRS.
Therefore, it is unlikely to be comparable to similar measures
presented by other publicly traded companies. We use Adjusted
EBITDA less CAPEX to evaluate the performance of our business as it
reflects its ongoing profitability. We believe that certain
investors and analysts use Adjusted EBITDA less CAPEX to evaluate
the performance of a business. Refer to the August 9, 2018
MD&A for a reconciliation of CAPEX.
2 For the twelve-month periods ended June 30.
SOURCE Yellow Pages Limited