MONTREAL, May 15, 2019 /CNW Telbec/ - Yellow Pages
Limited (TSX: Y) (the "Company"), a leading Canadian digital media
and marketing company, released its operating and financial results
today for the quarter ended March 31,
2019 and is announcing that the Company will make an
aggregate redemption payment of $91.7
million composed of a $50.9
million mandatory redemption and $40.8 million optional redemption including
accrued and unpaid interest of $0.9 million and an optional redemption
premium of $0.8 million, on its
senior secured notes on May 31, 2019
and June 13, 2019 respectively.
"After yet another quarter of strong cash generation, our net
debt excluding lease obligations1 is down to
$154 million, a reduction of over
$200 million since the end of 2017.
We are benefiting from having shed non-synergistic and unprofitable
business and having implemented efficiencies throughout the
company. As we are now working hard to bend the revenue curve in
our core business, we are pleased that we are able to make such
strides in eliminating debt and maintain strong cash
generation," said David A.
Eckert, President and CEO of Yellow Pages Limited.
Financial
Highlights
(In thousands of
Canadian dollars, except percentage information and per share
information)
|
|
Three-month
periods ended March 31,
|
Yellow Pages
Limited
|
2019
|
2018
|
Revenues
|
$104,787
|
$159,314
|
Adjusted
EBITDA2
|
$45,381
|
$47,933
|
Adjusted
EBITDA2 margin
|
43.3%
|
30.1%
|
Net earnings
(loss)
|
$12,660
|
($919)
|
Basic earnings (loss)
per share
|
$0.48
|
($0.03)
|
Diluted earnings
(loss) per share
|
$0.45
|
($0.03)
|
CAPEX2
|
$2,624
|
$5,395
|
Adjusted EBITDA less
CAPEX2
|
$42,757
|
$42,538
|
Cash flow from
operating activities
|
$33,548
|
$31,411
|
First Quarter 2019 Results
- Adjusted EBITDA less CAPEX increased $0.3 million year-over-year and amounted to
$42.8 million despite a $54.5 million revenue decline mainly due to
divestitures
- Net earnings increased to $12.7
million or $0.45 per diluted
share
- The Company will make a mandatory redemption payment of
$50.9 million on its 10.00% Senior
Secured Notes, at par, including accrued and unpaid interest of
$0.4 million, on May 31, 2019
- The Company will also make an optional redemption payment of
$40.8 million, including accrued and
unpaid interest of $0.5 million and
an optional redemption price premium of $0.8
million on its 10.00% Senior Secured Notes on June 13, 2019.
Segmented Information
Following the organizational changes made throughout fiscal year
2018, including the disposal or liquidation of several affiliates,
the Company made changes to how it manages its business to assess
performance and allocate resources. The Company's operations have
been categorized into two reportable segments:
- The YP segment provides, small and medium-sized businesses
across Canada, digital and
traditional marketing solutions, including online and mobile
priority placement on Yellow Pages' owned and operated media,
content syndication, search engine solutions, website fulfillment,
social media campaign management, digital display advertising,
video production and print advertising. This segment also includes
the 411.ca digital directory service helping users find and connect
with people and local businesses
- The Other segment includes the YP Dine and Bookenda until their
sale on April 30, 2019 and the
Mediative division until its liquidation on January 31, 2019. The operations of the
businesses sold in 2018 are also included in this segment until
their respective disposal dates, namely: JUICE Mobile,
RedFlagDeals.com™, Yellow Pages NextHome, ComFree/DuProprio, Totem
and Western Media Group.
The comparative figures have been restated to reflect the
changes to the reportable segments. An overview of each segment and
the performance of each segment for the three-month period ended
March 31, 2019 can be found in the
May 15, 2019 Management's Discussion
and Analysis.
Financial Results for the First Quarter of 2019
Total revenues for the first quarter ended March 31, 2019 decreased by $54.5 million or 34.2% year-over-year and
amounted to $104.8 million as
compared to $159.3 million for the
same period last year. The decline in total revenues for the
three-month period ended March 31, 2019 was due mainly to
the divestitures in the Other segment as well as lower revenues in
the YP segment.
The YP segment revenues for the three-month period ended
March 31, 2019 totalled $103.7 million compared to $127.8 million for the same period last year. The
$24.1 million or 18.9% decrease for
the three-month period ended March 31,
2019 is mainly due to the decline of our higher margin YP
digital media and print products and to a lesser extent to our
lower margin digital services products, thereby creating pressure
on our gross profit margins.
Adjusted EBITDA decreased by 5.3% to $45.4 million in the first quarter ended
March 31, 2019 relative to
$47.9 million for the same period
last year. The Company's Adjusted EBITDA margin for the first
quarter of 2019 was 43.3% compared to 30.1% for the same period
last year. The decrease in Adjusted EBITDA was the result of the
revenue pressures in the YP segment as well as the divestitures in
the Other segment. The increase in Adjusted EBITDA margin for the
first quarter ended March 31, 2019
was mainly due to the dilutive effect on profitability of the lower
margin Other segment in 2018 and reductions in both our cost of
sales and other operating costs in the YP segment.
YP Segment Adjusted EBITDA for the first quarter ended
March 31, 2019 totalled $45.1 million compared to $46.9 million for the same period last year as a
result of lower overall revenues and pressures from the change in
product mix. Despite these pressures, the Adjusted EBITDA margin
for the YP segment for the first quarter of 2019 increased to 43.5%
compared to 36.7% for the same period last year. The improvement in
the YP segment was mainly due to an increased focus on the
profitability of our products and services and reductions in both
our cost of sales and other operating costs. The reductions in cost
of sales were mainly due to workforce reductions primarily in
non-customer facing areas in the first quarter of 2018, call center
consolidations and optimization of our servicing model in the
second quarter of 2018. The decrease in other operating costs
included reductions in our workforce and associated employee
expenses, reductions in the Company's office space footprint, other
spending reductions across the segment as well as an adjustment to
the variable compensation expense mainly due to the employee
attrition and previous year performances.
Adjusted EBITDA less CAPEX increased by $0.3 million to $42.8
million during the first quarter of 2019, compared to
$42.5 million during the first
quarter of 2018. The increase in Adjusted EBITDA less CAPEX for the
three-month period ended March 31,
2019 was mainly impacted by decreased capital expenditures
which offset the lower Adjusted EBITDA.
The Company recorded net earnings of $12.7 million during the first quarter of 2019 as
compared to a net loss of $0.9
million during the first quarter of 2018. The improvement in
profitability of $13.6 million for
the three-month period ended March 31,
2019 is explained principally by lower depreciation and
amortization expenses and a decrease in restructuring and other
charges.
Cash flows from operating activities increased by $2.1 million to $33.5
million from $31.4 million for
the first quarter ended March 31,
2018 due to lower Adjusted EBITDA of $2.6 million offset mainly by lower payments for
restructuring and other charges of $1.7
million, lower funding of post-employment benefit plans of
$1.5 million and lower interest paid
of $0.7 million. Cash flows also
benefited by an additional $1.5
million generated by the change in operating assets and
liabilities.
Conference Call & Webcast
Yellow Pages Limited
will hold an analyst and media call and simultaneous webcast at
8:30 a.m. (Eastern Time) on
May 15, 2019 to discuss first quarter
2019 results. The call may be accessed by dialing 416-340-2216
within the Toronto area, or
1-888-273-9672 outside of Toronto.
Please 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, Canada411.ca and 411.ca. The Company also holds
the YP, Canada411 and 411 mobile applications and Yellow Pages
print directories. 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 May 15, 2019, 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
May 15, 2019 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 Net
debt excluding lease obligations Net debt excluding lease
obligations is comprised of Senior secured notes and Exchangeable
debentures less Cash and restricted cash as presented in our
Unaudited Interim Condensed Consolidated Statements of Financial
Position
|
|
2
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
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 May 15, 2019 MD&A for a reconciliation
of CAPEX.
|
SOURCE Yellow Pages Limited