MONTREAL, Aug. 14, 2019 /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, 2019 and announces that the Company
intends to make an additional optional redemption payment of
$30 million toward the principal amount of its Senior Secured
Notes on November 1, 2019.
"We are very pleased with the Company results that we are
reporting today. For the second quarter in a row, our Adjusted
EBITDA margin was above 40%. Partly as a result of that, we are
planning another optional, $30
million payment on our Senior Secured Notes. That payment,
on November 1, 2019, along with the
estimated next mandatory payment on November
30, 2019, would leave only approximately $10 million outstanding.
"And on the revenue front, our sales professionals, and our
entire team, have been working very hard to 'bend the revenue
curve.' We are now beginning to see progress. In our core, YP
segment, today we report for the second quarter in a row an
improved year-on-year rate of revenue change. And we are seeing
further strengthening in our 'bookings,' which are a leading
indicator of future reported revenue," 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)
|
Yellow Pages
Limited
|
For the
three-month periods ended June 30,
|
For the
six-month periods ended June 30,
|
2019
|
2018
|
2019
|
2018
|
YP
|
$106,610
|
$129,339
|
$210,285
|
$257,173
|
Other and Intersegment
Eliminations
|
162
|
33,873
|
1,274
|
65,353
|
Total
revenues
|
$106,772
|
$163,212
|
$211,559
|
$322,526
|
Adjusted
EBITDA1
|
$43,422
|
$57,222
|
$88,803
|
$105,155
|
Adjusted EBITDA
margin1
|
40.7%
|
35.1%
|
42.0%
|
32.6%
|
Net
earnings
|
$14,573
|
$16,646
|
$27,233
|
$15,727
|
Basic earnings per
share
|
$0.55
|
$0.63
|
$1.03
|
$0.60
|
Diluted earnings per
share
|
$0.51
|
$0.56
|
$0.96
|
$0.57
|
CAPEX1
|
$2,782
|
$416
|
$5,406
|
$5,811
|
Adjusted EBITDA less
CAPEX1
|
$40,640
|
$56,806
|
$83,397
|
$99,344
|
Cash flow from
operating activities
|
$28,627
|
$25,571
|
$62,175
|
$56,982
|
Second Quarter of 2019 Results
- Adjusted EBITDA less CAPEX1 decreased by
$16.2 million year-over-year and
amounted to $40.6 million as a result
of revenue pressures partially offset by cost reductions.
- Net earnings decreased by $2.1
million to $14.6 million, or
$0.51 per diluted share.
- The Company made a $90 million
principal repayment on its Senior Secured Notes.
Segmented Information
The Company's operations are 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 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.
An overview of each segment and the performance of each segment
for the three-month and six-month periods ended June 30, 2019 can be found in the August 14, 2019 Management's Discussion and
Analysis.
Financial Results for the Second Quarter of 2019
Total revenues for the three-month period ended June 30, 2019 decreased by $56.4 million or 34.6% year-over-year and
amounted to $106.8 million as
compared to $163.2 million for the
same period last year. The decline in total revenues for the
three-month period ended June 30,
2019 was due to the divestitures in the Other segment as
well as lower digital and print revenues in the YP segment.
Revenues for the YP segment for the second quarter of 2019
decreased by $22.7 million or 17.6%
year-over-year and amounted to $106.6
million compared to $129.3
million for the same period last year. The decrease for the
quarter ended June 30, 2019 is mainly
due to the decline of our higher margin YP digital media and print
products and, to a lesser extent, our lower margin digital services
products, thereby creating pressure on our gross profit
margins.
Adjusted EBITDA decreased by $13.8 million or 24.1% to $43.4 million during the second quarter of
2019, compared to $57.2 million
during the second quarter of 2018. The Company's Adjusted EBITDA
margin for the second quarter of 2019 was 40.7% compared to 35.1%
for the second quarter of 2018. 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.
Adjusted EBITDA for the YP segment for the second quarter ended
June 30, 2019 totalled $43.4 million compared to $53.3 million for the same period last year as a
result of lower overall revenues and pressures from the change in
product mix. The Adjusted EBITDA margin for the YP segment for the
second quarter of 2019 was 40.7% compared to 41.2% for the second
quarter of 2018. The slight decrease in Adjusted EBITDA margin for
the second quarter is due to the revenue pressures being mostly
offset by an increased focus on the profitability of our products
and services and reductions in both our cost of sales and other
operating costs.
Adjusted EBITDA less CAPEX decreased by $16.2 million or 28.5% to $40.6 million during the second quarter of
2019, compared to $56.8 million
during the second quarter of 2018 mainly due to lower Adjusted
EBITDA partially offset by decreased spending on software
development. Adjusted EBITDA less CAPEX was further negatively
impacted by lease incentives received in 2018.
The Company recorded net earnings of $14.6 million during the second quarter of
2019 as compared to net earnings of $16.6
million during the second quarter of 2018. The decrease in
net earnings in the second quarter of 2019 compared to the same
period last year is mainly due to lower Adjusted EBITDA and the
increase in restructuring charges as the restructuring charges in
2018 benefited from more favorable lease recoveries than
anticipated. This was mostly offset by lower depreciation and
amortization expenses mainly from lower software development
expenditures and by lower financial charges from a reduced level of
indebtedness.
Cash flows from operating activities increased by $3.1 million to $28.6
million from $25.6 million for
the three-month period ended June 30,
2019 mainly due to lower interest paid of $7.8 million and lower payments for restructuring
and other charges of $7.0 million,
partially offset by lower Adjusted EBITDA of $13.8 million. Cash flows also benefited by an
additional $1.9 million generated by
the change in operating assets and liabilities.
As at June 30, 2019, the Company
had $128.7 million of net debt
excluding lease obligations2, compared to $182.2 million as at December 31, 2018.
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 14, 2019 to discuss second
quarter 2019 results. The call may be accessed by dialing
416-340-2216 within the Toronto
area, or 1-800-273-9672 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 August 14, 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 August 14, 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
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. Adjusted
EBITDA margin is defined as the percentage of Adjusted EBITDA to
revenues. Adjusted EBITDA and Adjusted EBITDA margin 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
interim consolidated statements of income, less CAPEX which we
define as additions to intangible assets and additions to property
and equipment less lease incentives received 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 14,
2019 MD&A for a reconciliation of CAPEX.
|
|
2 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.
|
SOURCE Yellow Pages Limited