MONTREAL, Aug. 5, 2021 /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 and six months ended June 30, 2021.
"We are very pleased with our second quarter results, which
reflect our continuing progress," said David A. Eckert, President and CEO of Yellow
Pages Limited.
Eckert commented on the key developments:
- Continued rebound of the "revenue curve." "For the third
consecutive quarter since
COVID-19 hit, we report a favorable 'bending of the revenue curve'
in Q2, with a better rate of change in revenue than reported for
the previous quarter."
- Promising trends in bookings. "The trends in our
bookings continue to be quite strong, suggesting further
improvement in our revenue curve in coming quarters, as the sales
levels already booked become reported revenue."
- Progress on revenue initiatives. "We continue to make
progress on executing on our programs to expand our tele-sales
force and to add to our strong product portfolio."
- Good quarterly earnings. "Our Adjusted
EBITDA1 for the quarter was a healthy 32.8% of revenue,
despite the COVID-19 crisis, our investments in revenue
initiatives, and a
4.5 percentage point charge related to stock-based compensation,
caused by the trading price of our shares continuing to increase
during Q2."
- Debt-free. "On May 31,
2021, we paid off the principal amount of our Exchangeable
Debentures of $107.0 million, at par,
plus any related interest owing, which were our only remaining
debt, excluding lease obligations."
- Still healthy cash balance. "Despite having repaid our
debt, due to our continued strong cash generation our cash on hand
was approximately $95.0 million as of
the end of July."
- Quarterly dividend2 declared. "Our Board has
declared a dividend of $0.15 per
common share, to be paid on September 15,
2021 to shareholders of record as of August 25, 2021."
- Pension plan being funded. "Consistent with last
quarter's announcement, we have begun making voluntary incremental
payments toward the Plan's wind-up deficit, per our
deficit-reduction plan."
- New common stock NCIB to be launched. "As approved by
our Board, the Company will enter into a new normal course issuer
bid ("NCIB"), commencing August 10,
2021, to purchase up to 5% of the Company's outstanding
shares for cancellation during a twelve-month period. The Company
intends to limit aggregate purchases under the new NCIB to
$16.0 million."
(1) Adjusted
EBITDA is equal to Income from operations before depreciation and
amortization and restructuring and other charges (defined herein as
Adjusted EBITDA), as shown in Yellow Pages Limited's interim
condensed consolidated statements of income. Adjusted EBITDA,
Adjusted EBITDA margin, CAPEX, Adjusted EBITDA less CAPEX and
Adjusted EBITDA less CAPEX margin are non-IFRS financial measures
and do not have any standardized meaning under IFRS. Therefore,
they are unlikely to be comparable to similar measures presented by
other public companies. Refer to the section on Non-IFRS financial
measures on page 5 of this document for more
details.
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(2) The dividend
will be designated as an eligible dividend pursuant to subsection
89(14) of the Income Tax Act (Canada) and any applicable
provincial legislation pertaining to eligible dividends.
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Financial Highlights
(In thousands of Canadian
dollars, except percentage information and per
share information)
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Yellow Pages Limited
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For the
three-month periods
ended June 30,
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For the six-month
periods
ended June 30,
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2021
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2020
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2021
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2020
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Revenues
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$74,588
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$88,280
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$148,102
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$176,588
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Adjusted
EBITDA1
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$24,440
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$41,928
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$51,023
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$74,491
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Adjusted EBITDA
margin1
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32.8%
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47.5%
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34.5%
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42.2%
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Earnings before
income taxes
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$8,346
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$30,479
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$24,986
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$47,447
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Net
earnings
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$6,018
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$22,039
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$18,153
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$34,442
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Basic earnings per
share
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$0.23
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$0.83
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$0.69
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$1.29
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Diluted earnings per
share
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$0.22
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$0.73
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$0.68
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$1.17
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CAPEX1
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$1,345
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$1,528
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$2,585
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$2,759
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Adjusted EBITDA less
CAPEX1
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$23,095
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$40,400
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$48,438
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$71,732
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Adjusted EBITDA less
CAPEX margin1
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31.0%
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45.8%
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32.7%
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40.6%
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Cash flows from
operating activities
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$28,563
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$31,673
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$51,119
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$58,821
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Second Quarter of 2021 Results
- Total revenues decreased 15.5% year-over-year and amounted to
$74.6 million for the
three-month period ended June 30,
2021, an improvement from the decrease of 16.8% reported
last quarter.
- Adjusted EBITDA less CAPEX1 totaled $23.1 million and the EBITDA less CAPEX
margin1 was 31.0%.
- Net earnings decreased to $6.0
million, or $0.22 per diluted
share.
Financial Results for the Second Quarter of 2021
Total revenues for the second quarter ended June 30, 2021 of $74.6
million decreased by $13.7
million or 15.5% as compared to $88.3
million for the same period last year. The decrease in
revenues for the three-month period ended June 30, 2021 is mainly due to the decline of our
higher margin 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 EBITDA1 for the three-month period
ended June 30, 2021 totalled
$24.4 million compared to
$41.9 million for the same period
last year. The Adjusted EBITDA margin1 decreased to
32.8% in the second quarter of 2021 compared to 47.5% for the same
period last year. The decrease in Adjusted EBITDA for the
three-month period ended June 30,
2021, is the result of revenue pressures, investments in our
tele-sales force capacity, as well as the impact of the increase in
the Company's share-price on cash settled stock-based compensation
expense and lower wage subsidy received, partially offset by
efficiencies from optimization in cost of sales and reductions in
other operating costs including reductions in our workforce and
associated employee expenses as well as in the Company's office
space footprint and other spending across the Company. The increase
in YP's share price resulted in an incremental charge related to
cash settled stock-based compensation expense of $3.4 million in the second quarter of 2021
compared to a charge of $0.8 million
for the comparative three-month period ended June 30, 2020. The Company received a
$2.3 million emergency wage subsidy
during the second quarter compared to $4.8
million for the three-month period ended June 30, 2020. Furthermore, the second quarter of
2020 benefited from paused spending and the delayed revenue impacts
related to the COVID-19 pandemic. Revenue pressures, coupled
with increased headcount in our salesforce partially offset by
continued optimization, will continue to cause some pressure on
margin in upcoming quarters.
Adjusted EBITDA less CAPEX1 for the three-month
period ended June 30, 2021 totalled
$23.1 million compared to
$40.4 million for the same period
last year. The decrease for the three-month period ended
June 30, 2021 is driven by the
decrease in Adjusted EBITDA as CAPEX was relatively stable
year-over-year.
1) Adjusted EBITDA
is equal to Income from operations before depreciation and
amortization and restructuring and other charges (defined herein as
Adjusted EBITDA), as shown in Yellow Pages Limited's interim
condensed consolidated statements of income. Adjusted EBITDA,
Adjusted EBITDA margin, CAPEX, Adjusted EBITDA less CAPEX and
Adjusted EBITDA less CAPEX margin are non-IFRS financial measures
and do not have any standardized meaning under IFRS. Therefore,
they are unlikely to be comparable to similar measures presented by
other public companies. Refer to the section on Non-IFRS financial
measures on page 5 of this document for more
details.
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Net earnings for the three-month period ended June 30, 2021 decreased to $6.0 million as compared to net earnings of
$22.0 million for the same period
last year. The decrease in net earnings of $16.0 million for the three-month period ended
June 30, 2021, compared to the same
period last year, is explained principally by lower Adjusted
EBITDA1 and the loss on early repayment of debt,
partially offset by decreases in depreciation and amortization,
financial charges and provision for income taxes.
Cash flows from operating activities decreased by $3.1 million to $28.6
million for the three-month period ended June 30, 2021 compared to $31.7 million for the same period last year,
mainly due to lower Adjusted EBITDA of $17.5
million partially offset by an increase of $14.5 million from the change in operating assets
and liabilities. The change in operating assets and liabilities
mainly results from the increase in accounts payable due to the
impact of the share price on the cash settled stock-based
compensation expense of $3.4 million
for the three-month period ended June 30,
2021, and the timing of certain accounts payable as well as
the decrease in trade receivables.
During the quarter, the Company fully repaid the principal
amount of Exchangeable Debentures of $107.0
million at par plus any accrued and unpaid interest. As at
June 30, 2021, the Company had
$85.5 million of cash.
Common Share NCIB
The Toronto Stock Exchange (the "TSX") has accepted
a notice filed by the Company of its intention to make a Normal
Course Issuer Bid (the "Bid") to be transacted through the
facilities of the TSX or any alternative Canadian trading system.
The notice provides that the Company may, during the twelve-month
period commencing on August 10, 2021
and ending on August 9, 2022,
purchase up to 1,386,184 common shares ("Shares"), being
approximately 5% of the Company's 27,723,697 issued and
outstanding common shares as of July 27,
2021. The price which the Company will pay for any such
Shares will be the prevailing market price at the time of
acquisition. The actual number of Shares which may be purchased
pursuant to the Bid will be determined by management of the
Company. All Shares will be purchased for cancellation.
Notwithstanding the foregoing, the Company will limit the purchase
of common shares to approximately $16.0
million.
Pursuant to TSX policies, the maximum amount of Shares that may
be purchased in one day pursuant to the Bid will
be 1,487 Shares, representing 25% of 5,951 Shares,
being the average daily trading volume of the Shares on the
TSX for the six months ended July 31,
2021. In addition, the Company may make, once per week, a
block purchase of Shares not directly or indirectly owned by
insiders of the Company, in accordance with TSX policies.
In connection with the Bid, the Company entered into an
automatic securities purchase plan ("ASPP") with a
designated broker. The ASPP is intended to allow for the purchase
of Shares when the Company would ordinarily not be permitted to
purchase Shares due to regulatory restrictions and customary
self-imposed blackout periods. Pursuant to the ASPP, before
entering into a blackout period, the Company may, but is not
required to, instruct the designated broker to make purchases under
the Bid in accordance with the terms of the ASPP and TSX policies
during the blackout period. Such purchases will be determined by
the designated broker at its sole discretion based on purchasing
parameters set by the Company in accordance with the rules of the
TSX and any applicable alternative Canadian trading system,
applicable securities laws and the terms of the ASPP. The ASPP will
be in effect for the term of the bid. All purchases made
under the ASPP will be included in computing the number of Shares
purchased under the Bid.
The board of directors of the Company (the "Board")
believes that during the course of the Bid the market price of the
Shares may not, from time to time, reflect the inherent value of
the issuer and purchases of Shares pursuant to the bid may
represent an appropriate and desirable use of funds that allows the
issuer to return excess cash to shareholders, while still having
sufficient cash available to fund all of its growth capital
expenditure requirements.
Under the Company's current normal course issuer bid that
commenced August 10, 2020 and
terminates August 9, 2021, the
Company was authorized to purchase up to 1,403,765 Shares. Under
that bid, the Company has purchased 403,220 Shares through open
market purchases at a volume weighted average price of $12.40 per Share.
1) Adjusted EBITDA
is equal to Income from operations before depreciation and
amortization and restructuring and other charges (defined herein as
Adjusted EBITDA), as shown in Yellow Pages Limited's interim
condensed consolidated statements of income. Adjusted EBITDA,
Adjusted EBITDA margin, CAPEX, Adjusted EBITDA less CAPEX and
Adjusted EBITDA less CAPEX margin are non-IFRS financial measures
and do not have any standardized meaning under IFRS. Therefore,
they are unlikely to be comparable to similar measures presented by
other public companies. Refer to the section on Non-IFRS financial
measures on page 5 of this document for more
details.
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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 5, 2021 to
discuss second quarter 2021 results. The call may be accessed by
dialing 416-695-6725 within the Toronto area, or 1-866-696-5910 outside of
Toronto, Passcode 8577790#. 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 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 and results of
operations and businesses of YP (including, without limitation,
payment of a cash dividend per share per quarter to its common
shareholders; the number of Shares purchased by the Company during
the NCIB; and the intention to limit purchases to $16.0 million).These statements are
forward-looking as they are based on our current expectations, as
at August 4, 2021, 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 4, 2021 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.
Non-IFRS Financial Measures
Adjusted EBITDA and Adjusted EBITDA margin
In order to provide a better understanding of the results, the
Company uses the terms Adjusted EBITDA and Adjusted EBITDA margin.
Adjusted EBITDA is equal to Income from operations before
depreciation and amortization and restructuring and other charges
(defined herein as Adjusted EBITDA), 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 under
IFRS and are therefore not likely to be comparable to similar
measures used by other publicly traded companies. Adjusted EBITDA
and Adjusted EBITDA margin should not be used as exclusive measures
of cash flow since they do not account for the impact of working
capital changes, income taxes, interest payments, pension funding,
capital expenditures, business acquisitions, debt principal
reductions and other sources and uses of cash, which are disclosed
on page 14 of our August 4, 2021 MD&A.
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 as common measurement to value companies in the
media and marketing solutions industry as well as to evaluate the
performance of a business.
Adjusted EBITDA less CAPEX and Adjusted EBITDA less CAPEX margin
The Company also uses Adjusted EBITDA less CAPEX, which is
defined as Adjusted EBITDA, as defined above, less CAPEX which we
define as additions to intangible assets and additions to property
and equipment as reported in the Investing Activities section of
the Company's interim condensed consolidated statements of cash
flows. Adjusted EBITDA less CAPEX margin is defined as the
percentage of Adjusted EBITDA less CAPEX to revenues. Adjusted
EBITDA less CAPEX and Adjusted EBITDA less CAPEX margin are
non-IFRS financial measures and do not have any standardized
meaning under IFRS. Therefore, are unlikely to be comparable to
similar measures presented by other publicly traded companies. We
use Adjusted EBITDA less CAPEX and Adjusted EBITDA less CAPEX
margin to evaluate the performance of our business as it reflects
cash generated from business activities. We believe that certain
investors and analysts use Adjusted EBITDA less CAPEX and Adjusted
EBITDA less CAPEX margin to evaluate the performance of businesses
in our industry.
The most comparable IFRS financial measure to Adjusted EBITDA
less Capex is Income from operations before depreciation and
amortization and restructuring and other charges (defined above as
Adjusted EBITDA) as shown in Yellow Pages Limited's interim
condensed consolidated statements of income. Refer to page 8 of the
August 4, 2021 MD&A for a
reconciliation of Adjusted EBITDA less CAPEX.
SOURCE Yellow Pages Limited