MONTREAL, Feb. 10, 2022 /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 year ended December 31, 2021.
"We are very pleased with our fourth quarter and full year
results, which further reflect our steady march toward revenue
stability," said David A. Eckert,
President and CEO of Yellow Pages Limited.
Eckert commented on the key developments:
- More progress toward revenue stability. "For the fifth
consecutive quarter since COVID-19 hit, and the tenth of the last
twelve quarters overall, we report a favorable 'bending of the
revenue curve' in Q4, with a better rate of change in revenue than
reported for the previous quarter."
- Continued favorable trends in bookings. "The trends in
our bookings continue to be quite strong, as we continue to
approach revenue stability."
- Concrete investments in 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,
including two key strategic partnerships announced earlier
today."
- Strong quarterly earnings. "Our Adjusted
EBITDA2 for the quarter and full year was a very strong
35.5% of revenue, despite our focus on and investments in revenue
initiatives."
- Ever-growing cash balance. "Our steadily strong cash
generation has grown cash on hand to approximately $130 million as of the end of January."
- Pension plan funding on track. "Consistent with our
previously announced deficit-reduction plan, in 2021 alone we made
$4.0 million of voluntary incremental
payments toward our Defined Benefit Pension Plan's wind-up
deficit."
- Quarterly dividend declared. "Our Board has declared a
dividend of $0.15 per common share,
to be paid on March 15, 2022 to
shareholders of record as of February 25,
2022."
- Continuing common stock NCIB. "Under our current NCIB
program commenced
August 10, 2021, at the end of the
year the Company had purchased 251,376 common shares for cash of
$3.6 million."
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(1)
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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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(2)
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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 consolidated
statements of income. Adjusted EBITDA, Adjusted EBITDA margin,
CAPEX, Adjusted EBITDA less CAPEX and Adjusted EBITDA less CAPEX
margin are non-GAAP 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-GAAP financial measures on page 5 of
this document for more details.
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Financial Highlights
(In thousands of Canadian dollars, except
percentage information and per
share information)
Yellow Pages Limited
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For the
three-month periods
ended December 31,
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For the year
ended December 31,
|
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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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$68,624
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$76,669
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$287,646
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$333,538
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Adjusted
EBITDA1
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$24,360
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$27,639
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$102,000
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$129,442
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Adjusted EBITDA
margin1
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35.5%
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36.0%
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35.5%
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38.8%
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Earnings before
income taxes
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$15,924
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$19,155
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$59,914
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$78,712
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Net
earnings
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$38,735
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$16,815
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$70,635
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$60,298
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Basic earnings per
share
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$1.48
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$0.63
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$2.68
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$2.27
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Diluted earnings per
share
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$1.46
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$0.58
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$2.64
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$2.10
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CAPEX1
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$1,220
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$1,474
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$5,074
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$5,573
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Adjusted EBITDA less
CAPEX1
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$23,140
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$26,165
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$96,926
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$123,869
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Adjusted EBITDA less
CAPEX margin1
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33.7%
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34.1%
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33.7%
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37.1%
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Cash flows from
operating activities
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$28,775
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$35,438
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$104,579
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$126,998
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Fourth Quarter 2021 Results
- Total revenues decreased 10.5% year-over-year and amounted to
$68.6 million for the
three-month period ended December 31,
2021, an improvement from the decrease of 11.7% reported
last quarter.
- Adjusted EBITDA less CAPEX totalled $23.1 million and the EBITDA less CAPEX margin
was 33.7%.
- Net earnings increased to $38.7
million, or to $1.46 per
diluted share.
Financial Results for the Fourth Quarter of 2021
Total revenues for the fourth quarter ended December 31, 2021 decreased by 10.5%
year-over-year and amounted to $68.6
million as compared to $76.7
million for the same period last year. The decrease for the
quarter ended December 31, 2021 is
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 EBITDA1 decreased to $24.4 million or 35.5% of revenues in the fourth
quarter ended December 31, 2021,
relative to $27.6 million or 36.0% of
revenues for the same period last year. The decrease in Adjusted
EBITDA and Adjusted EBITDA margin in the three-month period ended
December 31, 2021 is the result of
revenue pressures, investments in our tele-sales force capacity,
and lower wage subsidies 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. Revenue pressures, coupled with
increased headcount in our salesforce partially offset by continued
optimization, will create some pressure on margin in upcoming
quarters.
Adjusted EBITDA less CAPEX decreased by $3.1 million to $23.1
million during the fourth quarter of 2021, compared to
$26.2 million during the same period
last year. The decrease in Adjusted EBITDA less CAPEX for the
three-month period ended December 31,
2021 is mainly due to lower Adjusted EBITDA partially offset
by lower capital expenditures.
Net earnings for the three-month ended December 31, 2021 amounted to $38.7 million as compared to net earnings of
$16.8 million for the same period
last year due to higher recognition of previously unrecognized tax
attributes and temporary differences. Earnings before taxes
decreased from $19.2 million for the
fourth quarter of 2020 to $15.9
million for the three-month period ended December 31, 2021, explained principally by lower
Adjusted EBITDA and the increase in restructuring and other
charges, partially offset by decreases in depreciation and
amortization and financial charges.
Cash flows from operating activities decreased by $6.6 million to $28.8
million for the three-month period ended December 31, 2021 from $35.4 million last year. The decrease is mainly
due to lower Adjusted EBITDA1 of $3.3 million, increased funding of
post-employment benefit plans of $1.7
million and a decrease of $6.5
million from the change in operating assets and liabilities,
partially offset by lower interest paid of $4.4 million and lower payments for restructuring
and other charges of $0.3
million.
Financial Results for the Year Ended December 31, 2021
Total revenues for the year ended December 31, 2021 decreased by 13.8% to
$287.6 million, as compared to
$333.5 million for the same period
last year. The decrease in revenues 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.
For the year ended December 31,
2021 Adjusted EBITDA decreased by $27.4 million or 21.2% to $102.0 million or 35.5% of revenues, compared to
$129.4 million or 38.8% of revenues
for the same period last year. The decrease in Adjusted EBITDA is
the result of revenue pressures, investments in our tele-sales
force capacity, as well as the impact of the Company's share-price
on cash settled stock-based compensation expense and lower wage
subsidies 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 the Company's office space footprint and other
spending across the Company.
For the year ended December 31,
2021 Adjusted EBITDA less CAPEX1 decreased by
$26.9 million or 21.8% to
$96.9 million, compared to
$123.9 million for the same period
last year. The decrease is mainly driven by the decrease in
Adjusted EBITDA, partially offset by lower capital expenditures
driven by lower spend in software development year-over-year.
Net earnings increased to $70.6
million for the year ended December
31, 2021 compared to net earnings of $60.3 million, for the same period last year due
to higher recognition of previously unrecognized tax attributes and
temporary differences. Earnings before income taxes decreased from
$78.7 million to $59.9 million for the year ended December 31, 2021, explained principally by lower
Adjusted EBITDA and the loss on early repayment of debt, partially
offset by decreases in depreciation and amortization, restructuring
and other charges, and financial charges.
Cash flows from operating activities decreased by $22.4 million to $104.6
million for the year ended December
31, 2021 from $127.0 million
last year. The decrease is mainly due to lower Adjusted EBITDA of
$27.4 million and increased funding
of post-employment benefit plans of $4.2
million, partially offset by lower payments for
restructuring and other charges of $4.1
million, and lower interest paid of $4.2 million.
As at December 31, 2021, the
Company had $123.6 million of
cash.
Conference Call & Webcast
Yellow Pages Limited
will hold an analyst and media call and simultaneous webcast
at 8:30 a.m. (Eastern Time) on February
10, 2022 to discuss fourth 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 3151105#. 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 February 9, 2022, 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 February 9, 2022 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-GAAP 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 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 22 of
our February 9, 2022 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 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-GAAP 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 consolidated
statements of income. Refer to pages 9 and 17 of the February 9, 2022 MD&A for a reconciliation of
Adjusted EBITDA less CAPEX.
_____________________________________________
(1)
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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 consolidated
statements of income. Adjusted EBITDA, Adjusted EBITDA margin,
CAPEX, Adjusted EBITDA less CAPEX and Adjusted EBITDA less CAPEX
margin are non-GAAP 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-GAAP financial measures on page 5 of
this document for more details.
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SOURCE Yellow Pages Limited