Click here to close now.

Welcome!

News Feed Item

Yellow Media Limited Reports First Quarter 2014 Financial Results

MONTREAL, QUEBEC -- (Marketwired) -- 05/08/14 -- Yellow Media Limited (TSX: Y)


--  The Company experiences a 10.6% year-over-year growth in digital
    revenues across its core YPG operations during the first quarter of 2014

--  Customer penetration of the Yellow Pages 360 degrees Solution reaches
    29.9% as at March 31, 2014, as compared to 18.9% last year

--  The Company records net earnings of $39.2 million during the first
    quarter of 2014, as compared to $53.5 million for the same period last
    year

--  A $73.5 million principal mandatory redemption payment on the 9.25%
    Senior Secured Notes is anticipated to be made on June 2, 2014

--  Yellow Media develops a Return to Growth Plan to support its digital
    transformation and return the Company to revenue growth and stable
    profitability

Yellow Media Limited (TSX: Y) (the "Company" or "Yellow Media") released its operational and financial results today for the first quarter ended March 31, 2014. The Company continues to advance the second phase of its digital transformation, designed to bring Yellow Media closer to its long-term objective of becoming Canada's leading local digital company.

"Supported by a healthier capital structure, the first phase of our transformation established a solid digital foundation for us to build upon," said Julien Billot, President and Chief Executive Officer of Yellow Media. "We are currently executing the second phase of our digital transformation, using this strengthened foundation to gain a leadership position within Canada's local digital advertising market while returning the Company to growth."

First Quarter 2014 Financial Results

Revenues for the first quarter of 2014 decreased 11.9% to $223.2 million, as compared to $253.3 million for the same period last year.

For the first quarter of 2014, digital revenues across our core YPG operations, which exclude the impact of Mediative and Wall2Wall, increased by 10.6% year-over-year. Consolidated digital revenues reached $104 million in the first quarter of 2014, representing a growth of 5.1%, and were negatively impacted by the loss of a national account at Mediative during the second quarter of 2013. During the first quarter of 2014, consolidated digital revenues represented 46.6% of total revenues, up from 39.1% during the same period in 2013.

Growth in digital revenues continues to result from the ongoing migration of traditional media customers towards digital products and services, as well as continued customer adoption of the Yellow Pages™ 360 degrees Solution. The penetration of the Yellow Pages 360 degrees Solution offering amongst Yellow Media's customer base, which is defined as customers who purchase three product categories or more, grew to 29.9% as at March 31, 2014 compared to 18.9% the year prior.

Print revenues continued to show stable declines during the first quarter of 2014, decreasing 22.7% year-over-year to reach $119.3 million.

EBITDA decreased to $94.6 million during the first quarter of 2014, as compared to $115.5 million last year. EBITDA remains adversely impacted by print revenue pressure and a lower EBITDA margin.

The EBITDA margin decreased to 42.4% for the three-month period ended March 31, 2014, as compared to 45.6% for the same period last year. The EBITDA margin for the first quarter of 2014 was primarily affected by lower print revenues, a change in product mix and investments required to advance the Company's digital transformation. The EBITDA margin for the first quarter of 2014 was also impacted by a non-recurring benefit associated with a litigation outcome. Excluding this element, the EBITDA margin for the first quarter of 2014 decreased to 41%.

In an effort to promote long-term profitability, the Company continues to invest in business efficiencies and the streamlining of operational processes. During the first quarter of 2014, YPG enhanced its digital fulfillment processes by automating the creation of Virtual Business Profiles. In addition, the Company is presently standardizing its existing legacy architecture through consolidation of print publishing systems and IT data centers.

For the first quarter ended March 31, 2014, the Company recorded net earnings of $39.2 million and basic earnings per share of $1.43. This compares to net earnings of $53.5 million and basic earnings per share of $1.91 for the same period last year. The decrease is mainly explained by lower EBITDA.

The Company used free cash flow of $3.3 million for the first quarter of 2014, as compared to free cash flow generation of $67.7 million last year. This decline results mainly from higher income taxes paid in 2014, as the Company was not required to pay income tax installments in 2013, lower EBITDA and higher restructuring payments related to the November 2013 workforce realignment.

Yellow Media expects to generate sufficient cash flow from its operations to invest in its digital transformation and service all future debt obligations. As at March 31, 2014, net debt totaled $541.2 million, which compares to $533.1 million as at December 31, 2013. On June 2, 2014, the Company anticipates making a $73.5 million mandatory redemption payment on its Senior Secured Notes.

"Yellow Media remains committed to delivering long-term, sustainable value to its shareholders," said Ginette Maille, Chief Financial Officer of Yellow Media. "We will increase shareholder value through execution of our digital transformation, thereby investing in projects that promote revenue growth and protect profitability. In addition, we will further strengthen and optimize our capital structure by maintaining a focus on debt repayment."

Operational Update

"Yellow Media's long-term objective remains unchanged, and we strive to develop into Canada's leading local digital company," said Billot. "The realization of this objective will come in multiple, distinct phases to be executed over the medium-to-long-term. As part of our second phase of transformation and Return to Growth Plan, we have focused our investments in projects that enhance our brand, media assets and go-to-market strategy, and, ultimately, improve our positioning within the local digital advertising market."

Extending our Brand Promise


--  The Company repositioned its flagship local search property from
    "yellowpages.ca" to "YP.ca" to boost brand recognition and strengthen
    the Company's digital identity.

--  A television and digital advertising campaign was launched across Canada
    to grow usage and traffic on the YP mobile application. The campaign
    introduces Canadians to the new YP brand, while also highlighting the
    enhancements made on the mobile application to provide shoppers with an
    improved search experience.

Strengthening our Media Assets


--  Total digital visits, which measures the number of visits made across
    the YP, RedFlagDeals and ShopWise desktop and mobile properties, grew to
    94.1 million. This compares to 93.8 million visits for the same period
    last year.

--  The Company launched its redesigned YP online and mobile properties to
    provide users with more relevant search results, quick access to
    trending local search themes, an improved ability to discover local
    deals and popular merchants in and around their neighborhoods, as well
    as faster response times.

--  Yellow Media expanded its database of business information by creating
    250,000 new, more targeted business categories and adding richer
    information to its national and local merchant pages. The Company also
    continued the rollout of Merchant Content Collection Applications across
    its sales force to promote the real-time collection and publishing of
    customer information.

Enhancing our Go-to-Market Strategy

a) Promoting Customer Acquisition


--  Total customer count was 270,000 as at March 31, 2014, compared to
    300,000 at the end of the same period last year.

--  Customer acquisition for the twelve-month period ended March 31, 2014
    stood at 16,500. The rate of customer acquisition continued to improve,
    with customer acquisition for the twelve month periods ended March 31,
    2013 and December 31, 2013 having totaled 16,400 and 15,200,
    respectively.

--  A new Customer Relationship Management platform was implemented across
    the Company's acquisition call centers, automating the routing and
    assignment of incoming leads to promote effective leads management and
    nurturing.

b) Promoting Customer Retention


--  The customer renewal rate declined slightly to reach 85% as at
    March 31, 2014, as compared to 86% for the same period last year.

--  The Company remains committed to providing local businesses with the
    industry's most valuable, diversified and comprehensive digital
    services. Yellow Media recently launched Smart Digital Display across
    its sales channels, a display advertising solution that helps small and
    medium enterprises ("SMEs") build an online presence by exposing their
    digital banner ads to local online audiences.

--  Yellow Media also introduced a social media solution to help SMEs
    establish and maintain visibility on Facebook. Currently being rolled
    out to customers in Ontario and Western Canada and anticipated to be
    launched nationally by June 2014, this solution provides customers with
    professional Facebook Page creation, optimization of their social media
    presence and Facebook Ad campaign management.

The Return to Growth Plan

Following the Company's progress in the first quarter of 2014, the Return to Growth Plan (the "Plan") has been established to efficiently guide the Company as it continues to execute upon its second phase of digital transformation. The Plan serves to leverage investments made in 2013, as well as the Company's strengthened digital foundation, to gain a leadership position within Canada's local digital advertising market.

Successful implementation of the Plan will be promoted through ongoing focus on the following pillars of transformation:


--  Extending the Brand Promise - Investments will be made to evolve legacy
    perceptions of the brand and boost awareness of the Company's platforms
    and solutions. A simplified brand architecture will be implemented,
    positioning Yellow Media as a differentiated, unique digital player
    within the local neighborhood economy. National multi-media campaigns
    will also be deployed to increase usage of its properties and promote
    customer acquisition.

--  Strengthening its Media Assets - Investments will be made across the
    Company's owned and operated digital media to attract and grow
    audiences. Improved content and functionalities will be added onto the
    YP properties to help users best fulfill their daily needs. In addition,
    the Company will develop new verticals to deliver a more targeted search
    experience and expand Yellow Media's share of business search in
    underpenetrated categories such as shopping, restaurants, real-estate
    and leisure. An enhanced focus will also be maintained on evolving the
    Company's mobile and tablet properties and providing an upgraded on-the-
    go local search experience.

--  Enhancing its Go-to-Market Strategy - The Company will evolve its suite
    of digital products and services by introducing simplified and more
    verticalized offerings, as well as performance-based solutions that best
    leverage the power of its owned and operated digital properties and
    protect profitability. In conjunction with improved customer acquisition
    and retention efforts, Yellow Media anticipates returning to a growth in
    customer count by 2017. An expanded sales force, as well as new
    technologies, processes and training programs, will be developed to
    promote an acquisition-centric sales culture throughout the
    organization. Furthermore, Yellow Media will enhance customer
    satisfaction by improving basic service levels and introducing more
    personalized levels of customer service to its clients. Lastly,
    Meditative will invest to strengthen its offerings to national agencies,
    customers and retailers. They will also engage in research, development
    and innovation within digital marketing to help support Yellow Media's
    ongoing transformation.

The Company has put in place an internal Transformation Office to implement the Return to Growth Plan. Reporting to the Chief Executive Officer, the Transformation Office will be led by Stephen Port, Vice President - Transformation Office, and assume full ownership and delivery of projects supporting the Plan.

"Successful execution of our Return to Growth Plan will significantly improve our relationship with Canadian businesses and audiences," said Billot. "Upon completion of the Return to Growth Plan, Yellow Media will be equipped with a strengthened platform onto which it can diversify, start new digital businesses and, ultimately, meet its objective of becoming Canada's leading local digital company."

The Plan is expected to allow the Company to achieve consolidated revenue growth by 2018. Digital revenues are anticipated to surpass print revenues in 2015 and grow at high single-digit annual rates thereafter. As print revenue stabilization remains challenging to forecast, the Company will continue to optimize the profitability of the print platform through redesigned offers, targeted directory distribution, as well as the streamlining of operational processes. Profitability will also be promoted through the automation of various digital fulfillment processes and improved productivity across our sales channels.

The Company will be required to make incremental operating and capital expenditures over the short-to-medium term to promote proper execution of the Return to Growth Plan. Consequently, EBITDA margins will remain under pressure relative to 2013, as additional investments will be made during the remainder of 2014 and in 2015 to strengthen the brand promise, improve the user experience and grow and maintain digital audiences.

Annual capital expenditures will increase to approximately $85 to $90 million in 2014 and $70 to $75 million in 2015 as the Company develops IT platforms to support growth in digital audiences, customer acquisition, customer retention and new product introduction.

By 2018, upon returning to revenue growth, the Company anticipates EBITDA margins to stabilize between 30% and 35% and capital expenditures to be maintained at approximately 5% of consolidated revenues.

"The Return to Growth Plan will significantly strengthen Yellow Media's financial profile, allowing it to maintain a sustainable level of revenue growth and profitability," said Maille. "In conjunction, the Company will continue to maintain an enhanced focus on debt repayment and aim to significantly delever its balance sheet by 2018."

The Company has made organizational changes to ensure it has the right expertise in place to implement the Return to Growth Plan. Among these changes, Rene Poirier, Chief Information Officer of Yellow Media, will lead the organization's Information Services and Information Technology functions and direct the end-to-end fulfillment of all related projects. Paul Ryan, previously Chief Technology Officer of Yellow Media, will become Mediative's Chief Technology Officer to support their growth in the Canadian national digital advertising market as well as foster an environment of continued digital innovation.

Investor Conference Call

Yellow Media Limited will hold an analyst and media call at 2:00 p.m. (Eastern Time) on May 8, 2014 to discuss the first quarter 2014 results. The call may be accessed by dialing (416) 340-2218 within the Toronto area, or 1 866 225-2055 outside of Toronto.

The call will be simultaneously webcast on the Company's website at http://www.ypg.com/en/investors/financial-reports/2014/quarterly-reports/first-quarter-webcast.

The conference call will be archived in the Investors section of the site at www.ypg.com.

A playback of the call can also be accessed from May 8 to May 15, 2014 by dialing (905) 694-9451 within the Toronto area, or 1 800 408-3053 outside Toronto.

The conference passcode is 3237581.

About Yellow Media Limited

Yellow Media Limited (TSX: Y) is a Canadian digital and print media company, offering businesses comprehensive media solutions to meet their key marketing objectives and providing consumers with platforms to access reliable local business information. By helping local businesses foster stronger relationships with their consumers through its various media, the Company encourages the growth of thriving neighbourhood economies. Yellow Media holds some of Canada's leading local search properties and publications including YP.ca™, Canada411.ca and RedFlagDeals.com™, the YP, ShopWise and RedFlagDeals mobile applications and Yellow Pages™ print directories. Yellow Media is also a leader in national digital advertising through Mediative, a division of Yellow Pages Group devoted to digital marketing and performance media services for national-scale agencies and customers. For more information, visit www.ypg.com.

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 8, 2014, 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 7 of our May 8, 2014 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.


Financial Highlights
(in thousands of Canadian dollars - except share information)
----------------------------------------------------------------------------
                                                        For the three-month
                                                    periods ended March 31,
Yellow Media Limited                                       2014        2013
----------------------------------------------------------------------------

Revenues                                               $223,203    $253,277
Income from operations                                  $73,302     $95,595
Net earnings                                            $39,222     $53,465
Basic earnings per share attributable to common
 shareholders                                             $1.43       $1.91
Cash flow from operating activities                     $10,910     $86,588
----------------------------------------------------------------------------
EBITDA(1)                                               $94,621    $115,478
EBITDA margin(1)                                           42.4%       45.6%
----------------------------------------------------------------------------
Weighted average shares outstanding                  27,419,026  27,955,077
----------------------------------------------------------------------------

Non-IFRS Measures(1)

In order to provide a better understanding of the results, the Company uses the term EBITDA, defined as income from operations before depreciation and amortization and restructuring and special charges. Management believes this measure is reflective of ongoing operations. This term is not a performance measure defined under IFRS. EBITDA does not have any standardized meaning and are therefore not likely to be comparable to similar measures used by other publicly traded companies. Management believes EBITDA to be an important measure.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Discussions about cloud computing are evolving into discussions about enterprise IT in general. As enterprises increasingly migrate toward their own unique clouds, new issues such as the use of containers and microservices emerge to keep things interesting. In this Power Panel at 16th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the state of cloud computing today, and what enterprise IT professionals need to know about how the latest topics and trends affect t...
"We provide a web application framework for building really sophisticated web applications that run on a browser without any installation need so we get used for biotech, defense, and banking applications," noted Charles Kendrick, CTO and Chief Architect at Isomorphic Software, in this SYS-CON.tv interview at @DevOpsSummit (http://DevOpsSummit.SYS-CON.com), held June 9-11, 2015, at the Javits Center in New York
SYS-CON Events announced today that Secure Infrastructure & Services will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Secure Infrastructure & Services (SIAS) is a managed services provider of cloud computing solutions for the IBM Power Systems market. The company helps mid-market firms built on IBM hardware platforms to deploy new levels of reliable and cost-effective computing and hig...
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society-changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his session at @ThingsExpo, Jason Mondanaro, Director, Product Management at Metanga, discussed how you can plan to cooperate, partner, and form lasting all-star teams to change the world...
In the midst of the widespread popularity and adoption of cloud computing, it seems like everything is being offered “as a Service” these days: Infrastructure? Check. Platform? You bet. Software? Absolutely. Toaster? It’s only a matter of time. With service providers positioning vastly differing offerings under a generic “cloud” umbrella, it’s all too easy to get confused about what’s actually being offered. In his session at 16th Cloud Expo, Kevin Hazard, Director of Digital Content for SoftL...
"What Dyn is able to do with our Internet performance and our Internet intelligence is give companies visibility into what is actually going on in that cloud," noted Corey Hamilton, Product Marketing Manager at Dyn, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, will explore the IoT cloud-based platform technologies drivi...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Arch...
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and Containers together help companies to achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of...
IT data is typically silo'd by the various tools in place. Unifying all the log, metric and event data in one analytics platform stops finger pointing and provides the end-to-end correlation. Logs, metrics and custom event data can be joined to tell the holistic story of your software and operations. For example, users can correlate code deploys to system performance to application error codes. In his session at DevOps Summit, Michael Demmer, VP of Engineering at Jut, will discuss how this can...
The last decade was about virtual machines, but the next one is about containers. Containers enable a service to run on any host at any time. Traditional tools are starting to show cracks because they were not designed for this level of application portability. Now is the time to look at new ways to deploy and manage applications at scale. In his session at @DevOpsSummit, Brian “Redbeard” Harrington, a principal architect at CoreOS, will examine how CoreOS helps teams run in production. Attende...
Containers are revolutionizing the way we deploy and maintain our infrastructures, but monitoring and troubleshooting in a containerized environment can still be painful and impractical. Understanding even basic resource usage is difficult – let alone tracking network connections or malicious activity. In his session at DevOps Summit, Gianluca Borello, Sr. Software Engineer at Sysdig, will cover the current state of the art for container monitoring and visibility, including pros / cons and liv...
Live Webinar with 451 Research Analyst Peter Christy. Join us on Wednesday July 22, 2015, at 10 am PT / 1 pm ET In a world where users are on the Internet and the applications are in the cloud, how do you maintain your historic SLA with your users? Peter Christy, Research Director, Networks at 451 Research, will discuss this new network paradigm, one in which there is no LAN and no WAN, and discuss what users and network administrators gain and give up when migrating to the agile world of clo...
Agile, which started in the development organization, has gradually expanded into other areas downstream - namely IT and Operations. Teams – then teams of teams – have streamlined processes, improved feedback loops and driven a much faster pace into IT departments which have had profound effects on the entire organization. In his session at DevOps Summit, Anders Wallgren, Chief Technology Officer of Electric Cloud, will discuss how DevOps and Continuous Delivery have emerged to help connect dev...
WebRTC converts the entire network into a ubiquitous communications cloud thereby connecting anytime, anywhere through any point. In his session at WebRTC Summit,, Mark Castleman, EIR at Bell Labs and Head of Future X Labs, will discuss how the transformational nature of communications is achieved through the democratizing force of WebRTC. WebRTC is doing for voice what HTML did for web content.