|By Marketwired .||
|August 6, 2014 07:00 AM EDT||
MONTREAL, QUEBEC -- (Marketwired) -- 08/06/14 -- Yellow Media Limited (TSX: Y)
-- Digital revenues across the Company's core YPG operations grew 10.8% year-over-year during the second quarter of 2014. -- Continued acceleration in the annual run-rate of customer acquisition, as YPG acquires 18,400 new customers during the twelve-month period ended June 30, 2014 as compared to 15,300 for the same period last year. -- Total digital visits across the YP, RedFlagDeals and ShopWise desktop and mobile properties reach 102.4 million during the second quarter of 2014, up from 100.1 million visits during the same period last year. -- Strong free cash flow generation of $42.1 million during the second quarter of 2014, as compared to $68.5 million during the same period last year. -- The Company records net earnings of $27.6 million during the second quarter of 2014, which compares to $50.3 million for the same period last year.
Yellow Media Limited (TSX: Y) (the "Company" or "Yellow Media") released its operational and financial results today for the second quarter ended June 30, 2014. The Company continues to execute upon the Return to Growth Plan (the "Plan"), a strategy dedicated at reacquiring revenue growth by helping Yellow Media gain a leadership position within Canada's local digital advertising market.
"The Return to Growth Plan supports our mission of championing neighborhood economies by allowing us to strengthen the relationships we foster between businesses and consumers," said Julien Billot, President and Chief Executive Officer of Yellow Media. "Completion of our Return to Growth Plan will provide Yellow Media with the resources required to enter new digital businesses and, ultimately, meet its long-term objective of becoming Canada's leading local digital company."
Second Quarter 2014 Financial Results
Revenues for the second quarter of 2014 decreased to $220.6 million, representing a 9.3% year-over-year decline. Consolidated revenues continue to be negatively impacted by ongoing declines in print revenues. For the three-month period ended June 30, 2014, print revenues decreased 22.5% year-over-year to reach $112.2 million, in line with prior quarters.
For the quarter ended June 30, 2014, digital revenues across our core YPG operations, which exclude the impact of Mediative, 411 Local Search Corp. ("411") and Wall2Wall, increased by 10.8% year-over-year. On a consolidated basis, digital revenues reached $108.4 million during the second quarter of 2014, growing 10.1% from the same period last year. Digital revenues represented 49.1% of total revenues for the second quarter of 2014, up from 40.5% during the same period in 2013.
Growth in digital revenues continues to be driven by the active migration of traditional media customers towards digital products and services. As at June 30, 2014, 63% of YPG customers were purchasing digital products, as compared to 61% the year prior. Digital revenue growth is also supported by the continued adoption of the Yellow Pages 360 degrees Solution among YPG's existing customer base. The customer penetration of the Yellow Pages 360 degrees Solution, which is defined as the percentage of YPG customers who purchase three product categories or more, grew to 32.9% as at June 30, 2014 compared to 21.1% for the same period last year.
EBITDA decreased to $81.3 million during the second quarter of 2014, as compared to $107.2 million the year prior. EBITDA remains adversely impacted by print revenue pressure and a lower EBITDA margin. The EBITDA margin decreased to 36.8% for the three-month period ended June 30, 2014, as compared to 44.1% for the same period last year. In addition to lower print revenues, EBITDA margins were adversely impacted by investments related to the Return to Growth Plan and employee related expenses.
For the second quarter ended June 30, 2014, the Company recorded net earnings of $27.6 million and basic earnings per share of $1.01. This compares to net earnings of $50.3 million and basic earnings per share of $1.81 for the same period last year. The decrease is mainly explained by lower EBITDA and a restructuring and special charge incurred during the second quarter of 2014.
Free cash flow during the second quarter of 2014 totaled $42.1 million, as compared to $68.5 million during the same period last year. This decline results mainly from lower EBITDA, a more stable working capital and higher income taxes paid in 2014, as the Company was not required to pay income tax installments in 2013. Following a $73.5 million mandatory redemption payment made on the senior secured notes on June 2, 2014, net debt totaled $515.7 million as at June 30, 2014, down from $533.1 million as at December 31, 2013.
"Successful execution of the Return to Growth Plan will strengthen the Company's financial profile and deliver long-term, sustainable value to shareholders," said Ginette Maille, Chief Financial Officer of Yellow Media. "The investments underlying the Plan are focused on returning Yellow Media to consolidated revenue and EBITDA growth by 2018, while also generating the free cash flow required to significantly delever the balance sheet over the next four years."
"The Return to Growth Plan is aimed at strengthening Yellow Media's relationship with consumers and local businesses," said Billot. "Having the right strategy is critical, and the Company will continue investing in growing the digital awareness of the Yellow Pages brand, enhancing the user experience across its media assets and delivering an improved end-to-end customer journey in order to grow customer acquisition and, ultimately, return Yellow Media to revenue and profitability growth."
Extending our Brand Promise
-- Yellow Media ran national and local campaigns to promote the download and use of the YP mobile application. A national television and digital campaign was launched in April 2014 to highlight the improved content and search functionalities available on the YP mobile application. Increased adoption of the YP mobile application was further supported through an extensive local, multimedia advertising initiative across Canada's largest urban markets in June and July 2014. -- The Company's national and local campaigns contributed positively to the usage of the YP mobile application, with average weekly downloads and visits having increased by 65% and 20%, respectively, when compared to pre-campaign periods. -- The Company launched radio and digital advertising campaigns in Montreal and Calgary to introduce prospective customers to its entry-level Booster Pack digital solution. To further promote customer acquisition, Digital Seminar Series were launched in Alberta and Atlantic Canada to educate small business owners on digital trends and strategies, as well as the solutions offered by YPG to help them champion local digital marketing.
Strengthening our Media Assets
-- Total digital visits, which measures the number of visits made across the YP, RedFlagDeals and ShopWise desktop and mobile properties, reached 102.4 million during the second quarter of 2014. This compares to 100.1 million visits for the same period last year. -- The YP mobile application received various acknowledgments on the App Store, including "Editor's Choice" and "Best New App" in May 2014, "Best of May 2014" and "Top Canadian-Made App" in June 2014. These recognitions followed the release of an enhanced version of the YP mobile application on the iPhone and iPad, providing users with an improved user interface, more relevant search results, a richer database of local business information and quicker search response times. -- The Company delivered a richer search experience on its ShopWise mobile application, introducing personalization features that allow users to select preferred categories of deals to appear on the homepage. A version of the RedFlagDeals.com mobile application was also officially launched and made available on the Android platform.
Enhancing our Go-to-Market Strategy
a) Promoting Customer Acquisition
-- The rate of customer acquisition continued to improve, with customer acquisition for the twelve-month period ended June 30, 2014 having totaled 18,400, up from 15,300 during the same period last year and 16,500 for the twelve-month period ended March 31, 2014. Total customer count was 265,000 as at June 30, 2014, compared to 291,000 at the end of the same period last year. -- Promoted by an acceleration in customer acquisition, digital-only customers increased to 29,400 as at June 30, 2014, compared to 19,700 at the same period last year and 26,100 as at March 31, 2014. -- Yellow Media acquired the remaining 70% interest of 411 for a purchase price of $22.7 million, net of cash acquired of $3.6 million. The acquisition results from the exercise of a put option by the other shareholders of 411, requiring the Company to acquire the remaining 70% interest of 411. 411 is the operator of 411.ca, an online search engine dedicated to finding people and local businesses in Canada. With a sales force of 60 call center representatives servicing approximately 15,000 digital customers nationwide, 411 holds a proven track record in lead generation, lead conversion and customer acquisition. The acquisition of 411 complements Yellow Media's Return to Growth Plan, allowing the Company to leverage the expertise of 411's sales team to best support its customer acquisition efforts.
b) Promoting Customer Retention
-- YPG experienced a customer renewal rate of 85% over the twelve-month period ended June 30, 2014, remaining stable versus the same period last year. -- In an effort to improve the customer experience and develop enhanced customer-facing tools, the Company launched a redesigned version of its B2B 360 degrees Solution website entitled the 360 degrees Business Centre (http://businesscentre.yp.ca/). The 360 degrees Business Centre delivers a simplified architecture and more appealing design, making it easier for existing and prospective customers to be informed on YPG's digital products and services, claim their listings and book consultations. -- A new version of Yellow Pages Analytics was developed, now featuring an easier-to-navigate interface, enhanced performance monitoring of customers' marketing activities, as well as the introduction of a Revenue Calculator to provide insight as to the contacts and revenues generated from customers' respective marketing campaigns.
Improving Business Efficiencies
-- In the context of a decline in print revenues, Yellow Media is presently consolidating and replacing its legacy print publishing systems, as well as reviewing its existing national print distribution model, to protect the profitability of the print platform. The Company is also enhancing core platforms and infrastructure, having consolidated eight of its IT data centers and replaced legacy telephony systems and exchange servers, to further promote cost savings across the organization.
Investor Conference Call
Yellow Media Limited will hold an analyst and media call at 1:00 p.m. (Eastern Time) on August 6, 2014 to discuss the second 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/second-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 August 6 to August 13, 2014 by dialing (905) 694-9451 within the Toronto area, or 1 800 408-3053 outside Toronto.
The conference passcode is 1997641.
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 August 6, 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 6 of our August 6, 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 For the six-month periods ended June 30, periods ended June 30, Yellow Media Limited 2014 2013 2014 2013 ---------------------------------------------------------------------------- Revenues $220,579 $243,183 $443,782 $496,460 Income from operations $56,331 $92,455 $129,633 $188,050 Net earnings $27,551 $50,326 $66,773 $103,791 Basic earnings per share attributable to common shareholders $1.01 $1.81 $2.45 $3.71 Cash flow from operating activities $57,823 $86,457 $68,733 $173,045 ---------------------------------------------------------------------------- EBITDA(1) $81,261 $107,234 $175,882 $222,712 EBITDA margin(1) 36.8% 44.1% 39.6% 44.9% ---------------------------------------------------------------------------- Weighted average number of common shares outstanding 27,188,087 27,872,822 27,302,919 27,913,722 ----------------------------------------------------------------------------
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.
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the technological advances and new business opportunities created by the rapid adoption of containers. With the success of Amazon Web Services (AWS) and various open source technologies used to build private clouds, cloud computing has become an essential component of IT strategy. However, users continue to face challenges in implementing clouds, as older technologies evolve and newer ones like Docker c...
Mar. 1, 2017 03:30 PM EST Reads: 2,059
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
Mar. 1, 2017 03:30 PM EST Reads: 2,258
Artificial Intelligence has become a topic of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming Cloud Expo | @ThingsExpo at the Javits Center in New York, June 6-8, will find fresh new content in a new track called Cognitive Computing | Artificial Intelligence, Machine Learning, Deep Learning. Cloud Expo is still accepting submissions for this new track, so please visit www.cloudcomputingexpo.com for the latest information. 2...
Mar. 1, 2017 03:15 PM EST Reads: 309
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 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 Dev...
Mar. 1, 2017 03:15 PM EST Reads: 6,683
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
Mar. 1, 2017 03:15 PM EST Reads: 2,923
SYS-CON Events announced today that Outlyer, a monitoring service for DevOps and operations teams, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Outlyer is a monitoring service for DevOps and Operations teams running Cloud, SaaS, Microservices and IoT deployments. Designed for today's dynamic environments that need beyond cloud-scale monitoring, we make monitoring effortless so you ...
Mar. 1, 2017 03:15 PM EST Reads: 457
SYS-CON Events announced today that TMC has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo and Big Data at Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY, , and the 21st International Cloud Expo, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Global buyers rely on TMC’s content-driven marketplaces to make purchase decisions and navigate markets. Learn how we can he...
Mar. 1, 2017 03:15 PM EST Reads: 396
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 D...
Mar. 1, 2017 03:00 PM EST Reads: 6,344
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Mar. 1, 2017 02:45 PM EST Reads: 2,220
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smart...
Mar. 1, 2017 02:45 PM EST Reads: 1,030
SYS-CON Events announced today that Addteq will exhibit at SYS-CON's DevOps Summit at Cloud Expo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Addteq specializes in creating innovative solutions to solve business processes through the use of DevOps automation. Addteq was founded on the firm belief that automation is essential for successful software releases. Addteq's products and services are centered around the fundamental approach of understanding the p...
Mar. 1, 2017 02:45 PM EST Reads: 116
In recent years, containers have taken the world by storm. Companies of all sizes and industries have realized the massive benefits of containers, such as unprecedented mobility, higher hardware utilization, and increased flexibility and agility; however, many containers today are non-persistent. Containers without persistence miss out on many benefits, and in many cases simply pass the responsibility of persistence onto other infrastructure, adding additional complexity.
Mar. 1, 2017 02:30 PM EST Reads: 1,975
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Mar. 1, 2017 02:30 PM EST Reads: 519
ChatOps is an emerging topic that has led to the wide availability of integrations between group chat and various other tools/platforms. Currently, HipChat is an extremely powerful collaboration platform due to the various ChatOps integrations that are available. However, DevOps automation can involve orchestration and complex workflows. In his session at @DevOpsSummit at 20th Cloud Expo, Himanshu Chhetri, CTO at Addteq, will cover practical examples and use cases such as self-provisioning inf...
Mar. 1, 2017 02:28 PM EST Reads: 136
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
Mar. 1, 2017 02:15 PM EST Reads: 1,015