Yellow Pages Q1 2023 Earnings Report

Yellow Pages EPS Results

• Actual EPS: C$0.68
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Yellow Pages Revenue Results

• Actual Revenue: $62.72 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Yellow Pages Announcement Details

• Quarter: Q1 2023
• Date: 5/11/2023
• Time: N/A
• Conference Call Date: Thursday, May 11, 2023
• Conference Call Time: 8:30AM ET

Yellow Pages (TSE:Y) Ltd is a media and marketing solutions company in Canada, offering small and medium-sized enterprises (SMEs) services to help them connect with local consumers. The company has two reportable segments namely Yellow Pages and Other. It generates maximum revenue from the Yellow Pages segment.

Yellow Pages Q1 2023 Earnings Call Transcript

[Operator]

Good morning, ladies and gentlemen. Welcome to Yellow Pages' Q1 2023 Earnings Release Call. Today's conference call contains forward looking information about Yellow Pages' outlook, objectives and strategy. These statements are based on assumptions and are subject to important risks and uncertainties. Yellow Pages' actual results could differ materially from expectations discussed.

[Operator]

The details of Yellow Pages' caution regarding forward looking information, Including key assumptions and risks can be found in Yellow Pages' Management Discussion and Analysis for the Q4 of 2022. This call is being recorded and webcast and all of the disclosure documents are available on the company's website and on SEDAR. I would now like to turn the meeting over to Mr. David Eckert, President and Chief Executive Officer. Please go ahead, sir.

[Speaker 1]

Thank you very much. Good morning, everyone, and thank you all for joining our Q1 2023 analyst call. We really appreciate your interest in our company and your participation here today. As usual, I'll start out in a moment by making some overview comments. And then Franco Chenamblo, our Chief Financial Officer, will provide some more detail.

[Speaker 1]

And then Franco and Cherilyn King, our Senior Vice President of Sales, Marketing and Customer Service, and I will be happy to answer any questions that there might be. As an overview, our first quarter results were very pleased with what we have to report today, Continued very strong profitability and very strong cash generation. In spite Our continued investments in revenue initiatives, including significant expansion of our sales force, We reported adjusted EBITDA for the quarter of 33.1 percent of revenue, continued very strong. Consistent with our plan to reduce the deficit in our defined benefit pension plans, wind up deficit In the Q1, we again made $1,500,000 of voluntary incremental payments towards that plan. Even after that and after certain regular seasonal cash disbursements during the quarter, our cash on hand at the end of April The end of April was approximately $54,000,000 of cash on hand.

[Speaker 1]

Our revenue situation, In spite of some increased headwinds in the general economy, our change in revenue in the Q1 compared to prior year Was still slightly better than the same measure a year previous, and we're very pleased with our continued progress On the underlying metrics, including the size of our sales force, which is expanding nicely our rate of churn of customers, Which is good and improving and our rate of gaining new accounts. I'm very pleased to announce today that we are increasing our quarterly cash stock dividend from $0.15 per share Per quarter to $0.20 per share per quarter and to announce that our Board has indeed Declared a dividend of $0.20 per common share to be paid on June 15 to shareholders of record as of May 25. So overall, we feel continued good progress, and I'm happy to turn it over now to Franco for some Additional details behind those headline points.

[Speaker 2]

Thanks, David, and good morning to everyone. Let me take you through our financial results for the Q1 ended March 31, 2023. On revenues, they decreased by $5,100,000 or 7.5 percent year over year and amounted to $62,700,000 for the Q1. The decrease in revenues For the quarter, it's due to the decline of our higher margin digital and print products and to a lesser extent, our lower margin Digital service and resale products. This change in products and product mix continues to put pressure on our margins.

[Speaker 2]

The decline rates for total revenues and digital revenues improved year over year. Total revenue decline of 7.5% this quarter compares to a decline of 7.8 Percent reported for the same period last year. Digital revenue decline of 5.7% this quarter Compares to a decline of 7.7% reported for the same period last year. These improvements were due to better spend per customer In digital, increased renewal rates as well as continued improvement in customer claims. The perp revenue decline of 13.7% this quarter compares to a decline of 7.9% reported for the same period last year.

[Speaker 2]

A higher decline rate for print revenue attributable to the decrease in average spend per customer, partially offset by improvements in customer claims. On adjusted EBITDA for the quarter, it was impacted by revenue pressures As well as ongoing investments in our tele sales force capacity, partially offset by reductions in other operating costs, Including reductions in our workforce and associated employee expenses and lower variable compensation expense. As a result, adjusted EBITDA decreased year over year by $4,700,000 or 18.3 percent to $20,800,000 And EBITDA margin decreased to 33.1% compared to 37.5% for the same period last year. Revenue pressures coupled with increased headcount in our sales force, partially offset by continued optimization, will continue to cause some pressure on margins in the upcoming quarters. Adjusted EBITDA less CapEx for the Q1 decreased by $4,100,000 year over year to $19,800,000 mainly due to the decrease in adjusted EBITDA partially offset by lower capital expenditures as 2022 CapEx spend was impacted by the integration of new products.

[Speaker 2]

On our workforce, as of March 31, it increased to 656 employees compared to 608 at the same Date last year, sales force headcount increased by 64, while all other headcount decreased by 16. Net income for the Q1 amounted to $12,400,000 compared to $14,600,000 for the same period last year due to lower adjusted EBITDA, partially offset by lower depreciation and amortization, lower restructuring and other charges, financial charges and lower income taxes. Diluted EPS for the quarter was $0.68 an increase of 21% versus Q1 2022, EPS of $0.56 This increase was due to lower shares outstanding. Consistent with our deficit reduction plan on pension contributions, In the Q1 of 2023, the company made $1,500,000 in voluntary incremental cash contribution to the planned wind up deficit. As David mentioned, our cash on hand at the end of April stood at approximately $54,000,000 And as David announced, the Board of Directors As modified the dividend policy and approved an increase in quarterly cash dividend from $0.15 to $0.20 per common share, up 33% from previous Quarterly dividends.

[Speaker 2]

Finally, the Board of Directors declared a cash dividend of $0.20 per common share payable on June 15 to shareholders of record as at May 25, 2023. This concludes our formal remarks. Thank you for taking the time to take this morning. We'll now take your questions. Over to you, operator.

[Operator]

Certainly, sir. Ladies and gentlemen, we will now take questions from the telephone lines. There are no questions at the moment, Mr. Eckert.

[Speaker 1]

Okay. Well, we thank you all for your participation, for your support of our company, and we look forward to you again, 1 quarter from now. Thanks very much and have a great day.

[Operator]

Thank you. Ladies and gentlemen, your conference has now ended. All callers are asked to hang up their lines at this time, and thank you for joining today's call.