MONTREAL, May 10, 2016 /CNW Telbec/ - Yellow Pages Limited (TSX: Y) (the "Company") released its operational and financial results today for the quarter ended March 31, 2016, demonstrating successful implementation of its Return to Growth Plan and transformation into Canada's leading digital advertising company.

• Digital revenues grew 16.6% year-over-year to reach $131.6 million for the three-month period ended March 31, 2016, representing 64.6% of total revenues.
• EBITDA adjusted for restructuring and special charges ("Adjusted EBITDA") totalled $61.9 million for the three-month period ended March 31, 2016, as compared to $70.8 million for the same period last year. The Adjusted EBITDA margin was 30.4% during the first quarter of 2016, as compared to 34.4% the year prior.
• The Company's customer count totalled 244,000 customers as at March 31, 2016, as compared to 251,000 customers as at the same time last year. Customer acquisition continued to accelerate, with 34,600 new customers acquired during the twelve-month period ended March 31, 2016, as compared to 23,700 new customers acquired during the same period last year.
• Yellow Pages acquired the net assets of JUICE Mobile ("JUICE") on March 17, 2016 for a total consideration of $35.3 million, paid with cash on hand. The acquisition positions Yellow Pages as a leader in national mobile advertising, significantly expanding its reach of brands and media publishers and providing the Company with proprietary programmatic technologies to connect national advertisers with mobile users across North America.
• The Company anticipates making a $36 million principal mandatory redemption payment on its 9.25% Senior Secured Notes (the "Notes") on May 31, 2016. Total principal mandatory redemption payments in 2016 are expected to amount to approximately $100 million.

"Generating over $526 million in annualized digital revenues, Yellow Pages remains one of Canada's largest media and marketing solution providers. Over 244,000 small and medium sized businesses trust our advertising services to grow their local presence, with over one third of Canadians also consulting our network of digital media properties to interact and transact with merchants in and around their neighbourhoods," said Julien Billot, President and Chief Executive Officer of Yellow Pages. "Now two years into the implementation of our Return to Growth Plan, we have successfully leveraged our expertise and market positioning to grow and enrich the connections made between Canadian consumers and businesses, as well as strengthen our financial profile."

First Quarter 2016 Financial Results
Revenues for the quarter ended March 31, 2016 decreased 1.1% year-over-year to $203.6 million, as compared to $205.9 million for the same period last year.

Digital revenues grew 16.6% year-over-year to total $131.6 million for the quarter ended March 31, 2016, as compared to $112.9 million the year prior. Digital revenues represented 64.6% of total revenues for the three-month period ended March 31, 2016, up from 54.8% during the same period last year.

Growth in digital revenues continues to be driven by accelerated customer acquisition and growth in digital spending among the Company's renewing customers. Digital revenue growth was also favourably impacted by the acquisitions of ComFree/DuProprio ("CFDP") and JUICE on July 1, 2015 and March 17, 2016, respectively. On a pro forma basis, digital revenues for the three-month period ended March 31, 2016 grew 8% year-over-year. Pro forma digital revenue growth adjusts digital revenues for the full inclusion of CFDP and JUICE during the three-month period ended March 31, 2015, as well as for the full inclusion of JUICE during the first quarter of 2016.

Print revenues decreased 22.6% year-over-year to $72 million during the first quarter of 2016, remaining adversely impacted by a decline in the number of print customers and the ongoing migration of customers' print advertising spending to digital. Print revenue decline rates are anticipated to remain relatively stable, in part supported by initiatives geared at protecting usage of the print directory and encouraging customers' renewal of print advertising spending.

Adjusted EBITDA totalled $61.9 million for the three-month period ended March 31, 2016, as compared to $70.8 million during the same period last year. The Adjusted EBITDA margin for the first quarter of 2016 was 30.4%, as compared to 34.4% for the first quarter of 2015. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was principally impacted by lower print revenues and a change in product mix, partly offset by the realization of cost saving initiatives.

Free cash flow for the three-month period ended March 31, 2016 totaled $8.8 million, as compared to $44.9 million during the same period last year. The decrease in free cash flow was principally impacted by income taxes paid of $1.9 million during the first quarter of 2016, as compared to income taxes received of $25.6 million during the first quarter of 2015 related to a past tax settlement. Free cash flow for the three-month period ended March 31, 2016 was also impacted by a decrease in Adjusted EBITDA.

Net debt totalled $463.1 million as at March 31, 2016, as compared to $455.1 million the year prior. The Company anticipates making a $36 million principal mandatory redemption payment on its Notes on May 31, 2016, with principal mandatory redemption payments expected to total approximately $100 million in 2016.

"Our cash flow profile remains strong, providing us with the financial flexibility required to delever the balance sheet and transfer value to shareholders," said Ginette Maillé, Chief Financial Officer of Yellow Pages. "As we continue implementing the Return to Growth Plan, our cash flow profile will continue to strengthen, driven by the delivery of sustainable digital revenue growth, a reduction in operational and capital expenditures, and cost savings generated from the realization of operational efficiencies."

Net earnings for the three-month period ended March 31, 2016 amounted to $13.2 million. This compares to net earnings of $25.5 million the year prior, principally impacted by lower Adjusted EBITDA. For the quarter ended March 31, 2016, the Company recorded basic earnings per share of $0.49, as compared to basic earnings per share of $0.95 for the same period last year.

Operational Update
"We have grown into a reputable digital advertising company, enriching the services and solutions we offer to merchants to help them thrive in today's complex digital economy," continued Mr. Billot. "Our platforms and operations have evolved to support the digital needs of our local and national customers, while new processes have been introduced to enhance the service levels provided by our customer-facing teams. These initiatives continue to play a key role in accelerating customer acquisition, protecting customer renewal rates and growing digital advertising spending among renewing customers, drivers critical to returning our company to revenue and Adjusted EBITDA growth by 2018."

Enhancing its Customer Value Proposition

• The Company's customer count totalled 244,000 customers as at March 31, 2016, as compared to 251,000 customers as at March 31, 2015. This represents a year-over-year net customer count decline of 7,000, down significantly from 19,000 net customers lost during the same period last year.
• Yellow Pages acquired 34,600 new customers during the twelve-month period ended March 31, 2016, exceeding 23,700 new customers acquired during the same period last year. The Company has made significant progress in developing a sales culture focused on acquiring new customers, while also implementing technologies that have boosted the productivity and performance of its sales channels. A dialer has been introduced across the Company's call centers to automate the qualification and assignment of customer leads. In conjunction, Yellow Pages' sales force is being equipped with enhanced customer-facing tools that leverage proprietary competitive intelligence and fact-based selling techniques to provide clients with more valuable digital marketing campaigns.
• The renewal rate among customers remained relatively stable at 84% for the twelve-month period ended March 31, 2016, as compared to a renewal rate of 85% during the same period last year. This performance continues to be supported by the delivery of an improved sales, customer service and digital fulfillment experience to the Company's customers.

Strengthening its Media Assets

• Total digital visits ("TDV"), which measures the number of visits made across the YP, YP Shopwise, YP Dine, RedFlagDeals, Canada411, Bookenda and dine.TO online and mobile properties, as well as visits made across the properties of the Company's application syndication partners, amounted to 100.2 million for the first quarter ended March 31, 2016, as compared to 105.3 million visits during the same period last year.
• TDV during the first quarter of 2016 remained adversely impacted by a change made to the layout of Google's mobile web search results pages in late 2015, which pushed organic results for mobile web publishers lower on Google's search pages. Yellow Pages' leading ranking among Google's organic listings on mobile web remained relatively unchanged despite this layout change, a reflection of the high relevance and quality of the Company's listings.
• The YP Dine mobile application continued to receive various enhancements over the course of the first quarter of 2016, offering better content, a larger repertoire of restaurant listings, and easier-to-use search and booking functionalities. The YP Dine desktop property (http://www.yellowpages.ca/dine) also saw improvements, now allowing users to optimize their search experience by filtering and booking restaurants by availability.

Acquisition of JUICE Mobile

• On March 17, 2016, Yellow Pages closed the acquisition of the net assets of JUICE for a total consideration of $35.3 million. JUICE is a leading Canadian mobile advertising technology company whose proprietary programmatic direct and real-time bidding platforms facilitate the automatic buying and selling of mobile advertising between brands and publishers. Since its inception in 2010, JUICE has successfully leveraged its mobile advertising platforms to build valuable relationships with numerous Fortune 500 customers across North America, while also operating a mobile media publisher network attracting over 11 billion impressions annually. The acquisition positions Yellow Pages as a leader in national mobile advertising, significantly expanding its existing reach of brands and media publishers, and equipping the Company with leading technologies to better fulfill mobile advertising campaigns. The transaction will also help to accelerate Yellow Pages' monetization of local mobile audiences, leveraging JUICE's publishers and advertising platforms to create more targeted hyperlocal mobile advertising campaigns for small and medium sized businesses nationwide.
• Following the acquisition of JUICE, the Company anticipates delivering, for the year ending December 31, 2016, year-over-year pro forma digital revenue growth between 9% and 11%. While the acquisition of JUICE is accretive to Adjusted EBITDA, the Company is revising its Adjusted EBITDA margin guidance for 2016 to approximately 28%, as JUICE operates at a lower Adjusted EBITDA margin relative to Yellow Pages prior to the acquisition.

Conference Call
Yellow Pages Limited will hold an analyst and media call at 2 p.m. (Eastern Time) on May 10, 2016 to discuss first quarter 2016 results. The call may be accessed by dialing (416) 340-2219 within the Toronto area, or 1 866 225-2055 outside of Toronto.

The call will be simultaneously webcast on the Company's website at https://corporate.yp.ca/en/yellow-pages-news/events/q1-2016-financial-and-operational-results-and-2016-annual-general-meeting/

The conference call will be archived in the Investors section of the site at https://corporate.yp.ca/en/investors/financial-events-presentations/

A playback of the call can also be accessed from May 10 to June 8, 2016 by dialing (905) 694-9451 within the Toronto area, or 1 800 408-3053 outside of Toronto.

The conference passcode is 6191781.

About Yellow Pages Limited
Yellow Pages Limited (TSX: Y) is a Canadian digital media and marketing solutions company that supports local economies by helping neighbourhood businesses reach new customers and foster stronger relationships with existing clients through its various media and products. Yellow Pages holds some of Canada's leading local online properties including YP.ca™, RedFlagDeals.com™, Canada411.ca, 411.ca, Bookenda.com, dine.TO, DuProprio.com, ComFree.com and YP NextHome. The Company also holds the YP, YP Shopwise, YP Dine, RedFlagDeals, Canada411, 411, Bookenda, DuProprio, ComFree and YP NextHome mobile applications and Yellow Pages™ print directories. In addition, Yellow Pages is a leader in national advertising through its various channels and services devoted to North American businesses. The Company also owns JUICE Mobile, a mobile advertising technology company whose proprietary programmatic platforms facilitate the automatic buying and selling of mobile advertising between brands and publishers. 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, results of operations and businesses of the Company. These statements are forward-looking as they are based on our current expectations, as at May 10, 2016, 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 May 10, 2016 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.

SOURCE Yellow Pages Limited