MONTREAL, Nov. 8, 2018 /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 nine months ended September 30, 2018 and is announcing that the Company will make a redemption payment of $115.4 million, including accrued and unpaid interest of $0.9 million, on its senior secured notes on November 30, 2018.

"This quarter, for the third quarter in a row, we are reporting dramatically increased EBITDA less CAPEX, which is 59% higher than last year.  We continue to concentrate on aligning our spending with the realities of our revenue and laying the groundwork for profitable growth.  We have accelerated the shedding of unprofitable or non-synergistic businesses and revenues, to allow us to concentrate on creating long-term value and growth," said David A. Eckert, President and CEO of Yellow Pages Limited.   

Third Quarter 2018 Results

• Adjusted EBITDA less CAPEX¹ increased by $16.4 million, to $44.1 million, despite a $45.5 million revenue decline relative to the third quarter of 2017.
• Net earnings increased by $34.3 million, to $27.1 million or $0.89 per diluted share.
• The Company's cash flows in the six months ended September 30,2018 and the net proceeds from the sales of ComFree/DuProprio and RedFlagDeals.com™ will result in a redemption payment of $115.4 million, including accrued and unpaid interest of $0.9 million, on its 10.00% Senior Secured Notes on November 30, 2018.

Segmented Information

The Company's operations are divided into the following four segments:

• YP – digital and traditional marketing solutions, including owned and operated media, provided to small and medium sized enterprises ("SMEs"). This segment included the operations of RedFlagDeals.com™, Canada's leading provider of online and mobile promotions, deals, coupons and shopping forums, until its sale on August 22, 2018.
• Agency – national advertising services to brands and publishers, primarily through Mediative and JUICE, as well as Totem until its divestiture as of May 31, 2018. Subsequent to the quarter ended September 30, 2018, the Company decided to exit the Agency segment by the end of the year through the liquidation of its Mediative division and sale of its JUICE assets excluding working capital. The Company has entered into a binding letter of intent (LOI) for the sale of its JUICE assets excluding working capital with the expected closing date of December 31, 2018. 
• Real Estate – media and expertise to help Canadians buy and sell their homes. Fully divested in July 2018: ComFree/DuProprio (CFDP) as of July 6, 2018 for cash consideration of $51 million on a cash free debt free basis and Yellow Pages NextHome as of July 23, 2018.
• Other – 411.ca and included local lifestyles magazines specific to the Western Canadian market until the divestiture of Western Media Group as of May 31, 2018.

An overview of each segment and the performance of each segment for the three and nine-month periods ended September 30, 2018 can be found in the November 8, 2018 Management's Discussion and Analysis.

Financial Results for the Third Quarter of 2018

Total revenues for the three-month period ended September 30, 2018 decreased by $45.5 million or 25.9% year-over-year and amounted to $130.2 million as compared to $175.7 million for the same period last year. The decline in total revenues for the three-month period ended September 30, 2018 was due to both digital and print revenue declines in all segments and to the divestitures that occurred in the second and third quarters of 2018.

Despite an overall $45.5 million decrease in revenues and pressures on margins, Adjusted EBITDA increased by $0.3 million or 0.7% to $46.3 million during the third quarter of 2018, compared to $45.9 million during the third quarter of 2017. Our Adjusted EBITDA margin for the third quarter of 2018 was 35.5% compared to 26.1% for the third quarter of 2017. The increase in Adjusted EBITDA and Adjusted EBITDA margin for the third quarter ended September 30, 2018 was mainly the result of our focus on profitability of our products and services, reductions in our cost structure including reductions in our workforce and associated employee costs, reductions in the Company's office space footprint, and other spending reductions across the Company.

Adjusted EBITDA less CAPEX¹ increased by $16.4 million or 59.2% to $44.1 million during the third quarter of 2018, compared to $27.7 million during the third quarter of 2017. The increase in Adjusted EBITDA less CAPEX¹ for the three-month period ended September 30, 2018 was mainly impacted by the result of higher Adjusted EBITDA and decreased spending on software development, office and computer equipment and leasehold improvements associated with office relocations.

The Company recorded net earnings of $27.1 million during the third quarter of 2018 as compared to a net loss of $7.2 million during the third quarter of 2017. The improvement in net earnings is mainly due to higher Adjusted EBITDA, decreased depreciation and amortization expenses, a gain on the sale of the assets related to the operations of RedFlagDeals and a reversal of income tax provisions of $18.3 million recorded with respect to previous taxation years.

Cash flows from operating activities decreased by $2.0 million to $35.9 million from $37.9 million for the third quarter period ended September 30, 2018 mainly due to lower change in operating assets and liabilities of $5.0 million, and increased payments for restructuring and other charges of $5.0 million, partially offset by lower interest paid of $7.0 million. The lower interest paid is due to the fact that the Company's 10.00% Senior Secured Notes interest payments are semi-annual in the second and fourth quarter of 2018 whereas the 9.25% Senior Secured Notes they replaced had quarterly interest payments.

Conference Call & Webcast
Yellow Pages Limited will hold an analyst and media call and simultaneous webcast at 8:30 a.m. (Eastern Time) on November 8, 2018 to discuss third quarter 2018 results. The call may be accessed by dialing 647-484-0475 within the Toronto area, or 1-888-220-8451 outside of Toronto, with both the password #6221731. 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.ca, 411.ca and Bookenda.com. The Company also holds the YP, YP Shopwise, YP Dine, Canada411, 411, Bookenda, and mobile applications and Yellow Pages print directories. In addition, Yellow Pages is a leader in national advertising through its businesses devoted to servicing the marketing needs of large North American brands, including Mediative and JUICE. 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 November 8, 2018, 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 November 8, 2018 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

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