"We are very pleased with our third quarter results and how our Company continues to cope with the COVID-19 pandemic and build for the future," said
Eckert commented on the key developments for the quarter:
- Cash continued to build. "As of today, our cash on hand is approximately
$137 million . This balance already significantly exceeds the$107 million principal amount of our Exchangeable Debentures, which are our only remaining debt, excluding lease obligations. As previously announced, we intend to fully pay off those Exchangeable Debentures, at par, on or aroundMay 31, 2021 ." - Quarterly cash dividend2 declared. "Our Board has declared a cash dividend of
$0.11 per common share, to be paid onDecember 15, 2020 to shareholders of record as ofNovember 27, 2020 ." - Common stock NCIB effective. "Under our NCIB program, at the end of the third quarter the Company had purchased 99,280 common shares for cash of
$1.1 million . That program is continuing." - Modest effect of COVID-19 crisis on revenue. "All of our operations have continued unabated since the COVID-19 crisis began. And the effect of the crisis on our revenues in the third quarter was again only a handful of percentage points. Bookings trends indicate only modest additional effects on our revenue curve over the next couple of quarters, as the sales levels already booked become reported revenue."
- Progress on revenue initiatives. "We are on track to double our tele-sales capacity by the end of the year, aimed at significantly ramping up our acquisition of new accounts. And we are executing on our programs to add to our strong product portfolio."
- Solid quarterly earnings. "Our Adjusted EBITDA1 for the quarter was a healthy 34% of revenue, despite the COVID-19 crisis, our investments in revenue initiatives, and some 1-time expenses. We are committed to generating good cash and profitability, while making the targeted investments necessary to bend our revenue curve toward stability."
Financial Highlights
(In thousands of Canadian dollars, except percentage information and per share information)
Yellow Pages Limited | For the three-month periods | For the nine-month periods | ||
2020 | 2019 | 2020 | 2019 | |
YP Revenues | ||||
Other revenues and Intersegment Eliminations | - | - | - | 1,274 |
Total revenues | ||||
Adjusted EBITDA1 | ||||
Adjusted EBITDA margin1 | 34.0% | 38.5% | 39.6% | 40.9% |
Net earnings | ||||
Basic earnings per share | ||||
Diluted earnings per share | ||||
CAPEX1 | ||||
Adjusted EBITDA less CAPEX1 | ||||
Adjusted EBITDA less CAPEX margin1 | 32.4% | 36.1% | 38.0% | 38.4% |
Cash flows from operating activities |
(1) Adjusted EBITDA is equal to Income from operations before depreciation and amortization and restructuring and other charges (defined herein as Adjusted EBITDA), as shown in |
(2) The dividend will be designated as an eligible dividend pursuant to subsection 89(14) of the Income Tax Act ( |
Third Quarter of 2020 Results
- Adjusted EBITDA less CAPEX1 totaled
$26.0 million and the EBITDA less CAPEX margin1 was 32.4%. - Net earnings decreased by
$4.8 million to$9.0 million , or$0.34 per diluted share. - Cash position at the end of the period was
$124.5 million and approximately$137.0 million as atNovember 11, 2020 .
Segmented Information
The Company's operations are categorized into two reportable segments: YP and other.
- The YP segment provides small and medium-sized businesses across
Canada digital and traditional marketing solutions, including online and mobile priority placement on Yellow Pages' owned and operated media, content syndication, search engine solutions, website fulfillment, social media campaign management and digital display advertising, video production and print advertising. This segment also includes the 411.ca digital directory service helping users find and connect with people and local businesses. - The Other segment includes YP Dine digital property until its sale on
April 30, 2019 and the Mediative division until its liquidation onJanuary 31, 2019 .
An overview of each segment and the performance of each segment for the three and nine-month periods ended September 30, 2020 and 2019 can be found in the
Financial Results for the Third Quarter of 2020
Revenues for the YP segment for the third quarter of 2020 decreased by
Adjusted EBITDA for the YP segment for the three-month period ended
Total revenues for the third quarter ended
Adjusted EBITDA1 decreased by 27.7% to
Adjusted EBITDA less CAPEX decreased by
Net earnings for the three-month period ended
1) Adjusted EBITDA is equal to Income from operations before depreciation and amortization and restructuring and other charges (defined herein as Adjusted EBITDA), as shown in |
Cash flows from operating activities decreased by
As at
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 12, 2020 to discuss third quarter 2020 results. The call may be accessed by dialing 416-695-6725 within the Toronto area, or 1-866-696-5910 outside of Toronto, Passcode # 8902057. 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
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements about the objectives, strategies, financial conditions, including potential full repayment of the Company's remaining exchangeable debentures on or shortly after May 31, 2021, at par; to its common shareholders, a cash dividend payment of
1) Adjusted EBITDA is equal to Income from operations before depreciation and amortization and restructuring and other charges (defined herein as Adjusted EBITDA), as shown in |
Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA margin
In order to provide a better understanding of the results, the Company uses the terms Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA is equal to Income from operations before depreciation and amortization and restructuring and other charges (defined herein as Adjusted EBITDA), as shown in
Adjusted EBITDA less CAPEX and Adjusted EBITDA less CAPEX margin
The Company also uses Adjusted EBITDA less CAPEX, which is defined as Adjusted EBITDA, as defined above, less CAPEX which we define as additions to intangible assets and additions to property and equipment as reported in the Investing Activities section of the Company's interim condensed consolidated statements of cash flows. Adjusted EBITDA less CAPEX margin is defined as the percentage of Adjusted EBITDA less CAPEX to revenues. Adjusted EBITDA less CAPEX and Adjusted EBITDA less CAPEX margin are non-IFRS financial measures and do not have any standardized meaning under IFRS. Therefore, are unlikely to be comparable to similar measures presented by other publicly traded companies. We use Adjusted EBITDA less CAPEX and Adjusted EBITDA less CAPEX margin to evaluate the performance of our business as it reflects cash generated from business activities. We believe that certain investors and analysts use Adjusted EBITDA less CAPEX and Adjusted EBITDA less CAPEX margin to evaluate the performance of businesses in our industry.
The most comparable IFRS financial measure to Adjusted EBITDA less Capex is Income from operations before depreciation and amortization and restructuring and other charges (defined above as Adjusted EBITDA) as shown in Yellow Pages Limited's interim condensed consolidated statements of income. Refer to page 5 and page 11 of the November 11, 2020 MD&A for a reconciliation of CAPEX and Adjusted EBITDA less CAPEX, respectively.
Net debt excluding lease obligations
Net debt excluding lease obligations is a non-GAAP financial measure and does not have any standardized meaning under IFRS. Therefore, it is unlikely to be comparable to similar measures presented by other publicly traded companies. Net debt excluding lease obligations is comprised of Exchangeable debentures less Cash as presented in our consolidated statements of financial position. We use net debt as indicator of the Company's ability to cover financial obligations and reduce debt and associated interest charge as it represents the amount of debt excluding lease obligations that is not covered by available cash. We believe that certain investors and analysts use net debt to determine a company's financial leverage.
The most comparable IFRS financial measure is total debt, as presented in the capital disclosures note on page 49 of our Audited consolidated financial statements for the years ended 2019 and 2018. The table below provides a reconciliation of total debt to net debt excluding lease obligations.
Net debt excluding lease obligations | ||
(In thousands of Canadian dollars) | ||
As at | ||
Exchangeable debentures | $ 100,433 | $ 98,537 |
Lease obligations | 53,507 | 57,885 |
Total debt | ||
Lease obligations | (53,507) | (57,885) |
Cash | (124,475) | (44,408) |
Net debt excluding lease obligations | $ (24,042) | $ 54,129 |
SOURCE
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