Yellow Pages Limited Reports Fourth Quarter and Full Year 2023 Financial and Operating Results and Announces an Increase in Quarterly Cash Dividends(1)
"We are pleased with our fourth quarter and full year results which reflect continued strong profitability and cash generation, despite headwinds in the global economy and, particularly, the Canadian small business sector hindering our progress on the revenue front," said
Eckert commented on the key developments:
- Strong earnings. "Our Adjusted EBITDA2 for the quarter and full year was 29.1% and 32.1% of revenue, respectively, despite our continued investments in revenue initiatives, including the further expansion of our sales force."
-
Cash to Shareholders and Pension Plan. "During the fourth quarter, we completed the previously announced plan of arrangement, distributing
$50.0 million to shareholders through a share buy back and advancing$12.0 million of voluntary contributions to our Defined Benefit Pension Plan's wind-up deficit. In addition, consistent with our deficit-reduction plan announced inMay 2021 , we made$1.5 million of voluntary incremental payments in the quarter and$6.0 million for the full year toward our Pension Plan's wind-up deficit, bringing the total voluntary contributions to our Defined Benefit Pension Plan's wind-up deficit in 2023 to$18.0 million ." -
Healthy cash balance. "Following the disbursements to shareholders and the Pension Plan, our steady cash generation has grown cash on hand to approximately
$27.0 million at the end of January." - Continued progress on revenue initiatives. "The headwinds in the global economy and, particularly, the Canadian small business sector contributed to a challenging quarter for revenue. However, we remain pleased with our progress on underlying metrics, including the size of our sales force, our rate of churn of customers, and our rate of gaining new accounts. In particular, our rate of gaining new accounts was 28.5% higher than in the previous year. We believe these fundamentals bode well for our medium- and long-term future."
- Optimistic outlook for "revenue curve." "After 2023's four quarters of declining rate of change of revenue vs. prior year, we expect in the first quarter of 2024 a resumption of our climb toward revenue stability."
-
Increase in quarterly cash dividend. "Our board has modified the dividend policy of paying a quarterly cash dividend to common shareholders by increasing the dividend from
$0.20 per share to$0.25 per share." -
Quarterly dividend declared. "Our Board has declared a dividend of
$0.25 per common share, to be paid onMarch 15, 2024 to shareholders of record as ofFebruary 27, 2024 ."
Financial Highlights
(In thousands of Canadian dollars, except percentage information and per share information) |
Y e l l ow Pages Limited |
For the three-month periods |
|
||
|
2023 |
2022 |
2023 |
2022 |
Revenues |
|
|
|
|
Adjusted EBITDA2 |
|
|
|
|
Adjusted EBITDA margin2 |
29.1 % |
32.5 % |
32.1 % |
36.0 % |
Income before income taxes |
|
|
|
|
Net income |
|
|
|
|
Basic income per share |
|
|
|
|
Diluted income per share |
|
|
|
|
CAPEX2 |
|
|
|
|
Adjusted EBITDA less CAPEX2 |
|
|
|
|
Adjusted EBITDA less CAPEX margin2 |
27.4 % |
31.0 % |
30.4 % |
34.1 % |
Cash flows from (used in) operating * activities* |
|
|
|
|
*Includes voluntary contributions to the Defined Benefit Pension Plan (the "Pension Plan") of |
(1)
The dividend will be designated as an eligible dividend pursuant to subsection 89(14) of the Income Tax Act ( |
(2)
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 |
Fourth Quarter of 2023 Results
- Total revenues decreased 13.4% year-over-year and amounted to
$55.9 million for the three-month period endedDecember 31, 2023 compared to the decrease of 5.9% reported for the same period last year. - Adjusted EBITDA less CAPEX1 totalled
$15.3 million and the EBITDA less CAPEX margin1 was 27.4%. - Net income amounted to
$12.2 million , or to$0.71 per diluted share.
F inancial Results for the Fourth Quarter of 2023
Total revenues for the fourth quarter ended
Total digital revenues decreased 12.1% year-over-year and amounted to
Total print revenues decreased 18.7% year-over-year and amounted to
The decline rate of revenues increased year-over-year. Total revenue decline of 13.4% this quarter compares to a decline of 5.9% reported for the same period last year. Digital revenue decline of 12.1% this quarter compares to a decline of 4.3% reported for the same period last year. Print revenue decline of 18.7% this quarter compares to a decline of 11.7% reported for the same period last year. The higher decline rates are attributable to a decrease in customer count in both digital and print, and to customer claim rates remaining stable in 2023, while 2022 benefited from a substantial improvement. These pressures, augmented by the economic headwinds, were partially offset by a higher spend per customer in digital, driven in part by increased pricing.
Adjusted EBITDA1 decreased to
Adjusted EBITDA less CAPEX decreased by
Net income for the three-month period ended
Cash flows from operating activities increased by
(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 |
F inancial Results for the Year Ended December 31 of 2023
Total revenues for the year ended
Total digital revenues decreased 9.0% year-over-year and amounted to
Total print revenues decreased 17.0% year-over-year and amounted to
The decline rate of revenues increased year-over-year. The higher decline rate is attributable, in part, to (a) the headwinds in the global economy, whereby, customer renewal rates have remained strong but stable while the improvements in average spend per customer has slowed as customers look to optimize their spend, (b) customer claim rates remaining stable in 2023, while 2022 benefited from a substantial improvement and (c) a cybersecurity incident which resulted in the Company's operations and IT systems being suspended for approximately three weeks during the second quarter of 2023.
For the year ended
For the year ended
Net income decreased to
Cash flows from operating activities decreased by
As at
(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 |
Conference Call & Webcast
Yellow Pages Limited will hold an analyst and media call and simultaneous webcast at 8:30 a.m. (Eastern Time) on
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
Caution Concerning Forward-Looking Statements
T
his press release contains forward-looking statements about the objectives, strategies, financial conditions
and results of operations and businesses of YP (including, without limitation, payment of a cash dividend per share per quarter to its common shareholders and completion of the plan of arrangement).
These statements are forward-looking as they are based on our current expectations, as at
Non-GAAP Financial Measures
A djusted 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
A djusted 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 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-GAAP 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
SOURCE