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 year ended December 31, 2019.
'We continued our strong Adjusted EBITDA less CAPEX margin1 in the Fourth Quarter and for the full year 2019. As we predicted last quarter, this allowed us to fully repay our notes on December 2, 2019, three years ahead of maturity. And today we announce our intention to make an optional redemption payment of $107.1 million toward the principal amount to fully repay all of our remaining debt, our exchangeable debentures, on or shortly after May 31, 2021, at par. 'We also intend to initiate a regular quarterly dividend of 11 cents per common share per quarter, beginning in the second quarter of 2020. 'In addition, we continue to invest appropriately in our business, including significant expansion of our tele-sales force to support further 'bending of the revenue curve.' We are heartened that, including this most recent quarter, we produced an improved year-on-year rate of revenue change in our YP segment for four consecutive quarters, as our various initiatives to 'bend the revenue curve' continued to bear fruit,' said David A. Eckert, President and CEO of Yellow Pages Limited.
Financial Results for the Fourth Quarter of 2019 Revenues for the YP segment for the fourth quarter of 2019 decreased by $17.3 million or 15.6% year-over-year and amounted to $93.5 million compared to $110.8 million for the same period last year. This compares to a decrease of $26.4 million or 19.2% for the fourth quarter of 2018 compared to the same period in 2017. The decrease for the quarter ended December 31, 2019 is mainly due to the decline of our higher margin YP digital media and print products and to a lesser extent to our lower margin digital services products, thereby creating pressure on our gross profit margins. Adjusted EBITDA for the YP segment for the fourth quarter of 2019 totalled $34.8 million compared to $38.9 million for the same period last year. The decrease in Adjusted EBITDA is a result of lower overall revenues, pressures from the change in product mix and investments in customer care and investments in new customer acquisition. The Adjusted EBITDA margin for the YP segment for the fourth quarter of 2019 was 37.2% compared to 35.1% for the same period last year. The increase in Adjusted EBITDA margin for the fourth quarter is due to the revenue pressures, investments in customer care and investments in new customer acquisition being more than offset by an increased focus on the profitability of our products and services and reductions in both our cost of sales and other operating costs. Total revenues for the three-month period ended December 31, 2019 decreased by $31.0 million or 24.9% year-over-year and amounted to $93.5 million as compared to $124.5 million for the same period last year. The decline in total revenues for the quarter ended December 31, 2019 was due to lower digital and print revenues in the YP segment as well as the divestitures in the Other segment. Adjusted EBITDA decreased by $6.4 million to $34.8 million during the fourth quarter of 2019, compared to $41.1 million during the same period last year. The Company's Adjusted EBITDA margin for the three-month period ended December 31, 2019 was 37.2% compared to 33.0% for the same period last year. The decrease in Adjusted EBITDA for the three-month period ended December 31, 2019 is the result of revenue pressures in the YP segment as well as the divestitures in the Other segment. The increase in Adjusted EBITDA margin is mainly due to reductions in both our cost of sales and other operating costs which fully offset the revenue pressures in the YP segment as well as the dilutive effect on profitability of the lower margin Other segment in 2018.
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 and 411.ca. The Company also holds the YP, Canada411 and 411 mobile applications and Yellow Pages print directories.
Caution Concerning Forward-Looking Statements
This press release contains forward-looking statements about the objectives, strategies, financial conditions, including potential repayment of the Company's exchangeable debentures in full on or shortly after May 31, 2021, at par, the initiation of a quarterly common share dividend of $0.11 per common share beginning in the second quarter of 2020, results of operations and businesses of the Company. These statements are forward-looking as they are based on our current expectations, as at February 12, 2020, 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 February 12, 2020 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.