DALLAS--(BUSINESS WIRE)--DexYP™*, one of the largest national providers of local business automation software, today announced financial results for third quarter 2017.
Key highlights for DexYP:
- Generated $568.2 million of Pro Forma Net Revenue
- Achieved $139.3 million of Adjusted Pro Forma EBITDA, a 24.5% EBITDA margin
- Produced $54.1 million of Free Cash Flow and reduced Net Debt by $57.8mm
“The benefits of the YP acquisition are being realized,” said Joe Walsh, DexYP CEO. “We added important skills to the company and have been impressed with the way the former YP sales organization is selling our local business automation software Thryv℠.
“We all believe that local businesses nationwide need this software and our support to modernize their operations and work smarter.”
|
Third Quarter 2017 Results |
|||||||||||||||||||||||||
| Q3 | YTD | ||||||||||||||||||||||||
| Variance | Variance | ||||||||||||||||||||||||
| 2017 | 2016 | Fav (Unfav) | % | 2017 | 2016 | Fav (Unfav) | % | ||||||||||||||||||
|
Client Count, Period End (000) |
(a), (b) | ||||||||||||||||||||||||
| Multi-Product | 213 | 246 | (33) | -13.4% | |||||||||||||||||||||
| Digital | 116 | 121 | (4) | -3.6% | |||||||||||||||||||||
| 296 | 396 | (100) | -25.3% | ||||||||||||||||||||||
| Total Clients | 625 | 763 | (137) | -18.0% | |||||||||||||||||||||
|
Net Revenue ($mm) |
(b), (c) | ||||||||||||||||||||||||
| $ | 274.0 | $ | 355.6 | $ | (81.6) | -22.9% | $ | 875.7 | $ | 1,129.0 | $ | (253.3) | -22.4% | ||||||||||||
| Digital | 292.4 | 334.6 | (42.2) | -12.6% | 906.5 | 1,023.3 | (116.8) | -11.4% | |||||||||||||||||
| Other | 1.8 | 2.5 | (0.7) | -28.7% | 5.9 | 5.6 | 0.3 | 5.7% | |||||||||||||||||
| Total Net Revenue | $ | 568.2 | $ | 692.7 | $ | (124.5) | -18.0% | $ | 1,788.1 | $ | 2,157.9 | $ | (369.8) | -17.1% | |||||||||||
| Adjusted Pro Forma EBITDA ($mm) | (b), (d), (e) | $ | 139.3 | $ | 178.5 | $ | (39.2) | -22.0% | $ | 409.0 | $ | 529.3 | $ | (120.3) | -22.7% | ||||||||||
| Adjusted Pro Forma EBITDA Margin % | 24.5% | 25.8% | -1.3% | 22.9% | 24.5% | -1.7% | |||||||||||||||||||
| Free Cash Flow ($mm) | (b), (f), (g) | $ | 54.1 | $ | 47.7 | $ | 6.4 | 13.5% | $ | 174.5 | $ | 189.8 | $ | (15.3) | -8.1% | ||||||||||
|
Debt ($mm) |
(b) | ||||||||||||||||||||||||
| Term Note | $ | 728.0 | $ | 890.5 | $ | 162.5 | 18.3% | ||||||||||||||||||
| ABL | 164.2 | 139.7 | (24.5) | -17.5% | |||||||||||||||||||||
| Total Outstanding Debt | $ | 892.2 | $ | 1,030.3 | $ | 138.1 | 13.4% | ||||||||||||||||||
| Cash | $ | (14.4) | $ | (74.5) | $ | (60.1) | 80.7% | ||||||||||||||||||
|
Net Debt |
(g) | $ | 877.8 | $ | 955.8 | $ | 78.0 | 8.2% | |||||||||||||||||
| *Note: DexYP is a trade name for Dex Media Holdings, Inc. | |||||||||||||||||||||||||
| Footnotes: | |||
| (a) | Duplicative local clients were removed from the 2017 results but not from the 2016 results. | ||
| (b) | All figures presented are preliminary, subject to change, and unaudited. Material changes may result from audit procedures, and finalization of fresh start accounting and acquisition accounting. Finalization of the 2016 and 2017 financial statement audit of multi-element revenue accounting could result in a non-cash shift between reported Print and Digital Net Revenue and between reporting periods. | ||
| (c) | Net Revenue for Q3 2017 and YTD September 2017 is presented on a consolidated pro forma basis as a result of fresh start accounting. Dex Media's historical net revenue for Q3 2016 and YTD September 2016 has been adjusted to reflect proper recognition of contracts with both print and digital advertising components. DexYP's historical net revenue for the periods prior to the acquisition date of June 30, 2017 does not reflect the elimination of intercompany net revenue between Dex Media and YP. YP's historical accounting treatment for multi-element arrangements is currently being evaluated for conformity with Dex Media's current methodology and therefore is subject to change. Any identified differences will be addressed as part of acquisition accounting. | ||
| (d) | Adjusted Pro Forma EBITDA excludes interest, taxes, depreciation and amortization, and other non-cash/non-recurring expenses, such as integration costs and transaction fees, pension, long-term incentive compensation, capital restructuring, business transformation and adjustments for reorganization (emergence), fresh start and acquisition accounting. | ||
| (e) | The accounting policies of YP are currently being reviewed and evaluated for conformity with Dex Media. Additionally, the historical results of YP are reflective of YP's accounting policies in place during those periods. | ||
| (f) | Free Cash Flow reflects cash generated from operating activities, less capital expenditures, proceeds from the sale of the St. Petersburg building in Q3 2017 and interest payments. Free cash flow in 2017 includes the payment of YP acquisition integration and transaction fees of $15.3 million in Q3 and $58.3 million YTD September, income taxes of $24.0 million in Q3 and $124.3 million YTD September, and other non-recurring costs of $1.9 million in Q3 and $17.8 million YTD September. Free cash flow in 2016 includes capital restructuring costs of $2.6 million in Q3 and $29.4 million YTD September and reorganization costs of $12.2 million in Q3 and $13.8 million YTD September. | ||
| (g) | Net debt excludes capital lease obligations. Total capital lease obligations as of Q3 2017 and Q3 2016 were $72.3 million and $74.2 million, respectively. Total capital lease payments in Q3 2017 were $3.5 million. | ||
Earnings Conference Call Information
DexYP will host an investor conference call at 2 p.m. CST on November 15, 2017. Individuals within the United States can access the conference call by dialing (888) 603-6873. International participants should dial 973-582-2706. The passcode is: 94596630.
Basis of Presentation and Non-GAAP Financial Measures
The financial information accompanying this release provides a reconciliation of GAAP to non-GAAP and adjusted pro forma non-GAAP results. DexYP believes that the use of non-GAAP financial measures provides useful information to investors to gain an overall understanding of its current financial performance. Specifically, DexYP believes the non-GAAP results provide useful information to management and investors by excluding certain nonrecurring items that DexYP believes are not indicative of its core operating results. In addition, non-GAAP financial measures are used by management for budgeting and forecasting as well as subsequently measuring DexYP's performance, and DexYP believes that non-GAAP results provide investors with financial measures that most closely align to its internal financial measurement processes.
About DexYP
DexYP provides local business automation software and digital and print marketing solutions to more than 500,000 local businesses that enable them to compete and win in today’s on-demand economy. We provide the digital tools and marketing sophistication that big businesses utilize, arming local businesses with the deep resources they need to survive and thrive. Our flagship product—Thryv—allows local businesses to automate the business functions they performed manually in the past, or never performed. These include building a digital customer list, communicating with customers via email and text, updating business listings across the internet, accepting appointments, sending notifications and reminders, managing ratings and reviews, generating estimates and invoices, processing payments, and issuing invoices and coupons.
DexYP also provides consumer services through our market-leading search, display and social products— and connects local businesses to the 47.5 million monthly visitors of DexKnows.com®, Superpages.com® and yellowpages.com search portals; and local print directories The Real Yellow Pages®. For more information about the company, visit dexyp.com.
Forward-Looking Statements
Some statements included in this release constitute forward-looking statements. Statements that include the words “may”, “will”, “could”, “should”, “would”, “believe”, “anticipate”, “forecast”, “estimate”, “expect”, “preliminary”, “intend”, “plan”, “project”, “outlook” and similar statements of a future or forward-looking nature identify forward-looking statements. You should not place undue reliance on these statements, as they are not guarantees of future performance. Forward-looking statements provide current expectations with respect to our financial performance and future events with respect to our business and industry in general. Forward-looking statements are based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the risks related to the following: the Company's ability to maintain adequate liquidity to fund operations; the Company’s future operating and financial performance; limitations on our operating and strategic flexibility and the ability to operate our business, finance our capital needs or expand business strategies under the terms of our credit facilities; our ability to retain existing business and obtain and retain new business; general economic or business conditions affecting the markets we serve; declining use of print yellow page directories by consumers; our ability to collect trade receivables from clients to whom we extend credit; credit risk associated with our reliance on small and medium sized businesses as clients; our ability to attract and retain key managers; increased competition in our markets; our ability to obtain future financing due to changes in the lending markets or our financial position; our ability to maintain agreements with major Internet search and local media companies; reduced advertising spending and increased contract cancellations by our clients, which causes reduced revenue; and, our ability to anticipate or respond effectively to changes in technology and consumer preferences; and our ability to successfully integrate the YP business with the Company’s business. With respect to the acquisition, important factors could cause actual results to differ materially from those indicated by forward-looking statements and projections included herein, including, but not limited to: the risk that anticipated cost savings, growth opportunities and other financial and operating benefits as a result of the transaction may not be realized or may take longer to realize than expected, the risk that benefits from the transaction may be significantly offset by costs incurred in integrating the companies, including, coordinating geographically separate organizations, integrating business cultures, which could prove to be incompatible, difficulties and costs of integrating information technology systems; and the potential difficulty in retaining key officers and personnel. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such cautionary statements.
If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. These forward-looking statements speak only as of the date hereof and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.