DexOne, YPG Announce Q1 Results

Both publishers posted Q1 2010 results today. Revenues and earnings were down in both cases, although YPG fared better.

YPG:

For the quarter ending March 31, 2010, consolidated net earnings were $121.8 million compared with $132.1 million for the same period in 2009. Income from operations was $166.8 million versus $185.7 million last year. Cash flow from operating activities reached $143.5 million during the quarter as compared to $197.4 million in 2009.

Consolidated Adjusted Revenues and revenues, at $408.1 million, decreased by approximately 1% and $0.2 million respectively from last year. Consolidated Adjusted EBITDA was $219.8 million, down from $225.9 million twelve months ago. EBITDA (income from operations before depreciation and amortization, and acquisition-related costs) was $216.1 million compared to $223.9 million in 2009. EBITDA on a reported basis is net of non-recurring rebranding and conversion costs aggregating $3.7 million in the first quarter of 2010 . . .

Combined online revenues for Directories and Vertical Media reached $98.4 million for the quarter or $393.6 million on an annualized basis, representing online organic growth of 20%.

If I’m doing the math right, online revenues were 24% of overall.

DexOne (formerly RHD) “a leading provider of marketing solutions for local businesses”:

New accounting rules/procedures make the results apparently anomalous. But here are some excerpts from the release:

“First quarter ad sales declined 19 percent largely reflecting selling activity during the third and fourth quarters of 2009. Recent sales campaigns are generating sequential improvements in ad sales trends, which we expect to continue throughout the remainder of 2010 . . .”

Dex One is affirming full year 2010 guidance originally provided on March 4, 2010:

— Year over year decline in advertising sales of between 12 percent and 15 percent.

— Combined adjusted net revenue(1,2) of approximately $1.8 billion and net revenue of approximately $0.9 billion.

— Combined adjusted EBITDA(1,2,3) of approximately $750 million and operating loss of approximately $100 million.

— Combined adjusted free cash flow(1,2,3) of approximately $450 million and cash flow from operations of approximately $400 million.

Again: “Year over year decline in advertising sales of between 12 percent and 15 percent.”

To what extent is this a benchmark for the rest of the industry?


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