Yellow Pages Limited

I would now like to turn the meeting over to Mr. David Eckert, President and Chief Executive Officer.

Please go ahead, sir.

Second, I think most all of you know that we have had a modest size, normal course issuer bid for our stock. And when that concludes, which is in the month of August, we plan to launch a larger normal course issuer bid.

At that time, that would be to a scale of capped at approximately $16 million.

Thanks, David, and good morning, everyone. Let me take you through our financial results for the first quarter ended March 31, 2021.

Starting with our revenues. They decreased year-over-year by $14.8 million or 16.8% and amounted to $73.5 million.

The decrease for the quarter is due to the decline of our higher-margin digital and print products and to a lesser extent, our lower-margin in digital service and resale products. This change in product mix created pressure on our margins.

Our revenues were also negatively impacted by the COVID-19 pandemic, which mostly affected customer spend rather than customer renewal rates. Digital revenues decreased 15.7% to $57 million due to a decrease in the number of customers and, to a lesser extent, lower spend per customer.

Our print revenues decreased by 20.2% to $16.5 million from a decline in both the customer count and spend per customer.

Revenue pressures, coupled with increased headcount in our sales force, partially offset by continued optimization, will continue to create some pressure on margin in upcoming quarters. Adjusted EBITDA less CapEx decreased by $6 million or 19.1% to $25.3 million, while adjusted EBITDA less CapEx margin decreased from 35.5% to 34.5%.

This decrease was driven by the decrease in adjusted EBITDA as the CapEx spend was relatively stable year-over-year. As at March 31, our total workforce had decreased 6% year-over-year to 677 employees as increased headcount in telesales was more than offset by continued optimization in other areas of the business.

In terms of restructuring and other charges, we recorded $1.1 million, consisting mainly of $1.2 million charge associated with workforce reductions, partially offset by a small recovery of $0.1 million related to office closures. Net earnings was relatively stable year-over-year at $12.1 million compared to $12.4 million for the same period last year as the decrease in adjusted EBITDA was offset by lower depreciation and amortization, lower restructuring and other charges and lower financial charges.

Our cash continues to build, as David mentioned earlier. As of April 30, our cash on hand was approximately $181 million, significantly exceeding the $107 million principal amount of our exchangeable debentures, which are our only remaining debt, excluding lease obligations.

As announced, we will fully pay off those exchangeable debentures at par on May 31, 2021. Also, as David mentioned, the Board of Directors modified the dividend policy and approved an increase in the quarterly cash dividend from $0.11 to $0.15 per common share, up 36% from previous quarterly dividends.

On June 1, following the full repayment of the exchangeable debentures, the Board of Directors intends to formally declare a cash dividend of $0.15 per common share payable on the 30th of June to shareholders of record as of June 9. In terms of our NCIB program, in August 2020, we entered a normal course issuer bid to purchase up to $5 million of common shares in the open market for cancellation on or before August 9, 2021.

During the first quarter of 2021, the company purchased 50,960 common shares for cash of $0.6 million under this program. As at March 31, 2021, the company had cumulatively purchased 324,150 common shares for cash of $3.9 million since the start of the NCIB program.

Congrats, again.

Thank you.

I just have a clarification for Franco and then a bigger picture question for David. For Franco, can you maybe update us on the sort of the mix within digital with respect to sort of the reseller piece of the product has over the sort of O&O component.

Is there any kind of color you can give us as to where that mix stands today?

Sure. So basically, we have a solution where we are providing an e-commerce website to our customers, and we have the ability with some of our partners to provide shipping mechanisms or payment mechanisms for the customer as well.

Okay. Look, we appreciate very much all of your support.

Thank you for joining us today, and we look forward to being with you in another 3 months. Take care.

Thanks very much. Be healthy.