Yellow Media (TSX:YLO) Tuesday said it swung to a third quarter profit, two weeks after it wrapped up its court case, arguing the need for its aggressive restructuring plan.
In July, the company proposed a recapitalization plan which would cancel its preferred dividends, and shake up its board of directors as it looked for ways to pay back its $1.4 billion debt. The company’s restructuring can’t move ahead without court approval.
In early September, the restructuring plan was approved by the requisite majority of its debt holders and shareholders at their respective meetings, with 70.39 per cent of support received from the debt holders and 77.26 per cent of support received from the shareholders.
The court hearing for the final approval of the plan ended on October 23, and the company said a decision from the Quebec Superior Court is pending.
For the quarter that ended September 30, the phone book publisher recorded net earnings of $24.0 million or four cents per share, compared to a net loss of $2.8 billion or $5.52 per share a year earlier.
Adjusted earnings were $77.1 million or 15 cents per share for the quarter, compared to $69.2 million or 14 cents per share last year.
The company said the increase was largely due to lower cash taxes and cash interest payments.
Total revenues for the third quarter were down 17.2 per cent to $267.7 million, mainly a result of lower print revenues, the discontinuation of duplicate directories published by Canpages, and the sale of LesPAC in 2011.
Online revenues, however, increased 5.3 per cent to $92.0 million. As internet services continue to dominate the information world, Yellow Media has had to rethink its strategy.
Fewer Canadians are opening up phone books to look up numbers and advertising revenues that underpin that industry are increasingly harder to generate.
The company is streamlining its print operations to improve its financial position as the publisher of the Yellow Pages directories continues its transformation to an internet company.
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Launched in 2011, Yellow Pages 360° Solution offers advertisers single point access to products and services, including online, mobile and print media platforms, managed website services, customized search engine marketing and search engine optimization, and Yellow Pages Analytics.
At the end of the quarter, the advertiser penetration of the 360º Solution, defined as advertisers who subscribe to three product categories or more, was 14.0 per cent compared to 4.1 per cent a year earlier.
Additionally, in the third quarter the company launched Digital PowerPlay, which it said “establishes and optimizes” a business’ digital presence by determining the necessary steps to “maximize qualified leads” across various digital channels.
Further, last month Yellow Media kicked-off a new ad campaign called “Meet the New Neighborhood,” which is aimed at using digital tools and platforms in connecting consumers with local businesses.
As at the end of the quarter, the company’s network of sites reached 9.1 million unduplicated unique visitors.
Yellow Media said its mobile applications have been downloaded 4.7 million times, compared to 3.0 million times at the same period last year.