PrefBlog

Yellow Media has announced:

Net earnings per share from continuing operations before the impairment charge for 2011 were $0.29 compared to net earnings per share from continuing operations of $0.42 in 2010. Adjusted earnings per common share from continuing operations for the year were $0.53 versus $0.84 last year due to lower EBITDA and increased cash taxes.

Revenues decreased 5.2% from $1.40 billion to $1.33 billion, due to lower print revenues as well as lower revenues associated with the Company’s U.S. operations. This was partly offset by higher organic online revenues and revenues generated from Canpages and Mediative. Online revenues in 2011 were $346.1 million representing growth of 30% versus last year’s results.

Income from operations before the impairment charge was $484.9 million in 2011 compared to $514.9 million in 2010. EBITDA for the year declined from $757.1 million to $679.7 million and the EBITDA margin for 2011 was 51.1% compared to 54.0% last year. The decrease is mainly attributable to print revenue pressure, lower margins associated with Canpages, investments in the national digital division Mediative and in support of the Company’s transformation.
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EBITDA for the fourth quarter declined from $161.3 million to $147.2 million while EBITDA margin was approximately 47.0% for the fourth quarter of 2011 and 2010.
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The Company has begun evaluating alternatives to refinance maturities in 2012 and beyond. A broad range of alternatives will be considered and may involve the issuance of secured or unsecured debt, equity or other securities or other transactions. At this time, the Board of directors has decided to suspend the dividends on the outstanding series of preferred shares.

In connection with this review, the Board of directors of Yellow Media has established a committee of independent directors to serve as the Financing Committee of the Board (the “Financing Committee”) that will oversee this process with the objective of completing any transaction or transactions during the current fiscal year.

The Financing Committee is comprised of directors Anthony G. Miller, Michael T. Boychuk, John R. Gaulding and Bruce K. Robertson. Mr. Robertson will serve as Chair of the Financing Committee.

The Company also announced this morning three new appointments to its Board of Directors. David G. Leith, Bruce K. Robertson and Craig Forman will bring extensive knowledge of corporate finance, and corporate development and strategy within the technology, media and communications industries.

The new directors have dealmaking experience:

David G. Leith is Chair of MTS Allstream and Manitoba Telecom Services. Mr. Leith is also a trustee of TransGlobe Apartment REIT and a member of the Economic Advisory Panel of the Government of Ontario. Mr. Leith spent over 25 years at CIBC World Markets and its predecessors where he retired as Deputy Chairman of CIBC World Markets and Managing Director and Head of CIBC World Markets’ Investment, Corporate and Merchant Banking in 2009. Mr. Leith has a Bachelor of Arts from the University of Toronto and a Masters of Arts from Cambridge University.

Bruce K. Robertson serves as Principal at Grandview Capital, a Canadian merchant bank. Prior to Grandview Capital, Mr. Robertson was a senior officer at AbitibiBowater Inc. Mr. Robertson also served as Senior Managing Partner of Brookfield Asset Management Inc., a specialty asset management company. Mr. Robertson received his Bachelor of Commerce (Honours) from Queen’s University and is a Chartered Accountant.

I will provide more commentary in this month’s edition of PrefLetter, which will be prepared as of the close tomorrow for delivery to clients prior to the opening on Monday, February 13. But I will say that it is highly unusual for a profitable, cash-flow positive, company to suspend its preferred dividend.

YLO has four issues of preferreds outstanding: YLO.PR.A and YLO.PR.B (OperatingRetractible) and YLO.PR.C and YLO.PR.D (FixedReset). All are tracked by HIMIPref™; all are relegated to the Scraps index on credit concerns.

This entry was posted on Thursday, February 9th, 2012 at 2:16 pm and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.