Yellow Pages Ltd
TSX:Y
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Yellow Pages Ltd
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Good morning, ladies and gentlemen, and welcome to Yellow Pages' Third Quarter 2022 Earnings Release Call. Today's conference call contains forward-looking information about Yellow Pages' outlook, objectives and strategy. These statements are based on assumptions and are subject to important risks and uncertainties.
Yellow Pages' actual results could differ materially from expectations discussed. The details of Yellow Pages' caution regarding forward-looking information, including key assumptions and risks, can be found in Yellow Pages' management discussion and analysis for the third quarter 2022. This call is being recorded and webcast, and all of the disclosure documents are available on the company's website and on SEDAR.
I would now like to turn the meeting over to Mr. David Eckert, President and Chief Executive Officer. Please go ahead, sir.
Thank you very much. Good morning, everyone. Thank you all for joining us today. As usual, we'd like to first comment just briefly on our third quarter results, and then take any of your questions that you may have. Today I'm joined by Franco Sciannamblo, our Chief Financial Officer; and by Sherilyn King, our Senior Vice President of Sales, Marketing and Customer Service.
Our third quarter this year results continue to be encouraging in my opinion. From a revenue standpoint, we moved ever closer to stability of revenue this quarter. In fact, for the -- almost getting sick of counting for the 8th consecutive quarter since COVID-19 hit and the 13th of the last 15 quarters overall, even including the COVID period, today we report a favorable bending of the revenue curve in this quarter where we are reporting a better rate of change in revenue than we reported for the previous quarter. So we're pretty pleased with the revenue results.
From a profitability standpoint, a very strong profitability quarter. Our adjusted EBITDA for the quarter was 39.8% of our reported revenue, which is a very strong number. From a cash standpoint, after the -- immediately or shortly after the end of the quarter, we executed our previously announced plan of arrangement, under which we used $100 million of our discretionary cash to buy back company shares. And we've also -- and we also, by that point in time, had already contributed $12 million of the planned $24 million voluntary contributions to our company's Defined Benefit Pension Plan.
Also during the quarter, we made an additional $1 million of voluntary incremental contribution payments toward our pension plan's wind up deficit as we had previously announced that we would, so that even after those disbursements, our cash balance at the end of October was still approximately $39 million. And no surprise that we also have declared a dividend consistent with recent previous quarters of $0.15 per common share.
So we're very pleased with the revenue, with the profitability, with the cash. And we're pretty bullish about the future as well, just in general, as we get ever closer to stability of revenue. Lots of good things going on. Most of it 1 inch at a time, every day, every minute, and we're very pleased with where we are.
Now Franco Sciannamblo, our Chief Financial Officer, will provide some additional details. And then we'll all be happy to take any questions that you might have for us. Thanks very much.
Thanks, David, and good morning to everyone. Let me take you through now our financial results for the third quarter ended September 30, 2022. On revenues, they decreased by $4.6 million or 6.5% year-over-year and amounted to $66.3 million for the third quarter, an improvement from the decrease of 6.7% reported last quarter. The decrease in revenues for the quarter is due to the decline of our higher-margin digital and print products and, to a lesser extent, our lower-margin digital service and resale products. This change in product mix continues to put pressure on our margins.
The decline rates for total revenues -- digital revenues as well as print revenues all improved significantly year-over-year. Total revenue decline of 6.5% this quarter compares to a decline of 11.7% reported for the same period last year. Digital revenue decline of 5% this quarter compares to a decline of 10.3% reported for the same period last year. And print revenue decline of 11.7% this quarter compares to a decline of 16.0% reported for the same period last year. These improvements were due to better spend per customer, increased renewal rates as well as an improvement in customer claims. The improved customer spend per customer is due in part to increased pricing.
On adjusted EBITDA for the quarter, it was impacted by the pressure from revenues, partially offset by price increases, the efficiencies from continued optimization in cost of sale, reductions in other operating costs including reductions in our workforce and associated employee expenses, the decrease in bad debt and the impact of the company's share price on cash-settled stock-based compensation expense. As a result, adjusted EBITDA decreased year-over-year by $0.2 million or 0.9% to $26.4 million, while EBITDA margin increased by 2.3% to 39.8% compared to 37.5% for the same period last year.
Revenue pressures, coupled with further investment in our telesales force capacity, partially offset by continued optimization, will continue to cause pressure on margin in upcoming quarters. On adjusted EBITDA less CapEx for the third quarter, it decreased by $0.2 million or 0.9% year-over-year to $25.1 million mainly driven by the decrease in adjusted EBITDA, while adjusted EBITDA less CapEx margin increased from 35.7% to 37.9%.
Our workforce as at September 30 decreased to 631 employees compared to 652 at the same date last year. Sales force headcount increased by 13, while all other headcount decreased by 34. Our net earnings for the third quarter, it increased to $16.7 million compared to $13.7 million for the same period last year. The increase in net earnings for the third quarter is explained principally by the decrease in adjusted EBITDA being more than offset by decreases in depreciation and amortization, restructuring and other charges and financial charges.
On October 4, 2022, we completed the previously announced plan of arrangement and repurchase from shareholders, pro rata, an aggregate of 7,949,125 common shares for cash of $100 million. During the month of October, also pursuant to the plan of arrangement, the company contributed $12 million toward the pension plan's wind-up deficit and will advance the remaining $12 million prior to December 31, 2022.
Also consistent with our previously announced deficit reduction plan in the third quarter of 2022, the company made $1 million in voluntary incremental cash contribution to the plan's wind-up deficit, bringing the year-to-date total to $3 million. And as David mentioned earlier, our cash after all these elements stood at approximately $39 million at the end of October.
And finally, the Board of Directors declared a cash dividend of $0.15 per common share payable on December 15 to shareholders of record as of November 30 -- November 24, sorry, 2022.
This concludes our formal remarks. Thank you for taking the time to join us this morning. We'll now take your questions.
There are no questions registered at this time. So Mr. Eckert, I'll return the meeting back over to you.
Okay. Thanks very much. Thank you, everyone, for joining us today. We appreciate your interest in our company and your support of what we're doing, and we look forward to chatting with you again in 90 days. Thanks very much, and have a good day. Bye now.
Thank you. Your conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.