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R.H. Donnelley Reports Second Quarter 2009 Results

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-- Net Revenue of $566 Million
-- Adjusted EBITDA of $293 Million
-- Adjusted Free Cash Flow of $164 Million

CARY, N.C., Aug. 4 /PRNewswire-FirstCall/ -- R.H. Donnelley Corporation, one of the nation's leading consumer and business-to-business local commercial search companies, today reported second quarter 2009 net revenue of $566 million, representing a 15 percent decline from second quarter 2008. Adjusted EBITDA(1) in the quarter was $293 million, down 20 percent from second quarter 2008. Adjusted free cash flow in the quarter was $164 million - based on cash flow from operations of $121 million, capital expenditures of $6 million and $49 million related to reorganizational, restructuring and restricted stock unit payments - up from $159 million in second quarter 2008, primarily due to the termination of bond interest payments while in bankruptcy. Second quarter advertising sales were $523 million, down 23 percent from advertising sales in the second quarter 2008. Net loss was $75 million in the quarter compared to a net loss of $339 million in second quarter 2008.

"While the local ad sales environment remained very challenging, we made significant headway on several business priorities in the quarter," said David C. Swanson, Chairman and CEO of R.H. Donnelley. "We successfully negotiated a new, three-year union contract that covers approximately 420 employees and made great progress on our restructuring plans. We still expect to emerge from Chapter 11 in early 2010 as a stronger company with a more sustainable capital structure. We also continued to prudently manage the business and reduce costs while also investing in programs that drive additional value to advertisers."

Important information regarding operating results and related reconciliations of non-GAAP financial measures to the most comparable GAAP measures can be found in the schedules and related footnotes of this press release, which should be thoroughly reviewed. In addition, the forthcoming quarterly reports on Form 10-Q for the period ended June 30, 2009 for R.H. Donnelley and its subsidiaries that are SEC registrants should be carefully examined as they will contain important information, including the financial impact of filing voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Advertising sales is a statistical measure and consists of sales of advertising in print directories distributed during the period and Internet-based products and services with respect to which such advertising first appeared publicly during the period. It is important to distinguish advertising sales from net revenue, which is recognized under the deferral and amortization method.

Helping Local Small- and Medium-Sized Businesses Reach More Customers

R.H. Donnelley's integrated Dex product solutions extend the marketing reach of local businesses. Through its unique Dex Advantage, customers' business information is leveraged and marketed through a single profile, and efficiently distributed via a variety of local search products. Dex ensures advertisers' business content and messages are found wherever, whenever and however consumers choose to search. The Dex Advantage spans multiple media platforms for local advertisers including print with the Dex directories; online and mobile devices with DexKnows.com; voice-activated directory search at 1-800-Call-Dex; and leading search engines and other online sites via Dex Net.

About R.H. Donnelley

R.H. Donnelley Corporation (OTC: RHDC) is one of the nation's leading consumer and business-to-business local commercial search companies. The company delivers relevant search results for consumers and leads to small- and medium-sized businesses through its Dex-branded print yellow and white pages directories, Internet yellow pages site, mobile and voice search platforms as well as one of the largest pay-per-click ad networks in the U.S. It also operates the nation's leading business search engine and online directory through its Business.com subsidiary. For more information, visit www.rhd.com and www.dexknows.com.

Safe Harbor Provision

Certain statements contained in this press release regarding R.H. Donnelley's future operating results or performance or business plans or prospects and any other statements not constituting historical fact are "forward-looking statements" subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. Where possible, the words "believe," "expect," "anticipate," "intend," "should," "will," "would," "planned," "estimated," "potential," "goal," "outlook," "may," "predicts," "could," or the negative of such terms, or other comparable expressions, as they relate to R.H. Donnelley or its management, have been used to identify such forward-looking statements. All forward-looking statements reflect only R.H. Donnelley's current beliefs and assumptions with respect to future business plans, prospects, decisions and results, and are based on information currently available to R.H. Donnelley. Accordingly, the statements are subject to significant risks, uncertainties and contingencies, which could cause R.H. Donnelley's actual operating results, performance or business plans or prospects to differ materially from those expressed in, or implied by, these statements.

Factors that could cause actual results to differ materially from current expectations include risks and other factors described in R.H. Donnelley's publicly available reports filed with the SEC, which contain a discussion of various factors that may affect R.H. Donnelley's business or financial results. Such risks and other factors, which in some instances are beyond R.H. Donnelley's control, include: the impact of our bankruptcy filings and the related Chapter 11 bankruptcy process on our business, financial condition or results of operations; changes in directory advertising spend and consumer usage; regulatory and judicial rulings; competition and other economic conditions; changes in the Company's and the Company's subsidiaries credit ratings; changes in accounting standards; adverse results from litigation, governmental investigations or tax related proceedings or audits; the effect of labor strikes, lock-outs and negotiations; successful integration and realization of the expected benefits of acquisitions; the continued enforceability of the commercial agreements with Qwest, Embarq and AT&T; our reliance on third-party vendors for various services; and other events beyond our control that may result in unexpected adverse operating results. R.H. Donnelley is not responsible for updating the information contained in this press release beyond the published date, or for changes made to this document by wire services or Internet service providers. This press release is being furnished to the SEC through a Form 8-K.

    (1) Before the following expenses: (a) reorganization, (b) FAS 123 R, (c)
        restructuring and (d) restricted stock units related to the
        Business.com acquisition.


    R.H. DONNELLEY CORPORATION                                     Schedule 1
    INDEX OF SCHEDULES
    ------------------

    Schedule 1:   Index of Schedules

    Schedule 2:   Unaudited Condensed Consolidated Statements of Operations
                  for the three and six months ended June 30, 2009 and 2008

    Schedule 3:   Unaudited Condensed Consolidated Balance Sheets at June 30,
                  2009 and December 31, 2008

    Schedule 4:   Unaudited Condensed Consolidated Statements of Cash Flows
                  for the three and six months ended June 30, 2009 and 2008

    Schedule 5:   Reconciliation of Non-GAAP Measures

    Schedule 6:   Statistical Measure - Advertising Sales

    Schedule 7:   Notes to Unaudited Condensed Consolidated Financial
                  Statements and Non-GAAP Measures



    R.H. DONNELLEY CORPORATION                                     Schedule 2
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
    ----------------------------------------------------------


    Amounts in millions, except loss per share
    ------------------------------------------

                                            Three Months       Six Months
                                                Ended             Ended
                                               June 30,          June 30,
                                           --------------    ----------------
                                           2009     2008      2009       2008
                                           ----     ----      ----       ----
    Net revenue (1)                      $565.6   $663.8  $1,167.6   $1,338.4
    Expenses                              279.4    309.2     574.9      639.5
    Depreciation and amortization         142.3    119.5     285.2      237.8
    Impairment charges (2)                    -    660.2         -    3,123.9
                                            ---    -----       ---    -------
    Operating income (loss)               143.9   (425.1)    307.5   (2,662.8)
    Interest expense, net                (161.5)  (234.3)   (360.3)    (430.1)
    Gain on debt transactions, net (3)        -    159.2         -      159.2
                                            ---    -----       ---      -----
    Pre-tax loss before reorganization
     items, net and income taxes          (17.6)  (500.2)    (52.8)  (2,933.7)
    Reorganization items, net (4)         (70.8)       -     (70.8)         -
                                          -----      ---     -----        ---
    Loss before income taxes              (88.4)  (500.2)   (123.6)  (2,933.7)
    Tax (provision) benefit                12.9    161.3    (353.1)     971.7
                                           ----    -----    ------      -----
    Net loss                             $(75.5) $(338.9)  $(476.7) $(1,962.0)
                                         ======  =======   =======  =========

    Loss per share (EPS):
       Basic and Diluted                 $(1.10)  $(4.93)   $(6.92)   $(28.51)
    Shares used in computing EPS:
       Basic and Diluted                   68.9     68.8      68.9       68.8


    See accompanying Notes to Unaudited Condensed Consolidated Financial
    Statements and Non-GAAP Measures - Schedule 7.



    R.H. DONNELLEY CORPORATION                                     Schedule 3
    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
    -----------------------------------------------


    Amounts in millions
    -------------------                           --------    ------------
                                                  June 30,    December 31,
                                                    2009          2008
                                                    ----          ----
    Assets
      Cash and cash equivalents                     $406.9        $131.2
      Accounts receivable, net                       951.8       1,027.0
      Deferred directory costs                       165.7         164.3
      Other current assets                           114.4         193.0
                                                     -----         -----
    Total current assets                           1,638.8       1,515.5

      Fixed assets and computer software, net        170.5         188.7
      Intangible assets, net                       9,752.6      10,009.3
      Other non-current assets                        75.5         167.2
                                                      ----         -----
    Total Assets                                 $11,637.4     $11,880.7
                                                 =========     =========

    Liabilities and Shareholders' Deficit
      Accounts payable and accrued liabilities      $125.7        $216.1
      Accrued interest                                 5.0         181.1
      Deferred directory revenue                     978.0       1,076.3
      Current portion of long-term debt              592.0         113.6
                                                     -----         -----
    Total current liabilities not subject to
     compromise                                    1,700.7       1,587.1

      Long-term debt (4)                           3,023.4       9,508.7
      Deferred income taxes, net                   1,066.5         998.1
      Other non-current liabilities                  356.1         280.2
                                                     -----         -----
    Total liabilities not subject to compromise    6,146.7      12,374.1

    Liabilities subject to compromise (4)          6,430.0             -

    Shareholders' deficit                           (939.3)       (493.4)
                                                    ------        ------

    Total Liabilities and Shareholders' Deficit  $11,637.4     $11,880.7
                                                 =========     =========


    See accompanying Notes to Unaudited Condensed Consolidated Financial
    Statements and Non-GAAP Measures - Schedule 7.



    R.H. DONNELLEY CORPORATION
    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS      Schedule 4
    ---------------------------------------------------------

    Amounts in millions
    -------------------

                                      Three Months        Six Months
                                         Ended              Ended
                                        June 30,           June 30,
                                     --------------     ---------------
    Operating activities:            2009      2008     2009       2008
                                     ----      ----     ----       ----
    Net loss                       $(75.5)  $(338.9) $(476.7) $(1,962.0)
    Impairment charges (2)              -     660.2        -    3,123.9
    Gain on debt transactions,
     net (3)                            -    (159.2)       -     (159.2)
    Depreciation and amortization   142.3     119.5    285.2      237.8
    Deferred income taxes           (14.0)   (162.5)   352.7     (974.6)
    Non-cash reorganization items,
     net (4)                         20.3         -     20.3          -
    Changes in working capital       25.2     (21.8)   (30.3)     (70.9)
    Other                            22.2      79.0     25.4       81.3
                                     ----      ----     ----       ----
    Net cash provided by operating
     activities                     120.5     176.3    176.6      276.3

    Investment activities:
    Additions to fixed assets and
     computer software               (5.9)    (20.2)    (9.9)     (30.3)
    Equity investment disposition       -         -        -        4.3
                                      ---       ---      ---        ---
    Net cash used in investing
     activities                      (5.9)    (20.2)    (9.9)     (26.0)

    Financing activities:
    Credit facilities
     borrowings, net of costs           -   1,018.7        -    1,018.7
    Credit facilities repayments   (207.4) (1,099.8)  (229.4)  (1,191.2)
    Borrowings under the Revolver       -     157.8    361.0      373.1
    Revolver repayments             (18.7)   (163.8)   (18.7)    (396.2)
    Debt issuance costs                 -      (8.5)       -       (8.5)
    Repurchase of common stock          -         -        -       (6.1)
    Decrease in checks not yet
     presented for payment          (14.9)     (8.4)    (3.9)      (4.3)
    Proceeds from employee stock
     option exercises                   -         -        -        0.1
                                   ------    ------    -----     ------
    Net cash (used in) provided by
     financing activities          (241.0)   (104.0)   109.0     (214.4)

    (Decrease) increase in cash
     and cash equivalents          (126.4)     52.1    275.7       35.9

    Cash and cash equivalents,
     beginning of period            533.3      29.9    131.2       46.1

                                   ------     -----   ------      -----
    Cash and cash equivalents, end
     of period                     $406.9     $82.0   $406.9      $82.0
                                   ======     =====   ======      =====


    See accompanying Notes to Unaudited Condensed Consolidated Financial
    Statements and Non-GAAP Measures - Schedule 7.



    R.H. DONNELLEY CORPORATION                                    Schedule 5a
    RECONCILIATION OF NON-GAAP MEASURES
    ------------------------------------
    (unaudited)

    Amounts in millions

                                         Three Months        Six Months
                                            Ended               Ended
                                           June 30,            June 30,
                                        -------------     -----------------
                                        2009     2008     2009         2008
                                        ----     ----     ----         ----

    Reconciliation of net loss - GAAP
     to EBITDA and Adjusted EBITDA (5)

    Net loss - GAAP                    $(75.5) $(338.9) $(476.7)   $(1,962.0)
    Plus (less) tax provision
     (benefit)                          (12.9)  (161.3)   353.1       (971.7)
    Plus interest expense, net          161.5    234.3    360.3        430.1
    Plus depreciation and amortization  142.3    119.5    285.2        237.8
                                        -----    -----    -----        -----
    EBITDA                             $215.4  $(146.4)  $521.9    $(2,265.8)
                                       ------  -------   ------    ---------

    Impairment charges (2)                  -    660.2        -      3,123.9

    Gain on debt transactions, net (3)      -   (159.2)       -       (159.2)

    SFAS No. 123 R compensation
     expense (including Long-Term
     Incentive Plan)                      4.6      5.5      8.6         16.3

    Restricted stock unit expense
     related to the Business.com
     acquisition                          0.2      1.2      0.4          3.2

    Restructuring costs                   2.0      4.6     11.1          4.6

    Reorganization items, net (4)        70.8        -     70.8            -

                                       ------   ------   ------       ------
    Adjusted EBITDA                    $293.0   $365.9   $612.8       $723.0
                                       ======   ======   ======       ======



    See accompanying Notes to Unaudited Condensed Consolidated Financial
    Statements and Non-GAAP Measures - Schedule 7.



    R.H. DONNELLEY CORPORATION                                Schedule 5b
    RECONCILIATION OF NON-GAAP MEASURES (cont'd)
    --------------------------------------------
    (unaudited)

    Amounts in millions

                                              Three Months      Six Months
                                                 Ended             Ended
                                                June 30,          June 30,
                                              ------------     -------------
                                              2009    2008     2009     2008
                                              ----    ----     ----     ----

    Reconciliation of cash flow from
     operations - GAAP to adjusted free
     cash flow

    Cash flow from operations - GAAP        $120.5   $176.3  $176.6    $276.3
    Add: Cash reorganization payments         44.7        -    47.0         -
    Add: Cash restructuring payments           4.4      1.5    17.8       1.5
    Add: Cash restricted stock unit
     payments related to the Business.com
     acquisition                               0.2      1.2     0.4       3.5
                                               ---      ---     ---       ---
    Adjusted cash flow from operations       169.8    179.0   241.8     281.3
    Less: Additions to fixed assets and
     computer software - GAAP                  5.9     20.2     9.9      30.3
                                               ---     ----     ---      ----
    Adjusted free cash flow                 $163.9   $158.8  $231.9    $251.0
                                            ======   ======  ======    ======



                                             Three Months       Six Months
                                                 Ended             Ended
                                                June 30,          June 30,
                                             -------------    --------------
                                             2009     2008    2009      2008
                                             ----     ----    ----      ----

    Reconciliation of interest expense -
     GAAP to adjusted interest expense (6)

    Interest expense - GAAP                 $161.5   $234.3  $360.3    $430.1
    Plus: Amortization of fair value
     adjustment due to purchase accounting     3.0      4.4     7.7       8.6
    Less: One-time expense related to
     ineffective interest rate swaps as a
     result of the refinancings completed
     during the second quarter of 2008           -    (42.9)      -     (42.9)
                                               ---    -----     ---     -----

    Adjusted interest expense               $164.5   $195.8  $368.0    $395.8
                                            ======   ======  ======    ======



                                                         As of       As of
                                                        June 30,  December 31,
                                                          2009        2008
                                                          ----        ----

    Reconciliation of debt - GAAP to net debt and net
     debt - excluding fair value adjustment (6) (7)

    Debt - GAAP                                        $3,615.4    $9,622.3
    Less: Cash and cash equivalents                      (406.9)     (131.2)
                                                         ------      ------
    Net debt                                            3,208.5     9,491.1

    Less: Fair value adjustment due to purchase
     accounting                                               -       (86.2)
                                                            ---       -----
    Net debt - excluding fair value adjustment         $3,208.5    $9,404.9
                                                       ========    ========

    See accompanying Notes to Unaudited Condensed Consolidated Financial
    Statements and Non-GAAP Measures - Schedule 7.



    R.H. DONNELLEY CORPORATION                                      Schedule 6
    STATISTICAL MEASURE
    CALCULATION OF ADVERTISING SALES PERCENTAGE CHANGE OVER PRIOR YEAR PERIODS
    --------------------------------------------------------------------------
    (unaudited)


    Amounts in millions, except percentages

                       Six Months
                          Ended               Three Months Ended
                       ----------    -------------------------------------
                          June
                           30,       June     March   December   September
                          2009        30       31        31         30
                          ----       ----     -----   --------   ---------


    2009 Advertising
     sales (8)           $1,121.0   $522.8   $598.1

    2008 Advertising
     sales disclosed in
     2008 Form 10-K and
     Forms 10-Q           1,395.9    678.3    717.6     $618.4      $503.6

    2007 Advertising
     sales disclosed in
     2007 Form 10-K and
     Forms 10-Q                 -        -        -      700.3       541.6

    Adjustments primarily
     related to changes
     in publication dates    (1.5)    (2.5)     1.0        0.1         7.7
                             ----     ----      ---        ---         ---

    2008 Pro forma
     advertising sales    1,394.4    675.8   $718.6

    2007 Pro forma
     advertising sales                                  $700.4      $549.3

                            -----    -----    -----      -----        ----
    Pro forma advertising
     sales percentage
     change over prior
     year periods          (19.6%)  (22.6%)  (16.8%)    (11.7%)      (8.3%)
                            =====    =====    =====      =====        ====

    See accompanying Notes to Unaudited Condensed Consolidated Financial
    Statements and Non-GAAP Measures - Schedule 7.



    R.H. DONNELLEY CORPORATION                                      Schedule 7
    NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
     AND NON-GAAP MEASURES

    (1) Our advertising revenues are earned primarily from the sale of
        advertising in yellow pages directories that we publish. Revenue from
        the sale of such advertising is deferred when a directory is
        published, net of estimated sales claims, and recognized ratably over
        the life of a directory, which is typically 12 months. Advertising
        revenues also include revenues for Internet-based advertising
        products, including our proprietary local search site, dexknows.com
        and Dex Net. Revenues with respect to our Internet-based advertising
        products that are sold with print advertising are initially deferred
        until the service is delivered or fulfilled and recognized ratably
        over the life of the contract. Revenues with respect to Internet-based
        services that are not sold with print advertising are recognized as
        delivered or fulfilled.

    (2) As a result of the decline in the trading value of our debt and
        equity securities during the first and second quarters of 2008 and
        continuing negative industry and economic trends that have directly
        affected our business, we performed impairment tests of our goodwill,
        definite-lived intangible assets and other long-lived assets in
        accordance with SFAS No. 142, Goodwill and Other Intangible Assets
        ("SFAS No. 142") and SFAS No. 144, Accounting for the Impairment or
        Disposal of Long-Lived Assets ("SFAS No. 144"), respectively. Based
        upon this analysis, we recognized non-cash goodwill impairment charges
        of $2.5 billion and $660.2 million during the three months ended March
        31, 2008 and June 30, 2008, respectively, for total non-cash goodwill
        impairment charges of $3.1 billion during the six months ended June
        30, 2008. As a result of these impairment charges, we have no recorded
        goodwill at December 31, 2008 or June 30, 2009.

    (3) On June 25, 2008, RHD completed an exchange of its senior notes and
        senior discount notes for new senior notes ("debt transactions").
        Please refer to our Current Report on Form 8-K filed on June 25, 2008
        for additional information. The debt transactions have been accounted
        for as an extinguishment of debt.

    (4) For the three and six months ended June 30, 2009, the Company
        recorded reorganization items on a separate line item on the condensed
        consolidated statement of operations in accordance with Statement of
        Position 90-7, Financial Reporting by Entities in Reorganization Under
        the Bankruptcy Code ("SOP 90-7").  Reorganization items represent
        charges that are directly associated with the process of reorganizing
        the business under Chapter 11 of the bankruptcy code and include
        certain expenses such as professional fees, the write-off of
        unamortized deferred financing costs, net premiums / discounts and
        fair value adjustments due to purchase accounting associated with
        long-term debt classified as liabilities subject to compromise (see
        Note 7 below), and rejected leases. Additionally, in accordance with
        SOP 90-7, liabilities are segregated between liabilities not subject
        to compromise and liabilities subject to compromise on the condensed
        consolidated  balance  sheet. The  Company's  senior  notes, senior
        discount  notes and senior  subordinated  notes have been classified
        as liabilities subject to compromise at June 30, 2009 and the
        Company's credit facilities have been excluded from liabilities
        subject to compromise at June 30, 2009.

    (5) EBITDA and Adjusted EBITDA are not measurements of operating
        performance computed in accordance with GAAP and should not be
        considered as a substitute for net loss prepared in conformity with
        GAAP. In addition, EBITDA may not be comparable to similarly titled
        measures of other companies. Adjusted EBITDA is determined by
        adjusting EBITDA for items such as (i) impairment charges, (ii) gain
        on debt transactions, net, (iii) stock-based compensation in
        accordance with SFAS No. 123 (R), Share-Based Payment, (iv) restricted
        stock unit expense related to the Business.com Acquisition, (v)
        restructuring costs, and (vi) reorganization items, net.

    (6) As a result of purchase accounting, RHD was required to adjust the
        carrying value of Dex Media's debt at January 31, 2006 to its fair
        value. Adjusted interest expense eliminates the interest benefit
        resulting from the amortization of the fair value adjustment to Dex
        Media's debt. Due to filing the Chapter 11 petitions, the remaining
        unamortized fair value adjustments due to purchase accounting at May
        28, 2009 were written-off and recognized as a reorganization item on
        the condensed consolidated statement of operations for the three and
        six months ended June 30, 2009.

    (7) Net debt represents total debt less cash and cash equivalents on the
        respective date. Net debt - excluding fair value adjustments
        represents net debt adjusted to remove the remaining fair value
        purchase accounting adjustment of Dex Media's debt noted in footnote 6
        above. The Company has reclassified $6.1 billion of our senior notes,
        senior discount notes and senior subordinated notes to liabilities
        subject to compromise on the unaudited condensed consolidated balance
        sheet at June 30, 2009.

    (8) Advertising sales is a statistical measure and consists of sales of
        advertising in print directories distributed during the period and
        Internet-based products and services with respect to which such
        advertising first appeared publicly during the period.  It is
        important to distinguish advertising sales from net revenue, which is
        recognized under the deferral and amortization method.

SOURCE R.H. Donnelley Corporation

CONTACT:
Investors, James M. Gruskin, 1-800-497-6329,
or Media, Tyler D. Gronbach, +1-919-297-1541,
both of R.H. Donnelley Corporation

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