| | Contacts: |
| | Investors – James M. Gruskin |
| | 800/497-6329 |
| | Media – Tyler D. Gronbach |
| | 919/297-1541 |
R.H. DONNELLEY REPORTS FIRST QUARTER 2009 RESULTS
| · | Net Revenue of $602 Million |
| · | Adjusted EBITDA of $320 Million |
CARY, N.C., May 7 /PRNewswire-FirstCall/ -- R.H. Donnelley Corporation, one of the nation's leading consumer and business-to-business local commercial search companies, today reported first quarter 2009 net revenue of $602 million, representing an 11 percent decline from first quarter 2008. Adjusted EBITDA1 in the quarter was $320 million, down $37 million or 10 percent from first quarter 2008. Adjusted free cash flow in the quarter was $66 million – based on cash flow from operations of $56 million, capital expenditures of $4 million and $14 million of other adjustments that primarily relate to restructuring – down from $92 million in first quarter 2008. First quarter advertising sales were $598 million, down 17 percent from advertising sales in the first quarter 2008. Net loss was $401 million in the quarter, compared to a net loss of $1,623 million in first quarter 2008. Net debt during the quarter decreased by $61 million, resulting in quarter-end net debt outstanding of $9,344 million, excluding the purchase accounting fair value adjustment. As of March 31, 2009, the cash balance was $533 million.
“Results continue to be impacted by the recession and its effect on small- and medium-sized businesses and consumer spending,” said David C. Swanson, chairman and CEO of R.H. Donnelley. “Our efforts to improve efficiency and eliminate non-mission critical costs helped to protect EBITDA and generated over $30 million of year-over-year cost savings.”
| 1 | Before the following expenses: (a) restructuring, (b) FAS 123 R and (c) restricted stock units related to the Business.com acquisition. |
Swanson continued, “As we previously announced, we are working to better position R.H. Donnelley for the future by establishing a more sustainable capital structure. We continue to discuss options for amending, refinancing or restructuring our debt obligations with our creditors.”
During the first quarter, the Company underwent an ownership change as defined in Section 382 of the Internal Revenue Code. As a result, the Company believes it will be restricted in its ability to use some of its net operating losses and other corporate tax attributes in the future. The financials in the attached schedules contain the Company’s best estimate of the impact related to the ownership change based on analysis performed to date; however, the analysis is not yet complete and there could be material changes in subsequent periods. As a result, deferred tax liability at quarter-end and deferred tax expense in the first quarter were each $375 million higher than they otherwise would have been. Such ownership change does not constitute a change in control under any of the Company’s debt agreements.
Further 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. 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 revenues, 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: our ability to generate sufficient cash to service our significant debt levels; our ability to comply with or obtain modifications or waivers of the financial covenants contained in our debt agreements, and the potential impact to operations and liquidity as a result of restrictive covenants in such debt agreements; our ability to refinance or restructure our debt on reasonable terms and conditions as might be necessary from time to time, particularly in light of the continuing instability in the global credit markets; increasing LIBOR rates; 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. The Company’s 2009 quarterly report on Form 10-Q for the period ended March 31, 2009 to be filed with the SEC may contain updates to the information included in this release.
(See attached tables)
