Dex One (DEXO)
Q2 2010 Earnings Call
August 5, 2010 8:30 a.m. ET
Tyler Gronbach – Senior VP, Administration and Communications
Kirk Liddell – Member of Oversight Committee and Interim Principal Executive Officer
Steve Blondy – Executive VP and CFO
Jonathan Levine - Jeffries
Zachary Gluster - Davidson and Kempner
Todd Morgan – Oppenheimer
Matt Aronsky - Citigroup
Good morning and welcome to Dex One Corporation’s second quarter 2010 results conference call. [Operator instructions.] I would now like to turn the call over to Tyler Gronbach. Sir, you may proceed.
Thank you operator, and good morning everyone. I am the senior vice president of administration and communications at Dex One Corporation. Hosting the call today are Steve Blondy, executive vice president and chief financial officer, and Kirk Liddell, a member of the executive oversight committee and the company’s interim principal executive officer.
I would like to remind you certain statements made today may be forward looking as defined by the Private Securities Litigation Reform Act. We call your attention to our press release for the quarter ended June 30, 2010 and the company’s form 8-K, furnished to the SEC this morning. These documents discuss second quarter 2010 results and the 8-K also includes the results information package, a presentation that contains information pertaining to the quarter.
We encourage you to review these materials and the company’s other periodic filings with the SEC, which set forth important risks and other factors that could cause actual results to differ materially from those contained in, or suggested by, any forward looking statements. In addition, please review the risk factors described in the Safe Harbor language. Electronic versions of Dex One’s SEC filings can be obtained by contacting us, visiting our web site at dexone.com, or visiting the SEC’s web site at sec.gov. The press release and results information package are available on our corporate web site and can be accessed by going to dexone.com and clicking on the Investor Relations tab.
Commencing on February 1, 2010, the company adopted fresh start accounting as required under GAAP, which had a significant impact on the reported results of operations. These reported results are not indicative of our underlying operating and financial performance, and are not comparable to any prior period presentation. In addition, 2010 GAAP year to date figures only include results from the most recent five months.
During the call today we will refer to certain adjusted and combined adjusted figures that are non-GAAP financial measures such as revenue, expenses, EBDA, free cash flow, and net debt. Some of these exclude items such as impairment charges, reorganization costs, stock based compensation, and long term incentive program expenses, fair value adjustment, and the impact of fresh start accounting.
Additional information about the non-GAAP financial measures, as well as a reconciliation between these items and the comparable GAAP measures can be found in the press release and related 8-K furnished to the SEC.
One final reminder: This call is the property of Dex One Corporation and any retransmission or broadcast, without the expressed consent of the company, is strictly prohibited. With that, I’d now like to turn the call over to Kirk.
Thank you Tyler. Good morning everyone, and thank you for joining us today. As some of you know, I joined Dex One as the lead director upon the company’s emergence from bankruptcy a little over six months ago. When Dave Swanson retired after 25 years of dedicated service in May, the board formed a three-member executive oversight committee consisting of directors Jonathan Bulkeley, Mark McEachen, and me. I became the interim principal executive officer and, to preserve independence, stepped down as lead director. I also came off the audit and finance committee. Al Schultz became the non-executive chairman of the board, and he, Gene Davis, and Dick Kuersteiner became members of the newly formed CEO search committee.
The three of us on the executive oversight committee together serve as the interim CEO. We have three primary responsibilities. First, to assure that the business continues to run smoothly during the transition. Second, to increase the scope, quality, and pace of the company’s ongoing product and process initiatives. And third, to review all aspects of the business for the benefit of the new CEO so that he or she will be able to assess the situation and transition into his or her new role as quickly as possible.
Jonathan, Mark, and I all have solid management and leadership experience, and we bring complementary skills and perspectives to the committee. In particular, Jonathan and Mark have a wide and current understanding of the interactive and mobile space, knowledge of the media industry and solid financial acumen, and I have more than 20 years of leadership experience as a CEO, particularly in the areas of sales, operations, and human relations. As a team, the three of us are able to dedicate more time to the company, accomplish more, and achieve better outcomes than any of us would be able to do individually.
While we on the EOC are focusing the bulk of our attention on company operations, the board CEO search committee has been concentrating its attention on identifying and engaging a first-rate business leader with a forward looking vision and solid management skills. Working in conjunction with a major search firm, the committee has identified several strong candidates who share our excitement about Dex One’s future. We are moving this process forward as rapidly as possible, with the caveat that we intend to take whatever time is necessary to find the right candidate for the position. We are actively interviewing and doing research on the top current applicants and will have additional updates for you as matters progress.