Q1 2011 Earnings Call
May 03, 2011 10:00 am ET
Samuel Jones - Chief Financial Officer, Executive Vice President and Treasurer
Peter McDonald - Chief Executive Officer, President and Director
Wilson Jaeggli - Southwell Partners
Jason Alper - BTIG, LLC
Jake Newman - CreditSights
Unknown Analyst -
Mark Kaufman - MLK Investment Management
Previous Statements by SPMD
» SuperMedia's CEO Discusses Q4 2010 Results - Earnings Call Transcript
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» SuperMedia Inc. Q2 2010 Earnings Call Transcript
Good morning and welcome to SuperMedia's First Quarter 2011 Earnings Conference Call. With me today are Peter McDonald, Chief Executive Officer; and Dee Jones, Chief Financial Officer.
Some statements made by the company today during this call are forward-looking statements. These statements include the company's beliefs and expectations as to future events and trends affecting the company's business and are subject to risks and uncertainties. The company advises you not to place undue reliance on these forward-looking statements and to consider them in light of the risk factors set forth in the report filed by SuperMedia with the Securities and Exchange
Commission. The company has no obligation to update any forward-looking statements.
A replay of this teleconference will be available at (800) 642-1687. International callers can access the replay by calling (706) 645-9291. The replay passcode is 59180762. The replay will be available through May 17, 2011. In addition, a live webcast will be available on SuperMedia's website in the Investor Relations section at www.supermedia.com. At the end of the company's prepared remarks, there will be a question-and-answer session.
And now I'd like to turn the call over to Peter McDonald. Peter?
Thank you, Wes. I'd like to welcome everyone, and thank you for your time and interest in our company. This morning, I will provide you an overview of our first quarter results and provide an update on the progress we are making to drive profitable sales while maintaining strong financial discipline. Dee will provide more detail relative to our financials, and we will then open things up for questions and answers.
First, a quick summary of our results. First quarter of 2011 advertising sales declined 17.8%, compared to the first quarter of 2010, the decline of 20.4%. Adjusted earnings before interest, taxes, depreciation and amortization were $154 million for the first quarter of 2011, a 5.5% decline compared to the first quarter of 2010 adjusted pro forma EBITDA of $163 million. And continued cost management and expense reductions partially mitigated revenue declines, resulting in an improved adjusted EBITDA margin of 35.2%, compared to an adjusted pro forma EBITDA margin of 30.6% in the first quarter of 2010. Looking at the big picture, we are disappointed with these top line results.
This was a productive quarter. First, as I just mentioned, we continue to see improvements in our adjusted EBITDA margins because of our rigorous eye towards expense reduction. Second, we solidified our sales and marketing team with the addition of a new chief marketing officer, Matt Stover. And lastly, we began implementing the disciplined processes and practices I outlined on our last call.
To help execute our plans and to better complement our new sales leadership of Del Humenik and Steve Nord, brought in during the fourth quarter of 2010, Matt Stover was appointed Executive Vice President, Chief Marketing Officer in February. The team of Del, Steve and Matt had a proven track record in local media, and some of the best experience in selling and marketing to small businesses across the United States.
Before joining SuperMedia, Del led a team of approximately 2,000 in the sales, marketing and business development organizations at Paychex. Prior to that, Del was a Senior Vice President and General Manager for R.H. Donnelly. He also worked for SuperMedia's predecessor's companies for nearly 20 years.
Steve has over 30 years of experience, including senior leadership roles at Dex Media, SBC Directory and Ameritech Publishing.
Matt is a local media pioneer who is credited with creating the first national online yellow pages and in integrating online search, advertising and shopping. Matt has been an officer and director of companies providing online commerce, mobile services, search and advertising solutions, as well as print and online directories. His knowledge of our operations, his 6 years as director and then chairman of the Yellow Pages Industry Association (sic) [Yellow Pages Association], his experience overseeing corporate communications, advertising and branding for major corporations and his involvement in negotiating and manage numerous business transaction and partnerships will be a great asset for our company. Matt will drive the process of developing and refining our company strategy and marketing functions across print, online, mobile and social media, as well as oversee business development and partner relationships.
Matt, Dell and Steve and the entire company are now implementing the go-to-market approach that I mentioned on the last call and was presented to the entire company during a series of first quarter employee roadshows. The go-to-market approach better aligns our company with our mission of helping small and medium-sized businesses grow through effective local marketing solutions across print, online, mobile and social media. The initiatives are designed to stabilize our core products, leverage new offerings within our Superpages.com network and broaden the distribution of our customers' content.
First, sales compensation now focuses on customer and revenue growth and retention instead of focusing on selling specific products.
Second, our sales structure as a whole is realigned to place accountability for profitability at the local office level and to capitalize on face-to-face customer interactions.
Third, the training of our sales force has a new direction. Now looking at how to sell on value to establish long-lasting customer relationships instead of focusing on how to maneuver through internal systems and product specifications. We've also streamlined those internal systems with new and improved reporting and process changes.