SuperMedia (SPMD) Q1 2011 Earnings Call May 03, 2011 10:00 am ET Executives Samuel Jones - Chief Financial Officer, Executive Vice President and Treasurer Peter McDonald - Chief Executive Officer, President and Director Analysts Wilson Jaeggli - Southwell Partners Kyle Okita Jason Alper - BTIG, LLC Dale Stohr Jake Newman - CreditSights Steve Hasnain Unknown Analyst - Mark Kaufman - MLK Investment Management Presentation Operator
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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. Read the rest of this transcript for free on seekingalpha.com