Both Dex and Supermedia are in Chapter 11 in preparation for their merger. Previously the majority of creditors signed off on the deal.
The companies said that they’ll save $175 million per year as a combined entity. Jobs will undoubtedly be shed but as it stands the new company would have almost 6,000 employees.
Prior to the bankruptcy Dex and Supermedia had a combined $4.69 billion in debt. The companies said that they expect to emerge from bankruptcy in 45 to 60 days.
The following are excerpts from the Supermedia results and earnings call this week:
- Q4 2012 revenue of $312 million, an 18.8% decline YoY
- Full year 2012 revenue was $1.354 billion, a 17.5% decline, compared to 2011.
- [Combined print and digital ad] sales for the fourth quarter declined 19.1% and full year declined 18.9% compared to 15.9% and 16.5% for the same periods last year.
- 2012 full year cash flow was $275 million
- Cash on hand at the end of 2012 was $105 million
- 15% decline in [advertisers] in 2012
- Digital is 34% of revenue (see correction below)
- Adjusted free cash flow of $88 million for Q4 and $335 million for 2012
- In 2012 print was down 23%
- CEO Alfred Mockett: We are looking to bundles to help mitigate the rate of decline in print. Overall, bookings declined 13% in the quarter and for the year. Ad sales were down 14% in the quarter and for the full year.
- Mockett: We’ve seen the greatest decline in the metro — major metros, and now we’re beginning to see that trend spread through Tier 1, Tier 2 and Tier 3 cities.
What do you think about the outlook for the combined entity?
Correction: Yesterday I said that digital sales were generating 30% of revenue. I was corrected. Here’s the accurate statement:
In 2012, Dex One’s digital sales exceeded projections and generated 34% of total bookings from digital sales. The digital business is an increasingly important source of the company’s profit, with contribution margins nearing 30% of revenue and continuing to improve as the business scales.