Dex Media, Inc. Reports Solid Third Quarter 2005 Results
Recognized Revenue is $418 Million in the Third Quarter, a 1.2 Percent Increase Over the Third Quarter of 2004
DENVER, Nov 03, 2005 /PRNewswire-FirstCall via COMTEX News Network/ -- Dex Media, Inc. (NYSE: DEX) today announced its consolidated results for the quarter ended September 30, 2005. Dex Media, Inc. ("Dex Media") reported third quarter net income of $15.6 million, or basic and diluted net income of $0.10 per share. For the third quarter, the company reported EBITDA (earnings before interest, taxes, depreciation and amortization), as adjusted*(1) of $236.9 million; an EBITDA margin, as adjusted* of 56.6 percent; cash provided by operating activities of $155.6 million; and adjusted free cash flow*(2) of $150.8 million, which was used to pay down $132.8 million in aggregate bank debt, net of borrowings on the company's revolving credit facilities.
For the three months and nine months ended September 30, 2005, Dex Media reported recognized revenue of $418.3 million and $1,244.4 million, respectively. Publication sales*(3) was $421.7 million for the quarter ended September 30, 2005, and $1,331.8 million for the nine months ended September 30, 2005, a 2.5 percent and 2.3 percent increase over the same periods in 2004, respectively.
"Dex delivered solid revenue growth, operating results that are in line with expectations and the third consecutive quarter of positive net income," said George Burnett, president and CEO of Dex Media. "We continue to build on our track record of innovation, both in print and online. During the third quarter, we distributed five new Dex Plus directories, and early results indicate growing usage share. Dex Web Clicks package sales exceeded 5,600 in the third quarter, an increase of 22 percent over the second quarter. We are also very pleased that DexOnline.com(TM) sustained its in-region IYP/local search leadership for the sixth straight quarter.**"
Consolidated GAAP Results
Third Quarter Consolidated GAAP Results
For the quarter ended September 30, 2005, Dex Media reported $418.3 million in revenue, compared to $404.8 million for the third quarter of 2004. Dex Media reported $343.2 million in local directory services revenue in the third quarter of 2005, compared to $339.4 million in the third quarter of 2004. Recognized revenue from national advertisers in the third quarter of 2005 was $57.7 million, compared to $51.4 million in the third quarter of 2004. This represented the fourth consecutive quarter of growth in national directory services revenue. Qwest advertising revenue in the third quarter of 2005 was $4.7 million, compared to $5.5 million for the same period in 2004. For the three months ended September 30, 2005, Dex Media reported other revenue of $12.9 million, compared to $8.5 million for the same period in 2004. The increase in other revenue was driven by an increase in Internet revenue, and was partially offset by the impact of discontinuing certain direct marketing products in 2004.
For the quarter ended September 30, 2005, cost of revenue was $124.9 million, compared to $123.5 million for the same period in 2005. General and administrative expense, including bad debt expense, was $63.1 million for the third quarter of 2005, compared to $82.0 million for the same period in 2004. This decrease was attributable primarily to the $20.0 million payment in 2004 to eliminate the annual advisory fee payable to Dex Media's private equity sponsors in connection with the company's initial public offering and $5.9 million of severance expense incurred in the third quarter of 2004 in excess of that incurred during the third quarter of 2005. Partially offsetting this decrease was an increase in bad debt expense of $5.5 million.
Dex Media reported $134.9 million and $87.6 million in operating income for the third quarter of 2005 and 2004, respectively. Net income was $15.6 million for the three months ended September 30, 2005, compared to a net loss of $33.7 million for the third quarter of 2004. For the quarter ended September 30, 2005, basic and diluted earnings per share was $0.10, compared to basic and diluted net loss per share of $0.23 for the comparable period in 2004.
For the three months ended September 30, 2005 and 2004, Dex Media reported $9.0 million and $8.6 million in depreciation and amortization expense, respectively. Amortization of intangibles for the three months ended September 30, 2005 and 2004 was $86.4 million and $103.1 million, respectively, and related to identifiable intangible assets such as customer relationships and non-compete/publishing agreements. The decrease in amortization of intangibles was the result of a declining method used to amortize the value of the acquired accounts in proportion with their estimated retention lives.
Dex Media reported interest expense of $109.4 million and $144.6 million for the three months ended September 30, 2005 and 2004, respectively. For the three months ended September 30, 2005, interest expense included $7.7 million of amortization of deferred financing costs and $12.2 million of accretion on discount notes. Interest expense for the three months ended September 30, 2004 included $16.8 million of amortization of deferred financing costs and $11.2 million of accretion on discount notes.
Source: Dex Media
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