YP Corp. Announces Third Fiscal Quarter 2005 Results
YP Corp. (OTCBB: YPNT), a leading provider of nationwide Internet Yellow Pages and related services, today reported its financial results for the fiscal quarter ended June 30, 2005.
Net revenue for the quarter ended June 30, 2005 was $6,517,158, an increase of approximately 1% over net revenue of $6,444,609 for the previous quarter. The increase in revenue is primarily the result of an increase in the average number of Internet Advertising Package(TM) advertisers throughout the quarter. For the nine months ended June 30, 2005, the company realized revenue of $19,151,922. Operating income for the quarter ending June 30, 2005 was $321,880, a decrease of approximately 1.6% over operating income of $383,806 the prior quarter. The net loss for the quarter ended June 30, 2005 was $149,784.
There were two non-recurring charges recorded in the fiscal quarter ended June 30, 2005. The first was a pre-tax charge of $282,000 attributable to the reacquisition of shares from the company's major shareholder in exchange for the forgiveness of debt owed to the company and the acquisition of certain intellectual property rights. An additional non-recurring pre-tax charge of $328,000 was taken as the result of an arbitration judgment against the company that is currently on appeal. Both of these charges are included in other income and expense in the company's financial statements.
The company had approximately 108,000 customers at June 30, 2005 compared to approximately 105,000 as of March 31, 2005 and 222,000 customers at June 30, 2004. The year over year reduction in customers was a result of LEC billing issues and the transition of the customer base to ACH billing. The company has provided more information with respect to its customer count metric in the Executive Overview section of Management's Discussion & Analysis of Financial Condition and Results of Operation in its Quarterly Report on Form 10-Q for the fiscal period ended June 30, 2005, which was filed prior to this press release.
Peter J. Bergmann, YP Corp.'s CEO, commented, "We have sustained YP Corp. through a period of high turmoil. Between our issues with Local Exchange Company (LEC) billings, migration of our customer base to ACH, shifts in the market place and an internal reorganization, we are now seeing the beginning of what we expect to be a favorable turnaround. If it were not for the non-recurring charges during the quarter, we would have again had a profitable quarter. As it is, we have hit our internal projections on customer count and net revenue."
YP Corp.'s chief operating officer, John Raven, added, "We continue to take active measures to reduce our customer attrition rates. We are communicating with our customers more regularly and making them aware of the value proposition that YP offers. In short, we believe that we are addressing the challenges and are positioning our company for stability, profitability, and renewed growth in the months ahead."
Financial statements for the period ended June 30, 2005 are set forth below, as well as in the company's Form 10-Q, which were filed with the Securities Exchange Commission promptly prior to this press release.
About YP Corp.
YP Corp., a leading provider of Internet-based Yellow Pages services, offers an Internet Advertising Package(TM) ("IAP") that includes a Mini-WebPage(TM) and Preferred Listing through its Yellow Pages Web site at www.YP.Com. The company's Web site contains listings for approximately 17 million businesses in the United States.
YP Corp. also provides an array of other Internet services that complement its Yellow Pages Web site, including an Internet Dial-Up Package(TM) (dial-up Internet access) and QuickSite(TM) (Web site design & hosting services).
YP Corp. is a longstanding member, exhibitor and sponsor of the two major Yellow Pages trade associations -- Yellow Page Integrated Media Association (YPIMA), the major trade association of Yellow Pages publishers throughout the world, and the Association of Directory Publishers (ADP), which mostly represents independent Yellow Pages publishers. YP Corp. is based in Mesa, Ariz. and Las Vegas. For more information, visit the Web site at www.YP.Com.
Forward-looking Disclaimer
This press release may include statements that constitute "forward-looking statements," which are often characterized by the terms "may," "believes," "projects," "expects," or "anticipates," and do not reflect historical facts. Forward-looking statements involve risks, uncertainties and other factors that may cause actual results, performance or achievements of YP Corp. and its subsidiary to be materially different from those expressed or implied by such forward-looking statements. Specific forward-looking statements contained in this press release include, but are not limited to, (i) the continued success of the company's efforts to address the challenges it faced during fiscal 2004, particularly with respect to its billing and collections issues; (ii) the company's expectations that it will be able to reduce the dilution level and costs to implement its new billing method to more normal levels over the next few quarters, and (iii) the company's expectation of stability, profitability, and growth in fiscal 2005.
Factors that may affect forward-looking statements and the company's business generally include, but are not limited to, (i) the risk factors and cautionary statements made in the company's Quarterly Report on Form 10-KSB for the year ended Sept. 30, 2004; and (ii) other factors that YP Corp. is currently unable to identify or quantify, but may exist in the future.
Forward-looking statements speak only as of the date the statement was made. YP Corp. does not undertake and specifically declines any obligation to update any forward-looking statements.
YP CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, Sept. 30,
2005 2004
------------ ------------
(unaudited)
Assets
Cash and equivalents $9,004,290 $3,576,529
Restricted cash 365,000 -
Accounts receivable, net of allowance for
doubtful accounts of $963,654 and
$3,400,575 6,217,833 8,362,283
Prepaid expenses and other current assets 1,187,910 822,919
Income tax refund receivable - 1,239,436
Deferred tax asset 148,362 352,379
------------ ------------
Total current assets 16,923,395 14,353,546
Accounts receivable, long term portion, net
of allowance for doubtful accounts of
$85,522 and $269,662 1,317,970 2,075,334
Customer acquisition costs, net of
accumulated amortization of $3,821,547
and $5,096,669 3,022,645 4,482,173
Property and equipment, net 485,865 725,936
Deposits and other assets 60,919 239,060
Intangible assets, net of accumulated
amortization of $3,139,328 and $2,446,403 4,981,102 3,326,274
Advances to affiliates - 3,894,862
------------ ------------
Total assets $26,791,896 $29,097,185
============ ============
Liabilities and Stockholders' Equity
Accounts payable $ 501,539 $ 1,210,364
Accrued liabilities 767,644 542,481
Income taxes payable 505,458 -
Notes payable- current portion - 115,868
------------ ------------
Total current liabilities 1,774,641 1,868,713
Deferred income taxes 183,099 1,116,314
------------ ------------
Total liabilities 1,957,740 2,985,027
------------ ------------
Commitments and contingencies - -
------------ ------------
Series E convertible preferred stock, $.001
par value, 200,000 shares authorized,
127,840 and 128,340 issued and
outstanding, liquidation preference
$38,202 10,866 10,909
Common stock, $.001 par value, 100,000,000
shares authorized, 48,964,728 and
50,071,302 issued and outstanding 48,965 50,071
Paid in capital 10,577,670 11,375,384
Treasury stock (1,606,131) -
Deferred stock compensation (3,872,075) (5,742,814)
Retained earnings 19,674,861 20,418,608
------------ ------------
Total stockholders' equity 24,834,156 26,112,158
------------ ------------
Total liabilities and stockholders'
equity $26,791,896 $29,097,185
============ ============
YP CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Nine Months Ended
June 30, June 30,
------------------------ -------------------------
2005 2004 2005 2004
----------- ------------ ------------ ------------
Net revenues $6,517,158 $16,890,361 $19,151,922 $47,098,181
Cost of services 925,805 8,195,264 2,921,322 19,678,248
----------- ------------ ------------ ------------
Gross profit 5,591,353 8,695,097 16,230,600 27,419,933
----------- ------------ ------------ ------------
Operating expenses:
General and
administrative
expenses 3,320,434 3,271,624 9,886,929 9,142,889
Sales and
marketing
expenses 1,565,536 1,667,040 4,896,063 4,403,385
Depreciation and
amortization 383,503 243,261 977,382 639,173
----------- ------------ ------------ ------------
Total operating
expenses 5,269,473 5,181,925 15,760,374 14,185,447
----------- ------------ ------------ ------------
Operating income 321,880 3,513,172 470,226 13,234,486
Other income
(expense):
Interest expense
and other
financing costs - (5,643) (8,610) (13,310)
Interest income 29,859 104,540 206,621 261,905
Other income
(expense) (584,988) 436,464 (477,535) 782,617
----------- ------------ ------------ ------------
Total other
income
(expense) (555,129) 535,361 (279,524) 1,031,212
----------- ------------ ------------ ------------
Income before
income taxes and
cumulative
effect of
accounting change (233,249) 4,048,533 190,702 14,265,698
Income tax benefit
(provision) 83,465 (1,409,113) (92,982) (4,992,994)
----------- ------------ ------------ ------------
Income before
cumulative effect
of accounting
change (149,784) 2,639,420 97,720 9,272,704
Cumulative effect
of accounting
change (net of
income taxes of
$53,764 in 2005) - - 99,848 -
----------- ------------ ------------ ------------
Net income (loss) $ (149,784) $ 2,639,420 $ 197,568 $ 9,272,704
=========== ============ ============ ============
Net income (loss)
per common share:
Basic:
Income (loss)
applicable to
common stock
before
cumulative
effect of
accounting
change $ (0.00) $ 0.06 $ 0.00 $ 0.20
Cumulative
effect of
accounting
change $ - $ - $ 0.00 $ -
Net income
(loss)
applicable to
common stock $ (0.00) $ 0.06 $ 0.00 $ 0.20
Diluted:
Income (loss)
applicable to
common stock
before
cumulative
effect of
accounting
change $ (0.00) $ 0.05 $ 0.00 $ 0.19
Cumulative
effect of
accounting
change $ - $ - $ 0.00 $ -
Net income
(loss)
applicable to
common stock $ (0.00) $ 0.05 $ 0.00 $ 0.19
Weighted average
common shares
outstanding:
Basic 44,860,228 47,294,551 46,060,709 47,033,977
=========== ============ ============ ============
Diluted 44,860,228 48,096,618 46,296,626 47,805,915
=========== ============ ============ ============
YP Corp., Mesa
Roger Bedier, 480-325-4339 (Investor Relations)
rogerb@ypcorp.com
Source: Business Wire (August 15, 2005 - 6:19 PM EDT)
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