Yellow Pages Limited (Y) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Yellow Pages Annual Meeting Conference Call. Please go ahead, Susan Kudzman.

[Foreign Language] Good morning, ladies and gentlemen. My name is Susan Kudzman. I'm the Chair of the Board of Yellow Pages Limited. It is my pleasure to welcome you to our Annual and Special Meeting of shareholders. Due to the ongoing uncertainty surrounding the public health impact of the coronavirus, COVID-19 pandemic, the corporation has determined that holding this year's meeting virtually via a live audio webcast is a proactive and prudent step to ensure the health and safety of our shareholders and employees and the communities in which we live. I do also hope that you and your families are staying healthy and keeping safe. [Foreign Language] Let me now formally open the Annual Meeting of Shareholders. And as per the bylaws of Yellow Pages, I shall act as chair of the meeting, and Treena Cooper will act as secretary. [Foreign Language] I would also like to introduce the people who will be speaking today. They are David Eckert, President and Chief Executive Officer of Yellow Pages; Franco Sciannamblo, Senior Vice President and Chief Financial Officer; Treena Cooper, Vice President, Secretary and General Counsel; and Sherilyn King, Vice President, Sales, Customer Care and Marketing. It's my pleasure to introduce you to the directors who are with us today. All except Mr. Donald Morrison are standing for reelection. We would like to thank Mr. Morrison for his many years of service and wish him well in his future endeavors. Those standing for reelection, in addition to Mr. Eckert and myself are: [Foreign Language] Craig Forman, [Foreign Language], McClatchy Company; Rob Hall, Corporate Director; Kalpana Raina, Managing Partner, 252 Solutions; Paul Russo, Corporate Director. [Foreign Language] Before we begin, I would like to say a few words about the proceedings of this meeting. [Foreign Language] As set out in the proxy circular sent to all shareholders, the business of today's meeting includes: the election of directors and the appointment of the external auditor; the adoption of 2 special resolutions, one, to reduce the corporation's stated capital account and the second to approve the continuance of the corporation from the Canada Business Corporations Act to the British Columbia Business Corporations Act; and the approval of an amendment to the 2012 stock option plan. I would ask Jerry Trotter and [ Alex Cull ] of Broadridge to act as scrutineers. [Foreign Language] The Secretary has informed me that Yellow Pages Limited has received confirmation from Broadridge that the notice of 2020 Annual Meeting of Shareholders and notice of availability of meeting materials was sent together with a form of proxy to all shareholders entitled to vote at the meeting. The meeting materials, being a copy of the notice of annual meeting of shareholders; the management proxy circular and to those who requested it; the 2019 annual report, including the consolidated financial statements of Yellow Pages, was made available to all shareholders via notice and access. [Foreign Language] I direct that a copy of each of these documents, along with the affidavit of Broadridge confirming that the notice of 2020 Annual Meeting of Shareholders and notice of availability of meeting materials, together with the form of proxy were sent to shareholders, be kept by the secretary in the records of Yellow Pages. Treena, have you received the scrutineer's report confirming the number of common shares represented and to be voted at this meeting?

[Foreign Language] Madam Chair, I'm advised by the Scrutineer that 23,969,375 common shares representing 85.38% of the issued and outstanding common shares are represented at this meeting, well in excess of the required quorum.

I therefore declare that this meeting is regularly called and properly constituted for the transaction of all business for which it was called. Before we proceed to the business of the meeting, I would like to briefly comment on the procedures for voting and asking questions in this new virtual format. To facilitate the formal business of the meeting, Franco Sciannamblo will propose and Sherilyn King will second the formal motion. At any time during the meeting, registered shareholders who have not already provided voting instructions or appointed a proxy holder that are logged on and wish to vote their shares may do so by selecting their vote for each motion and clicking on the submit button on your screen once all of your selections are complete. Proxy holders may also vote now using the same method. The polls will remain open until just before the conclusion of the formal business of the meeting. Shareholders or proxy holders may ask questions at any time during the meeting by submitting the question in writing in the question box on your screen. We will respond to questions received on each matter of formal business at the time it comes before the meeting. Questions that are not received by that time or which do not relate to the formal business of the meeting, will be addressed in the question-and-answer session following the conclusion of the meeting. If you have voted your shares prior to the start of the meeting, your vote has been received by the scrutineers, and there is no need to vote those shares during the meeting unless you wish to revoke or change your vote. We have been advised by the scrutineers that based on the proxies already deposited with them, enough votes have been cast to carry each of the motions. [Foreign Language] The first item on the agenda for today's Annual Meeting is the reception of the 2019 annual report of Yellow Pages, including the consolidated financial statements of Yellow Pages for the year ended December 31, 2019, and the auditor's report thereon. A copy of the 2019 annual report of Yellow Pages was sent to all shareholders who requested a copy. The annual report was also made available on the company's website and on SEDAR. As you have had the opportunity to review the annual report, I would ask the secretary to include in the minutes of this meeting, the 2019 annual report of Yellow Pages, including the consolidated financial statements of Yellow Pages for the year ended December 31, 2019, and the auditor's report thereon. [Foreign Language] The next item on the agenda relates to the election of directors of Yellow Pages. In the proxy circular, Yellow Pages Limited proposes 6 persons as Directors of Yellow Pages. I invite Franco Sciannamblo to introduce the motion proposing the nomination and election of these 6 persons as directors of Yellow Pages.

[Foreign Language] My name is Franco Sciannamblo, and I move that David A. Eckert, Craig Forman, Rob Hall, Susan Kudzman, Kalpana Raina, Paul W. Russo [Foreign Language] be elected as Directors of Yellow Pages Limited.

[Foreign Language] Thank you. Yellow Pages has not received notice from any shareholder of other nominations of persons for election as a director of Yellow Pages pursuant to Yellow Pages bylaw #1, which provides for, amongst other things, advanced notice of nominations of directors. Notice of any such nominations was required to be delivered to Yellow Pages on or before April 13, 2020, being 30 days prior to this Annual Meeting of Shareholders. Since there can be no further nomination, I declare the nominations closed. Treena, have we received any questions relating to this item of business?

No, we have not received any questions relating to this item of business. As a reminder to shareholders and proxy holders voting at the meeting, to vote on this item of business under Item #1 in the voting section on the right-hand side of your screen, you will find listed the names of the 6 nominees for election to the Board of Directors listed in the management information circular. For each nominee, you may vote for or withhold from voting in respect to that nominee. If you have already provided voting instructions or submitted a proxy, you do not need to vote on this matter.

I have been advised by the scrutineers that a significant majority of the proxies received by management prior to the meeting have been voted for the election of each of the persons nominated to serve as directors. I confirm that the 6 director nominees named in the management information circular have been elected as directors. [Foreign Language] The next item on the agenda concerns the appointment of auditors of Yellow Pages for the fiscal year in progress and authorization for the directors of Yellow Pages to fix their remuneration. Yellow Pages recommends the reappointment of Deloitte chartered accountants as auditors of Yellow Pages to hold office until the next Annual Meeting of Shareholders. I invite Franco Sciannamblo to make the necessary motion.

[Foreign Language] My name is Franco Sciannamblo, and I move that Deloitte LLP chartered accountants be reappointed as auditors of Yellow Pages for the fiscal year in progress and that the directors of Yellow Pages be authorized to fix their remuneration.

I invite Sherilyn King to second the motion.

My name is Sherilyn King, and I second the motion. [Foreign Language]

The motion is duly made and seconded. Treena, have we received any questions relating to this item of business?

No, we have not received any questions relating to this item of business. As a reminder to shareholders and proxy holders voting at the meeting, to vote on this item of business under Item 2 in the voting section on the right-hand side of your screen, you may vote for or withhold from voting in respect of this motion. You may not vote for an accounting firm other than Deloitte LLP. If you have already provided voting instructions or submitted a proxy, you do not need to vote on this matter.

I have been advised by the scrutineers that a significant majority of the proxies received by management prior to the meeting have been voted for the motion, and I declare the motion carried. [Foreign Language] The next item on the agenda concerns the adoption of a special resolution to reduce the stated capital amount of the corporation. I invite Franco Sciannamblo to make the necessary motion.

[Foreign Language] My name is Franco Sciannamblo, and I move that the adoption of the special resolution to reduce the corporation's stated capital as set out in the management proxy circular be approved.

I invite Sherilyn King to second the motion.

My name is Sherilyn King, and I second the motion. [Foreign Language]

The motion is duly made and seconded. Treena, have we received any questions relating to this item of business?

No, we have not received any questions relating to this item of business. Again, as a reminder to shareholders and proxy holders voting at the meeting, to vote on this item of business under Item #3 in the voting section on the right-hand side of the screen, you may vote for the motion or against the motion. If you have already provided voting instructions or submitted a proxy, you do not need to vote on this matter.

I have been advised by the scrutineers that significantly more than 2/3 of the proxies received by management prior to the meeting have been voted for the motion, and I declare the motion carried. [Foreign Language] The next item on the agenda concerns the adoption of a special resolution to approve the continuance of the corporation from the Canada Business Corporations Act to the British Columbia Business Corporations Act. I invite Franco Sciannamblo to make the necessary motion.

[Foreign Language] My name is Franco Sciannamblo, and I move that the adoption of the special resolution to approve the continuance of the corporation from the Canadian Business Corporations Act to the British Columbia Business Corporations Act as set out in the management proxy circular be approved.

I invite Sherilyn King to second the motion.

My name is Sherilyn King, and I second the motion. [Foreign Language]

The motion is duly made and seconded. Treena, have we received any questions relating to this item of business?

No, we have not received any questions relating to this item of business. Again, as a reminder to shareholders and proxy holders voting at the meeting, to vote on this item of business under Item #4 in the voting section on the right-hand side of the screen, you may vote for the motion or against the motion. If you have already provided voting instructions or submitted a proxy, you do not need to vote on this matter.

Again, we have been advised by the scrutineers that significantly more than 2/3 of the proxies received by management prior to the meeting have been voted for the motion, and I declare the motion carried. [Foreign Language] The last item on the agenda concerns the approval of an amendment to the 2012 stock option plan to provide for a cashless exercise feature, payable in cash without a full deduction of the underlying shares from the planned reserve. I invite Franco Sciannamblo to make the necessary motion.

[Foreign Language] My name is Franco Sciannamblo, and I move that the amendment to the 2012 stock option plan to provide for cashless exercise feature, payable in cash without a full deduction of the underlying shares from the planned reserve as set out in the management proxy circular be approved.

I invite Sherilyn King to second the motion.

My name is Sherilyn King, and I second the motion. [Foreign Language]

The motion is duly made and seconded. Treena, have we received any questions relating to this item of business?

No, we have not received any questions relating to this item of business. As a last reminder to shareholders and proxy holders voting at this meeting, to vote on this item of business under Item #5 in the voting section on the right-hand side of the screen, you may vote for the motion or against the motion. If you have already provided voting instructions or submitted a proxy, you do not need to vote on this matter.

I have been advised by the scrutineers that a significant majority of the proxies received by management prior to the meeting have been voted for the motion, and I declare the motion carried. The polls are now closed with respect to voting on all of the motions. A final report on voting results provided by the scrutineers after the meeting will be incorporated into the minutes of the meeting. After the meeting, we will also post the final voting results on the Investor Relations page on the company's website and will file the results on SEDAR. Since there are no other matters of business to come before the formal part of the meeting, the meeting is terminated. I would like to thank you for your participation and for your interest in Yellow Pages.

[Foreign Language] At this point, we will begin the Q&A for shareholders. Questions can be submitted through the web portal. Treena will read those questions submitted and which relate to the corporation's business. Treena, have we received any questions?

Yes, we have received one question. I will proceed to read it now. You announced your intent to double your current monthly contribution to the Defined Benefit Pension Plan. Could you provide us an idea of what will be this contribution in dollar figures on an annual basis, and what your plans to reduce this huge deficit of this Defined Benefit Pension Plan?

This is David Eckert, the President and Chief Executive Officer of the corporation. And let me say, I thank you and appreciate that question. We take our obligations to our retirees' and our pensioners' Defined Benefit Pension Plan very seriously. We pay a lot of attention to that, and we have been working very hard to make sure every dollar that [ almost ] to every pensioner will ultimately, and on a timely basis, be paid. Let me point out that at the time of the most recent valuation of that plan, the plan was actually showing a surplus on a going concern basis. And that assumes that the company is a going concern and is able to continue making payments into the plan. And we have been working very hard, as I think most all shareholders know, for years now, to make sure that the company does well and is in a position to make payments on all of its obligations, including the Defined Benefit Pension Plan. I will point out that in just the last -- we announced this morning that in just the last 9 quarters, as evidence of that, we have reduced our, what we call, our net debt in just 9 quarters from over $350 million to only $28 million. And that's beneficial to everyone. With respect to your specific question, the voluntary additional contribution that we announced our intention to make this morning, beginning in June of this year, each month through the end of next year, would double our regular required monthly contributions. And those would go from approximately $150,000 a month to approximately $300,000 a month. But let me just reemphasize that at the point of the last valuation of the plan, the plan was actually in a surplus position, on a going concern basis, and we have every intention -- and I think the results of the last few years underscore this -- every intention of having this company continue to thrive as it has in recent times. And thank you for your question.

[Foreign Language] I think it's appropriate to conclude the question period now as I see no new questions. Thank you again for attending our meeting today in this new virtual format. I hope you are keeping safe and healthy in today's -- in the current context, and I thank you for your ongoing interest in our company, Yellow Pages. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.