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SuperMedia
Type Publicly Traded:
NASDAQSPMD
Headquarters Dallas, TX, USA
Key people Scott W. Klein, CEO
Industry Advertising Agency
Media
Publishing
Internet
Website SuperMedia.com

SuperMedia (formerly Idearc Media - pronounced EYE-dee-arc), is based in Dallas, TX. SuperMedia (NASDAQ:SPMD) is an advertising agency that only sells its own products and services, which emerged from the bankruptcy of Idearc Media in January 2010.

SuperMedia’s advertising products and services include: the SuperGuaranteeSM and SuperTradeExchange® programs, Verizon® SuperYellowPages, FairPoint® SuperYellowPages, Superpages.com®, EveryCarListed.comSM, Switchboard.comSM, LocalSearch.comSM, Superpages MobileSM and SuperpagesDirect™ direct mail products.

In 2009, the company launched two new programs, SuperGuarantee and SuperTradeExchange. However, the SuperGuarantee program was patterned almost exactly like a guarantee program from one of its largest customers at the time, ServiceMagic.[1]

Idearc Media voluntarily filed for Chapter 11 bankruptcy on March 31, 2009 and emerged on December 31, 2009. At the start of 2010, it announced a new name, SuperMedia, with ticker symbol SPMD. Shares in the new company were issued to the creditors and bondholders. The pre-emergence common stock of Idearc Inc. (which has recently traded under the symbol “IDARQ.PK “) was cancelled effective December 31, 2009. Holders of the old Idearc Inc. common stock did not receive any distributions as part of the emergence Plan and their equity interests became worthless. No further transfers of the old Idearc Inc. common stock were then recorded on the Company’s books.[2]

The current negotiated debt position showed SuperMedia owing $2.75 billion, due in 2015. The interest rate on the bonds is 8% over LIBOR with a minimum of 11%, qualifying it for High-yield debt or "junk bond" status.[3] The outlook presented for SuperMedia's future prospects in its September 15, 2009 8-K filing with the SEC was stark. Its "current case" projections for print revenue showed a decline from $2.165 billion in 2009 to $1.694 billion in 2010 to $1.418 billion in 2011 to $1.278 billion in 2012 and $1.187 billion in 2013.[4] Unfortunately, the online revenues are only projected to increase $144 million during the same time that print revenues are forecast to drop $978 million.[5] The same 8-K filing shows that projected EBITDA would be insufficient to cover the $2.75 billion debt, much less free cash being able to do so.

Superpages
Superpages.com
SuperYellowPages
SuperYellowPages.com
SuperPagesDirect
SuperPagesDirect.com
SuperMedia Brands




History as Idearc Media

Idearc Media, formerly Verizon Information Services, was spun-off of from Verizon in 2006. It is home to Superpages.com and publisher of the Verizon Yellow Pages. It also offered "Solutions Direct" full-color direct mail postcards. Its efforts to offer several proprietary magazines such as "Solutions at Hand" and "Solutions at Home,[6] which were essentially direct mail products with content, ultimately faied and are no longer offered.[7]

The company diversified its product set by moving its focus from a "print-centric" business to a "multi-platform" business, including the 2007 acquisition of InfoSpace Inc.’s directory assets and the LocalSearch.com URL.[8] Nonetheless, the bulk of the company's revenues come from Yellow Pages. This is a major concern as a plan circulated to creditors by Idearc estimated that its printed book revenue would fall by nearly another billion dollars more by the year 2013.[9]

While its local search site Superpages.com grew 24 percent growth and 4.8 billion network searches in 2007—the yellow pages directory business still brings in the majority of the company’s revenue.[8] By the end of 2009, Superpages.com had stagnated in unique visitors to its network, dropping to #33 on comScore's ranking of the top 50 internet sites, one spot below AT&T Interactive,[10] owned by AT&T Advertising Solutions. As a result, Briggs Ferguson, Executive Vice President in charge of SuperMedia's Internet Division was summarily terminated in 2009 without any press release announcing it, although he disappeared from the company's quarterly 8-K filings.[11]

According to data released by the Yellow Pages Association, yellow pages usage grew to 17.2 billion searches in 2007, up from 16.7 billion in 2006. However, print usage remains in a pattern of decline with 13.4 billion print yellow pages references in 2007[12] and 12.3 billion in 2008, [13] a drop of over one billion references. Yet, even those numbers have been called into question due to polling samples that ignore U.S. households without traditional landlines in their polls yet include them in extrapolating their results.[14] Furthermore, a cursory analysis of the statistics show that based upon an adult population of 231 million aged 18 and over in 2008,[15] this would mean that every living American adult references the yellow pages more than once per week on average.

As print usage has dropped, print revenues have been declining accordingly in recent years. In 2008, Idearc reported a 6.8 percent decrease of multi-product revenues compared to the same period in 2007.[16]. Idearc stock fell from an intra-day high of $38.00 on August 3, 2007 to a closing low of $0.86 on September 16, 2008. According to company releases, The decline in share value may have reflected investors' concerns about Idearc's ability to successfully transition to a "multi platform" media company. Moreover, Idearc stated that concerns about management leadership, ongoing adverse cyclical and secular trends were viewed to be contributing to revenue and operating margin declines for the foreseeable future.[17] However, the most telling concern was a downward spiral in revenues that saw operating income fall from $3.374 billion in 2005[18] to $2.512 billion in 2009,[19] a drop of over 25% in just four years. CFO Dee Jones noted that he was uncertain when Supermedia would turn things around. “From an ad sales perspective we feel that we are in the valley. Our ad sales for the fourth quarter [of 2009], on top of what we did in the third quarter, indicate to us that we are in the valley. It is too early to tell when we get out of the valley.”[20]

As of January 22, 2009, Idearc was no longer trading on the New York Stock Exchange due to its low of 2¢ per share and failing to close at or above $1.00 for longer than 30 consecutive days.

On March 31, 2009, Idearc entered Chapter 11 bankruptcy in an effort to "restructure its capitalization and debt obligations to a more appropriate level." [21] As a reward for bankrupting the company and substantially cutting corporate debt obligations in the process, the SuperMedia "Human Resources Committee" awarded CEO Scott Klein a $2 million bonus on February 11, 2010, paying out a total of $5,213,000 to eight corporate officers.[22] Not surprisingly, Klein chairs the SuperMedia Human Resources Committee.

External links

References

  1. ^ Dallas Google Guru October 5, 2009, http://dallasgoogleguru.wordpress.com/2009/10/05/idearc-medias-superguarantee-whats-all-the-fuss-about-it/
  2. ^ Idearc Completes Debt Restructuring; Emerges With New Name and Increased Client Focus http://my.supermedia.com/CammsServlet/pressrelease/10933.pdf
  3. ^ Seeking Alpha March 5, 2010 http://seekingalpha.com/article/192128-supermedia-is-lipstick-on-the-pig-that-was-idearc
  4. ^ Idearc 8-K September 15, 2009 http://ir.idearc.com/sec.cfm?DocType=&Year=2009
  5. ^ Idearc 8-K September 15, 2009 http://ir.idearc.com/sec.cfm?DocType=&Year=2009
  6. ^ bNet Business Wire August 31, 2007 "http://findarticles.com/p/articles/mi_m0EIN/is_2007_August_31/ai_n27360860/
  7. ^ SuperMedia http://www.supermedia.com/media-network/our-brands
  8. ^ a b Idearc Inc. 2007 Annual Report
  9. ^ Dallas Google Guru http://dallasgoogleguru.wordpress.com/2010/01/03/supermedia-ships-jobs-to-india-but-scott-klein-got-his-bonus/
  10. ^ comScore September, 2009, http://comscore.com/Press_Events/Press_Releases/2009/10/comScore_Media_Metrix_Ranks_Top_50_U.S._Web_Properties_for_September_2009
  11. ^ Dallas Google Guru March 16, 2010, http://dallasgoogleguru.wordpress.com/category/uncategorized/disgruntled-former-employee-rants/
  12. ^ February 2007 http://ypassociation.org
  13. ^ Yellow Pages Association March 2009, http://www.insideyp.org/2009/03/
  14. ^ Search Engine Land Yellow Pages Usage Stats Are Likely Wrong http://searchengineland.com/yellow-pages-usage-stats-are-likely-wrong-14466
  15. ^ United States Census Bureau http://www.census.gov/compendia/statab/2010/tables/10s0010.pdf
  16. ^ 2:01p ET March 27, 2008 (MarketWatch)
  17. ^ Standard & Poor's stock report (IAR) March 29, 2008
  18. ^ Idearc Form-10K http://ir.idearc.com/secfiling.cfm?filingID=1193125-07-48926
  19. ^ Idearc Form-10K http://www.faqs.org/sec-filings/100226/IDEARC-INC_10-K/#NotesToConsolidatedFinancialState_215405
  20. ^ BIA Kelsey http://blog.kelseygroup.com/index.php/2010/03/01/signs-of-life-for-yellow-pages/
  21. ^ Idearc Statement on Chapter 11 filing http://www.idearc.com/restructuring
  22. ^ Idearc Form-8K http://biz.yahoo.com/e/100216/spmd8-k.html
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