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Thryv® Announces Third Quarter 2019 Financial Results

[October 29, 2019]

Thryv® Announces Third Quarter 2019 Financial Results

Thryv, Inc., the leading small business software provider, announced today financial results for third quarter 2019.

Key highlights for the Quarter:

SaaS (News - Alert) Products' revenue grew by $2.5 million compared to prior Q3, an 8.3% increase, with trailing twelve-month net revenue of $131 million¹
Increased Q3 EBITDA margin to 36.0% from 33.7% in the prior Q3
Generated $57.3 million adjusted free cash flow during Q3, and reduced our net debt to $782 million

"Our priority for this year has been driving usage of our software," said Thryv CEO Joe Walsh (News - Alert). "We have made great progress on many measures: a more engaged set of clients, with higher usage and increases in customer lifetime value."

Third Quarter 2019 Results

			Q3								YTD
							Variance								Variance
			2019		2018^(b)		Fav (Unfav)		%		2019		2018^(b)		Fav (Unfav)		%
			(in thousands)								(in thousands)
Operating/Net Revenue		(a)
SaaS Products		(c)	$ 32,028		$ 29,565		$ 2,463		8.3	%	$ 97,370		$ 80,266		$ 17,104		21.3	%
IYP / ESS			77,784		94,548		(16,764	)	-17.7	%	245,151		300,136		(54,985	)	-18.3	%
SEM / Performance			56,313		75,687		(19,374	)	-25.6	%	175,957		242,532		(66,575	)	-27.4	%
Other Digital			24,279		32,437		(8,158	)	-25.2	%	75,542		101,752		(26,210	)	-25.8	%
Total Digital			190,404		232,237		(41,833	)	-18.0	%	594,020		724,686		(130,666	)	-18.0	%
Print			162,557		211,077		(48,520	)	-23.0	%	513,698		677,523		(163,825	)	-24.2	%
Other			6,805		6,112		693		11.3	%	21,305		15,589		5,716		36.7	%
Total Operating/Net Revenue			$ 359,766		$ 449,426		$ (89,660	)	-19.9	%	$ 1,129,023		$ 1,417,798		$ (288,775	)	-20.4	%

Variable Expenses			94,244		128,062		33,818		26.4	%	319,253		422,552		103,299		24.4	%
Variable Profit			$ 265,522		$ 321,364		$ (55,842	)	-17.4	%	$ 809,770		$ 995,246		$ (185,476	)	-18.6	%
Variable Margin			73.8	%	71.5	%					71.7	%	70.2	%

Total Direct Expenses			88,752		114,005		25,253		22.2	%	279,228		369,355		90,127		24.4	%
Direct Profit			$ 176,770		$ 207,359		$ (30,589	)	-14.8	%	$ 530,542		$ 625,891		$ (95,349	)	-15.2	%
Total Direct Margin			49.1	%	46.1	%					47.0	%	44.1	%

Indirect Overhead			47,212		55,770		8,558		15.3	%	148,015		183,470		35,455		19.3	%
Adjusted EBITDA		(a), (d)	$ 129,558		$ 151,589		$ (22,031	)	-14.5	%	$ 382,527		$ 442,421		$ (59,894	)	-13.5	%
Adjusted EBITDA Margin %			36.0	%	33.7	%					33.9	%	31.2	%

Adjusted Free Cash Flow		(a), (e)	$ 57,258		$ 106,856		$ (49,598	)	-46.4	%	$ 208,745		$ 219,403		$ (10,658	)	-4.9	%

Net Debt		(a)
Term Note			$ 668,000		$ 446,000		$ (222,000	)	-49.8	%
ABL			116,663		153,067		36,404		23.8	%
Total Outstanding Debt			$ 784,663		$ 599,067		$ (185,596	)	-31.0	%
Less: Cash			(2,184	)	(5,517	)	(3,333	)	-60.4	%
Net Debt			$ 782,479		$ 593,550		$ (188,929	)	-31.8	%

Footnotes:
(a)	All 2019 figures presented are preliminary, subject to change, and are unaudited. Material changes may result from year-end 2019 audit procedures.
(b)	2018 results include certain pro forma adjustments related to acquisition accounting.
(c)	SaaS Products consists of Thryv and Thryv Leads. Thryv revenue for Q3 2019 and 2018 was $24,723 and $28,235, and for YTD 2019 and 2018 was $77,619 and $78,693, respectively. Thryv Leads revenue for Q3 2019 and 2018 was $7,305 and $1,330, and for YTD 2019 and 2018 was $19,751 and $1,573, respectively.
(d)	Adjusted Pro Forma EBITDA excludes interest, taxes, depreciation and amortization, and other non-cash/non-recurring charges, consisting of business restructuring and integration related activities, which includes exit and disposal costs associated with closing office facilities and reduction of workforce to achieve operational efficiencies, long-term incentive compensation, and pension expense.
(e)	Adjusted Pro Forma Free Cash Flow reflects cash generated from operating activities, less capital expenditures, adjusted to exclude the impact of cash used to repurchase stock option awards in the May 2019 stock tender.

Earnings Conference Call Information

Thryv will host an investor conference call at 12 p.m. CDT (News - Alert) on Wednesday, November 6, 2019. Individuals within the United States can access the conference call by dialing (888) 603-6873. International participants should dial (973) 582-2706. The passcode is: 3494807.

Basis of Presentation and Non-GAAP Financial Measures

The financial information accompanying this release provides a reconciliation of GAAP to non-GAAP and adjusted pro forma non-GAAP results. Thryv believes that the use of non-GAAP financial measures provides useful information to investors to gain an overall understanding of its current financial performance. Specifically, Thryv believes the non-GAAP results provide useful information to management and investors by excluding certain nonrecurring items that Thryv believes are not indicative of its core operating results. In addition, non-GAAP financial measures are used by management for budgeting and forecasting as well as subsequently measuring Thryv's performance, and Thryv believes that non-GAAP results provide investors with financial measures that most closely align to its internal financial measurement processes.

About Thryv^®

Thryv^® builds and owns the simple, easy-to-use software that helps small business owners with the daily demands of running a business; and allows them to take control and be more successful. Our SaaS product, Thryv, provides modernized business functions allowing them to manage their time, communicate with clients, and get paid. These include building a digital customer list, communicating with customers via email and text, updating business listings across the internet, accepting appointments, sending notifications and reminders, managing ratings and reviews, generating estimates and invoices, processing payments, and issuing invoices and coupons.

Thryv delivers business services to more than 400,000 small businesses across America that enable them to compete in today's economy.

Thryv also provides consumer and marketing services through our market-leading search, display and social products-and connects local businesses via The Real Yellow Pages® from the over 25 million monthly visitors of DexKnows.com®, Superpages.com® and yellowpages.com search portals; and local print directories. For more information about the company, visit thryv.com.

Forward-Looking Statements

Some statements included in this release constitute forward-looking statements. Statements that include the words "may", "will", "could", "should", "would", "believe", "anticipate", "forecast", "estimate", "expect", "preliminary", "intend", "plan", "project", "outlook" and similar statements of a future or forward-looking nature identify forward-looking statements. You should not place undue reliance on these statements, as they are not guarantees of future performance. Forward-looking statements provide current expectations with respect to our financial performance and future events with respect to our business and industry in general. Forward-looking statements are based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the risks related to the following: the Company's ability to maintain adequate liquidity to fund operations; the Company's future operating and financial performance; limitations on our operating and strategic flexibility and the ability to operate our business, finance our capital needs or expand business strategies under the terms of our credit facilities; our ability to retain existing business and obtain and retain new business; general economic or business conditions affecting the markets we serve; declining use of print yellow page directories by consumers; our ability to collect trade receivables from clients to whom we extend credit; credit risk associated with our reliance on small and medium sized businesses as clients; our ability to attract and retain key managers; increased competition in our markets; our ability to obtain future financing due to changes in the lending markets or our financial position; our ability to maintain agreements with major Internet search and local media companies; reduced advertising spending and increased contract cancellations by our clients, which causes reduced revenue; and our ability to anticipate or respond effectively to changes in technology and consumer preferences. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by such cautionary statements.

If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate. All forward-looking statements included in this press release are expressly qualified in their entirety by the foregoing cautionary statements. These forward-looking statements speak only as of the date hereof and, other than as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

¹ SaaS Products consists of Thryv and Thryv Leads.

View source version on businesswire.com: https://www.businesswire.com/news/home/20191029006107/en/

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