Directory Publisher Gets Wrong Numbers
Pick the phrase that best completes this sentence: A Yellow Pages directory is:
a) a useful way to find business phone numbers.
b) a pretty good doorstop.
c) unnecessary if you have Internet access.
If you answered “c,” you’re part of a trend that worries publishers. References to print business telephone directories in the United States declined from 15.1 billion in 2002 to 13.4 billion in 2007, according to a study by the Yellow Pages Association, a trade group.
Executives at Cary-based R.H. Donnelley Corp. say increased use of Internet-based directories is a big reason. While demand for information technology has fueled the Triangle’s economic growth — Cary software developer SAS Institute is the state’s second-largest private company — the boom hasn’t been a boon to all. As more people go online for addresses and phone numbers, Yellow Pages publishers such as Donnelley have a harder time holding on to customers.
Its 2007 numbers don’t look too bad, at first. After posting a loss the previous year, Donnelley netted $46.9 million on revenue of $2.7 billion — a 41% increase on what it reported in 2006. But when the numbers are adjusted for a big acquisition it made in 2006, net revenue actually dropped 8%, and net income fell 71%. Even worse, the company warned that this year will continue the downward spiral. Sales will be flat, at best, and operating income is expected to fall as much as 9%. The company also broke a promise to start paying a dividend because it needs the cash to pay down more than $10 billion in debt.
The slump forced Donnelley to eliminate some jobs earlier this year. More cuts could be coming, but the company won’t provide details. It moved its headquarters in 2003 from New York to the Triangle, where about 600 of its 4,400 employees work.
Donnelley has developed some Internet offerings, but online revenue isn’t enough to offset declining print revenue, says Peter Salkowski of Goldman Sachs. Analysts are divided about whether the downturn is short-term — the soft economy certainly has played a role — or the company is beginning a long-term decline as advertisers shift spending to the Internet. “We believe it’s next to impossible to get customers back into a book, potentially mitigating any recovery,” says Paul Ginocchio of Deutsche Bank Securities.
SILER CITY — Pittsburg, Texas-based Pilgrim’s Pride will close its chicken-processing plant in Siler City by June, idling 836 workers. It blamed rising feed costs, an oversupply of meat and other factors.
MORRISVILLE — About 550 former employees of Morrisville-based Midway Airlines received nearly $54,000 in settlement checks for payroll claims filed by the state Department of Labor when the carrier went bankrupt in October 2003. Most of the checks, which were for unused vacation time, are for less than $85. The money came from sales of company assets.
DURHAM — Becton Dickinson, a Franklin Lakes, N.J.-based medical-equipment maker, plans to expand operations at three plants in Durham, adding about 180 workers during the next five years to bring its employment in the Bull City to about 760.
CARY — TowerCo, which builds and operates wireless-communication towers, agreed to sell as many as 430 to SBA Communications of Boca Raton, Fla., for up to $193.5 million. TowerCo, which has 18 employees, will continue to build and lease towers. The deal is scheduled to close this month.
WAKE FOREST — PowerSecure International, which supplies emergency generators to businesses, sold its Metretek subsidiary for $2.25 million to Mercury Investments of Cincinnati. Melbourne, Fla.-based Metretek helps customers measure the volume of natural gas in pipelines. PowerSecure International employs about 150 here.
APEX — Torrance, Calif.-based Rapiscan Systems, which makes scanners to detect bombs and con- traband, opened a factory that employs about 50.
DURHAM — Commercial printer PBM Graphics was acquired by Houston-based Consolidated Graphics. Terms were not disclosed. The fate of PBM’s nearly 1,000 workers — about half of whom work here — was unclear.
CARY — SAS Institute, which makes data-mining software, bought software maker Teragram, a 40-employee company based in Cambridge, Mass. Terms were not disclosed.
RALEIGH — Red Hat, which sells and services the Linux computer-operating system, agreed to buy Richmond, Va.-based Amentra. Terms were not disclosed. Amentra makes business software.
RESEARCH TRIANGLE PARK — AVI BioPharma, a Portland, Ore.-based drug developer, bought Ercole Biotech for $9 million. Ercole, which is working on a treatment for mus- cular dystrophy, employs eight. AVI plans to maintain the RTP office.
RESEARCH TRIANGLE PARK — Monica Doss, 56, will step down at the end of the month as president of the nonprofit Council for Entrepreneurial Development. She has been president since 1986. CED had not named a replacement.
RALEIGH — New York-based Time Warner Cable will pay the city as much as $4.5 million to change the name of Walnut Creek Amphitheatre to Time Warner Cable Music Pavilion at Walnut Creek. It agreed to a five- year deal with an option to extend it two more years. The money will be split between the city, which owns the 7,000-seat amphitheater, and Beverly Hills, Calif.-based Live Nation, which manages it.
DURHAM — New York-based drug maker Pfizer plans to buy Serenex. Terms were not disclosed. Serenex, which employs about 35, is working on a lung-cancer treatment. Pfizer has not said what will happen to Serenex workers.
RALEIGH — Cherokee Investment Partners, which cleans polluted sites and then develops them, raised $200 million for investments in China, Japan and other countries in the Far East. The company is still studying when and where to make specific investments.
DURHAM — Scynexis, a drug developer, raised $13.5 million in venture capital. Financing was led by Merial Limited, a London-based maker of animal-health products.