Local Insight Regatta Holdings, Inc. Reports Third Quarter 2009 Results

DENVER, Nov. 12 /PRNewswire/ -- Local Insight Regatta Holdings, Inc. ("LIRH"
or the "Company") today announced consolidated results for the three and nine
months ended September 30, 2009.

"We delivered solid results for the quarter, reflecting our organization's
ability to offset pressure in certain areas, including national sales and bad
debt, with continued implementation of cost optimization initiatives," said
Scott Pomeroy, director of LIRH. "I am pleased with the benefits of early
execution on our leads-based, Pay4Performance model. As a result, our
sequential EBITDA-as adjusted results continued to ramp as expected."

Financial Summary

LIRH reports financial results prepared in accordance with accounting
principles generally accepted in the United States ("GAAP"). In addition,
LIRH presents certain non-GAAP measures. These non-GAAP measures are
described and are reconciled to the corresponding GAAP measures in the
accompanying financial schedules. LIRH does not intend for the non-GAAP
information to be considered in isolation from or as a substitute for GAAP
measures.

The condensed consolidated financial statements include the results for LIRH,
Local Insight Yellow Pages, Inc. ("LIYP") and The Berry Company LLC ("The
Berry Company") for the three and nine months ended September 30, 2009. The
Berry Company acquired substantially all the assets of the Independent Line of
Business division of L.M. Berry and Company (the "Berry ILOB") on April 23,
2008; as such, results for the nine months ended September 30, 2009 and 2008
are not comparable. On June 30, 2009, LIYP merged with and into The Berry
Company. For more information, please see LIRH's Quarterly Report on Form
10-Q for the quarter ended September 30, 2009.

For the quarter ended September 30, 2009, LIRH reported $144.2 million in
revenue and net loss of $1.1 million. For the nine months ended September 30,
2009, LIRH reported $434.2 million in revenue and net loss of $12.4 million.

EBITDA-as adjusted was $26.9 million in the third quarter of 2009, resulting
in an EBITDA-as adjusted margin (EBITDA-as adjusted, divided by revenue-as
adjusted of $145.7 million) of 18.5 percent. For the nine months ended
September 30, 2009, EBITDA-as adjusted was $74.0 million, resulting in an
EBITDA-as adjusted margin of 16.7 percent, based on year-to-date revenue-as
adjusted of $444.3 million. LIRH defines "EBITDA-as adjusted" as net income
(loss) before interest, income taxes, depreciation and amortization, purchase
accounting adjustments, other non-cash items and certain non-recurring costs.
LIRH defines "revenue-as adjusted" as revenue before purchase accounting and
certain other adjustments.

Unlevered free cash flow, defined as EBITDA-as adjusted less non-cash and
non-recurring items and less property and equipment, net additions, was $60.5
million for the nine months ended September 30, 2009. A significant portion
of the capital expenditures related to investments in the Company's new
technology platform.

At September 30, 2009, LIRH had total debt (in millions) of:

Bank Credit Facilities $322.2
Bank Revolver 11.0
Notes Outstanding 210.5
-----
$543.7
=====

For the nine months ended September 30, 2009, debt repayments of $26.7 million
were made on LIRH's credit facilities. At September 30, 2009, the fixed rate
portion of LIRH's capital structure approximated 39 percent. LIRH's average
cost of debt, based on the weighted average interest cost for the nine months
ended September 30, 2009, was 8.7 percent.

Operating Results

During the third quarter, LIRH continued its focus on driving current year
results by executing on the revenue and cost initiatives which began in late
2008 and have continued through 2009. LIRH also focused on accelerating
mobilization efforts to introduce the Company's new sales and service model
early in 2010. The new model, which has been designed to allow the Company
year-round "touch points" to create and monitor advertising programs for
clients, is expected to deliver measurable leads through high quality,
relevant print and digital products.

Same store ad sales declined by 5.3 percent for the quarter and 4.1 percent
year-to-date. Total sales is comprised of approximately 90 percent local and
10 percent national sales. Local ad sales declined 3.7 percent for the
quarter and 3.1 percent year-to-date, reflecting the benefit of LIRH's
multi-platform and Pay4Performance solutions. National ad sales contributed
approximately a point and a half and a point of decline in third quarter and
year-to-date results, respectively. LIRH's bad debt rate for the three and
nine months ended September 30, 2009 was 4.9 percent and 3.8 percent,
respectively.

Third Quarter Conference Call

A conference call will be held Thursday, November 12, 2009, at 11 a.m. Eastern
Time. The domestic dial-in number is 800.946.0774 and the international
number is 719.325.2234. The participant passcode is 6440252. Please call 10
minutes in advance to facilitate an on-time start.

Please note: All statements made by LIRH officers or directors on this call
are the property of LIRH and subject to copyright protection. Recording of
the call is prohibited without the express written consent of LIRH.

About Local Insight Regatta Holdings, Inc.

Local Insight Regatta Holdings, through its subsidiary The Berry Company LLC,
is a leading provider of local search solutions, generating leads for its
advertising clients and enabling consumers to efficiently find the products
and services they need. The Berry Company serves approximately 300,000
advertising clients in 42 states, publishing nearly 900 print Yellow Pages
directories on behalf of approximately 130 telco and other customers. As an
authorized reseller of YELLOWPAGES.com(TM) in all of its markets, The Berry
Company provides its clients with online listings and video advertising
through this leading national Internet Yellow Pages site. The Company also
provides small and medium-sized businesses with search engine marketing and
optimization, and is a Google(TM) AdWords Authorized Reseller.

For more information, please see www.localinsightregattaholdings.com. Regatta
is a wholly-owned, indirect subsidiary of Local Insight Media Holdings, Inc.

Local Insight Media Holdings, Inc. is a portfolio company of Welsh, Carson,
Anderson & Stowe, or WCAS. Since its founding in 1979, WCAS has organized 15
limited partnerships with total capital of over $20 billion. Since its
inception, WCAS has invested in more than 150 companies in its target
industries and has funded over 650 follow-on acquisitions.

Safe Harbor for Forward-Looking and Cautionary Statements

This press release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In some cases, forward-looking
statements can be identified by terminology such as "may," "will," "should,"
"expects," "intends," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue," "assumption" or the negative of these
terms or other comparable terminology. Regardless of any identifying phrases,
these statements relate to future events or our future financial performance,
and involve known and unknown risks, uncertainties and other factors that may
cause our actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of activity,
performance or achievements expressed or implied by these forward-looking
statements. Although we believe that the expectations reflected in these
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements.

The following important factors, among others, could cause such a difference:
(i) declines in our revenue; (ii) the loss of any of our key customer
agreements or our inability to enforce or fully realize our rights under those
agreements; (iii) impairment of our rights, or a decrease or cessation of
payments to us, under existing agreements if bankruptcy proceedings were
brought by or against the parties to such agreements or certain third parties
and any of those agreements are rejected or payments to us are challenged as
part of those proceedings; (iv) a declining usage of printed Yellow Pages
directories or a decrease in the number of businesses that advertise with us;
(v) the effects of the economic recession, which is causing us to experience
declining revenue and to incur increased bad debt expense, and of war,
terrorism or other catastrophic events; (vi) increased competition from
incumbent and independent Yellow Pages directory publishers, Internet-based
advertisers and search engines, as well as other types of media; (vii) rapid
technological developments and changing preferences in the Yellow Pages
publishing and advertising industries; (viii) the effect of competition in
local telephone service on the incumbent local exchange carriers', or LECs',
current leading positions in the markets we serve; (ix) the impact of union
organizing activity; (x) disruptions to our operations caused by our
conversion to a new process management and production platform and integrating
our information technology systems and processes; (xi) our dependence on
ability to maintain satisfactory relationships with third party service
providers; (xii) the effect of extending credit to small and mediumsized
businesses; (xiii) a decline in the performance of third party certified
marketing representatives, which coordinate sales of advertising to national
accounts or a decision by these representatives to reduce or end their
business with us; (xiv) the loss or impairment of our intellectual property
rights; (xv) changes in, or the failure to comply with, government
regulations, including franchising laws, accounting standards, zoning laws,
environmental laws and taxation requirements; (xvi) future changes in
directory publishing obligations, and additional regulation regarding use of
the Internet, data and data security; (xvii) the possibility that material
weaknesses may exist when we report on the effectiveness of our internal
control over financial reporting; (xviii) the loss of key personnel or
turnover among our sales representatives; (xix) fluctuations in the price or
availability of paper; (xx) national or local economic or business conditions
that affect advertising expenditures by businesses and individuals or consumer
trends in the usage of our products; (xxi) risks related to our substantial
indebtedness, the substantial indebtedness of our affiliates and our senior
subordinated notes; (xxii) the increased risk regarding our ability to
maintain compliance with our debt covenants due to the current economic
downturn and expected print revenue declines; (xxiii) continued or increased
disruption in the credit and equity markets; (xxiv) the failure of our
Pay4Performance advertising solution or our new sales and service model to
deliver anticipated revenues, or delays in implementing our new sales and
service model; and (xxv) our failure to realize anticipated savings from our
on-going cost optimization efforts.

These and other risks and uncertainties are described in detail in our Annual
Report on Form 10-K for the year ended December 31, 2008, as well as our other
periodic filings with the SEC, which are available on the SEC's internet site
(http://www.sec.gov). Investors, potential investors and other readers are
urged to consider these factors carefully in evaluating the forward-looking
statements and are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements made herein are
only made as of the date of this press release, and LIRH undertakes no
obligation to publicly revise or update such forward-looking statements to
reflect events or circumstances that occur after the date of this press
release or to reflect the occurrence of any unanticipated event.

LOCAL INSIGHT REGATTA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(in thousands)

Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----
Revenue $144,187 $135,951 $434,248 $290,319
Operating expenses:
Cost of revenue 23,744 32,505 74,805 101,968
Publishing rights 70,813 73,263 213,716 131,694
General and
administrative
expenses 24,666 31,529 84,773 65,926
Consulting
fees - affiliate - 2,720 - 7,273
Depreciation and
amortization 12,702 15,793 38,004 36,378
------ ------ ------ ------
Total operating
expenses 131,925 155,810 411,298 343,239
------- ------- ------- -------
Operating income
(loss) 12,262 (19,859) 22,950 (52,920)

Other expenses 13,744 14,799 41,621 36,316
Income tax benefit (334) (12,840) (6,254) (33,220)
--- ------ ----- ------
Net loss $(1,148) $(21,818) $(12,417) $(56,016)
===== ====== ====== ======

The nine month periods as presented are not comparable as the Company
acquired the Berry ILOB on April 23, 2008. Accordingly, the 2009 period
reflects the Company's ownership of the Berry ILOB for the full nine
months ended September 30, 2009, compared to its ownership of the Berry
ILOB only from the date of acquisition (April 23, 2008) during the nine
months ended September 30, 2008.

LOCAL INSIGHT REGATTA HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
UNAUDITED
(in thousands)

September 30, December 31,
2009 2008
---- ----
Assets
Current assets $98,442 $126,626
Property and equipment, net 23,920 20,477
Assets held for sale 920 2,084
Intangible assets, net 388,746 425,146
Goodwill 279,090 279,090
Deferred financing costs and other assets, net 16,242 17,645
------ ------
Total Assets $807,360 $871,068
======== ========

Liabilities and Stockholders' Equity
Current liabilities:
Current portion of debt $32,965 $29,950
Accounts payable, accrued
liabilities and other 56,889 71,364
Due to affiliates - 7,395
--- -----
Total current liabilities 89,854 108,709

Long-term debt, net of current portion 482,374 509,195
Deferred income taxes and other long-
term liabilities 84,276 90,278
------ ------
Total Liabilities 656,504 708,182

Stockholders' equity 150,856 162,886
------- -------
Total Liabilities and Stockholders'
Equity $807,360 $871,068
======== ========

LOCAL INSIGHT REGATTA HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(In thousands)

Nine Months Nine Months
Ended Ended
September 30, September 30,
2009 2008
---- ----
Operating Activities
Net loss $(12,417) (56,016)
Adjustments to reconcile
net loss to net cash provided
by operating activities:
Depreciation and amortization
expense 43,762 113,003
Deferred income taxes (6,254) (40,838)
Change in uncertain tax
positions - 7,411
Provision for doubtful
accounts 16,484 6,745
Other 5,099 5,955
Changes in operating assets
and liabilities, net of effects
of acquired businesses (26,198) (8,666)
------ -----
Net cash provided by operating
activities 20,476 27,594
------ ------

Investing Activities
Acquisition of subsidiary, net
of cash acquired - (241,970)
Proceeds on sale of property and
equipment 806 -
Acquisition of property and equipment (10,822) (2,515)
------ -----
Net cash used in investing activities (10,016) (244,485)
------ -------

Financing Activities
Proceeds on revolving credit facility - 33,600
Repayments on revolving credit facility (15,600) (15,500)
Proceeds on issuance of term loan - 301,350
Repayments on term loan (11,137) (66,838)
Debt financing costs - (12,392)
--- ------
Net cash provided by (used in)
financing activities (26,737) 240,220
------ -------

Net increase (decrease) in cash
and cash equivalents (16,277) 23,329
Cash and cash equivalents, beginning
of period 19,421 1,758
------ -----
Cash and cash equivalents, end of period $3,144 $25,087
====== =======
Supplemental cash flow information:
Cash paid for interest $30,993 $25,682

The nine month periods as presented are not comparable as the Company
acquired the Berry ILOB on April 23, 2008. Accordingly, the 2009 period
reflects the Company's ownership of the Berry ILOB for the full nine
months ended September 30, 2009, compared to its ownership of the Berry
ILOB only from the date of acquisition (April 23, 2008) during the nine
months ended September 30, 2008.

LOCAL INSIGHT REGATTA HOLDINGS, INC.
RECONCILIATION OF NON-GAAP ITEMS
(in thousands)

EBITDA and EBITDA-as adjusted
LIRH presents calculations of EBITDA (defined as net income (loss) before
interest, income taxes, depreciation and amortization) and EBITDA-as adjusted
(defined as EBITDA excluding adjustments for purchase accounting, other
non-cash items and certain non-recurring costs permitted in calculating
covenant compliance under our indenture and credit facilities, subject to
certain limitations. Management uses these measures as an indicator of our
operating performance and because certain covenants in LIRH's senior secured
credit facilities contain ratios based on these measures on a rolling four
quarter basis. In addition, LIRH believes that the presentation of EBITDA,
EBITDA-as adjusted and EBITDA-as adjusted margin are helpful in highlighting
operational trends because these measures exclude certain non-cash charges and
other non-operating items that are not representative of LIRH's ongoing
business operations.

Unlevered Free Cash Flow
LIRH presents calculations of unlevered free cash flow (defined as EBITDA-as
adjusted, less non-cash and non-recurring items and less property and
equipment, net additions). Management uses the unlevered free cash flow
measure as an estimate of excess cash generated by operations before debt
servicing costs.

Revenue-as adjusted
LIRH presents calculations of revenue-as adjusted (defined as revenue plus pro
forma adjustments for non-cash items) for purposes of deriving EBITDA-as
adjusted margin.

EBITDA, EBITDA-as adjusted, EBITDA-as adjusted margin and unlevered free cash
flow are not indicators of financial performance under GAAP or a measure of
liquidity and may not be comparable to similarly captioned information
reported by other companies. In addition, they should not be considered as
alternatives to, or more meaningful than, loss before income taxes, cash flows
from operating activities or other traditional indicators of operating
performance. EBITDA, EBITDA-as adjusted and unlevered free cash flow are
reconciled to net loss as follows (in thousands):

LOCAL INSIGHT REGATTA HOLDINGS, INC.
RECONCILIATION OF NON-GAAP ITEMS
(in thousands)

Three-Months Nine-Months
Ended Ended
September 30, September 30,
EBITDA 2009 2009
---- ----

Net income (loss) $(1,148) $(12,417)
Income tax benefit (334) (6,254)
Interest, net 13,744 41,621
Depreciation and amortization 12,702 38,004
Purchase accounting:
Favorable sales contracts - 2,763
Deferred directory costs margin 192 2,997
Deferred revenue written off in
purchase accounting - 1,620
--- -----
EBITDA 25,156 68,334
Non-cash:
Impairment charges 273 273
Share-based compensation 87 387
Non-recurring charges 1,412 5,031
----- -----
EBITDA-as adjusted $26,927 $74,024
====== ======

Unlevered Free Cash Flow
EBITDA-as adjusted $26,927 $74,024
Non-cash:
Impairment charges 273 273
Share-based compensation 87 387
Non-recurring charges 1,412 5,031
Property and equipment, net additions 3,397 7,808
----- -----
Unlevered free cash flow $21,758 $60,525
====== ======

Revenue - as adjusted
Revenue $144,187 $434,248
Purchase accounting and other
adjustments 1,555 10,035
----- ------
Revenue - as adjusted $145,742 $444,283
======= =======

SOURCE Local Insight Regatta Holdings, Inc.

Investors, Brooke Martellaro, +1-303-867-1667,
brooke.martellaro@localinsightmedia.com, Media, Pat Nichols, +1-303-867-1651,
pat.nichols@localinsightmedia.com, both of Local Insight Regatta Holdings,
Inc.