Live Ventures Incorporated · NASDAQ:LIVE
Live Ventures — YP NET — Investor Day (April 2004)
90 slides from Live Ventures's investor day presentation, Apr 23, 2004
Slide 1: Welcome to YP Corp.'s Investor/Analyst Meeting
y= Welcome to YP Corp.’s Investor/Analyst Meeting April 23, 2004 a
Slide 2: YP Corp. Investor/Analyst Meeting
, = 4 YP Corp. Investor/Analyst Meeting April 23, 2004 Roger Bedier — Investor Relations SS
Slide 3: Getting Acquainted
, = Aa Getting Acquainted | @ Please wear your nametags. @ We want to get to know you. @ We want you to know us.
Slide 4: Angelo Tullo, Chairman/CEO
, = a8 Angelo Tullo, Chairman/CEO Business Model/Strategy/Outlook im Overview Market Size/Growth/Position @ Recent Marketing Initiatives/Results & The Competitive Landscape Se
Slide 5: Call Center Manager Penny Spaeth
Call Center Manager : Penny Spaeth - Review of Operations @ Ensuring Customer Satisfaction @ The Outbound/Inbound Calling Processes @ Quality Control Review & Training/Turnover il Employee/Customer Feedback SS
Slide 6: Overview of System Architecture
@ Overview of System Architecture = Website Improvements @ Search Engine Development Plans Sn
Slide 7: David Iannini - CFO
, = a8 David lannini— CFO Financial Review @ Economics of Business Model @ Recap of Financial Performance @ Understanding our Financial Statements Se
Slide 8: Angelo Tullo - Closing Remarks
, = a8 Angelo Tullo — Chairman/CEO @ Closing Remarks ™@ Questions and Answers @ Panel of Speakers Sn
Slide 9: Program Procedures
, = a8 Program Procedures @Each speaker will introduce the one following. @ Please hold questions until all speakers are finished. Sn
Slide 10: Schedule: Tour of Operations
ee a ah 10:30 AM Tour of Operations/Website Demonstration 11:30 AM CEO Luncheon or Golf Event A
Slide 11: Expanded Communications
, = Aa Expanded Communications ! @ This meeting is being Webcast live @ Replay available for two weeks @ Access Number available on our Website: www.YP.Com a
Slide 12: Contents of Investor Packet
, = a8 Contents of Investor Packet YP Corp. Fact Sheet Latest 10Q Recent Press Releases Speaker Biographies Chairman's Letter to Shareholders a a a a a a Sample of Direct Marketing Solicitation SS
Slide 13: Interest in YP Corp.: Less Than One Year Ago
Interest in YP Corp. : Investment Community LESS THAN ONE YEAR AGO ll No Research Coverage No Institutional Holders & Minimal Investor Communication Programs ee
Slide 14: Interest in YP Corp.: Today
Interest In YP Corp. q Investment Community TODAY Research Coverage Initiated & 20 Identified Institutional Holders @ Owning Over 30% of Shares Outstanding @ Expanded Investor Communication Programs @ Fact Sheet & Investor Presentation Available on Website @ Appearance at Conferences, Individual, an
Slide 15: Forward-looking Statement Disclaimer
: Forward-looking a8 Statement Disclaimer In this meeting we will discuss YP Corp.’s business outlook, which contains forward-looking statements. These particular forward-looking statements and all other statements that may be made in this meeting that are not historical facts, are subject to a numb
Slide 16: Forward-looking Statement Specifics
Statement Specifics : Forward-looking @ Overall Market Growth @ Future Revenues & Margin Expectations @ Capital Expenditure Plans — Marketing/Pricing Initiatives lm Customer Response Rate @ Tax Rate Estimates & Dividend Expectations ee
Slide 17: Disclaimer
, = a8 Disclaimer: During the course of this presentation we may discuss YP Corp.’s business outlook, which contains forward-looking statements. These particular forward-looking statements AND all other statements that may be made during this presentation that are not historical facts, are subject t
Slide 18: YP Corp. Business Review
y= YP Corp. Business Review Investor/Analyst Meeting April 23, 2004 Angelo Tullo CEO
Slide 19: YP Corp.
a8 YP Corp. Consistent Profit Consistent Growth Cash Rich Undervalued in the Marketplace Se
Slide 20: Slide 20
Slide 21: Yellow Pages search
Yoon Pages [Seaenty. —CatagoworBusness Name ‘searchin. oy. a c FinditNow America's Online Yellow Pages ‘obi yelow page= celular phone at Seatenspeciany 20
Slide 22: Return on your investment
Retum on your investment. America's Online Yellow Pages a1
Slide 23: YP.com listings
YP.com =i Retum on your Result or" RESTAURANT Preferred Listings aceasta ci ine CASABINNCA PIZZERIA SoswsrmHst NEWYORK, NY 10019 DA UMBERTO'S RESTA torwi7T4st NeW YORK,NY 10011 214 10TH AVE NEW YORI Nr 10011, investment. inser ar2s wdo ip oss 0303 wdo Gin aa0se wdo Basic Listings savers cetera FEET
Slide 24: America's Online Yellow Pages preferred listing
America’s Online Pretend sms) New} aun saw NEW YOI newvoy YP.com Prefered Listing xara er tsoass CASABIANCA PIZZERIA soavesTTH st NEWYORK NY 10019 (1 3973725 Here st Casablanca Pazera we ae afl enice and salads. ur restaurant offers a reladng dine-in area fusiness Hours Sunday 10.000m Monday 10:00am
Slide 25: Listing detail screens
soawsrte| NeWvoR DUMBER tarwirTy NEWYORK pravarn NeW vORK STOW BRO, NewvoRK 2506 3A CASABIANC/ sia wsrT4st NEWYORK NY 10} (i) 3078725 ‘Raatona Compa NeW YORK NF 10028 [3 2con Tot ree Cok “in| {is cate aFREE sence pe ‘acoue Phen © Automates System F coietayou ate using a latup connection ‘GORGIOS TRA
Slide 26: Slide 26
Slide 27: Additional Products
, = a8 Additional Products = QuickSite™ Packages = Internet Dial-Up Package (IDP) Sn
Slide 28: Customer Acquisition
a8 Customer Acquisition = Direct Mail Marketing a 3 Party Verification = Confirmation Card a Mini-Webpage™ Setup = Money Back Guarantee Se
Slide 29: Market Position and Growth Prospects
Market Position and Growth Prospects i) #1 in Yellow Page Internet paying advertising customer count' with: ™ 283,000 activated customers ™ 253,000 paying customers Advertising customer growth of 84.% over one year Added over 9,000 customers per month, on average, during calendar 2003 Substantial ad
Slide 30: Competitive Advantages
, = a8 Competitive Advantages The principal competitive advantages of YP.Net are: = Low customer acquisition cost. = Low cost and convenient billing methods. = Recognized Brand = Large Distribution Network = One Market Focus = Outstanding Customer Service ee
Slide 31: Internet Competitive Monthly Pricing Comparison
; Internet Competitive Monthly Pricing Comparison @ YP.Net- $21.95- $34.95. & Switchboard- $35.00 tm Dex Media- $60.00 lm Smart Pages (Southwestern Bell)- $39.00- $49.00 @ Super Pages (Verizon)- $55.00- $90.00 ee
Slide 32: Competitive Advantages of Internet Yellow Pages Over Print
q Competitive Advantages of Internet Yellow Pages Over Print To the advertiser: = Better Results, Lower Cost = Flexible Ad Content. To the user: = More current listing information. = Quick access = Fast and easy searching via desktop computer, laptop, PDA and cell phone. = Access to features such as
Slide 33: YP.Com Internet Yellow Pages versus Local Search
q YP.Com Internet Yellow Pages versus Local Search Local Search: Web Search Conversion Zip Code Fallacy Advertising Accountability High Learning Curve Tracking Nightmare YP.Com: = Tried & True Yellow Pages Search Model = Virtually No Learning Curve = Original “Local Search” = Simple Proven ig Method
Slide 34: CEO Summary
a8 CEO Summary = Branding = Continued Growth = Additional Countries = Dividends for Shareholders = Self Funded = Low PE Ratio Se
Slide 35: YP Corp. Operations Review
y= YP Corp. Operations Review Investor/Analyst Meeting April 23, 2004 Penny Spaeth, Call Center Manager ‘
Slide 36: Ensuring Customer Satisfaction
, = a8 Ensuring Customer Satisfaction The mission of the Customer Care Center is to provide 100% Customer Satisfaction. This is how we achieve that goal: Se
Slide 37: Customer Care Organization
, = a8 Customer Care Organization [ait | eseo ees << Sn
Slide 38: Outbound Calls
? Outbound Calls as Verify New Accounts @ New customers are generally called within 30 days lm New accounts are verified @ Business information gathered for Mini-WebPage™: Company name and address Toll free and FAX numbers Website URL and email Hours of operation 40 word description @ Customer is re
Slide 39: Outbound - Proofreading
: Outbound — Proofreading a8 Ensures Accuracy = All updated accounts are sent to the Proofreading Department before the IAP appears on YP.Com ™ CSRs are managed to the percentage of errors @ Errors are corrected and the listing is updated on YP.Com ™ CSRs get feedback on errors Se
Slide 40: Outbound Statistics
? Outbound Statistics a8 Confirm Effectiveness @ As of March 31% 2004, 277,211 advertisers have been contacted and MiniWeb Page™ built for them @ 24 CSRs on staff. Due to increased efficiencies, the Outbound department has been able to reduce staff and maintain the productivity of twice the headcoun
Slide 41: Outbound Management
: Outbound Management: a8 Close Monitoring H 1:8 ratio & Daily supervisor & CSR meetings Daily supervisor & manager meetings & Monitoring by supervisors & managers (side by side and blind) Daily goals @ Management review of results
Slide 42: Inbound Switch
a8 Inbound Switch Inbound Switch Design Is Customer Friendly @ Designed after the Southwest Airline’s model @ Calls routed directly into Customer Care & Option to leave a voicemail or email @ CSRs have voicemail for personal touch and ownership ee
Slide 43: Inbound CSRs
: Inbound CSRs a8 Are Empowered ™ Save customers through education = Empowered to grant credit within YP guidelines = Empowered to cancel customers Se
Slide 44: Inbound Customer Satisfaction
: Inbound Customer a8 Satisfaction Inbound Management Ensures Customer Satisfaction 1:8 ratio @ Daily supervisor & CSR meetings ® Daily supervisor & manager meetings = Monitoring by supervisors & managers (side by side and blind) @ Daily goals m Management review of results 4
Slide 45: Inbound Statistics
, = Inbound Statistics Inbound Statistics Are Carefully Monitored (15,000-20,000 calls per month) Key Performance Average Industry Goal & YP Corp. Indicators Standards” Actual Results Abandonment Goal 3-10% 4% -5% (rarely met) Attendance 75%-80% 95% (center wide) (rarely met) Attrition 4%-187% Annua
Slide 46: Inbound Process
a8 Inbound Process Inbound Transfer Process Reduces Complaints m Customer escalations = Complaints @ Special circumstances @Credit transfers Transferred if outside CSR credit limits mCustomer Care survey 4
Slide 47: Quality Assurance
a8 Quality Assurance Quality Assurance Provides Additional Satisfaction @ Transfer Process @ Handling of escalated calls @ Credit process ™ Customer Satisfaction Surveys & Majority of customers very satisfied ™@ Kudos for CSRs Se
Slide 48: Quality Assurance
a8 Quality Assurance Quality Assurance Monitoring Ensures High Standards Are Met Monitoring Inbound and Outbound = “Q-Tips” ™ CSR Supervisors coach CSR @ Tracking of recurring issues = Calibration SS
Slide 49: Quality Assurance
a8 Quality Assurance Quality Assurance is Closely Monitored & Daily meetings with supervisor and manager = Completely separate from inbound and outbound management to avoid conflict of interest @& Monitor Forms and personnel are also reviewed by supervisor to ensure accuracy SS
Slide 50: Training
a8 Training Training Develops CSR and Management Skills @ Outbound training 3 days @ Inbound training 5 days = QA training 5 days = Both classroom and side-by-side ™ Cross training of entire team @ Ongoing training SS
Slide 51: Supervisor Development
, = a8 Supervisor Development Supervisor Development is Crucial to Our Success m Weekly supervisors’ development meetings @ Daily meetings with manager @Calibration @ Observation SS
Slide 52: Training
a” Training Initial Training Begins a Career— Ongoing Training Ensures Success & Former College Educator @ Develops and updates all training material for company to ensure consistency = Implements initial training, keeps relationship with trainee after graduation @ Researches Yellow Page industry &
Slide 53: Excellent Employee Retention
: Excellent Employee a* Retention 24% annual attrition vs. industry average of 94%- 187% Through ... lm Employee empowerment @ Restricted Stock @ Training = Communication @ Acknowledgement @ Fun environment ee
Slide 54: Feedback
a8 Feedback Employee & Customer feedback is valued. ™@ Focus Groups = CSRs meet with Call Center Manager twice a month to address concerns and successes = Meeting minutes are distributed to entire center ™ CSR Meetings = Weekly team meetings with supervisors = Daily one-on-ones with supervisors ee
Slide 55: Feedback
a8 Feedback Employee & Customer feedback is positive. QA surveys @ Majority of customers are extremely satisfied with our level of service @ Many customers ask to speak to supervisors to praise CSRs Testimonials = Customers have called, written emails and letters about our quality service and produc
Slide 56: Employee Satisfaction Survey
Survey Employee Feedback Most Common Responses v Employee Satisfaction Likes Would Change Teamwork Increase my (employee) Management support efficiency Atmosphere Permanent before 90 days Communication Our suggestions/opinion matter ee Covered break area Bench outside
Slide 57: The Call Center
a8 The Call Center @An ever changing environment mRequires continual assessment and change in such a dynamic setting @Helps determine the temperature of our customers and the industry ee
Slide 58: The Call Center
a8 The Call Center The call center is critical to our success. By keeping a pulse on every aspect of the call center, we are able to work efficiently with the direct mail and billing departments to increase revenue and our marketing effectiveness. ee
Slide 59: YP Corp. Technology Overview
y= YP Corp. Technology Overview Investor/Analyst Meeting April 24, 2004 John Raven, Chief Technology Officer
Slide 60: Technology Review: Overview of System Architecture
, = a8 Technology Review Overview of System Architecture Sn
Slide 61: Program Objectives
Program Objectives The Goals: A* (Any data, Any device, Any place, Any time) Highly targeted search delivering fast, accurate and relevant results Intuitive and easy to use user interface consistent with YP philosophy Lowest cost to develop and operate in the industry Quarterly feature release cycle
Slide 62: Competitive Advantage
, = a8 Competitive Advantage The Value Proposition: Faster, Better, Cheaper! @ Low development, implementation and operating costs - cheaper lf Short development cycles - faster ll Extensible and complete product offering - better Integrated with an expansive distribution network - better & cheaper
Slide 63: Organization
, = Organization People, Process, Technology key staffing "Hire to Win" i Highly-experienced and educated high-performers and problem solvers i Diverse and multi-disciplined M@ Core operations, infrastructure and development Bi Aligned capability of the organization with the business delivery agenda
Slide 64: The Technology
The Technology Where the rubber meets the road & Core Operations 1 Marketing Engine 1 Biling System 1 Customer Support System ‘ Intemet Facing Technologies 1m Directory: ‘The platform" I DirecXML: “The interface engine” I hYPsearch "The search engine” 1 Mobile YP: “Any data, Any device Any Place, An
Slide 65: Website Improvements
Website Improvements 4 Maximum Business Value, Results So Far: Increased performance "Improved average page load fiom 6 5 sec. to 1,8 - 24 sec, source: alexa. com" Improved accuracy "Multiple data sources, robust highly targeted search algorithm" Improved reach and visibility "Switchboard, Palm, Ove
Slide 66: Search Engine Development Plans
Search Engine Development Plans On the horizon Distance Radius Search Feature ‘M "Rooftop level and Mobile Handset Locater Accuracy" Continued refinement of synonym feature set mL "Spelichecking and Synonyms" Dominate mobile directory space, expand mobile feature sets “ ‘Listed as Palm Prefered, Dev
Slide 67: Website network architecture
Slide 68: YP Corp. Financial Overview
y= YP Corp. Financial Overview Investor/Analyst Meeting April 24, 2004 David J. lannini, Chief Financial Officer F
Slide 69: Economics of the Business Model
? Economics of the Business Model Average of 1 million mailings per month. Random selection from the 18 million U.S. Business data base. Cost approximately $400,000 per month. Initial order rate — 1% - 2%. Net Advertiser customer growth rate of 5-10 thousand customers per month. Average payback peri
Slide 70: Excellent Financial Performance
Aa Excellent Financial Performance ! Revenues Up 144% t0 $30.8 million Up 162% to $13.9 milion Operating income Up 227% to $9.2 million Up 166% to $4.7 million Operating Incame Margin 30% 34% Net Income Up 114% ta $7.9 million Up 200% ta $3.3 million Net Income Margin 26% 24% Operating Cash Flaw Up
Slide 71: Balance Sheet - Accounts Receivable
=, Understanding Our Financial Statements: a8 Balance Sheet — Accounts Receivable ™ The Company's revenue is generated by customer subscriptions for directory and advertising services. @ The two major methods of billing are telephone billing and direct invoice. ™ The Company is increasing its initia
Slide 72: Balance Sheet - Accounts Receivable: Telephone Billing
y=, Understanding Our Financial Statements: a8 Balance Sheet — Accounts Receivable Telephone Billing ™@ The Company utilizes outside billing companies to transmit billing data, much of which is forwarded to Local Exchange Carriers (LECs) that provide local telephone service. @ These monthly subscrip
Slide 73: Telephone Billing Cycles
, =, Understanding Our Financial Statements: a8 Balance Sheet — Accounts Receivable Telephone Billing Two Billing Cycles per month = 1) Cycle 1 — last week of current month is first billing cycle of following month. Example: May’s first cycle is currently being billed now, in late April. 2) Cycle 2
Slide 74: Telephone Billing: Revenue Recognition
, =, Understanding Our Financial Statements: a8 Balance Sheet — Accounts Receivable Telephone Billing Revenue Recognition: ™@ The Company recognizes revenue based on net billings accepted by the Billing Aggregators. BTNs “Accepted” by Billing Aggregators are recognized as revenue based upon the Bill
Slide 75: Telephone Billing: Bad Debt Reserve
, Understanding Our Financial Statements: Balance Sheet — Accounts Receivable Telephone Billing Bad Debt Reserve: @ Due to the periods of time for which adjustments may be reported by the LECs and the billing companies, the Company estimates and accrues for dilution and fees. The costs are included
Slide 76: Telephone Billing: Holdbacks
, =, Understanding Our Financial Statements: Balance Sheet — Accounts Receivable Telephone Billing Holdbacks: i The billing companies retain certain holdbacks that may not be collected by the Company for a period extending beyond one year. These balances have been classified as long-term assets in t
Slide 77: Remittance/Collection Process: Estimation
, =, Understanding Our Financial Statements: a8 Balance Sheet — Accounts Receivable Remittance/Collection Process Estimation Process @ Funds are remitted to the Company by the billing aggregators based upon negotiated “advance” rates based upon collections history, net of dilution. @ These dilution
Slide 78: Remittance/Collection Process: True-up
, Understanding Our Financial Statements: Balance Sheet — Accounts Receivable Remittance/Collection Process True-up Process | The remittance process is based upon estimates which are “trued-up” within 12-18 months. & The billing companies ultimately remit payments to the Company on the basis of cash
Slide 79: Invoice Billing - Subscriptions
, =, Understanding Our Financial Statements: a8 Balance Sheet — Accounts Receivable Invoice Billing - Subscriptions Invoices sent directly to customers. @ Revenue for billings to certain customers whom are billed directly by the Company and not through the LEC’s, is recognized based on estimated fut
Slide 80: Balance Sheet - Customer Acquisition Costs
Understanding Our Financial Statements: Balance Sheet —- Customer Acquisition Costs These costs represent the direct response marketing costs that are incurred as the primary method by which customers subscribe to the Company's services. Includes costs of printing, mailing, postage etc. of mail soli
Slide 81: Balance Sheet - Intellectual Property
Slide 82: Balance Sheet - Advances to Affiliates
Slide 83: Profit & Loss Statement: Revenue Recognition
Slide 84: Profit & Loss Statement: Cost of Services
Slide 85: Profit & Loss Statement: G&A Marketing
Slide 86: Profit & Loss Statement: Taxes
Slide 87: Balance Sheet - Equity: Restricted Stock
Slide 88: Balance Sheet - Cash Flow
Slide 89: Balance Sheet - Cash Flow: Line of Credit
Slide 90: Attractive Characteristics