R.H. Donnelley Corporation, self-billed as a leading Yellow Pages publisher and online, local search company, is faltering following the release of first quarter financial results. Although revenues reached $675 million, up 2 percent from the same quarter in the prior year, it was unable to overshadow a first quarter net loss of $1.6 billion. That figure reflects a goodwill impairment charge of $2.5 billion, without the effects of which net income would have been $15 million. Adjusted free cash flow in the quarter was $92 million, and RHD adjusted EBITDA posted strong at $375 million, though with an outstanding debt of nearly $10 billion, investor confidence is at a low.

In response, RHD recently announced its intention to refinance the Dex West credit facility and amend a credit agreement with R.H. Donnelley Inc. that it hopes will provide additional fiscal flexibility, and extend the maturity date of the revolving credit facility. Regarding this matter, RH Donnelly CEO David Swanson offered this reassurance: “We are launching a series of refinancings that are expected to reduce near-term mandatory debt repayments, extend our maturity profile and reduce debt levels. These actions provide us with greater flexibility to navigate through this business cycle and manage the business for sustainable growth when a better climate returns.”

According to Zack’s Equity Research Analysts, shares of RHD have been rated a Hold following the release of first quarter 2008 financial results. They cite the recent “economic slowdown” as a cause for its poor prognosis, stating that RHD is currently trading at more than 15 times its 2008 EPS estimate. Despite assurances made by the company, an overall caution has been given.

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