Issue: Major Restructuring Aimed at Achieving
News: R.H. Donnelley will shed some
major pieces of its business in order to improve its earnings and be put
in a better position for long-term growth. The company announced that
Bell Atlantic will immediately buy out its New York sales contract, which
was to run through 2005.
RHD will also sell
its proprietary Yellow Pages directory, Cincinnati One Book, to Yellow
Book USA. In addition, RHD has extended its relationship with Sprint Corp.
through 2010. That agreement covers Sprint's Centel Directory Co. in Florida,
and gives RHD exclusive rights to sell print and electronic products in
the markets currently served. RHD recently launched a new Internet marketing
unit called Get Digital Smart, which has been testing a dedicated approach
to Internet sales in Florida.
The company will get
a one-time cash boost of $125 million from the Bell Atlantic buyout, $100
million of which it plans to use for a stock repurchase. The restructuring
produces a one-time gain totaling $85 million.