ALJJ - Earnings call transcript Q4 2019 | Alj Regional Holdings Inc

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Operator

Good afternoon. And welcome to the ALJ Regional Holdings Incorporated Fiscal Fourth Quarter and Full Year 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Brian Hartman, Chief Financial Officer. ahead. go Please

Brian Hartman

ALJ. you being thank name in teleconference CFO today's Brian our Jess Welcome and CEO in for an for Chairman. for the am investors and My me ALJ and is Hartman Ravich, and I participating With Regional is Holdings.

respect conference regarding with forward-looking XXrd, in begin, include Form our of earnings but I investor other XX-K listening will forward-looking not the the laws. the within statements December review our statements of to meaning limited that Such to to everyone we contain to is statements words and and information With federal release projections, call impact risk expectations similar note filed statements our SEC measures it the about business latest growth, security integration and XXXX. on today's including Before that intentions related this our as expressions. expect was future important communications ask call statement, regarding financial factors presented acquisition, as including well to the our measures, cost-cutting and goals, investor

performance those and Factors reliance should during involve differ risks Exchange You statements results made uncertainties results may that discussed We from or statements as and undue these materially assume in materially certain cause any Form to investor actual are Securities statement. any they not on differ place such with to forward-looking the Commission. can XX-K no actual discussed call. in filed our update obligation this

ended September we'll and update for fiscal the We quarter provide XXXX. will full for then fiscal financial XXXX provide year and XX, high-level guidance a

September at largely of sales and to months the $XX new of and three primarily packaging lower a in XXth, contracts for lower at months XX, for offset the X.X% $XX.X volumes Phoenix, compared XXXX. ALJ The ended at was or planned volumes driven XXXX, million decrease components recognized three by ended $X.X September by Faneuil. million revenue million decrease Carpets

majority share and of September deferred contract. compared of months earnings expense was recognized XXXX. loss of of ALJ million net the intangible The ended loss to a $X.X September for tax XXXX, of $X.XX XX, and to loss the net $X.X a income per share non-cash three per for $X.XX months of non-cash $X.X the million due of one million assets to million $X.X three Faneuil's of and ended write-off related of XX,

significant the mix addition, and In product Faneuil generated three and Phoenix unfavorable that impacted contracts profitability. quarter losses in lower overall had had

implementation $X.X recognition to contracts, XXXX, driven Phoenix, of was months million wind-down $X.X at the Faneuil, of the for September customer million related accounting million, The costs costs of contracts losses XXXX. EBITDA impacted adjusted a generated the that decrease higher XX.X%, the overall and compliance was ended lower new revenue SeptemberXX, recognized months XX, to mix. and $X.X Faneuil. three three unfavorable overall ALJ or At profitability volumes for ended product by a benefits compared standard, existing of decrease at

XXXX, or volume XX, due somewhat to due offset XX, of a planned $XX.X $XXX to packaging customer of decrease by consolidated at X%, lower ALJ new September year contracts. For Faneuil volumes September XXXX million, Phoenix, components for increases recognized million ended the Carpets, ended year $XXX.X lower at to and revenue the compared million, in at

of loss per to and the $X.X of net a XXXX. and recognized net XX, XX, $X.XX ended of September loss loss for September million of ALJ per XXXX, for $XX million $X.XX ended loss share year the share compared year

charge mix loss ended at and somewhat related process product fiscal that contracts of and for Carpet by to XXXX, certain reduction earnings for lower September well at higher Faneuil of Phoenix, significant a losses, expand to portion due initiatives a profitability offset improvement. tax year unfavorable as As XX, in volumes generated as mentioned earlier deferred increased non-cash above, the the cost lower

recognized September items September for a XXXX. XXXX, million the or adjusted adjusted to of the moments $X.X compared $XX.X a million, EBITDA million the for XX, year XX.X%, were by XX, decrease ALJ year of ended EBITDA driven few $XX.X ended Decrease mentioned same ago.

$X.X million debt of consisted to XXXX of loan; cost. an outstanding borrowing our XX, capital had credit. equipment XX, $X.X debt at of was are at million million covenants. term million our on With arrangement. September to total capacity regard and $X.X covenant leases $X.X with compliance Cash million line and of debt financing and XXXX, $XX.X was September credit; on related hand all of XXXX, financing amounts XXXX, we All At At line XX, of are on September any million. September XX, we in exclusive deferred million $XX.X $XX.X of

turnaround loan quarters $X.X to amendment lenders hold. we the were of X fixed to to On provisions XXrd, to leverage million next agreement. December term cushion provided for provided was details amendment filed related take which adjust the allow existing loan with over X term also in an our CEO. specific loan provide to charge and ratios The amendment the new for to additional term X-K several our our the into The participation of conversion

September to $XX.X remained million expenditures totaled outstanding year the unchanged build-out after a XXXX, Faneuil's loans new term support three of ended of transaction. fiscal majority call Capital total centers. XX, The for this was

average verse higher fiscal the for year $X.X capital outstanding interest for due The to totaled XXXX. XX, million fiscal for for in XXXX. million $X.X fiscal million year fiscal working XXXX fiscal verse $X Cash Cash XXXX XX, $X.X ended increase to revolver paid for September borrowings the zero XXXX total ended was compared taxes cash fiscal paid million weighted September our XXXX. facility on interest during

losses use taxable operating continue federal to income. We to offset existing net

at fiscal our forecasting call New which of million reflects fiscal training occurred XXXX. fiscal programs for previously contracts compared incentive are XXXX, $XX from million integration Faneuil, increase an For EBITDA improvement QX $XX center most range The $XX.X during a in related to XXXX, we of and adjusted to of of million customer Mexico. awarded hiring of to

For the $X in cash, interest of initiatives $XX of forecasting Cash to related million. be $X cash to And million And million. of taxes to capital the range to $X be expenditures $X fiscal to million XXXX, cash in range in to range million. range of to are in $X restructuring the costs million. we $X.X the efficiency be million

questions. open We the will call now you. Thank for

Operator

[Operator Instructions]

question Eric Our Investor. Please from a Private first ahead. is Moore, go

Unidentified Analyst

of of they things. was the on $XX new bit we million to relate footfalls the side And little talked Hey, you call just spent if how's more Faneuil specifically Brian? it how call Hey, a wondering I the going out kind centers. about it building the

BrianHartman

more customers customers we Enterprise other centers, And of in time incremental new of in, a brought an that nameplate will new the but been we so then the large, two ones incremental or volume Got three from feel million sense. we've centers Humana there's filled, $XX a added that didn't good we new over seats. The plus that we so seats it, X,XXX we call customers new put contracts, existing the On reputable seats us the left. sourced added few it are made marquee $XX.X that call off itself right what from large it, before has built like pay that and have million choice.

contract quarterly of One to will to we'll that from signed of the a issues that we quarter. regard that provided past loss. we are wind which and a that some acquisition, the Vertex where an as we of had loss in turning we we've in that have be in talked in and and the down did for final we've well. we previously were and end the actually the things With where that a we other to Since with also We've one that related process had time, Fanueil was this about acquisition one contract were That April, in concluded about around. item, March ending two that contracts the there them restructured Vertex loss the go early talked that had of termination. that getting income notice to significant great the them

And third pricing in with of the contract. then in the We're change to here contract. actual discussions the we're also

the basics trying take back into right each at and shed right place we're what's the we that to turn at holding the of time. have sure for or back Make that and look to us KPIs been some the And contracts. sort in and time. that them of profitable exit So contracts go the right to losses structure now pricing, those right those

UnidentifiedAnalyst

filled as Is one, none up contracts I so way a we like just we're bunch sounds the spent mean not if --with-- right -- say excess of $XX it three capacity. million don't It that and we it? restructuring haven't to of losing sounds have like we the the the it's

BrianHartman

center in New a there a we California basically about almost know We call call was peak already. No. had once that in filling, out, fully about and was We've press all we Sacramento great Wichita there. recently sold in existing out fully in one facility just release Mexico sold season a an or Albuquerque, during where Orlando plug-in more is the out the and play been sold

on some center them, had of and the set worth XXX state servers go comes with the several the dollars And and cheaper job it in that brought much call with desk We ready turn so go from to to so programs lights and with seats you up. center over, city. training million

will to facility for ramp the taking this we that continue where play plug as we're a there. and bottom to different up is and right that train to with So drop line comes personnel along tactic us incentives a

UnidentifiedAnalyst

of right but and about on. one. given know acquisition, the had to talk think you. an you we Fanueil at kind of are that I the have There them business? place one the guys the just love at big some hear two you we capital Got one to -- entered the And human Do newly inherited execute contracts on Fanueil to given people in from generally losses

JessRavich

This Hey, Eric. Jess. is

have we in grew at as promote answer people. outside $XX their from the looking with talent. accountability you'll have do million in one basic empowering So company always to to to which to going revenue, right the and to is we over bring $XXX go a go back back within be we But we think needed million the we're We're from and the principles and Faneuil aligned project to shareholders. to managers teams is

is they're at in could the We penalty be what can you what issues? looking What issues? is place not put where that minimum, revenue, we profit. business How, they're which on. the last but starting implementation quarter, process this be earnest looking be gross vetting could in KPI same that So a the at just the business new being-- and that this have to every contract thresholds goes count every quarter our contract EBITDA should the

The have If or much you contracts, the XXXX seat generates mentioned is thing ones EBITDA, sure so and process. it personnel the are make that at the many vetting rolling so we that's of TxDOT, appropriate. the replace issue Humana, hopefully in the seat through and nice contracts revenue and newer you each gone to extent going need MassHealth, to in doesn't, that the implementing much ones so quarter either seats, Brian in have not out generates all that each are the first second are

UnidentifiedAnalyst

me. sorry question for and last Great

middle? in how conservative you guys that on guidance of Just in been aggressive the terms of thinking would about right and terms down the

JessRavich

have is not guidance we well. arranged. that the We Obviously, forecasted know

telling So I when the goes the over we another Metro LA is always little perform that quarter. the is the forecast the range I'd then are about week, where gun-shy contract implementations and rather But the year large think live people point live in and light get. missed have you forecast. transportation the halfway this publicly goes next third at go we what everybody a

We healthcare after quarter. going the We'll contracts live update in that second have implementation. it two

Operator

Company. from The Oppenheimer Leonard go Please next question is ahead. with Jay &

JayLeonard

Hey guys.

one. new I a First What's Well, and independent. Director on on? Where Brian things easy search worked probably status? first. the start? Congratulations that we? do drag. hard are no I longer Where for John. is and know more with going corporates What's the

JessRavich

NAM in years obviously wanted working compliance we'll in regard could who committee additive it's for on from We're are not Anna --we business directors. five of the It's gov for looking has the The side. looked priority. whether gov on out. book call number now get We to inside new we a the It independent someone team on the And be versus because can don't that we deck highest Fanueil know with M&A all someone businesses. NAM is be is straightened hands a looking committee but don't been first business, look and who or center with The that. to with the aspect. at at priority

summer, to But we are the over we are looking as talked we about make acquisition.

priority the of acquisitions new along with that so would skillsets those come independent And the directors.

little a of bit do fill then we do Jay. then discussing we But one. or do we're there's it fill do So one it and that and

JayLeonard

-- Right. I mean more you add what can I definitely mean

JessRavich

You can.

JayLeonard

definitely you know to. if that help everything add I thing will One NASDAQ with can. and

JessRavich

$XXX, It's turn a person directors the have sets adding we doesn't looking every don't independent then we're $XXX, on really-- down that people XXX And want, skill XXX and I are more to mean we lights to at out. pushing the

JayLeonard

it. I'll additional, much it get that just I No. that, looks a build another for get I that element second. spot leave is better an there of

really it's what and things sounds have Faneuil larger to version initiative look and and Carpets like when this. with Because turned happened just where problems of get but it is The getting Anna new looks yes, like to don't least back get it. I take through kind at our I more. And, me of in you're great. lied say Let's at,

not example. does good capacity marquee you You've see simplistic upon new contract within be these have. being should Humana that the building me we we too It or not those. when contracts would that that seem to We as should sense? I adding be And an company got looking Am just on that with. make things for

JessRavich

clients the So some grow. can of

at don't think other, I capacity. Jay. one are And it's Some clients the of of the

or on a a -- or clients. a And salesforce, new places. don't contracts, have people for taking over transportation exchanges any and we We other extent, out the of brought tell them, from corporate number we we're good try health conduit go and to good look, and prospect good not

them, that lose right, build because just to and internal we do do we growth. going You're organic all from

Our clients tremendous. is these organic growth alone of with a number

it's in and going to what more down. because but side play But new look So --we've fallen tremendously. service not on defenses grown some really of on financial clients at we terms in we client had issues implementation. are has taking We've the of

quarter? is one the things than our still talking growing implementations a we worry on So that's Your what stellar ahead of we about don't a of is than it reputation regulator is is How why and we were in scheme. more new of about do just it many you get can so focus is you old. do clients is we on the

did to that selective along the a in to decided CapEx going be we've own as it about it more like business. marquee for plug-and-play available more can or you of jurisdiction And more year. was the able be are to see we has so that location pay us us in the lines a in state run instead going do as third to. to we and both the client going the and build skilled supposed the on forward help Brian Look, last also plug of we in what be is to that Texas from good good wages where But going to be and guess rate And my going is is are a win employees. of talked for city. And We is forward wanted we're either what play. that from centers build go call three was labor,

JayLeonard

question from top $X.X then because the Where XXXX, Okay it's said looking earlier and top sounds that. XXXX XXXX, yet not and but to was million down that XX.X, on is metrics line the what you salesforce at the never at for look it just gets paid you is of the Anna's are was, I when she EBITDA first revenue that were attached EBITDA to X.X the -- sake like for gets revenue profitability that EBITDA like deals not changed, just XX.X,

JessRavich

upon has more and paid based of or up the it's money It up we a question gone make it's gets a we acquisition. a at good call more feel, you me as centers. it's has say we based upon she paid has line. it on spend fit but gone the rich, gets She money. could not as to the Vertex it's It redshirt, contract, She

we a gets As charge. spend charged she capital money

mean between get -- because and less shareholder, pay numbers XX% So day is should think we to if I she is this more want making are she appropriate significantly at largest business loaded. the I business the X% our as into If be we the her the the more get but of fully work. an EBITDA mid end I back the as make up teens numbers will

you so do year. can EBITDA over going $XXX next numbers. do of And we're to revenue of the million

So I margins. and want her want if her we those hit paid incentivized I

JayLeonard

her worried can the like I'd just year us buried contract, just that be, were that giving that last rich get and Listen, offline away of to predicated as on it's get as house. I the the basically some three

JessRavich

paid, to get money. has that it's EBITDA. incentive make on Anna doesn't on paid doesn't contract she no But certainly a take

JayLeonard

Okay, good.

as long -- then So as

JessRavich

been has [Indiscernible] on she If

JayLeonard

looking you gets When at are so it, she fine.

up. So now contract, is vetting your to you're escalator all be there know because biggest all cost. component then are an that's on that for we And got wages going the

JessRavich

Yes.

JayLeonard

versus to so you're the you I that it's because us really focused I want our it hurts debt mean margins are just on we thin up? do sure know it's escalators mean [Indiscernible] of having powerful one have of have instead wages that the to an that contract company one in I the We escalator we that coverage. really go make doing are protect proper thing contracts on I like get those the that.

JessRavich

change writings pull. we -- So levers that are have don't any we to in can't are go that contracts and

We be live that a for What these? at we are a don't If wages? increases determine think it clearly, a long or might take it's to with two three-year what new it contracts because risk contract, is contract, a wages for the So able wage we if contracts going will the call up. that. because I short are paid it's look fixed contract

rather the out-years escalator. extension contract older have them to the that For full in that with don't ability long increases early getting we negotiating the to and earlier. We've do started were started the wage have than

at Amazon this more but get certain are of we hiring some of because Jay, wants wage is and no to hour bunch going the a $XX often it's in in in of minimum more whole coming inflation. cognizant up even at very of to wage just an times it's if states but so So, There minimum people because this everybody is were $XX $XX. state the jumped inflation

an where a X,XXX starting the an up with it's that big go hour and $X So you is in cycle number. are we economic to of employees aspect wages are more a

JayLeonard

That's Brian to Yes. what you The with knows happens. don't know, next say just come know. to that, the -- keep I minimum what that only god I it is That's that I've me at doubt federal never up and that going who what is level be I spoke knows would the when wage win not statement. in it's night a but that a political him. be. said Democrats minimum thing somehow wage on if the I would

going who me the agenda. by at talk just close deal forward into let's more, if leads on me say I to be somebody the our to are it worried you primary -those be know, are lender gets that just because with can easier a I to, bit don't that looking so changing are nervous we going about but little the on is to going might ratio way So perhaps a which we're we things get me

JessRavich

they services let's we when I to they've us. to with Well, loaned hard make been us They've mean a -- -- -- acquisitions. deal to loans start not good lender with. money wanted They think

JayLeonard

very with terms of are -- terms There definitely of that. top

JessRavich

high. is rate interest the But

JayLeonard

Yes.

JessRavich

September million point amortization is board are at we turn said. $X hit in have do at the three at $XX $XX as the we I at Where options of debt to of end below Xx a A be million fact good go from --we this available we'll amortizing want are X% a year Brian we're now pay mean $XX leveraged. to in discipline and amo, at where roughly quarter. one we We other things. So the get EBITDA look million million because of more it's

JayLeonard

are in just, to Yes. to just that the expert in it do look and the be and industry They interested say I tried stuff company. the market they better at our I've when not, get have I in the am place. market look, debt comes are that guys, everything. them I you and to able you should when the you friends

I know tendency So I something just-- you to have still now.

JessRavich

think better debt. going the four in have and We're don't in mid times XXs the million that running we if I marketplace do So have we of we $XXX debt. are to

JayLeonard

I with. agree

to We improve. have

JessRavich

need We to--

JayLeonard

no is There question.

JessRavich

Wait, should prefer schedule. amortize options. we out, the then next six down months And to amortization the to have according play more

JayLeonard

All right.

which So an of type thing what would thought have of is of year anyway. an more -- end I it's

around, purely, out Just who of where There's -- watch anywhere mean much you because Vertex that blocks it's has only know it's nobody out the we're just I really guesses stock stocks --I cove watch stock friends pressure whatever the stock. I those selling of and know the for lot stock I I I been knows the the taken that reportable not can't could out have and don't at took they company as anybody have coming we and figure we and a sale that is selling been as over the is guys you refresh. that have from. mean have still of watch stock

I to And though. big any other it's it figure can't shareholders We me. not be out. it's know I know you. not it's know I not

and on get look noble where maybe is. it you this. handle the figure probably a out So maybe And at guys got list to

do now from for you, to deal. and once cleaned So can I to Jess. six all you're get want come to know going look because months up

stock don't into sale a what dog, know I above know, went value a tangible book is three. it straight this mean lot. that's don't am ridiculous went just to bucks. but think I stock fair you I I two And think to to, need is around book down need I where just you again. You on

JessRavich

I know. Brian, I I don't I don't don't stocks but Jay, disagree, know and where it-- mean from the coming

BrianHartman

don't No, know either. I

JayLeonard

to the mean it's at Well money have there's-- least something a Should out know you you're but if ton still these but touch don't of noble to a -- list. with on in this that guys I guys kind certainly stock of be somebody Vertex. for I if them, way if figure refreshing XX,XXX if spending shares lot

JessRavich

of amount volume. This

JayLeonard

What look, selling. coming I mean news I -- but some Yes. out that have mean, like lost guys there insider whatever today, it's confusing, weird. out any mean you --it's like had not it's very have would I've it's it's of they an I

-- is it's have We would not selling thought Somebody packed anymore.

JessRavich

I know in the end of the December.

JayLeonard

have going paddle guys But XX,XXX conference, makes languishing up it. a summer be at coves by That the few days good the on be you would we dried that end it from the the shares when a way. fully at you draw which at the been of would refreshing up. we and into zeros expect tonight's clip starting the waiting last this news I has

JessRavich

And in be there'll stock the it time better know every that don't hold. obviously a thrilled one. down is. who on mean hand the Yes, not I comes other is in. the low it But somebody trades I new I'm

JayLeonard

better the would people very but stock. much everybody that to time same people dollar interested. It's -- hard I just interested be at getting acknowledge I for the in get it

JessRavich

you. hear I

JayLeonard

warrant, just It on for getting Bloomberg. I'm the $X.XX of I saying value is all at. warrant and What rid company actual the at intangible? it hope where I doesn't the mean it's doesn't stays book trading

guys a for number You have that.

BrianHartman

I million mean end $XX of balance September. the sheet on equity the value at the

shares, XX So approximately divided million by -- it's outstanding

JayLeonard

all accurate. the Bloomberg so $X, right, is

it below you the in like way guys putting are trading book we're So and corrections. looks

bad the us. behind contract got really You've

be I would out. online big that The have the confusing. two Why company it new sense. stock? you're we So That's get no in other backs. cat it, answer of world and slamming stuff sort the makes very but negotiating And no don't coming

other I fourth Let's have printing forward. any the your quarter The printing-- we're that stock see going competitors the if business. I from questions. know when

JessRavich

quarter fourth Calendar stock?

JayLeonard

fourth Calendar Yes. quarter.

JessRavich

That three-dimensional like interesting was It time. business chess. an this is playing at soft. super It's

magazine have Quad of mergers the what Viacom the out business. CBS then & business. happens their Quad book they're You Schuster. announcing that merging LSE and out getting to and off. announcing and getting of Simon LSE

a AL out there's not part. was We, going a book. have there's is of lot are moving gone trade capacity. way your borne is pretty going thesis professors the So the just lot mean which of and books having has a but I is news not the much college where high virtual not away good numbers away. obviously of

ago. flat chapters others, it to more went of of that at does to unknown a advent of and certain the do e-book plus they since published more read as and been model so. to he education which means produce slow years book. for sort start at education they year California I obviously every three the we figured way have of biggest But so higher lower on Florida, is and not do four going out decades number the have There's we're But the for before for actual move Kind workbook big are books math being Texas a prices. their us will which in price a versus year the to a The reason that have covers school they ad lot English in thing. certain up at has And --we don't compete that digital world. or is they're lot now why covers --the was five route. -- every they They

JayLeonard

you. Got

JessRavich

do workforce. in capacity and own But think they certain shake excess great that in facilities. in between we of their a are we to Quad And cost, trying have there's right-size LSE general marking job up the our as opportunities team this watching

where we'll shakes it So see out.

JayLeonard

And, mean as yes, I a business and he's been great. a anybody. he's steady been top

personally they anyway. from we I get -- a lower where EBITDA Like that's think

JessRavich

which line, generate the about lot and minimal it's things at at as profitable and not even we're our be of each weren't Their Phoenix a location in I we're because it either X,XXX EBITDA of bunch part you money. roughly mean be going why and those could reason or look also fairly is We dollar. significantly the discussion doing contract the grow by more and It'll deeds they is to but to of more they or line deed. exit and CapEx a know with that employees. to whole CapEx of and I started year plug-in but one next the a had some one cash with profitable going Brian have be management client of converts plays contracts we that's replacing we Faneuil we're

cognizant will-- be conversion we of they'll year. cash next So very

JayLeonard

Okay, I Carpets a it, is to what for Carpet or any fit still that plans? and fixed put mean got? that do us this we more, year. now Brian

JessRavich

It too million is not EBITDA. therefore a one. fit $X it's doing -- small. buy keep us for We buy million of we in we XXXX wouldn't would only it's shouldn't if is that And because a $X XXXX, never one, business to

So it's not a fit.

we're to do doesn't value right the range own out it We shareholders plus that the a the right unless have in EBITDA. to $XX exit, and to price million business of but any continue real figure

JayLeonard

least I of stock on these I selling at good. progress could believe thing draining I figure out. pull, in can't the are somebody anymore work we Well, I it and not pull blocks can't us back Okay. it's is it only that mean

figure out, at got noble what reach the guys least or at have it somebody list look out reach is. out to You

of Just will the once lot gets change cleaned it around things. complexion it up a

JessRavich

Brian, will you that? do

BrianHartman

look. a I'll take

JessRavich

Jay. Thanks,

Operator

Transco The next from ahead. with Koch Please go is question [Tom Partners].

UnidentifiedAnalyst

What got I Yes. LSE Brian. Quad. going printing the Hey, question. with opportunities and what's are Hey, a on in with Jess.

news but potentially Quad, it which or announce guess, there they So I business about didn't was the them press a lot some their -- in selling book is selling

JessRavich

announce. did They

UnidentifiedAnalyst

So okay. they did,

JessRavich

public. Yes,

UnidentifiedAnalyst

what all remember. Is that? you? So I you do they And with -- on are covers on hearing at compete don't there

JessRavich

rack that covers other areas at some do you in we The don't they but No the stuff airport the see rack do. book. books like

Quad with publishers where up, some divided -- the Quad. do may and work much really But up don't pretty with and both we their at pick publishers world's be it's So some And work. of us -- the from between end the we those to away we some we do depending -- work moment. of Quad able more do published

UnidentifiedAnalyst

Okay.

JessRavich

not like inside. are we Yes, own

UnidentifiedAnalyst

Okay.

with what's you potentially picture. assume to there and continue shed they are debt. Are after down assets there of well for for to sale? wondering just then going, if big with to businesses interesting yes, go going a as kind they're I LSE So, pay any to I'm

JessRavich

the of from do plan I for more for do of good to with sale a it a purchase and good they're for really their bought us and try We them some yes, what a They're them. good over they us. ours. land real them business was with We client right-size things where them. client And -- lot But, a workforce. we mean and we're took they of sense make and working good both

UnidentifiedAnalyst

XX- months? and over Has Coral Okay. the market there between last change in any share you material been

JessRavich

is Penguin No. I Penguin and mantra. owned have mean that ran. they our have people we the others by are They but same Penguin a clients;

UnidentifiedAnalyst

Right.

year anticipate share? look this as on you accounts with changes do you or out major any market your and So

JessRavich

year. I better prior market share and market not get doesn't. has market -- with with who books than If fantasy accounts, share, higher but going particular like share, have hot a thing market they share publisher obviously a who depends football our right. quarterback publisher, higher they particular that Even it we're that no, we-- like did with to doing

UnidentifiedAnalyst

are with customers been? had But as your of same your Right, kind okay. contracts they the

JessRavich

don't them We're House lose I Yes. and going going not to not Random business. clients you pick long-term don't see to -- all we're business. see their -- play Penguin shifts But mean around. all to the we big multi-year They're their We going could that any can they up market contract expect. so backlog. share in random like how shift and they're

UnidentifiedAnalyst

And Okay, then on all Faneuil. right. the question

be margin you much generally beginning which look mean quarters. tend seasonally however, couple to quarters, quarters stronger versus to their on that contracts the end be coming lives the first lower March December higher contracts toward my see be I'm tend tend the the contracts this I than to means would to coming lives. when lot of you are new progression back off on do So be seasonally that through of kind of year? first quarters margin at of their correct kind How -- a going I of understanding the your which tougher progressing and

how So for out year? that the does balance

JessRavich

[Multiple Speakers] benefit exchange.

For transportation they're actually stronger over the summer.

right is calendar in think the quarter. open in at quarter calendar is end. So are that the more which first If contracts during profitable don't I -- the but you're stronger fourth definitely the HP enrollment

the take that new like you're the the rev months contract dramatically. think really consistent that that them out that we training ours and how accounted But we're it you're lot we and -- versus at early least way are have a to on rec how revenue in with had that And have implementation rule the has that next to a I the of and havoc during written the think six six way with filled margin. because rev we pencil and term for last contracts right they're contract as and Ramping try played grew of expenses over especially months. take in ramping. we in the we business --because rec work the they of the seem I contract, with way over of

graduate example, phase contract. graduate until number not training you an But that. the expenses guarantee do time to that that paid, the any same repaid every a a get they'll does we up, about still we implementation but profitability our that that while a And you're revenue people To provide no may quarter class. is training there's book pay they talking contracts not reduce of all against for give guarantee happen people what we no show get from we'll training and that don't week the the because they're in of

UnidentifiedAnalyst

Okay.

JessRavich

phone weeks will you the spend Brian probably about that. with on

BrianHartman

we're becoming So -- experts but like it on

UnidentifiedAnalyst

June leniency should end been we at back and leverage calls has for year. a obviously, and your it toward It Faneuil lot in And get margin the in now. think So up amendments the about margin, kind the the tighten to the latest of of agreement starts March December. credit ratio more on we but given how what quarters negatively affected several for

BrianHartman

either So all June September. the or way in back to normal

UnidentifiedAnalyst

there's lot ,I I'm or you improvements turnover is parts there margin, So you've this? you is -- those trying business? the ones there business a existing in got to suffered new making full are get of so how making the two guess, if contracts, this what those to a have isn't for So, much along, are are new should turnover that humming keep and be existing -- sense

JessRavich

low negative were The called time not actually contracts the three just margins, negative EBITDA contracts. large that but we out

UnidentifiedAnalyst

Okay.

JessRavich

analysis do number that looking majority margin of contracts well. boost And the that that hit the our new the blend, for. have vetted So by we're as contracts our been to

UnidentifiedAnalyst

Okay.

you maybe time this catch talk losing I it that money you that was but about the are is sorry us, So said actually three said? what and - did they there you those didn't contracts behind

JessRavich

gave we is April. early One notice it's gone in then

did quarter the And it affect will in. affect we're December. it So

had we or with getting and amendments contract. are close They we the them because to to we line two, is what the year to with need red service need what of And clients extensions the go in a have market with left zone want and other to in new just put get. us. extend to discussed like red we'd The them both about to either zone the

later it but And we're rather so extensive. starting than early starting the contract

UnidentifiedAnalyst

was But continue until It that to and finalized? this that quarter be quarter December that's we'll drag. in continue the in will a

JessRavich

than One want be the quarter. them to and quarter I one We imagine half be will probably of will about a little full more half. this

UnidentifiedAnalyst

Okay.

hopefully of So most those this hit three in -- be all and summary will will definitely then December quarter and

JessRavich

quarter, more September yes. in the They are

UnidentifiedAnalyst

you out from of of on back then kind margin? EBITDA to where type said like hopefully then X% So it's

JessRavich

I business than fine a that, would, higher you. that's number should this for but I think run

UnidentifiedAnalyst

we're this Okay. Awesome, summer. hopefully there

JessRavich

-- should to able turning It's will. we on be dime. Hope a I you mean not see you'll progressing. it

in you the this see certain back Xx Board should leverage things on is by track we'll summer get. will our lead really You to be believe which wants to that to and the happening down where that quarter

Q&A of End

Operator

over to I turn question-and-answer would our for like Hartman session. conference back to the remarks. Brian closing concludes This any

Brian Hartman

thank like Conference attending to again. Great. today. to Thanks next Investor Thanks. Call providing for everyone our update. look We'd And forward the

Operator

conference for is concluded. today's attending now you presentation. The Thank

now may You disconnect.

Alj Regional (ALJJ) 16 Jan 202019 Q4 Earnings call transcript