TPCO - Earnings call transcript Q3 2017

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Operator

Good afternoon and welcome to the tronc Inc.

Third Quarter 2017 Earnings Conference Call. All participants will be in a listen-only-mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Aaron Miles, Vice President, Investor Relations. ahead. go Please

Aaron Miles

welcome call. and third XXXX quarter Thank to conference earnings you our

Before remind from intend, this like will would may, materially. we I begin, such words to continue, actual could statements as the Statements containing our anticipate, make during you will, course and the in of forward-looking actual results expect, our as outlook estimate, call these belief, results statements differ plan, from uncertainties Differences forward-looking forward-looking statements. management that risk or by other control. beyond similar in actions may as well the result those company expressions described taken are and from company's

including total financial income, adjusted measures uncertainties non-GAAP quarterly our we mention included of adjusted publically include earnings Securities that XX-Q. in on to debt. filed definitions on risks and our Commission net margins have on references including investor.tronc.com. will to impact the Form also in release diluted Annual at the share, XX-K Form And that our provided Some net report I press GAAP is Report and and which adjusted documents adjusted our are businesses should with today the Exchange remarks could and adjusted our measures comparable and website available reconciliations EBITDA EBITDA, operating most expenses, earnings per

and our President, Knight Dearborn; over President and Levinsohn. call Justin Vice Tim Executive Chief CEO, Ross now Angeles on me Justin and turn Terry Chief call the Dearborn. today's Jimenez; Officer, Officer, Joining I'll Times to Publisher, tronc Executive is Financial CEO Los

Justin Dearborn

to detail. turn the quarter to actions in with we in call took the by our towards for encouraged I’ll company the greater review third align our industry Terry going trends. and today. progress long term to everyone then thanks and better our sharing Thank achieving you Aaron the results with us joining I’m and strategic our I’m start highlights call some company financial goals the the for over

now During presence number we capital the more total world, to of our each with announced its adds in York, to the of us Daily of acquisition reach local the New Los in one presence quarter, New We advertisers. reputation the Pulitzer in bringing a York US gives media and our the markets, paper York, the the strong prices, top News, which our for XXX. ability already Angeles our which Chicago, have create to three XX New strengthens and re-establishes

new will unique experience capacity. has XXXX. In in York large websites market our continue operations, quarter class production visitors reported and addition, newspaper the that operator in XX printing million our facility at to are largest of the given third Daily world of country near one of News optimistic we the New The

tronc from investments we scale. drive should benefit daily plan the ahead, have made leverage Looking our by growth to news and at we continuing to

We invest in digital to transformation our have help drive to also undertaken. we team continue leadership the

we for marketing a led business digital media numerous to in significant has Rosen, known as Group. as the Times of continue effectively drive experience digital collaborate will and has development, both and has media content operate companies. content and roles the his businesses Editor-in-Chief and in of pioneer Publisher Media large Yahoo Media this pleased the ability Ross to businesses. named oversees D'Vorkin Ross Los well Levinsohn announce the is Chief Times and of of to and Mickie We company. aspects and Angeles Angeles Times the the Executive In quarter, related Officer are us to all and Group. as innovation Fox, and scale role, unique endeavors. His we operations and Angeles helped transform the close leadership multi-platform shift President partnerships subsequent growth perspective who to to proven Best build as complex Los at Ross Also, expertise. serve He at advertising, Ross start-up and product Los addition third Lewis

global considerable Editor-in-Chief, will and Forbes, cultural publication New significant including News As editing leading wining Pulitzer expanding on Journal, Price while build and York investigator Week the political coverage The news and Angeles Lewis Wall Street draw The his upon Times further experience to Times reporting, on and Los its events.

tronc, done play Group as other will in role diverse as with strategy, Angeles media growth Media an she Mickie Los integral Times President, digital as the has driving well forward companies. As across

make podcast LA our to The our to efforts its new traffic amassed and the Apple produced was way drive series weeks to John, number in which downloaded continue progress listeners editorial for over podcast We has the straight. in Times to Recently XX sites. on grow three and Dirty creative million

We is the many this are via first platform. of hopeful this successes

net quarter. We the increase versus XX% not also does the of the second or New which recorded XX,XXX subscribers year quarter XX% the an of at a include represents approximately the XXX,XXX increase end York versus This XXXX from digital close quarter, the Daily News. only prior and of contribution The of

of York also a unique XX million at of XXX again views We the not visitors include September, does in number around from The Daily number record page at record a had News. contribution which New achieved million and

York and visitors, million. News For unique The after the tronc duplicate Daily and quarter, XX visitors including totaled both removing New

been and display video now gain to reviews continue We have Lastly, momentum. per we XX,XXX over closely quarter.

over advertising there’s digital-only generated changing. flexibility and video from remain our similar strategy on starting third extraordinarily subscriber become With believe the and in rose executing focused quarter, fast revenue ever it tremendous remains and we Terry. video third business. is to of XX% the we growth Our XXXX. to environment transform that I’ll to our our upside to In than over turn agility numbers. Innovation, market quarter are important The meaningful and more uncertain

Terry Jimenez

and advertising us XXXX. of revenues discuss million, and the Thank us overall the in XXX.X to the for segments was were then X.X% for the down decline Thank from New offset by I XXXX I York print in review anticipated today. revenue, review third due partially our operation. our see of quarter for company was Justin joining which quarter, of Total will you News XXXX. you results same decline in This where Daily quarter The third performance finishing the impact primarily

York from Daily acquisition impact X.X%. The would the Excluding revenue total New News have declined

We continue to in challenging revenue show environment. a strong cost discipline

New was was income a third XX.X basis. third of Daily in million XXXX of impact is EBITDA to or was That’s or decline Adjusted of third XX.X Hurricane consolidated News quarter quarter $X.XX loss York year-over-year of Our on million due net third million the impact and compared on the per XXXX. of quarter XX.X share. a XXXX for of X.X third quarter per our for compared Irma operating operations. the XXX.X a the million which of million, quarter operation year-over-year the from expenses XX.X The to for down XXXX of $X.XX Florida Net loss to The million the share XXXX.

a capital We balance flat quarter very XXX.X leases XX solid a to which New from shape. Our in of with increased which we the second of daily of inherited million the pension in XXXX, sheet were was balance the of sequentially Daily grew compared cash, in to quarter as sheet by third loan stepping as XXXX. million of exited second the from liabilities Debt remains XX The the quarter quarter plan repayment. York XXXX second the our XXXX, a offset from from principal million acquisition. result news Pension single-employer quarter News sequentially of term the

were the the Total quarter Now quarter for reporting of discuss our XXX.X million, compared performance X% year. third down prior segments. the I troncM revenues to will of for of which were each the

to revenue increase revenue XX%. the decline to experienced nearly segment advertising revenue a X% volume we print continue Print compared for price year, the in was revenue experience same Circulation with total to by This continue prior advertising the of led We declines. our retail advertising advertising as was this increases see distribution matched period rebounces. quarter, revenue our requirements. circulation in where offsetting print down

sequential year and second the improvement year, The was was with in from decline primarily offset EBITDA third year-over-year so Third of X% period decline million X% the in was compared categories a the for X driven expense X.X auto of troncM by other compared the declines to from of quarter the tronc third growth Class the quarter. our nearly real in to XXXX, million was XX.X offset down XXXX we of had estate this adjusted advertising operating XX.X troncX perspective. revenue the million, year, revenue which total down recruitment, This the XXXX in prior productions. areas. prior quarter quarter of quarter of same which

this decline segment. Third XX% made XXXX, versus quarter EBITDA the million expense despite in we’ve up for XX.X which XXXX the third of quarter was investments revenue troncX and despite adjusted the was

a Let’s outlook billion million XXXX. revenue range million. now guidance total to turn X.XXX XXX adjusted to year is our to billion, our and X.XX we Full of XXX EBITDA for have Overall the in markets XXXX range most These some US. now cherished News. include in New Daily believe among most The York important operate which largest we the brands brands and the of is

proven The in talent, tronc team that Daily and infrastructure. a Justin and stronger a invested tools New became training highlighted have We focused York existing Lewis with management team. among Mickie, the blended News with and others Ross, system of sales, the additions We’ve

for our open have margins. We term long a now have for EBITDA off success [term]. a expanded debt-to-EBITDA stabilized our up our adjusted call balance to net have we performance near the we’ll us sheet that and With And one questions. set finally with showed

Operator

Noble Instructions] our first [Operator line the Michael Market. from comes question Kupinski from of And Capital

line open. Your is

Michael Kupinski

hurricanes quantify of revenue impact was the I from that in hit, of the able quarter. in terms were wondering you any

Terry Jimenez

for million roughly Sure. impact X.X It about the quarter. revenue on was

Michael Kupinski

in terms in programmatic York noticed then News, spot the increase of by unique have that you New a Daily as And paper? any The in advertising result of increase

Terry Jimenez

of some leadership units, for New quarter think strong with early York along that together our we’ll hope. better have moving the we had Daily improvement except is unit News still it’s have and the We’ll some the at regard strong once great in The I really we rest see combining tronc, so Yes, with third a they across our forward company that days. at integrate results some leadership that Mike

Michael Kupinski

flow from the Daily you guess might cash guidance but it The the you’re towards? the And looks the seems with you quarter. revenues. Do on fourth bit like Can little bit significant kind in quarter, your just the or had time have terms it of it cash although of in a little there? that Express you below sequential anticipating it, flow lighter guidance purchased seems before But over-achieved not revenues are revenue the reiterated bit revenue the little guidance, you be like you News kind a like seems maintaining a being that add in a about about though suggest troncM the the would guys of seem it you any on year. you tronc talk for in color still what talk you of can of Can terms guidance I that you little in kind improvement

Justin Dearborn

there So so and overall you happening of each continue is, of we to give quarter. are on the third saw the the on that’s in for but improvement a side looking the fourth the element. One couple fourth won’t in we digital a so segments, we’re one guide quarter, that in quarter to sequential the things

calendar fourth is for on if weeks on week a recall The XX a this there’s basis year, XX full you fiscal a a year, usually second we’ll element is we’re there from be year so actually quarter that. XXXX, key so and weeks factors of XX basis the are of the XXXX kind two week and and versus behind in drivers XX those ’XX a

Michael Kupinski

about you the stabilization seeing much the still range stabilized decline looking bit And it for it’s be little any a seems to retail Are or It seems it’s was XX%. same in while it was than on little pretty seems kind further are category? like predictable, you but soft (inaudible) it that side, or bit seems the like in quarter. the more that it of in it’s retail become like second it deterioration a down retail

Terry Jimenez

relatively It’s or here same the there. moves I down think X% same, number. roughly correct. the up or unfortunately you stated how it is It

I hoping think year. that to just we’re certainly business over that not we’re building ease, time for our but around easing

Michael Kupinski

and any a back owns shift they’re newspapers than now company from you potential so question from benefit course ask (inaudible) little [XX,XXX] and were was It again there of properties interesting that seems what quarter last newspapers broadcast we’ve years and do one just see seen or move so over together. broadcast It with over the broadcasters divesting like operations or where owning forth. in the last others newspapers questions. let from of any an the XX a bit a properties Is benefit that? merging a I’ll and And

Tim Knight

in tribune Knight. of initiatives era we Mike did in markets. the our obviously guess I around number its Tim a old that

was is the content were the and the and co-housed think we where kind that and one same saw operation. newspaper. I the together were the furthest it typically rather (inaudible) video of organizations the than TV at along ability with to presence share revenue. expertise, I And bring don’t much growth up web have the think a has news the the groups TV we the group Hartford lesser

but think see I big right think I So don’t it, opportunities now. be we’ll looking we at there

Michael Kupinski

divest market. they And I company, think the particular of claim to this in terms duopoly

not in are be to more able on on or So maybe of a but markets a opportunity station earnings is TV a the buy will particular find from reach maybe newspaper reach getting a to that benefit consider there it market, was an from or maybe something you might a additional in that that more these of you value. perspective looking

Tim Knight

I a be pure some at think we’re be interesting. more digital could bit not opportunities holes little right see that if have we We there in probably reach, a now. might that looking

Michael Kupinski

And what you environment describe M&A the at and point just point? appetite this then at is can this your

Justin Dearborn

Mike this is Justin.

changed. hasn’t really it So

weighted his call you and lot Ross still as on to that well, it’s So heavily where look on as is the focused only and that’s funnel, if exists. assets well who of our a relationships at digital is

continue legacy but at properties, to really said digital on heavily as look we we’ve the really focused the start, from side. So

Operator

line of Our Arthur next the comes Huber Doug from question from Research.

open. is line Your

Doug Arthur

thing Just break for housekeeping the the just on gain X.X line that in terms one Terry, in you of the of million, investor down composition? can

Terry Jimenez

Sure.

sold so we that the the million. So came was from although that mentioned gained, in distribution call California on last and called QX was effectively – in in I had which X business time, the quarter, was occurred substantially and out a we had of had transaction recognized think we north [Sips]

that seeing So you’re number there that made up Doug. the substantially

Doug Arthur

then I third fourth on Did that And revenue taken and weeks got the the the quarter? little not quarter in you guidance. XX was a confused the say

Terry Jimenez

mis-spoke. had I

will year. occur weeks fourth XX So this the in of quarter

So number. provided guidance year a full

Doug Arthur

So it you looks that’s XXX change EBITDA still like your full guidance, not year did XXX. to

it’s deal with that’s guidance I with trimmed week You the have extra your revenue and knew. the

looking a it? that is So at of fair way

Terry Jimenez

start built So factored the in extra actual week guidance the come the new the week a was only was daily really information in, the when of plan year. That in, to that’s and we the from was recently. news had play already and so really here

Doug Arthur

fourth I’ve or very real in Did impact here. on news quickly daily I And thought quantify you the out the quarter been the not?

Terry Jimenez

have We no. not,

Doug Arthur

broad on his if question. from a be finally, Ross particularly he And – there too just plan a side interested the I’d digital of hearing not his then LA hasn’t on long, couple bullet points but been Times, very that’s the of in of initial sort

Ross Levinsohn

really success. in it, in We marketed tremendous Yes, and be the put it; and We own best in where asset you with embraced it partnerships, and our it. Los by motion John the sure. in limit. it’s we’ve really think at What journalism we’ve and I (inaudible) of was it is think before exemplified dollar although just in brand I IP great tremendous well may And a But did marketing assets sky Dirty we effectively to bit a tremendous say. marketed had a found least Angeles, I didn’t to luck success it have I used is in I a seen spend got frankly. market it within. per

I think we building broadly our categories. that in I’ve great tronc the we I very with love assets already have digital journalism specific on the vertical really on and energies win and I the devote and off where the the what prosper also not on stand what needs is resources we but entertainment saying, and to focus area specifically business thinking do, about think to and you of you In and have opportunity have, in across starts Times we energies can And start resources have. in that’s you it’s to in been any space. space lot focus Times it’s about The around can Angeles Los an we with just to Angeles it. the what And record a that Los for more So what do right and think

over be of midst more strategy are in and be to next specific very we a the and together few and putting weeks in specific. we’ll So lot help months really the able that a crystallize

Doug Arthur

this and a subscriptions yet. go-to-market in see, see of you maybe really that can is terms or briefly, in you do change on strategy upside and follow-up But of slot digital not? did answer times of your one lot of you having there Just there been daily

Ross Levinsohn

want individual it’s we don’t have we’ve Times has certainly because for Los seen as that and Justin subscription couple strong (inaudible) in too overall quarters I really Well seen growth the The over Terry to month last a said grown. quantify Angeles much have it early, how but

also event a again Angeles to during and uptick Jonathan that digital instance driven Los subscribers. have off pretty just subscriptions. John, where food Pulitzer in seeing, uptick for people monthly Prize we of seeing we tied just the we and signing we restaurants columnist. in story, winning is XXX Angeles, week good a We saw Gold, like our top unveiled something, here that that held finished annual his the We’re specifically We’ve journalism in who when real Dirty we’re have Los

subscriptions. digital tying be it that’s we journalism do work the to in again driving So something to seems

Operator

Lance Cowen. next line comes our from Vitanza of from question Instructions] [Operator the

is Your open. line

Lance Vitanza

small category. it’s bigger and still in tronc. obviously just two grew total of the tronc areas, And they revenues, segment, the XX%, know piece little a worse. bit of other it’s the then but on trends looks XX% specifically I there, wondering like I’m I guess first a

is be in commercial expecting and as talk little printing there. there I bit should a going we this Now we and what’s forward? in modeling might about what be can’t But think segment could else remember you about that what

Justin Dearborn

Under printing the we category, delivery other that and segment that’s commercial revenue the commercial the and have. substantially businesses troncM

that actually So for year-to-date the bit down higher. X.X% was a quarter little

little quarter was bit of the the first a it this easier So half than year.

is of overtime. there markets the over we’re point ability have what to essentially the consolidation so seeing from there in more macro a is And view,

what without over; clients in and all new I of pressure of seeing industry the on you’re clients accounts think having see the winning revenue. ad of other kind you’ll of trends the our the circulation

that further And decline so clients of with consolidates bring happen, But will naturally in-house. to there each larger opportunity within an markets in as even those overtime. declines is our more

little win steady decline it’s jump a but there chance item, bit a we for new periodically to So a line up of business. as that is

Lance Vitanza

the right $XX And that Simplistically lastly, million then I about know just is way million to seasonality X.X daily or release the run the of on saw but particularly think month? or and revenues like September this obviously, included on a it. maybe is strong isn’t sort news, their September. I for rate

Terry Jimenez

news, we would of pretty think news owned daily I in kind the three on, third quarter. So for so the own daily it’s seasonality spot say. we wise We and in weeks weeks, fiscal the actually report I

number higher the than the basis it extrapolate a basis XX said. week little on would it you bit to of that XX were you if so And or out be

Lance Vitanza

a you EBITDA. acquired and it’s were plus something mentioned Irma about mean negative I’m assume get what for, I that. two were they or or that Thank EBITDA? that the the helpful. of than kind you, sense than is And in that or I them you. less resulting burning negative you When about Got then decline. it a trying more month they to EBITDA million just

Terry Jimenez

disclosure we X-K. So business amended better we’ll in coming have actually more on up an few disclosure weeks when and that a file

Lance Vitanza

of business in organic bit that or if this favorable, bit where you’ve you quarter been eke the on still EBITDA got be had trend to kind And a actually then reversal as, a out thinking able a been this should of little of going though, did sort growth see you we EBITDA anything? to about

Terry Jimenez

can of your Lance half the you repeat first question?

Lance Vitanza

at Coming in EBITDA a basis, on some an that’s surprisingly growth job I’m good to you’ve this and if maintaining quarter, wondering changed. least done organic

Terry Jimenez

New have we we quarter had days the events to term. So contributor to terms have about. guided well. longer hoping News, goal integration delivering And Still would that we this that would we in be look to Daily be so York our of a been that year we’ve guidance is for we talked imply two that we’re our on across that on positive organization from that get the to where performing full what and as early back

Lance Vitanza

balance debt this the cap then [video] lastly adds me liabilities you mentioned that pension sheet then on the of remind you obligations. on and memory you refresh as you part Could take what have? on you or much unfunded transaction And that cap, on also to can taking did how lease other the my

Terry Jimenez

there to contributions what So do single-employer lease but normal. roughly make is is million, its have balance The which relatively X on come sheet, that’s XX are we roughly capital there our pension, that that talked when the about closed we And about multi-employer isn’t in. close had we the a transaction. on we million which is about

Operator

questions Justin back like turn to further no to this would showing at I’m now the I time. Dearborn. conference

Justin Dearborn

make thank progress with meaningful [opportunity] forward you to and you We’ve we you next our day. interest to company. and we our everyone ahead in quarter. strategy, you, such in of our platform the Good building continue on Thank and brands updating and for our made progress our foundation look

Operator

today’s concludes this Thank day. gentlemen, and wonderful you a have conference. your participation for Ladies and

disconnect. You may now

Tribune Publishing (TPCO) 1 Nov 172017 Q3 Earnings call transcript