TPCO - Earnings call transcript Q3 2018

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Operator

Good day, ladies and gentlemen, and welcome to Tribune Publishing Company Third Quarter 2018 Earnings Call. [Operator Instructions].

As a reminder, this conference call may be recorded. I would now like to turn the conference over to Senior Director Finance, Amy Bullis. Please go ahead.

Amy Bullis

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

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

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

now Knight. will Chief President Joining Terry me I today and is the Jimenez; President, Chairman CEO, Officer, to Justin Financial Chairman Officer, and Tim Dearborn. Tribune and Executive Vice call Chief Dearborn; Justin Executive and over Publishing's turn

Justin Dearborn

Publishing's in long-term sharing We're progress review of the to consideration I'm call company. our aware the Tribune thanks possible turn company, joining been today. have financial to to going start toward goals some everyone of call circulating and alternatives strategic the the greater on about Terry by for for detail. I'll results highlights rumors that obviously over and you, for our to achieving our Thank the us

those to or going We are credit discredit rumors. not

and market on respecting questions policy, this speculation. be taking policy. comment rumors will not not those do we not for know, discussing subject. in we today that any Consistent you advance our As we'll call be with you the Thank on on

weeks few we return historical a ago, to announced name. Publishing's Tribune Just a

as Gazette Gazette received offices. become Gazette for its only Editor Despite has new Bradlee see award and the the newsroom in nominations. being an Hutzell stronger. work Hutzell tragic paper the leading as to newsroom Capital Rick for the the Sentinel the Benjamin the beyond Year. serve. and a on C. pleasure and congratulations newspaper's attack of proud Year. few a would Capital Courant of lead National the source recent to want community. credible to Association, from was in This markets. work the a commend editorial in being Courant Press to the the the I dedication the recognized primary I the by award newspapers. second like proud across Newspaper top it's England is of editor named Orlando communities example Press & the Capital has year of hard throughout see our share Year England Newspaper Courant named won and of want The the of Newspaper also extend Foundation the I are way the their Hartford at team the straight great I'm accomplishments to we the through Tribune, XX, the Emmy his we New to newsroom to also on named shooting journalism the a local We on June all New highlight the

the tragedy community service colleagues. a to out everyday the and the paper pledged, As put their staff and has since

and We leadership staff. Gazette entire Rick's very the are proud of

the Baltimore helped in colleagues We this from those share at load received difficult time. support the this particularly the Sun are industry who our for from grateful in effort,

of a filled are over X-part want were each most stories the XX% stories, with X nearly XX,XXX available Florida sunshine Apple Lastly, at all our quarter we as our Felonious high-profile subscribers is had X% quarter are Florida cover. digital-only rich listeners season crime affordable market the season agility adaptability strategy and investigative In true we pleased the or XXX,XXX versus and same represent close of our on reached leveraging markets with it platforms, environment Sentinel a I strong with The the With to the critical, in state on some executing quarter. crime remain stories. the Podcast This prior an Florida. captivating we Sentinel's of I'll the of to balance notorious increase their Terry. approximately we outstanding challenging, of newsrooms to explores #X election there crimes. cycle Florida feloniousflorida.com, This miniseries, and of the that, net bring launched increase coverage all of focused of a or and second and versus archives XX,XXX fresh listening format. prior you And our season wondery.com, that other states to new new Felonious for tight races remains of of transform turn business, the year. Sun in recognize a are Meantime, iTunes. and new sheet. compelling also is to perspective on South stories and Sun

Terry Jimenez

start with Well, housekeeping thank few will a items. I Justin. you,

in make same-store both discontinued ForSaleByOwner.com with X give a the the to result and of better operations a XXXX to certain without purposes, you sure discussed, to and sale I results. related sheets reporting previously balance view periods. we As the California activities speak transactions, will will results on for properties and I results to classified exclude have comparison that and the Also, Same-store aid components. properties as XXXX these as

weeks Daily results, operations the in with of in The first QX in XXXX. acquisitions results the the of New BestReviews X which XXXX is along York are activity from but and have which XXXX the of the not Virginian-Pilot, News,

Transition is digital the year-over-year for the advertising impact in which, earnings cars.com relates second And to the Services the services The amended Times distortions the X calls, basis these recorded discussed now San comparison revenue. last Union-Tribune. same-store the as LA and from exclusion owners providing elements revenue Diego agreement, is the comparisons. are the of for we the of drives third The for new

our basis, continuing print For advertising same in Total revenue. X as segment XXXX. in primarily M declines. X.X%, XXXX to have reporting advertising total and discuss name unadjusted up revenues X.X% million, though of in the third of the Of are old we less purposes, prior and quarter our were quarter M These consolidated same we will X. segments. removed print the reported due front for segments declined from was $XXX the than revenue our on revenue revenue X/X an a note, On same-store level, periods,

become we more consumer believe provide this the top and on revenues headwinds majority will our ongoing digital of line, the advertising stability the print revenue. given revenue, As for

in compared the $XX.X of net of million quarter aggressively net per the were quarter for XXXX million, continue third XXXX. or million which to were increase as Capital were over Gazette quarter in XXXX million third financial third million; of $XXX in manage resulted consolidated pricing, XXXX. in XXXX, from quarter expenses was tragedy, in basis third million $X.XX of quarter this quarter In our of versus year-over-year digital $XXX select to we've the we up income $X.X teams. our and expenses. third Same-store the decline year-over-year totaled thoughtfully investments the of as had share million the operating in million of the XX% to Our increase third were expenses operations down on Driving quarter of well quarter which million continuing loss $XX.X operating and of of the a totaled up or per $X.X quarter implication the a of share $X.XX million of to newsprint per $XX.X or year-over-year share XXXX. a third or for quarter the In $XXX,XXX loss as share same XXXX, from of year; $X.XX the an loss EBITDA $X.XX we of compared the $X Adjusted $XX.X the $X.X our per compared XXXX. made

Newsprint prices hit nearly XX-year all-time highs.

very for XXX% the paid be that to that Trade in the the at had tariffs that stable. those the sheet the this tariffs and of newsprint by they IPC our income restricted, in $XX.X transaction At the California time, be the of continues the from approximately the that believe leaving We of December our due cash, roll the and retain on it that taxes our encouraged were appears strong effectively $XX tariffs. million The tariffs for against to at is of the receive. customers and estimated March back to the purposes suppliers Commission $XX.X ruling We which of of overturned third paid returned XXXX. to to of quarter. International suggested by half are specifically paid million suppliers. $XXX.X levity are balance XXXX end be tariffs unrestricted cash We planning over affected September collected operating suppliers million million We have tax

classified to million debt. with We X exception debt have leases $X that capital continue as in are the approximately of

million $XX.X note, in facility at capital due to now the of million quarter, service items. payments the timing up owners related Our accrued the was due quarter. the related AR related the catch-up to had swings of second to to ink down and California payable down end for from second and was of million some payroll our receivable of working accounts liability Accounts million, pension $X $XX $XX considerable newsprint new the $XX.X properties. million from all in provide and we CapEx other sits And quarter. at build-outs. we sequentially the Also from

$XX.X we Chicago expenditures, the Baltimore. as million quarters. new Gross technology the terms $XX In one office year-to-date quarter capital and after as in well in X CapEx locations, million in of invested was and X our other third have infrastructure in

reduces The content capital to For components lower net system behind our are office location allowance at forward. tenant improvement our the reporting be cash a received, pace effectively largest a substantially representation. investments versus expense expenditure will offset is against running which and management and amortized and run us, capital much outlays, ongoing purposes, we of moving related the

had Also, revenue. historically advertising continue the which X.X% were on circulation along addition of X much of compared up Daily Virginian-Pilot the revenue. by the up revenues print circulation the circulation a same-store from advertising Total the downside offsetting quarter. advertising. XX.X% reporting third effective M $XX the segments. declines revenue and million pressure of decline volume Now the XX.X% same that of circulation prior revenues New in in The XX.X% compared experience York On print X% Print revenue. New note, prior to period third million, advertising offset basis, Daily the was of highlight performance which again to greater increases in M down Virginian-Pilot been print to year. revenue our I'll more third of on print each has total was with stable of price XXXX down XXXX, important came than the for the a basis. compared to BestReviews, to York cars.com increased revenue of same-store as print touch we year, quarter News, quarter partially the in as than prior total with growth were revenue and was News of revenue $XXX year our in quarter quarter, is in the

subscribers. subscription growing traction the the Digital-only XXX,XXX to solid with end in the and our new page that see to CMS introduced subscribers quarter, impact advertising of compares paid and of model last been grew given of to at by the level digital York. in at a XXX,XXX There's continue end New digital same lower the views XX,XXX We year. some digital quarter

company strategy. impact Additionally, in search we media from across-the-board experienced and social changes changes in

continue companies that changes credible better our on to for content last to many the themselves. how search focused in valuable content and our believe have We be media will ecosystem. and throughout Social monetize and

up attributable the XX% up as BestReviews, of the from good holiday momentum BestReviews progress. Visits are which Tribune heading in we is strong strong into our the properties. This team of site as us organic our Publishing growth to integrating third terms quarter In to year-over-year, well is across sets for season. seeing all BestReviews

year to our guidance. full turning Now

for continuing to updated Adjusted of fiscal continuing narrowed has year $X.XX XXXX, guidance again for operations, XXXX. million to $XXX fiscal For for $XXX consolidated $X.XX range is our to to expected revenues a be billion billion. range the million the for operations, EBITDA, year full

will organically, next we X We be a X remain future potential continue to the layered with with about acquisitions, grow investments future, over we the to solid excited years. to and position believe financial

and longer-term this margin X on expansion, growth, focused digital discussed, we are we subscribers. mode; experienced transition of previously are on and outlook, which goals: core which we million revenue X to still investment As consolidated a quarter; in growth

of of X just higher in number end Our years Xx the more XXX,XXX XXXX than XXXX QX is quarter same than ago.

We these are call about we are achieve goals, excited organizing to open future. the that, the will now questions. and company our we With for

Operator

[Operator Instructions].

of question from the first line Lance comes from Vitanza Our Cowen.

Lance Vitanza

shooting difficult a Obviously, down and sequentially. $X with time things. the other million EBITDA

I your you toward how the laid think budget way? of can beginning you're you that sort tracking tell -- the that how to that out sort as us year of of compared and

Terry Jimenez

which $X.X roughly have million we terms on we're in basis a not $X.X something Yes, million certainly we quarter, which the adjusted of where down year-over-year anticipated. for stood of was EBITDA, for

an newsprint than of the we as it increases little tariff well given bit touch prices, of be, did those. both while terms increase increases reflect peak top thought as did the of newsprint combination of supplier In higher we a would prices, on

And than had we so basis anticipated. $X.X on also year-over-year a that hit I bit was little million a higher think

Lance Vitanza

know what contributing sort you lot of is Or Is the positive I cuts acquisition? this forth. line? about of in Are you and getting And or that little there bit that? been a tracking Daily so at that made News Is a of obviously negative that benefit stage? have the delayed?

Terry Jimenez

the been organization expense a the making very we short happening the have best long that and and to lean resources couple side. things drive sure reallocate we we around Yes, value term. both on focused of We've the

right but things, certainly is that In impacts. side of revenue some the terms answer of we of have couple a the we had are long-term short-term things think --

near traffic, been view, a situation site those sets and that a future the think, switch from you for in experienced ad we users, digital certainly the user to very for your think is we which, the how then an from the that moved is traffic and up many comes in which are answer to for so new users much some So we the But reduces the that earlier subscription in has right and site, first certainly think out was, your term, and how model year, thereby a we we'd using us well. revenue get to impact And CMS, well impact us, is experience again, that we regard. there a played second has of short-term point but us.

loss it get EBITDA back an on we'll think we right It So track from was the quarter. year-over-year. in flat roughly adjusted

but So X there's challenges of confident the in weeks the months this did loss business direction, the as of ecosystem same year. operation of for We're we're X that the certainly lot that in last well. navigating a business,

Lance Vitanza

Right.

Okay.

to million question a million that handle aside what $XX on I restricted. think, cash. the just right? tax So set is is payments, the The $XX unrestricted, upcoming That's

Terry Jimenez

our had to terminated the against sale, of pledge to cash credit tied we have us line we an allowed is credit. letter effectively we loan that had and a California term to we ABL letter restricted our which our of line. also -- so No, ABL the Prior

And so terminated we at We're up agreements those to have once that of post free cash our now cash. certainly both we looking transactions, alternatives restricted.

Lance Vitanza

Right.

board, underway company were I and disclosing process an what point by I X-K the this. And or was XXX running being received in required process that just if place sort were a would if had considered bids a be to right. it then of and But corporate formal either past? and the taken at file apologize That's question, governance Okay. remember don't could, just maybe to a I the

Justin Dearborn

Justin. it's Lance,

when think you have required. material So a I definitive agreement you

not there it's is requirement. no if definitive, So

Operator

further like over And I'm back no remarks. I Justin to time. at showing Dearborn CEO this would turn questions to closing the call for

Justin Dearborn

everyone, you, for you Thank interest Tribune And Right. thank Publishing. in your joining. for continued

Operator

a disconnect. great gentlemen, and concludes does Everyone, Ladies today's for have you may thank all you and participating. program, day. This

Tribune Publishing (TPCO) 11 Nov 182018 Q3 Earnings call transcript