TPCO - Earnings call transcript Q1 2019

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Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the First Quarter 2019 Tribune Publishing Company's Earnings Conference Call. At this time, all participants are in a listen-only mode to prevent background noise. [Operator instructions]. Later, we will have a question-and-answer session, and instructions will be given at that time.

conference recorded. this reminder, a is being As

Now the and Vice pleasure to Analysis, call to turn the President Amy it's Bullis. my Ms. of Financial Planning

Amy Bullis

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

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

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

President is Chief call will the today Tim me President now Knight; I Financial and and to Joining and Jimenez. President Knight. CEO over Tim Terry Executive and CEO Officer Vice turn

Tim Knight

to first want be here quarter to pleased XXXX I'm welcome afternoon this Amy. call. to and you, earnings also our everyone Thank

in are When expanding focus a performance XXXX of in with year solid to the quarter. efforts second, work growth great we digital areas on our top-line first key third, spoke that beginning will our full-year second to for call our At high financial and over base. over level, led our in efforts would drive execute the overview before and business; people and ensuring these made the like the have subscriber the months Publishing bear national I and each I solid to the first, over a discuss and as Terry, of outlined right audience digital off quarter fourth, provide the our engagement passing as results roles and improvement subscriptions cash range mid-March, substantial to four last our particularly on our last the team, progress growth: as delivering areas local fruit optimizing with from by content; our the outlook last in during start several are efforts significant in flow, marketing including demonstrated right plan. to We update with and increase that on particularly, to a our over quarter digital we excellence journalistic to traditional a start advertising, of we solutions structure a organizational combined an commerce a for Tribune who both in at we level; the the selling and an continued and right have to print -- accelerate pays the XXXX. our of profitability

to paying growth. and value These a we the are the so, digital growth XX% build relationship and aggressively momentum revenue add digital-only subscribers even customers. are have first doing subscription our content In quarter, have revenues delivered a journey record subscribers. a it. XX XXX,XXX as Chicago our consecutive of customers we digital are Tribune of year-over-year, digital a we the willing At We we in end broad volume who with And are we subscribers. showing for that quarters had milestones grown and digital-only of to pay deep XX% of maintaining journalism XXX,XXX total surpassed and of pleased

adjusted overall of generating the which million of the profitability, in made, terms first quarter in progress first very I In $XX.X EBITDA XXXX, XXXX. am we represents pleased a with quarter increase million $XX.X the from of have

reap Firstly, our priorities in taken the of cost growth. our adjust savings to our improvement future all fit from adjusted significant the same-store a as actions was EBITDA continue businesses of to and XXXX in our and digital realized with fuel portion cost derived increase from operations we benefits

of transition newspapers to audiences. Chicago, into growing allows part newsrooms in we and digital focus our studio our more print, this on As more to which production their strategy, centralized continue design

in comprehensive Turning trends. shared for onto and have revenues quarter. grow order we half these previous the XXXX calls, the our each top-line advertising we efforts of us a of sales advertising We of implementing aggressively in more digital first markets performance on print to results improve and playbook the to in spent our see our second as started

same-store improvements stronger the advertising in from revenue enabled in stable advertising to quarter. on sales, segment print consolidated the local national prior a On side, and basis M us and declines improve preprint our

key digital drive the in in roles improvement On trends. side, revenue growth overall new helped digital hires in

have of We Cars.com excluding our growth importantly, advertising have our digital And X four seen markets. recorded in advertising improvement the our of segment agreement. cycling changes year-over-year in meaningful line, we in

digitally our to with Studio success continue see focused XXXX. great agency, We

endorsement some three digital as and Sentinel staff our Capital and awards was public In for recently editorial finalist the have service the largest clients. enforcement Awards Awards serving newsrooms by Sun home to to also events The fronts. were the Sentinel Pulitzer team High grief their Annapolis we and Writing the our Communicator a two of a tragic their transcends a category. honor held work The editorial Editorial our work continues are honor for the to of committee. multiple community shooting their Stoneman News board Prize in won completed in Gazette Sun also June awarded and Breaking South named school of capabilities. of The following courageous at the unflagging citation talented excellence a also the officials Our newsroom committee commitment exposing covering The that after deadly and recognized finalist recognition special April, journalist, Douglas was XXth in unspeakable and on journalism craft, The at the from of in news the Communicator innovation before recognized School. by pleased time award the clients and to our be to response category. Pulitzer Marjory perspective, our the law Pulitzer Florida From in in an for failings of Gazette XXXX. rampage marketing of serves they took for an Annual this

Fischman, newsrooms colleagues, serve slain and communities. As day, we we of work Rebecca Wendi do their we honor and each Smith Rob our McNamara, John remember to as Hiaasen, each our their Winters, five Joe memories

awards state their Pulitzer our we the work a are number national and congratulate the from many receive, a While among each paper of also recognized of can of honors winners. highest organizations, for newsrooms were our

not is nice readers serving stories recognition, our journalism and to can, best need it's be we the to be told clearly that Our telling in recognized. about but way about it's

and local, and serve to information that underlies we how audience at our is well consumers. are retain increases Now to of add The subscribers. audience premise our our communities. want becoming which a our to discuss using our executed differentiator sites each central and help news local ability I This more grow technology data is for and

Our newsrooms are expanding to like the engagement our among newsletters tools readers. use of build habit

to our of new out May, end the platform how our will journalism management audience platform journalism of from to properties that we by and most. continue and the three and where American data of introducing to the a leverage markets, are These our our tools our metrics from news for and rolled new to of the deliver platform new insights we Post. Publishing newsroom data rolled the week. out have web system content middle cover, to storehouse far, to Florida what we resources. addition, each the with our easy-to-use to for vast, Besides full data newsroom audiences Institute tools, have Thus pairing Washington newsrooms platform, it gives we value this Arc metrics in-house and insights In of therefore, customer deploy analytics inform in news Press real-time Arc develop on decisions a on analytical tendencies licensed to the the present

user the us move viewability and audience. newsrooms, to with where Arc our The encouraged Arc experience Washington appropriate are our tools alike. our our the increase Post work We a the by an sites, offerings, the experience we on resources work and received our have best. focusing our from learnings customers to readers for brands advertising to our of geared energy to do example while partnership internal and work and as quality deployment their enhance partners quality improve best-in-class a we leverage is feedback allow and we marketing on yield offer add with will The

to the and As We I the a organization we imperative. dynamic cost, the while committed committed our talent of that place and managing of the remain business in part understand at right never-ending said cost, call, a talent to diverse the right in remain given is beginning we critical, retaining is recruiting managing success.

employees hired the to across filled we XX business in of the support roles a first and we've addition also sales XX In editorial quarter, units. the sales total

have established we aggressive recruitment source broadens and an our strategy we the candidates. our diversity As team, quality build that of

colleges and that wide that to We business base with an a the our career at are begin talent we believe is of employee community to their it stage and vital in are that range sourcing communities We deploying working we an have serve. journey. partnerships earlier universities reflects long-term prospects

to on efforts by I've significantly business our to and We quickly as to the everyone planning. increased their our feedback, rally around knows how growth months my that to that career ensure first performing company with provide how staff designing employee importantly, success across our support more and our their the communication programs Tribune seen four is in company shared to the the contribute invest Based In contribute Publishing. continue professional development CEO, of we and people they priorities. entire have

strategic and first-quarter in outlook. stronger, We are over this on even this to engaging I the strongest us financial media time. to operate and the continued made our local forward our success improvement results short platforms XXXX. of execution most and Terry has turn look will now in to priorities fortunate our We rest discuss markets, our to and in

Terry Jimenez

Thank you, Tim.

pleased exceeded with mentioned, very quarter. Tim both EBITDA first the in revenue adjusted has in are started. We As how we XXXX expectations and our

two speak me better a items only provide are results Let view items. I'll that first will in which operating a business and had aid four I months purposes, acquisitions; to organic results from sure in on you To make Same three to results BestReviews, activity our start business housekeeping components: comparison in the our XXXX. with relatively operating differences few in XXXX our quarter exclude same the previously, are results. negative but XXXX results; the to two we slightly months adjusted in with slight Virginian-Pilot, and are the not on results, XXXX revenue results. The fiscal impact beneficial impact transition Also, first-quarter mid-first a and as EBITDA. discussed year-over-year immaterial business Cars.com of which a XXXX

declined a is up same-business of points versus from Finally, of quarter for the were print On for transition the an revenues primarily bottom-line. Total these on California services XXXX. to basis basis $XXX.X due the improvement declines. X.X% XXXX Exclusion to Sequentially the revenue million, comparisons. new revenue quarter revenue also this first owners are has the we business which X.X% is for minimal basis, properties, industrywide XX results. recorded providing impact total same of elements advertising QX's same in services the

year Virginian-Pilot. a to share net a million continuing million same $XX.X quarter improvement first XXXX. EBITDA from net million, to XXXX quarter $X.XX first loss expenses operating for improvement, the $X.X year quarter million million of of the or margin results the operating of first-quarter aggressively the Adjusted first declines business down loss of year attributable XXXX. million consolidated as compared continue the which basis quarter significant The increase in manage we over first of XXXX. quarter per to XX.X% and in resulted quarter first the were XXXX, million over stockholders This million. the $X.X of XXXX per to compared of of compared or $XXX.X Our our XXXX XXXX, or in a down as $XX.X first year-over-year on was BestReviews to $XX.X both Tribune we share, operating were of to year expense outpacing EBITDA loss Same and quarter $XXX.X adjusted and thoughtfully the expenses quarter was totaled $XX.X expenses. million, adjusted The our reductions, $XX.X $X.X significantly, from level of well. operations loss was In revenue had due for In of $X.XX in the million, in improving

agreement million our believe which made continues However, is mention and plan strong participants. We of million of and in operationally the these newsprint positive win $X.X for -- is million. from and restricted quarter, pricing, the we economically, LTM taxes is was XX% to the a another $XXX,XXX. $XX.X result Chicago our increase EBITDA end company, was in due net negotiated and Also also should revenues in very the the basis, $X.XX plan. up sheet very of million as a I proposed unrestricted On be stabilized resulted we into contribution balance merger $XXX.X made April pension $XXX.X million of partially stable. stabilizing the that billion the offsetting a to expense a $XX.XX a XXXX, year $XX.X increase plan for At up of plan transaction. cash, pension in year pension Strategically, and final an while we drivers QX, union cash. adjusted results had also over this paid and of healthy of California the big an million multiemployer

XXXX. of We new XXX, standard ASC lease our the have implemented fiscal at effective the accounting beginning

leases operating million a $XXX and of As $XXX lease of a million. right for recorded a assets lease liability of result, approximately use we have

which Our sits pension $XX.X than million, of at XXXX. lower the is liability end

have the new debt sheet. in accounting to continue as of are We the million no classified debt on exception $X with the leases lease approximately and capital classifications that balance

CapEx continue quarter in Gross expenditures, In terms for infrastructure. was our invest the $X.X of first to technology capital we million.

$XXX $XX.X segments. year. of X.X% XX.X% down year first-quarter XXXX, the compared of our of down same-business advertising the our BestReviews. to XX% the quarter was increases to total continue XXXX quarter. were the with XXXX. X on total the Virginian-Pilot in growth each million in quarter compared as X% Now print touch The basis. as revenues for same-business of growth approximately advertising. revenue for month the additional a I million, of of the revenue pressure first revenues was of XX.X% advertising full to will compared represented On digital M revenue, were the came the performance the Print had strong total strong XX% for reporting Total digital-only in subscription revenues The organic downside prior-year quarter first from organic down experience for on Print and we prior along in in a basis, BestReviews to operating up which

year. quarter XXX,XXX. new solid the traction paid end This at end digital to growing grew subscribers We see compares continue last of XXX,XXX the same quarter the at We in our XX,XXX subscribers. to to

our as we the it call, QX well Similar as to to turning thought full-year helpful be to would guidance. guidance. provide Now earnings last

anticipate guidance is which $XX adjusted EBITDA the we mentioned timeframe. for This a pays the XX-month from pension itself anticipate $XX.XX fall adjusted EBITDA total to $XXX $XXX the effect enhanced Included contribution into to enhancement adverse same range. $XX one-time will we and previously million by XXXX, within EBITDA revenue the million million, amount. of depresses QX in million For the between million

the our year actions, our of guidance savings full from of an launched expected and program XXXX to XXXX. performance; QX both quarter units we in first following and which significant savings $XXX in restructured midway separation quarter. the savings we million previous expense adjusted reduction -- This for our range EBITDA fiscal the year For voluntary York through perspective: included long-term. That provide drive fourth our XXXX. XXXX, million which also also the QX from are began fiscal Chicago, items transportation We executed to in New in updating flexibility EBITDA and $XXX to adjusted guidance we reflects

driving to reorganized at efficient making have additional the more executive our team accelerated savings. corporate We and be decision level,

office real peak estate we we we faced to expect ease from We savings pricing expenses in XXXX. to And in rationalization. pricing cycle we as see are XX-year finally, optimistic also continue newsprint will year-over-year nearly

we few spend Before key to call the want outlining questions, I financial a for our open up minutes priorities.

its industry from on and that that position. arguably are building continues past While in position our are and for best offline business we migration the online, to focused we in on we've the been the decade,

through creation flow adjusted value flexibility; sheet allocation. capital to our or simultaneously while in cash stream; our continuing investing balance continuing maintaining maintaining our and by diversify shareholders for drive growing and First operational thoughtful digital EBITDA, revenue businesses; generation to excellence,

our mixing expansion, the gap closing believe peers, we revenue valuation the our shift we from print strong gap over Given of to should to more and from digital our realize performance comparative multiple time.

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

discussed, we three the on we expansion, core this digital X a margin of of a revenue for year; and subscribers. goals: year in experienced previously which had longer-term to million full focused expansion XXXX growth the QX first which on outlook, quarter significant As basis; and year-over-year on are we growth, consolidated of

than the QX XXXX is end same XXXX, more only than years times number of Our XXX,XXX quarter of three higher ago. two of

key our the we this on will platforms experience and efforts and deliver open strategy. now to desire questions. will content unique With customer's consumer enable that, and for relevant focus Our that call

Operator

instructions]. Thank you. [Operator

Capital is with Kupinski Noble Michael from first Our question Market.

is line open. Your

Michael Kupinski

expected. question. bit taking quarter than the in came know Thanks. Thanks for that I I better the little a

Congratulations. that. about pleased I'm so And

facility of in -- for how savings expense doing that do hub of you the many are that kind that of kind me color see a And hubbing what the papers you your Chicago? out And hubbing operations give type with papers there? with of there? can So more little

Terry Jimenez

Yes.

-- print-oriented in the we out transition last news year. Chicago. product say, So centralized of We've production the year, lot a of rolling that we're continuing that this the started to

are although, it's and they content in on right more focus the the for about their drive I how it savings, allowing and local about there less get savings, think focus the is delivering marketplace really really to do us, together. really than paper markets it's

really -- And that's it. cool was that the focus so behind

transition so And the with so we're pleased far.

Michael Kupinski

better QX looks little we that of your decline the And it seeing than rate which was well, moderation of was a like in great. Got looking as like Part in is looks you. guidance side. for are print I advertising the

there indicated You point was from a basis improvement that XX QX.

And so your of And I you moderation to that continue see just going to print a remainder was Are trends? color QX. can provide advertising revenue you little terms year? that, if revenue anticipate outlook wondering in seeing still this throughout of you're into you in the if

Terry Jimenez

Yes.

that things all the So that advertising challenge, put we're off. and number the an business, we're it but that starting kind place a just organization our sales given not in our of optimistic on is we of area print manage optimistic, Certainly, also of is for advertising the side. the pay of to cautiously to peers

that think progress to good some so focused we've sure making that year. very the Certainly, And continues. we're on seen I start

we'll that a be And cautiously relatively that so we continue level optimistic to at moving forward. stable are see

Michael Kupinski

the so that be the there'll Got year. can newsprint subsiding you add balance newsprint the going bit more bit just prices you I -- that a of you where I year just significant weaning of us more can prices. that. I little off indicated newsprint? kind last Are was had if if period. color Or you you those you you. in little was is wondering -- some can now? the pricing that and just on And on just see wondering tariffs in earlier thought just color question through regarding forth of give a is know affect we

Terry Jimenez

we Yes. fourth we and year over year I year. quarter, quarter, were XX% QX, XX%, we up were like were up The in year so peak say pricing over XX% -- want in up to this

hopefully but lower percentages price think And actually to we just being being on so closer a QX. especially basis, not a as those getting were we're going much than to zero, see lifted, get year-over-year I directionally, to we

see year. kind back price we significant when think were get of back looking comes is come half is basis market to it actually hopeful the at the we I back evolve, the newsprint year-over-year So to as predict our continuing change in this of half were the we'll to that headwinds never hard of face last tailwinds -- an on year, we from to a to the hopefully, and element again. and component in But that's tariff back

So --

Operator

And next Huber with [Operator our question is Doug Instructions]. from Arthur Research.

Your line open. is

Doug Arthur

get moving provided -- the on that schedule you've kind the you mostly EBITDA. parts, cost million the services? is or I how that gauge on adjustments, total obviously, four to $XX.XXX back down all you which of assume at comp which breaks the Terry, includes in side, between components, the of would million, which is the main outside How $XX.X cost also it

Terry Jimenez

It's to comp. significantly be going

outlined, there's an more compensation. relevant was or I So think departures that's be that $XX.X of is related of a to executive schedules the stock-based really saw significant our we million the of which, component unusually to going of related of balance number. that And some of that $XX.X then high to million, that compensation. is acceleration million we throughout $X.X with of Part increase that the on that

Doug Arthur

Okay.

-- the driving a cost cost So -- Is quite cost. in bit quarter's is I marketing? quite you add what's result had quarter. back. tremendous not your but print I down What's much seems bit was a quirky, acquisitions? up like like adjusted a mean bit. first -- the -- seems I in bottom-line in adjusted number little a that X I Even comp in X the were adjustments M, in the mean if segment. or so is the It it's with really know so little that? it you sticking a the always that your guess

Terry Jimenez

It share that lion's and an I'd digital that the is costs these of -- for the the have proportion newsroom Yes. -- higher in between forming on a we has much of news of cost to proportionately also segments and be that say, the it's frankly, our a a of the based are And revenue. a for occurs kind and burden themselves allocation organization. allocation kind becomes revenue digital-first allocated way bigger There's newsrooms two it. as components. change a side of

so share And on the LION's X. that's impact

see And to You'll will we've we that is business the do make benefit second digital methodology. long M right allocation from that then on the driving -- investments continue sure focused got component on the side people to term. make

Doug Arthur

question. It Then a Okay. just final clarification. is

down revenues you it's X.X%? You on down M -- were same-store reported X% Did as a basis. say

Terry Jimenez

Yes.

M, same-store X.X%. basis, So down revenue total for was

Doug Arthur

%. X.X

of reflective that's drop well, as And XX% in so advertising, -- print Okay. the

Terry Jimenez

Right.

Operator

not to in I back turn remarks. I'm queue. Mr. like showing Tim will Knight call any for the And his further final the to questions

Tim Knight

everyone, and our XXXX. built initiatives call. quarter had forward progress made you, encouraging on for previous much. for Thank joining the growing remainder we against continue company. the us QX a shared year the quarters. the of to successful on in you anticipate and a today's the Thank look We very very momentum We was

Operator

concludes a ladies participating today's wonderful in Have program the we conference. And gentlemen, for you all may you with and thank that, and disconnect. This day.

Tribune Publishing (TPCO) 10 May 192019 Q1 Earnings call transcript