TPCO - Earnings call transcript Q2 2019

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Operator

Good day, ladies and gentlemen, and welcome to the Tribune Publishing Second Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator instructions] As a reminder, today's conference is being recorded.

I'll now like to turn the call over to Ms. of President Vice Bullis, Finance. Amy begin. Ma'am, you may

Amy Bullis

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

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

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

Ferreter. President; Joining me Michael today Financial Chief and Vice Terry Knight; and Officer, and President Executive is Relations, CEO and Jimenez; Investor Tim

call over Jimenez. turn Executive I Terry Chief the will Officer, President now to Vice and Financial

Terry Jimenez

joined will investors primary our investor forward. you, for joining Ferreter to you that us as for Good going today. new and has want everyone, He mention contact be thank lead. Thank I Michael relations the Amy. afternoon, us

EBITDA second our exceeded the of quarter, in strong results. adjusted second both on first a We half revenue quarter. out and delivered We our expectations XXXX closing

all the we our delivering across partners, enabled Publishing. Our to consumers, and performance reflects Tribune are by team advertisers value passionate

some let into me the housekeeping. we start details, dive Before with

that five results quarter. sure weeks which results I better make components: organic second had and Virginian-Pilot, two will of of these provide a exclude we for I revenue on California owners of in to purposes, same-business comparison view in Same-business to of same-business will services basis the related recorded speak are results; the XX secondly, properties. services transition operations The the XXXX the providing in only results XXXX the but included elements aid To weeks to operations comparisons. had the the to is for results exclusion

to of revenues. industry XX in X.X% same-business revenue due this print the which commerce of were same revenue the versus areas growth QX's second quarter in Sequentially, of We On revenues focus from was consumer Total improvement quarter XXXX. revenue an basis, XXXX a and down was for advertising million, is total largely $XXX.X which X.X%, results. saw points high-value declines. basis key wide declined

Our expenses consolidated from XXXX. second-quarter $XXX.X million million, of were second $XXX.X the XXXX quarter down operating in

business but as adjusted or year our $XX.X to were aggressively X.X% quarter over operating the in manage expenses. million year we thoughtfully Same down expenses continued

New continuing significant from second income our of properties. or sale improving California the we the XXXX, included of totaled million share per $X.X of or to the due strong months a compared quarter for $XXX for the EBITDA Virginian-Pilot quarter News, stockholders year income EBITDA of revenue year-over-year and the factors, operating gain for operations of $X.XX EBITDA year adjusted of margin compared $XX.X In the million XXXX. second $X.XX million a the versus This of from net a a quarter last declines. the level increase reductions improvement Last in derived month share, basis. improvement of several Daily quarter to of trends to million, compared three the $XX.X XXXX quarter the in net year, was significant BestReviews from In year-over-year which income per of to only second on of same results adjusted including of resulted million, attributable York Adjusted XXXX. The one $X.X The had XXXX, second Tribune quarter million. expense XXXX $XX.X to significantly was loss second over was outpacing $X.X in year million of

However, adjusted what the quarter $XX,XXX,XXX increased call, pension was multiemployer for we the on last these mentioned negative we had positive of due EBITDA partially results to earnings offsetting impact contribution. a

We million $XXX.X of by were cash. covered of up the Of able by made our the On and of EBITDA end million is our a to the we cash million cash, $XXX.X believe quarter, we unrestricted is of reduce continues be to sheet note, to adjusted last XX-month unrestricted. very quarter, basis, $X.XXX of billion balance $XXX.X restricted strong restricted and At $X.X cash in and revenue freeing million. had stable. up letter credits $XX.X million the the

We opportunity believe will look to dividend reducing reduce we cash Approximately July. in million for opportunity to restricted $XX.X as this of used of special a continue was cash further the pay further. in level exists for the to

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

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

invest second In our terms million. expenditures, technology Gross $X.X of we capital quarter capex was the infrastructure. in continued in to

on left now management come We our in weeks. board to system our only Virginia to the coming content new properties with are

our with of our will accelerate platform, can the and hyper-focused touch speed are And all experience way. in same a positive across We change on the the all of business on customer points.

reporting as second X.X% of was a same-business basis, Print the for were from XXXX. to Print were year. year Total will Now the the full of total of second revenue down first quarter as for in advertising. segments. which our performance advertising basis, compared XXXX prior a the touch quarter on print in each our over XXX-basis-point year revenues pressure X.X% which improvement I on XX.X% of the quarter. XX% On downside $XXX million, experience year the of revenues advertising M total quarter compared down XX% to continue the to declined we represented a for is same-business

metrics Profitability were and in line which management, operations strong XXXth and being improvement costs the also bottom adjusted some X, M from for improved over by News, allocation its income shift an also as up saw from York showed impact despite This mentioned. EBITDA June. M million previously year of at Daily New celebrated invested both was strong $XX.XX in anniversary driven we year cost the growth

in significant compared to of XXXX, quarter digital total quarter. Virginian-Pilot from XX.X% in prior and the The in year organic of came up million $XX.X strong the digital-only had revenues. revenue BestReviews revenue, growth a second subscription increase the X growth

XXX,XXX. additional We grew end at continue solid in our subscribers the to see traction quarter an XX,XXX subscribers. paid to growing We digital

This compares to at same of quarter XXX,XXX the the last year. end

Additionally, as in ago. growth, site, million given X continued year see to are we up partially X mentioned year XX% Visits the year revenues were up minute growth segment allocations year up over in at are over to business. BestReviews the by a the are over revenue and strong year business resource also describing XX% M metrics in year offset year our increase over $X Profitability up year. EBITDA our adjusted

we quarter provide Like Now thought it guidance. guidance. turning last upcoming year the helpful well full as call, would earnings to be to as our the

$XX For we $XX QX anticipate of million $XXX total revenue $XXX range we between million. XXXX, the adjusted to to million will anticipate in EBITDA, million and fall

$XXX fiscal full XXXX, the million year to increasing previous year XXXX. EBITDA For adjusted guidance fiscal our we range million of for to $XXX are

Before to Tim, our turning the want over few to highlighting spend call minutes financial key I priorities. a

with online, are the our arguably best position position. from continuing on and offline operational flexibility, its been and lot strategic and a are in of to that for and we building industry we financial on in to the continued past we While the have that focused operational migration business be decade

We our diversify continuing EBITDA while in our digital streams. investing revenue and growing simultaneously adjusted by will achieve businesses, this to our maintaining

revenue continue becoming be more predominant will more proportional minor mentioned, advertising as to overall our base becomes important growth revenue our consumer streams. print a portion of As from commerce

the fundamental operational by on being low excellence revenue transformation. debt customer shareholders historically customer cash which firmly investments our to capital the our experience, and value business for through the allocation, have maintain driving changes, We trend we'll hyper-focused and creation focused have committed improving the all and smart Additionally, thoughtful through in to flexibility. be generation, no balance will achieved improving accelerate currently profitability making line, flow sheet balances, pension underpinned and strong by

it I CEO, With Knight. to Tim our that, will turn over

Tim Knight

Thank you, Terry.

we of QX view want to share a the turn thoughts year. to and I we results on rest the how Before questions, our few

growth. and this year execution for has leadership provide been strong revenue order Our on EBITDA foundation future a hyper-focused team in to adjusted

strong results of this the reflect second-quarter Our benefit work.

we briefly our in areas people. to highlight actions want I and a strategic and of had audience focus: revenue, successes few three

First, aligned as is health in key success digital the strong around and business. consumer growth revenue the leadership team growth. had Terry a for and the we we highlighted subscription The experienced quarter. steady of entire digital relationships during metric the

can what at the each look relationships these to company fuel consistently the drivers across help We growth. of team this and various do

home our on print digital the delivery our most transformation involves executing is life extend while our serving to of valuable objective, and Second, primary our goal loyal subscribers.

we understand market execute drivers the print further any can the retention efficient opportunities better We how against most are manner. undertaking for research in and to subscriber

the Finally, of we number employee to engagement increase have across initiated actions organization. a

of on we diversity hire communities staff talent top continue We to in our the focus privilege of with enhancing represent newsrooms, to the to serve. the better have our all

year, a training all through representatives are we have nearly training program. the this and June, leadership sales of program in addition, late end In all reps By representatives. and launched will gone each of sales for in this adding sales sales market, our comprehensive

our entire confident the will in sales accelerate improvement We across are this help organization.

a occurring across highlight these areas. company, the While deal to there's wanted I great more

Now for it up open we will

questions.

Operator

come will [Operator Cowen. Instructions]. the question Vitanza first And from of line from our Lance

may begin. You

Lance Vitanza

you. Great Thanks question Congratulations. for thank guys. taking the quarter,

versus ago? how subscribers could total are sense free Let subs, to kind in and a sort of bit digital-only on thoughts for, pricing. on opposed on subs to I'm growth digital-only as guess, XX% trying increasing a get I year the talk paying a me of a really, to of XXX,XXX, period average any those the you you little this trial a ask digital-only quarter about many

the be those definition obviously, mean trends. for itself, bit little speaks great revenue I a would to but get more around growth

Terry Jimenez

Sure. is this Lance, Terry.

are subs $X, report, the of paying that of different start as start, offers but All XXX,XXX, as usually revenue for offer maybe those. us certainly, which digital the do we're We collecting some money. we stream range to a low

this that at So not existing we're time. offering free base any to

Lance Vitanza

of sort promotional over then of if has proportion? sort year. the of And steady think that sort looks XX% that that X on revenues I are you been Okay. periods, proportion a is subs, about up it the the Content Or or at proportion base like their year of XX%. increasing? up percentage mean are digital-only the

Now ARPU, I subscription that I doesn't going e-commerce content free and as that the guess down it's period is revenues includes up. syndication revenues, going the subscribers and/or well but as ARPU promo suggest are the performance understand just

guess you're in revenue that such enough case, right about think I either But there's elasticity that good seeing here demand growth. way the to Is a it? of

Terry Jimenez

Yes.

been. the actually in think a rate our than lower maybe smaller new at a proportion gets what mature, starting little more has is I as coming a entrants are base that at actually it bit So historically essentially

core quarter, to as well each of continue a proportion. we as the grow, the So as to longer continue grow base tenures

actual our it rate on relates basis individually. digital-only a year-over-year is as up so subscribers average And to

Lance Vitanza

BestReviews And year that say as Or misheard, you were on might did have over revenues XX-plus I year that? up I percent mishear well? you did

Terry Jimenez

No, that's correct.

Lance Vitanza

looks give also you next to quarter. what into wanted at down under over I possible, us sense expect the guess, $X of add if the earnings the I directionally? million of And restructuring like backs for some quality maybe, cash the improved. Restructuring year? we ask should in of least you, were charges year, it terms in Could balance

Terry Jimenez

of QX larger talked events, of think that we couple driving in calls, number of was as I'd to be this we I QX large. had up that a the year and say, Yes, kind last of abnormally about previous year,

little a what probably it's at run quarter, a this think normal basis. than we on lower bit I

we're than closer been I of number's but it quarters, And it's to this quarter more say, to level. be now probably has normalized a guide so specifically that. don't last we the I think couple getting for would But to of

Lance Vitanza

looking right? you ahead if and get And the sort I'm at Maybe so, but it if I'm adjusted If one quarter me, looking I could, for below could on well of EBITDA 'XX? for queue. then guidance if for 'XX, more XQ reading But looks the wondering if will at that seesaw? and the be like the back of comment XQ year. the that, I'll right, well the I'm just in why And it

Terry Jimenez

think through Yes, progress as we the I go year.

So through the actions taken of a kind year. built that last number have year, we up of

least where this last as full we drive pre-synergy year, a the few actions some place also quarter in well a So help still we'll benefit it at of year, run at was rate of running at, as year, next quarter synergy the that to had Virginian-Pilot rate. we year, for in year be have last a took this this performance, on run and second

for year. year, proceed this really other some And have cycling that some stronger into is have so actions is took place the last of a year, QX actions as the performance and it those think from QX this getting I started throughout major we last we benefit started in last we much Also, we'll component of was little the year bit against our And that benefit those Virginian-Pilot. year. than we

So is was it the with than the higher year relative last the fourth year this management associated in earnings incentive quarter.

Operator

will come next our Markets. question Michael And from Kupinski Capital of the from line Noble

begin. may You

Michael Kupinski

a couple notable this really about things There's quarter. of

side -- you -- there. had general of seeing kind give the a a because improving you What us some wondering print of you're I out maybe you're this is bit seeing you that of about all, trends a you trends saw both of if First point? choppiness given sequentially, talk the there. just newspaper little little improvement bit ad just why in sequential the which was of can color could at little surprising markets the

Terry Jimenez

to this in print. sure focus Sure. is we're we Terry. that on. And make the coming revenue something that for Yes, want level think of us, optimizing is this I always We that's

only with that to a they there's of marketing people the there's level print the not that out their also are and strong branding of advertisers side the help print higher of get Certainly, think marketing out get action mediums. but at marketing and engage the We the base some from ads using that balance than the they in take reading ROI still portfolios. side, ads value that other a

good pretty about there. So approach we feel our

tight choppiness we'll we'll all, a where quarter, I a see with of quarter benefit. little there think is bit bit see to of a little albeit within window,

get One for benefit quarter or a be the part, next, most several may seen we've the over little But us bit out been we've what years. last than better trending down. the

three everything certainly So the we relatively have I been, quarters We're doing can. think that last good.

on aspects, on general side. mentioned, in well really selling as the digital the Tim really training As training the heavy focus as composed

better be for forward. element moving and opportunities training side we'll us benefit think sales think on been that also I short so even have and reaps to some think we And investing our an has term, I

Michael Kupinski

And I earlier the last from of from settle think comps, bankruptcies in kind you the forth still of quarter? fourth recall. to a are cycling the quarter in year you if guess, year, I against and so third down the I started easy

were the have expecting, expenses than I about quarter and given that well. have thing you expected, forth. that then I the So the what guess, on you is the And lower million compensation that's at back, would notable $XX.X as were so second this

little initiatives some of on compensation have talk just So maybe can side? a the you might bit had you the about

Terry Jimenez

rightsize business little expense in year. of the we place but quarters. second the the actually in resources of QX that management bit to of out substantially, There's majority previous additional last quarter, in a the taken of number took initiatives a Yes, were took

which the had we restructuring employees voluntarily we driver QX, for year, had New the program, And into and a Going exit. beginning then to number launched of voluntary also had the both our Chicago in that decided York base. some of

the in a of changes that And some And in well. of the full also, at of through had so rolling all comp as kind we we QX are year on rate basis got beginning expenses benefit the run also then for the those executive QX.

Michael Kupinski

And but total the some give cost can some a I huge thought side, then it's thought. usage anymore, of pricing versus could just you maybe know on you of just on us give us not newsprint component newsprint.

Terry Jimenez

Yes.

the for year up range. was, volume over slightly pricing quarter, in year, So teens the down

We have August. of last year, been the focused, peak last were occurred QX in pricing year, as tariffs you recall, really of rolled as out end the

benefit year down the basis year-over-year quarters we'll on of time And a year. hopefully, for the of a so over have in number being pricing first

anticipate. we what That's

year, that of moving of And benefit peak over number still actually reduce things in hit as laid year a the newsprint see pricing the so high as will of light pricing that to kind in the volume some we've well. But of continue we'll forward. we kind

kind both. have of we'll So of the benefit

the some as taking as we well as well. Hopefully, price tailwind for that volume were us action

Michael Kupinski

companies other looking are cost efforts. at reduction additional other And

looking Saturday concept? of much have are the impact you a how edition. this thoughts. have even if publishers the printing at been prospect Has might the testing versus savings not on so, your Just revenues? you determined Some company And

Terry Jimenez

Yes.

we and periodically at each is have, we profitable. day look assets for that say our I'd footprint So incrementally this. the

-- to forced reduce we look days. do haven't So been we at how the haven't we had

than we a increase haven't least that we someday We the near continue doesn't value short we that in today, and do term at day during how of couple to we I'm done But products, days weekly. it be look the a We've have done fewer Thursday product. haven't at printing the we Wednesday customer. on future, this on a they to to tested week. paid this. -- of those the to every Certainly, may where side. but can moved We we the outside our then mean we're free products, term, And used moved the or free sorry, reductions to

Michael Kupinski

seeing you is going give in two thoughts or question ask consolidation, the final my question we're of post what consolidation the New and obviously, your competition, to terms might you address room-type Can I'm terms to between Media of me are and in how planned post-merger then want Tribune, in elephant those this further however just And Gannett merger. industry and whatever in terms potential industry affect that, the of companies. thoughts the your might

Terry Jimenez

Yes.

next it's relatively year. for So far And think row momentum they there's as we integration and in in we couple then continue Certainly, into likely for the transaction, I year it's before as a that have good to a as quarters a of that We've of forward into that us, had -- us. heavy usual had this business finish year. want year next out year. wouldn't lot mentioned, move they'll this lifting the close on too keep,

few a think to operate I it's not So, There's lot. Florida, relatively a of heck us, that we but markets for a adjacencies isolated. in

for existing us So challenges as the that basis. a to We're strategic operate we match up the doing don't but And think focused would we something opportunity focused Tribune we stand-alone that, making Certainly, that's competitively, there's can Publishing we're business we with somebody we'll the assets. with well if on. sure else, focused best a on can there. certainly, that see as any our we're consider board not on on

Michael Kupinski

their be or and you? New terms that make that of consolidation Gannett combination of interest be, papers here pick say, are interest there to a not might in to be sense there and more there few may follow-up. of a facilities the -- up assets to that as Media of for in distribution you Are may quick just opportunities and other in And let's you

Terry Jimenez

on at pass on speculation of that commenting this stage. Yes. any I'll

Operator

further showing I'd I'm Tim And to for the call you. to Knight back turn now no like closing remarks. Thank questions.

Tim Knight

everyone, for today's you, joining Thank on us call.

the a very on gained The strong we first was much. the Thank second we quarter for company, and half forward momentum year. of you to throughout building XXXX of one the look the

Operator

the and you program, Thank a gentlemen, conference. and have may Everyone day. today's does Ladies participating disconnect. all conclude for you great in This

Tribune Publishing (TPCO) 10 Aug 192019 Q2 Earnings call transcript