TPCO - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2020 Tribune Publishing Company Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today, Amy Bullis, Vice President of Finance. ma'am. ahead, go Please

Amy Bullis

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

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

Jimenez. Executive Terry Lavey. Officer, Joining now me Officer, today is turn to Chief Jimenez; and I will Mike Chief call Executive Chief Financial Officer, Interim Terry the over

Terry Jimenez

advertising Mike provide A with unprecedented our I perspective unrest through for and numbers. all and last The our our significant in lot our are as Well, in a people, interest a and good hope that recent morning, since impact everyone Publishing. will will come has QX has CEO. civil and for I on safe. call thank our and are These trust the world high-level lifetime. our COVID-XX appointment our families, to; I changed have pandemic business are partners our staying business. your today's uncertain times communities, walk you in the my Tribune my joining in and update you

So for our many Like like never despite long-term have lived of these about the this. myself, times through we optimistic challenges, prospects remain company. us

newspapers all. have However, seen our it

the Sentinel the Maryland covered American XXXX; XXXX; traces the the of to and Prize XXXX provide she and Sun Daily staff, its had Orlando which who the The Chicago Our financial meaningful Sun mention illustrating brands Morning Call the Hartford reporting local XXXX; in civil back to the their was journalism Mayor enduring system Baltimore in Capital for to oversee. Baltimore make coverage unrest revolution hospital XXXX; the Sentinel title, Tribune way related relationship News was like oldest Sun all the Annapolis, Courant a These XXXX; in a XXXX; a continue have XXXX; roots will undisclosed Virginian-Pilot founded special the the everything XXXX; awarded public to from pandemic they in Daily the future with the courageously and its current The Pulitzer I'd helped of through readers our value. through Press Baltimore lucrative XXXX. storied and the XXXX. lived

and humbled We that are brought of by recognition. proud change extremely about the coverage the by

the of International we Culture. We Best XXXX Media News -- our honored in Corporate by XXXX Studio the of Awards. recognition And we Telly New from are received proud of Enhance the XXXX at Initiative agency also are received to award the Alliance category the

I'd helped with and the challenges to leadership pandemic. has all faced and and we transformation. Our CEO, organization that to team's the navigating recognized now appropriately effort touch urgency responded to as speed resiliency, have all the on digital our creativity four strong like approach team by these awards. In have is months first my and accelerate our our to

safety Our priority our and employees was communities. the of our focusing on key

to continue deliver report mental on impact thorough physical, news economic We virus the a and implications. of and its the

without providing frontline to essential including we workers individuals visibility, and guiding care in move our facts to of like impact had essential a and us quickly rapidly safety visibility. through After the through thank of We to ensuring in perspective health the from we provided in this would to successfully extremely helping for on the frontline to business. potential challenging addition period. our businesses. employees, In team navigate our assessed all turbulence organizations I lot

with including debt the liquidity. We dividend. prudent; but on of this build advantage optimizing cash; preserve Act, CapEx; take following and and cash cash operating CARES and we on sufficient entered still the to no focused reduction where working our initiatives: focused applicable stream and first liquidity of pandemic The preserving suspending capital

workflow reduced significantly following and halted OpEx The we to reduce the expenses; schedules stream expenses; in second production or concurrent outside on areas: in order focused reducing services; our reconfiguring streamline occupancy and decision pay all made the to are reductions, companies similar what and which through to staff media other deployed. compensation discretionary have targeted spending; reduce action difficult we furloughs, also reductions

on focused digital opportunity. the stream third Our

of for we comScore March coming subscribers the end public's XX XX% that key anticipate stories had year. that Our by million our of will health. pass up in QX in QX was to XX,XXX year-over-year. the digital-only We in open XXXX and users which did of from level growth significantly sites, we up this We grew vital per our traffic digital paywalls to

growth. heavy platforms to the investment make tools projects, and product drive While experience, enhancements capital recommender Areas we to we spending of informed sophisticated site experience speed, experience make use optimize data marketing in our and froze continue to to customer most were further with mobile subscriber and growth. decisions the to along of capabilities discretionary analytics customer and marketing in, our digital-only

after journalism sought reliable phase, during sought Our credible consumers and information. as this out was highly

grow profitability and significantly. Additionally to terrific with quarter continues nearly our BestReviews business had of XX% growth a revenue year-over-year

value grown significantly XX% believe years two has business over became of we a about of and little since are very growth prospects We excited owners, business. this the this ago. We the

the recover of forward ever. from emerge business partners than the advertising helping Finally, help the to get positioned we doors, in the suffered of place. to unrest have looking companies them as efforts titles and open concerted to to a economy we our a storm look communities our our in succeeding result are and moving they've believe better negative weather and we COVID-XX their businesses and made forward We helping businesses nation positive as We virus. out support are again. We a begins confident civil and stronger communities our we direction our in impact to as the the in ourselves through communities the

cash I speak position Our most some unrestricted testament in financial specifics strength that nearly million, with endure times. to to of Mike of of call this to our business and over our cash continue year the on challenging to With of along to the the a the to is performance. turn $XX would the generate expectation ability positive to like our to

Mike Lavey

you, Thank Terry.

The of first quarter for pivotal quarter XXXX the was a company.

our resulted assets. intangible of non-cash of charge, long-lived million the our pandemic, goodwill, and a As did significantly an a impairment GAAP in $XX impacted assessment which we This assessment earnings. result

quarter. for Now first I'll speak our to the financial results

our there of will as reminder, prior no acquisitions. necessary, for business same a all be year we've comparisons all As of XXXX, cycled

XX.X% X.X% TSA the XXXX. or declined first on core the a For were declines associated quarter month. services revenue next $XX of California is X.X% on $X.X provided from year as comparable a reduction which the fourth or year-over-year million XXXX, is of with agreement basis. in Accordingly, million to decline the transition complete properties, excluding quarter revenue with that we the basis, in year-over-year the the prior

in Cars.com. the our related of revenue quarters, Cars.com, impact also We $X.X in see driving digital – decline included is XXXX. for We'll current comparisons also as next we've the first period down of that the concluded quarter the the four million agreement to

the program expenses, year related Regarding executed charges, the Included to quarter first or the year. on the impairment severance operating $XX.X focus same XXXX. year-over-year, operating $XX.X of managing severance quarter expenses last million we the $X.X expenses face increased pandemic we continue expenses the excluding XXXX revenue primarily with versus in which of non-cash of million in in the first to down voluntary expense, in current industry-wide quarter X.X% of the total headwinds and million operating

the loss For net was prior the driven largely to of loss quarter, we share impairment of attributable reported per a $X.XX net million, $X.X of compared in a XXXX net to adjusted a the XXXX. to delivering with of we related QX charges. loss $XX share in $XX.X in EBITDA million compared above to loss $XX period. QX the million million offset EBITDA of Tribune shareholders to Net to Despite year by Adjusted $XX.X the for year previously pandemic, $X.XX to in guided million able compared reductions expense were totaled clients XXXX. our softness revenue of specific revenue prior the thus per pandemic

speak the company $XX.X The me impairment COVID-XX of long-lived moment impact goodwill, for considered intangibles and The impairment particular Let COVID-XX charge related including mastheads a our pandemic for approximately in assessment charge. economy triggering impairment and a of on event totaled million. about is to other assets.

terminate to roughly Chicago company right-of-use related overall lease improvements charge taken totaling the leases was or and half reduce we've Angeles million. the which assets In and resulted real actively of estate in restructure. footprint to total, negotiating our of in actions $X impairment Additionally, is leasehold impairment Los to

to of balance and $XX.X cash We million the ended unrestricted which restricted. is Turning million cash sheet flow. the $XX.X quarter million and was of with $XX.X

and quarterly subsequently May. As Terry program disclosed dividend mentioned, the suspended Board payment previously in the shareholder

on terms, managing employer Social to pension of landlords deferral contributions balances remitting actively of our the several with taxes defer under Act company-sponsored CARES for very the extending are We plan. vendors favorable more due fronts by of negotiating portion cash Security and the including assessing utilizing and terms,

which company. monitoring the legislation items may any We additional are impact closely proposed for

building. During $X.X year, the by due proceeds from $X.X the quarter to our the But $X versus for was receivables. quarter, in CapEx of sale office lower offset from million million the million, declined Virginian-Pilot prior operations collections primarily but cash totaled on

we've no earnings The segments determined segments the in digital the noticed have that an its of and operations may quarter desegregation In and of reportable financial of XXXX, operations pandemic, segment. time, print change operating the combining the statements positive the be should not periods evaluation segments. flow to this business cash reflect been the was COVID-XX groups uncertainties will its its company's but year. of XXXX the You release. there media company the first triggered for restated the at together. of guidance the of believe do guidance and providing the realigned digital in we related in have is Prior light year With respect reportable to reportable company company one full the to reflect disclosure

$XXX we of as to pandemic and adjusted revenues by For company to a $XXX million. million closing, our the million In XXXX, quarter and $XX boost second total experienced on to demonstrated $XX.X a the company of provided growth digital of the digital-only expects to in in subscribers QX QX XXXX. EBITDA of million transformation the into has

must to we our ending eliminating by other areas late our these our reducing as including pay footprint and smaller the we or particularly changes flattening reduce as these cost furloughs. printing real difficult, compensation and recently and the outside very team quarter implementing of nimble monetizing our printer; these by However, of infrastructure, to base of run, in the of in cost of decisions fixed and ourselves compensation-related steps plant and properties; taken many taking position not our thereafter, yet introduced our Many long benefit as closure discretionary sustain were the leases full the reducing have the in members. seen many Certainly first directly reducing profitability were to impact headcount; Virginian-Pilot company announced so have such items the our actions Accordingly, have an restructuring taken. from reducing the we owned transition estate order they and the plant operation. livelihood a organization; we bonuses; are more management in reductions incentive and

Session are the its company And taken short- have to now all ensure will and to expense long-term to up achieve the However, we open the we meaningful journalism. ability of both Question-and-Answer necessary, actions questions. And produce mission.

Operator

[Operator you. first Our Arthur of comes Huber question Thank Doug from Instructions] Research.

Your is open. now line

Doug Arthur

Yeah. hear me? Thanks. Can you

Terry Jimenez

Yes.

Mike Lavey

Yes.

Doug Arthur

terms bit around give advertising if circulation. a guide, wondering the more I'm Yeah. in second print color revenue can little quarter of underlying you

look one I And think, some XX%, advertising. the And out parts I had may I moving digital quite of coming mean, given. in overall than in guess, a -- M segment you've higher bit down I rest a was figure, advertising a I the with in it, revenue the peace. guidance

if can color that. So I'm you. you Thank wondering give some just on

Terry Jimenez

preliminarily, that. is the points our we print higher side, few in advertising what were And be to April we're where a number on pacing than June. Yeah for like and that's probably going Sure. That's May. looking

down, a given -- also advertisers' our are we of the the will decline Come Doug, on considerably. be then agreement given year. rates And quarter higher sales through we're And up teams have points, digital just declines are a happening from while have traffic this then the with of direct year-over-year as rolling that gone the which we've have first on advertising for what's then about also we our So is talked altogether. businesses. we had programmatic seen Cars.com we And basis significantly also QX, side, there. that couple the down obviously our

that's... So

Mike Lavey

-- QX. in $X.X million million, $X.X about That's

Doug Arthur

digital Okay, advertising. okay. I assuming, was See, because

a in enough, Now sounds we've that's guys down had like, It of you sector digital advertising. I lot severe not the XX%. seen digital. guidance, on in

Terry Jimenez

Yeah.

So, specifically yeah is we worse imply be overall as digital yeah, probably would But won't to I digital. guide think little to well. little think I bit mathematically, worse. print And a bit a

Doug Arthur

you on going called of growth the in print subs digital circulation then of And What's revenues. side and the out circulation?

Terry Jimenez

seeing declines. we there are So

So circulation. there's, the two components of print

the So, engage on still to place subscription our had customers in as we and they're delivery paper hold with the see paper. the sheltered home

flip of part starts that, had in. cancellations a subscribers that side we kind strong number slowed shelter-in-place ins So the marketing is trend, able versus have What down, the the of call to pressured in terms we to we of during call for the them campaign, on provisions. weren't new especially first of of had bring new as

retail these of some a were traffic a definitely slippage in bit but areas, most We outperformed print drugstores, negative offset. a -- that. trending. down, And saw foot sold, are we it was significant, locations newsstands papers especially and on of of bit high grocery to at the then, closed saw slippage. and given sales that we partially see outlets, in heavy subscribers and That a transit what impact So in little did been had those stores not little

some of offset partially drops it bigger So the there.

worse been balance, it's bit is what than And So was The we decline. little I home on think a then trend. worse slightly have delivery than a trending. single copy definitely

Doug Arthur

missed TSA clear then LA I right. that. And wound you the that that or down now, finally, QX? what out XXX% the All Times. just on of sort said is with in on Is fading not I'm

Terry Jimenez

Fading out in QX.

Doug Arthur

Okay.

Okay, great. you. Thank

Terry Jimenez

you. Thank

Operator

from Market. Michael And our comes Capital next Kupinski of question NOBLE

now Your line is open.

Michael Kupinski

Thank go you. was first about cost in quarter. wondering, mostly that of the a maybe you was can bit if you if second savings you that the that the implemented balance said quantify was I compensation the wondering, we into talk little as quarter can for year? the and I

Terry Jimenez

actions of took the Yeah. at of pandemic. number the the a before year We Sure. beginning

become in beginning – of team we coming the then voluntary executive and the we had the also leadership also program in – we January, We company, realizing with those February, savings. reduced were well. of the as had size the change in So announced at had the

And mid-quarter, QX. pandemic. so play, pandemic more was all started before happened that changes quarter then making as first throughout came And kind the into of we the

see an to expenses is, there the improvement We'll comp QX. But guide in I So I a see QX. you'd decline adjusted number year-over-year you for think won't in what Mike. in specific

Michael Kupinski

would declines maybe if quantify, for. from of well? bit – I'm that can something a talk the if better I you the compensation little as your wondering, there volume. guidance kind bit about if the with to And there. I was trying you. getting it of those the trying EBITDA than little just what savings, print cost you're for a or you I magnitude to savings, imagine declines newsprint. got you adjusted is was QX pricing circulation – I the talk seeing looking outside can circulation have understand just of was because a Are little was I

Terry Jimenez

Yeah.

copies. So, sports in place also of seen we've without that volume sports are our on pages papers the fewer. the of the taking newsprint number print And both decline side, amount

fewer fewer and got we've copies. So pages

help ease So are prices that's pricing, on the the of because And we the a reducing helping volume on then the drops up volume cost, bit. – there. seeing quite

are year-over-year seeing also And benefit a these so we which price for through is decline, us navigate tough helping times.

Michael Kupinski

maybe of permanent expense to to the temporary? quarter I'm some you not second of reformatting you've kind the are mean, actions of savings expenses much types considered had things to vendor in the permanent just How certainly that expense you have again. to your savings the that. be And quarter may do of versus related related some going consider what of would comes to to I of be agreements, of the sports the the if especially back lack in back sports papers, may be expenses

So, kind consider what can sense us permanent you to versus a of be you temporary? just give of,

Terry Jimenez

we're we're So out there's that – had I'd reductions, driving to to business. while Mike we're be as temporary cost going referred our fixed sure to expense say, of some the make continuing

So provider. outsource transition we've in-house we'll to of in QX, Virginia instead we'll in just another that printing announced

So come QX. see some in layer we'll through savings of

focused going essentially future. to the be where of temporary the line back revenue So on structure make we're in reducing normal, actions bounce in to will the that to as some cost trends continue with we're sure

and line is. a actions going revenue expenses where So in, is shaping the actions other bounce I would I reduce to we're in but temporary size back in as see business, you side help because say the I with won't take significant of what come to won't think, back the temporary, the expenses expense those

Michael Kupinski

rapidly that, maybe of whether some from the forth. of trends. similar you us and actions highlighted BestReviews can performing? you or opening fact so Was you're is sense obviously give up still wondering so Or the was kind kind the growing you. benefiting that Got shelter-in-place we as terms it then of see economy how And in seeing not of

Terry Jimenez

Yeah.

e-commerce. a that's tethered to is that business So

and grocery had to And so of behaviors online. more as typically think seeing to kind while were shelter-in-place I traffic, pandemic stores drugstores would those during that changed this of and stores their provisions in, like buy go came open, level we're to really some

And a customers has that. of significant buying support more physical behaviors question with so store to which is, be changed of those And big our business, forever for that a to BestReviews go they because of will think that would normally level. is change, saw had benefit the online e-commerce, their the some pandemic at I

And we'll ongoing see some think, so from e-commerce. I benefit

it obviously but before a pandemic. it notch was speaking, pandemic, growing during generally Just the the kicked up tremendously just huge

e-commerce being good for tethered And growth well. future foresee that then I business we'll our for being to as so And that significant generally. a story growth see BestReviews really

Michael Kupinski

kind some a just the point? and newspapers appetite whether there's the in but not at obviously, down of M&A activity, lot it kind to to can of or at as bunker opportunistic what are you. just best financial your this Got is point you struggling about or are this acquisitions, of talk of And – right make not And this thoughts position now like kind are, that just manage you crisis? your be through

Terry Jimenez

Yeah.

prices. valuations look I would pretty acquire affordable the where to speaking, think like generally hand affordable – the said or one are on very at – has to prices that, business from acquire we

to us. that's think I So interesting

think, of that in. element deal fogginess just is flip of the I comes to something level go don't be it'd think great out unknowns us, new, bit other of time we of could want M&A while up a into side buying what there's we for and that about a is that implementation clarity the and future factored bunch mean. optimistic that think buy not a focus need there core little about assets is I we're still there's another, a getting to don't from I businesses time. start of energy time to think the that focus very really have that can there's any a the I probably number better we're own, prudent sense you of our have And other and and we just that, future company we to And that more a this until afford transition while we things on at as integration, distraction goes one into the

Michael Kupinski

it. Thanks Appreciate that for question. Great.

Terry Jimenez

you. Thank

Operator

Thank this any would gentlemen, our I you. conclude call remarks. does And session. ladies for turn now the and to over like back Jimenez question-and-answer to Terry closing

Terry Jimenez

mentioned a impact We period, we're manage the digitally as we to Well, in – focused we still recognize that as effectively to cost but I throughout in transform our are company, have to call we those our question company. the pandemic the both continue the and and civil making investments the be unrest interest you all our and Thank solution your of for well. Stay part the and and our impacted. in eager had employees, the for safe on Tribune be customers we Publishing. communities had

Operator

gentlemen, you today's conference this call. concludes and Thank for Ladies participating.

You disconnect. may now

Tribune Publishing (TPCO) 5 Jun 202020 Q1 Earnings call transcript