TPCO - Earnings call transcript Q2 2020

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Operator

Thank you for standing by, and welcome to the Q2 2020 Tribune Publishing Company Earnings Call. At this time all participants are in a listen-only mode. After the speakers presentation, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to hand the conference over to your first speaker today, Ms. Bullis. Amy ahead. go Please

Amy Bullis

welcome second 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,

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

Terry Jimenez

and our quarter, we and our for navigating today's interest Tribune will everyone will in in insights thank I staying Mike has trust to then you, good your ask perspective healthy the for performance financials. through some continue Well, call Publishing. walk and Thank as and second on pandemic. everyone. safe joining and Amy, this provide afternoon, I you been

I our continued demanded unforeseen collectively the And we responded. performed brought how has has alter circumstances as world our how faces have as Our pleased changing that Company with the am challenges last Company by dramatically approach, in and months our team several about pandemic. our has

and our advertising now than journalism are marketing and our valuable ever, to Our partners. more solutions, extremely readers

communities the depend on journalism. and audiences our information need we readers, Our and great provide

We on impact had. virus the and has information the continue reporting thorough to deliver

providing we provide perspective essential to businesses. and healthcare workers facts and addition in In frontline visibility, from in

As our communities local and we the advanced have regulations, lives. our the two organization new and continue to team readers rest their day-to-day has up virus first informed to need progressed strong keep in business. leadership with all stepped and our different In governments of information the this of year, guidelines our they navigate quarters and relevant drafted has

team, with own urgency to have like have our speed digitally and thank focused continued essential continued for through I uncharted help in frontline organizations, We their and and guiding us including enterprise. all responded would the a of these toward resiliency, territories.

of with hurricane on our business of impacting to shine discussions world the stories sports updates, key each audiences like we prime, large While our continue also and and the preparations civil and deliver in entertainment. communities local we government, ever-changing stories pandemic, and

in earnings events main action responded we mentioned the As of meaningful quickly unfolded. four areas. focused our call, with last on We as pandemic the

that, future our working are this unknowns, and and ensure These continue to peers, many we use capital, and facing significant our confident expenditures balance as the in balance that Unlike of we action significant flexibility strength reductions to and virtually suspended financial of the dividend. our storms. sheet. continue the our that help weather maintain many we debt made other pandemic us sheet maintain took we will strength actions cash. of no optimized capital we First, entered our of with we maintain into To

as include related actions virtually in concurrent schedules, changes reduced business. which to especially Company; secure we've to and These second services were we save costs, was on where and optimized expenditures, of on OpEx production the costs outside own out The rent occupancy contract focus part across reductions our every additional relevant in our sought result a not working savings. our our in where of offices; of

We reduced significantly discretionary spending. or all together also removed

these difficult addition, advertising maintain Though pay ensure reduce In our top-line and flows the we targeted the reductions made we revenues compensation impacted decision expenses by furloughs. cash through to staff as reductions, helped slowdown. difficult, were actions

In our on with over placed grew monthly our on this of second we million a our was growth sequentially digital-only the the basis. a single XX in quarter first we focus us us representing We average media began which second and these XX,XXX by quarter, above was outlets quarter year-over-year year, also of quarter, subscribers footprint, from greater subs ago. several of more in area since most XX% placing the opportunity. years than visitors our regional saw digital the peers third year Our most unique digital to growth growth largest efforts

XXX,XXX Our total at of year-over-year subs XX%. for quarter, representing the a gain ended

audience the in significant base. We and experience marketing as our digital-only we subscriber customer These sophistication our continued improved targeted to solutions. subscriber our inform gains to our our decision-making. or efforts experience, data mobile have We've and analytics grow to to we enhancements made of continue and experience our and make yielded utilize significant strides

posted of more. XX or growth subscriber consecutive digital XX% now We of have quarters

We stake BestReviews are the continually reminded Company business, success which in. has majority of a our the of

improvements. saw growth, line well The as second bottom post revenue BestReviews year-over-year quarter as substantial

negative as Our the our from our in to result fourth they've a virus. efforts focus made the businesses We recover suffered in businesses of with reconnecting the impact concerted the is communities. business on communities help

open to rebounds. marketing their as we to back begun with have partners them have ensure business businesses up, worked As

of audiences I'd Board extension leadership our our proactively the on executing team that initiatives and and an focus marketing to Company economies. agreement that several shareholder. announced first standstill of acquire to in the future. remain while agreement order the our our that partnerships digital potential our these transformation. and We the advertising allows intended premium. helping in that outside rights Directors, Company Our restarting investing businesses realize largest a the We our of control and the Publishing ability here. continue Company is groups on to local to In our solutions employees by their investment, of recent of We advancing Tribune value are to touch made and full we agreement. in to The likelihood stockholders it agreement client our our payment with the to confident will enable to stockholder like support focused assist the the readers against its appropriate efficiency the on later announced stockholders the interest patronize, has all weeks, to can businesses This announcements and digital without reduce operating degrees the an highest shares and protects

expectation generate Our to the with testament positive year this cash continue the times. of substantial endure challenging cash strength to to of the million, $XX in is our position our to along ability most of over a and business

financial to some over recovery. our to continue a to place, I'd and our speak Mike nation communities to the of our to call will our part As reporting, better in get our and performance. their turn that, our marketing play specifics like With on to the journalism solutions

Mike Lavey

Terry. you, Thank

management quarter response and that pandemic our we we difficult unprecedented Virginian-Pilot; of in cost has at future. in position XXXX the of staff. The particularly Company revenue the to Company country, challenging decisions These necessitated on printing our the focused our was second The facility significant take measures a packaging economy, declines, advertising compensation the outsourcing digital infrastructure, a customers, coronavirus quarter including our our and as to for reduce efforts leased to costs. reducing taking for included our fixed and reduce cost footprint steps our

our quarter. financial second the highlights to for speak I'll Now,

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

in comparisons the reportable disclosed will and Prior began there to fiscal quarter quarter one managing have as our first and business XXXX reflect in be segments. in one periods no been as change business reportable Additionally, Tribune segment. of restated segment results, beginning the first its as

$X.X the services revenue were which to National additional properties we decline impacted prior related the Included increased XXXX, XX.X% declined advertising quarter. or as associated X.X% concluded XX.X%. decline decreased revenue $X.X million agreement, with $X.X or declined digital-only this million Other million declined million Cars.com million only XX.X%. or or the basis. million a revenue, year-over-year year. last $XX.X copy $XX.X and million which taking XX.X% For offset or Circulation circulation decreased $X.X home in advertising declined XX.X% single decline, partially by quarter or million the that quarter. delivery advertising is delivery biggest in a or revenue more second even pandemic. online or in and compared print quarter. the so at year XX.X% our million the during as partially to transition were These expectations. as customers the California these offset turned down exceed with up quarter million to $X XX.X% week $X.X of XX.X% provided did agreement June sequentially as increase wrapped previous services each public commercial second in the to BestReviews improved An by $X.X million our on in We the from is XX.X% as second by increased revenue and were declines $XX.X in revenue retail $XX.X shopping guidance by the for equally classified prior with of Advertising or declines off

or year-over-year side, Reductions outside continued newsprint aggressively to or of XX.X% in the million million of million down pandemic expense, revenue XX.X% operating in $XX.X million expenses services, second the $XX.X expenses. expense XX% we $X.X quarter on expenses face a included ink, compensation expenses in or XX.X% or headwinds manage the and or and in $X.X other current $XX.X in and year total with On in industry-wide XXXX basis. operating million in XX.X%

second by compared shareholders revenues. prior to for we million continuing the of income net Tribune Adjusted with prior compared EBITDA in June For million XXXX period. guided our year to $X.XX attributable $X.XX reported in to share strong Favorable year control and in compared the operations adjusted loss of per quarter to share QX shareholders revenue cost deliver million XXXX. previously $X.X XXXX. attributable decline in the $XX.X in Tribune us was $X.X QX above totaled income of to per in to driven EBITDA $XX.X allowed the million quarter, net Net lower of XXXX the of from

Now turning the strong outflows. $XX.X of on to bright $XX.X driven management or flow. focused for flow the control XXX%, been the quarter for cash million increase to by primarily operations a and prior Cash quarter, $XX.X spot Company flow an with for million from cash of cost million cash very compared has year

cash million $XX.X to period, with $XX.X compared which the year. $XXX million extending $XX.X fronts, balances restricted. by taxes. in our is more the landlords for to as For on actively in remitting primarily we the also several million and ended managing defer social Act of million payments $XX.X the unrestricted utilizing quarter operations We're year-to-date portion is is prior payment cash, cash terms, driven million with the favorable flow terms, from CARES We rent of but cost control employer aggressive security negotiate reduced

We Company. closely for to may items the legislation proposed impact monitor continue further which

year. previously, but for the $X.X remainder expenditures Capital continue quarterly suspended guidance, Company associated flow with guidance, the of full-year mentioned Board As the the dividend respect is totaled the generate the not XXXX pandemic, COVID-XX to positive for expectation May. the in the million. of cash the in will to Company is light With quarter uncertainties our providing program

For by the we've pandemic $XX million transformation adjusted half experienced million digital third to the total EBITDA of in In subscribers $XX of to to digital-only Company XXXX. the of accelerated million. $XXX demonstrated revenues XXXX, million a the quarter $XXX has our growth and company as the expects closing, in of first

agile future liquidity marketing call and provide, pandemic sustain so, the compensation do we in we've reducing strong be We and drivers debt. team solutions withstand journalism to focusing and due Company well in now reduce taking and our questions. solid we of our have character of reducing footprint excellent long our believe more we our a we on the featuring open steps strength the to real operation. However, and smaller, positioned order estate for And by infrastructure, the expense up successful are and to challenges coronavirus to term, minimal are and to the the will our fixed primary balance ourselves the the sheet, expense. as To positioned cost

Operator

first Michael from the comes line Kupinski. Your question of Mr.

line is now Your open.

Michael Kupinski

good Mike taking questions, this Hi, is Thanks Kupinski. for the afternoon. and

of that I companies just for is media bit talk the because bankruptcies can guiding also made as choices sacrifices hearing so First I deliver revenue for a a was look And wondering quarter. to significant company flow, that QX revenues over that about interesting, of And is of some to bit other results. at mean, up that that we're year, of to your congratulate are our as guys little be looking some and many revenues your store closings all, better that employees I down it's you have for toward cash obviously very you being surprising. interesting type a traditional actually remarkable. performance types about to you're for and on and you the which want that actually tough in you year and little the your too, you the forth, range roughly guidance expectations. than XX% is is kind deliver overachieved these if what's and third of

there you components kind of of a flavor some kind the us be obviously key to QX side. out your and guide just us So just the of drivers in has there? give Can help for digital of

Terry Jimenez

Yes. This is Terry.

advertising the some see there. still think side, On I headwinds continue to we'll

line big retailers while albeit little advertising are and in certainly partners I entering retailers for fiscal other quarter there QX, was, into and those I it anticipate pretty QX, -- as through But our have improvement date. limited think circumstances environment, have going that reasons shut the we'll down bankruptcy, just into of is. our where trying some but should a QX. we conscious obvious a bankruptcy, from fight a of say, a second in as why were it not exposure announced with we're given lot the -- soft to for as in to QX are And open, in bit or support was of whereas quarter, softer-than-normal second slight trend they'll be we portion of a certainly,

really other half The of lot new guide our first subscribers component in a we year. digital-only the of was of had brought the in

terms we So digital-only QX, XXXX. a end of QX growth in record had of at was QX into in sequentially 'XX time of the what in from the growth of subscribers

benefit QX same sequentially, normalized those and a quite QX that And the in bit. at subscribers and we'll so the broke by have previous on paying and record rate beyond where a story topped our of we then QX

beyond. a and ecosystem have lot subscribers And digital in so we'll our QX more in

as going kind And So of we'll make long have had term, the not the of that then laid short taken a benefit be of position, those Mike groups in out, we term. of actions terms also as side, expense in a we're well. but to stable lot in order to just sure

on continue And -- we'll we continue given we so those revenue we're and savings the about we thoughtful the that be actions to continue to need need from see to confident money. our declines, obviously spend how

as actions what some scale saw see we'll in ongoing than see management so some QX expense we smaller at QX, And additional well. a in but we'll albeit actions,

Michael Kupinski

quick Thanks, follow-up. Terry. I just had one

QX, as storm digital But it the at you of the looking QX of into look you subscriber you forth, a of up type economies people are and growth to starting into go subscriber probably as you of you kind like QX? are kind where terms increase. and the are how that was digital growth seems look course subs and as and QX sticky -- seeing of into perfect obviously seeing activity so news, for the and In would are of what open home are

Terry Jimenez

acquired, days. we've a of that following those those From retention for least But it's kind normal that point of early are retention acquired, at still curve. a of we've Yes. view, those

subscribers. those terms newly in existing acquired the don't see then And we subscribers, pick anything we so move of base of look any churn new to they seen as again, haven't up all with on. And at

there's and access think same people their a they But with we're that is that a on exposure kind credible are relatively sure to going case the delivering certainly, QX news find here the people there's beyond the hopefully still at And navigate to come made kind longer not think certainly, our I think make pandemic story. are be this getting they're time, lives. that. small amount But to going a of now to properties of can story much as the with. that, that of a engaging news helps getting other and understanding that you top through, I I be them need for of are place invest people to waves their and to stay money can of that lot additional is right

Michael Kupinski

question. may But is the this to a you disappointed And, be not today. price fair where obviously stock Terry, be have

BestReviews, the Company stock where relative value parts be best at you what Company, cash at and of at cash just of the you than the at fact And the would at materially fundamentals look you especially at think you that and capital the price this Given see that higher throwing that point what currently? of sum to see if at at, the you would in cash it's point? the this off uses you Company how have the the you of have, you this that the this look would type how flow, do look that are allocation the

Terry Jimenez

day where valued, -- but I Yes. our it's obviously out, control it's in, week out. with about can't think agree we really stock in, I that price something don't something week the point is. appropriately day

translate longer will group term. set communities contribute is assets advertising shareholder continue sure the our on partners. our focused and of a belief shareholder And making a value that really medium growth will our into to to that we've over and to got we're value So assets of and

we growth. can on we're that just And really that deliver best to longer-term so operating focused the

help certainly there's do deploy be we've allocation, shareholder of to through value what And drive the think and I is there's plans the navigated yet. Board given fair but what near-term I of. the how uncertainty, of a the as as is just thoughtful capital no move uncertainty we capital think a continues and have to to part of heaviest with still forward. capital of the storm In we try that terms exited, discussion But definitive amount we

Michael Kupinski

taking for questions. it. Thanks the Appreciate

Terry Jimenez

Great. you. Thank

Operator

from Your question the Mason Slaine comes next Instructions] line [Operator [ph]. of

Unidentified Analyst

world, you're what's the basically quarter going given your didn't performance Congratulations on adjusted same kind -- was third much with for the projecting and last revenue a that where the thanks. your when Yes, the in year astounded actually great I'm the on just of the face is job world and COVID. EBITDA higher as

it third in just cash on a the a questions; cash your of expenditures. is in quarter, annualize have grow Apple than Tribune almost market EBITDA of in quarter And the cash I fantastic a to cap going job of million I literally, cap projecting together. with like and one, no holding on Congratulations is now as well congratulations So -- amount done. computer. for this on $XXX forecast third and market more two forward. you're mean, you capital now that's if percentage

pay wouldn't pay tons coming number why cash of in. a no you Why So dividend? a have not debt, That's you mean, I dividend? cash, one.

of is thing BestReviews. second terms in The

to Is situation So owned so XX% to half stay the buy plan? What's sell to You're where questions. my the at this just XX%? you're years of kind in, rest kind pregnant. of of the like plan here? and those it business of it, the in the a are for strategy What's few you've now odd

Terry Jimenez

Mason. Thanks, Sure.

more have a -- think definitely I the what level about there's that decisions one, there's that answered no capital I first as here the at It's conversation but continue much I could we not Board to definitely discussion of the in we're allocation On than how capital and allocation, announcing part other it's today, future. add on Michael's. the we

as obviously into to had e-commerce, to And quite BestReviews, investment. saw we've markets significantly. Tribune. during a of grow will lot uptick it's of that business an In pandemic the It continues continue the tremendous to grown since tremendously tethered investment e-commerce It's a retailers terms that's for grow. and It's a entered been shutdown. the a

the that a that growth on So, it's more BestReviews about and we're importantly, go, in there's But to the very excited even the trajectory of lot progress it's we of think the can asset. prospects and value where date. it made

of And business. the so about we're really excited the performance

Unidentified Analyst

Thank you.

Terry Jimenez

yes. know -- the I one a you. of had analysts Thank

So of all I questions. our think we've hit

Jimenez. term. everybody can the for of making thank you middle the see, want but creating our a he joining And I we're just be sure Tribune long One Terry is us in on storm so won't of analysts today Publishing. on, laser-focused interest situation, this in as your and value for we're really is that to

you we your everyone, safe. and So stay appreciate Thank interest, all.

Operator

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

You may now disconnect.

Tribune Publishing (TPCO) 9 Aug 202020 Q2 Earnings call transcript