TPCO - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q3 2020 Tribune Publishing Company Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker, Ms. Amy Bullis. Ma’am, please go ahead.

Amy Bullis

Thank you, and welcome to our third quarter 2020 earnings conference call.

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

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

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

Terry Jimenez

and third the Mike I provide in financials. some will we’ll Amy you for insights your Publishing. Tribune our walk joining And everyone. performance to you, good Thank Thank our then for perspective afternoon in today’s call through interest and quarter. on ask and

shown world. adjust, the country coronavirus continue eight workers employees lived and now the I efforts by while grateful and and Publishing to through the frontline have am We Tribune across for pandemic, and resiliency of we months

news locally this marketing tirelessly core our news important to like relevant who major cycle. solutions in events, national tools have as election Our to to incredibly of thank times cover we teams I’d worked navigate through uncertainty. and be journalism continue

and get votes committed roll on results results and in focused the As counted, and reporting to analysis remain our to continue perspective. insight journalists offering and

election, from ever-changing who local in consequential to the our and continues businesses these drive Leveraging our to and our and Beyond unrest are perspectives to for entertainment audiences for businesses, journalists information services. for maintain their everything meaningful ideal the deliver clients demand striving our provide continue our teams pandemic economy. results regulations advertising and and growing civil sports to between. and on their And as impact large products everything is engage to

have to a the year our organization times rest pandemic The these ensure step difficult its successful continues to and our future. digital path to communities to our first this quarters leadership team navigate three and of company seen up of face our this help

had. have to although made more there’s progress, be We great

in we calls, key previous earnings areas. maintain our As mentioned focus in four to continue

investments capital products, digital the against retained. We which and downturns. with we continuing development a reduced enhancement attracted incredibly exception cushion given important and halted of in any in or provides invest flexibility First, we level we virtually build We action sheet. maintain position, entered build comfortable into cash. and swift a with our of continued and which balance pandemic cash upon build debt took and to our more future hindsight immediately our to audience maintain no of to the and the that, large the the To projects, of strength

year, as as reduction for our we estate which well also real seen to of $XX pension obligations. last the million on our by obligations decline focus long-term We a since end obligations have continue in reducing lease approximately

the every reduce The on company, which to We we and as of costs work is higher in part every expenditures, took contract sought cost occupancy and model we second most not and lower provide focus in us to save costs, at are concurrent of outsourcing to a business. where where actions we especially where outside a working on offices both reduced was cost looked relevant variable operating expenses related rent across in operating expenses, services, our expense our our model.

positive In decisions in resulting reductions, outlook and to revenue step reductions, targeted actions made Though reduce margin furloughs. thoughtful reductions leadership we base the expense ourselves but expansion reality compensation provide addition, through our sustain over difficult, difficult, ability the the pay Right-sizing we staff profile and the our will expenses business. these and financial a sustainability light lasting necessary us the provide effects is for experienced and broader long-term. of to of

was area nearly saw of to XX base, XX% unique our monthly In year-over-year total average in growth we digital the user opportunity. the driving us million on focus third Our visitors. third quarter digital

Our digital XX%. ended year-over-year more a total at grew importantly, representing subscriber subscribers gain XXX,XXX digital of than And by year-over-year. XX% revenue

great growth in our user into has analysis around substantial provide all happening perspective communities. team a engagement and experienced and in around activities other results demand today work the we and our by of It Additionally, elections been our traffic context surrounding the elections. the to and continuing

top reminder, QX XXXX. of majority a growth in, a very a terms substantial third business, stake company of of BestReviews in In the our on quarter post saw revenue the which as strong a year-over-year basis BestReviews has on

from restarting audiences our from marketing audience economies. our will the have on our We partnerships sequential the is that several that key change, also to in conservative our efforts businesses employments. to related in trends communities. client the leveraging focus audience, made QX And businesses into due print strong a engaged our business the during negative our help virus growing large suffered are connecting recover communities and our those in impact consequences, or fourth Amid confident patronize. improvement executive We all the advertising we and in digital QX saw businesses assist cautiously continue. the proactively with and Our support solutions trends made and they local readers are we this our will and and to continue optimistic

of of sales and over marketing digital Idalmy Daily data, oversight she’ll Vice a the Manager three announced efforts. Carrera-Colucci of use News believe on and larger and responsibility. on will playbook Allentown Separately, organization we top have expanded that oversight our digital the team. well leaders and product as have have Morning businesses. team, Subscription has York a strong – business, allow Luna impacts have and to been deep Digital our Margaret the General her, in across been our New great our has de named focus extensively news, worked and named with having our scope as of Call Retention. to President Audience Margaret successful Engagement them our significant of a Idalmy their have has worked I background intersection of part as the be and We

style also creativity Sunset. very General Manager leadership named the focus Pham and Florida leadership Paul’s have Sentinel strong join and Paul of in an businesses, South our Florida the already energy, We news markets. which the includes and will Orlando group sales

in Our pandemic, allocation, near more to $XX unrestricted announce the against and position economy million, provides long-term of here. lasting has capital position the we Board we which certainty dynamics. to until protection and flexibility any discuss or be of a have The any continues but to the likely grown cash not industry will changes effects shifts in

to investments content, that demand, drive While continually meet assets. to key of to analytics to our to in adding or our investments and news some about maintaining further data really Mike developed of agency, resources expenses user resource With our that, turn our improve products Studio performance. to to tightly, over like at speak look powerful and XXXX, in-house the the decisions, just the we leveraging on advertising in financial strength to the we allows specifics I strategic would drive have continue to investment experience call

Michael Lavey

Thank you, Terry.

to year-over-year year-over-year XXXX Although QX challenge revenue revenues. the improvements, for We compared quarterly trends. see the of decline was QX. company’s sequential declined XX% This revenue third did in quarter a XX% XXXX

We expect X.X% the these our reduction adjusted and by cost third us further to Improving adjusted and prior trends quarter. year improvement EBITDA increase to EBITDA the outperform allowed over for in guidance to continuing revenue QX. in quarter

We digital measures to as significant driven declines, to company position cost pandemic the in management future. continue we work for pandemic post to take response revenue a

aggressively fixed significant Courant shortly Hartford of printing costs we packaging efforts Virginian-Pilot outsourcing We end. at during of are at the our the quarter all we completed expenses, three and QX, quarter. finalized in we the infrastructure. While outsourcing termination our after focused are particularly announced similar And leases managing a early during

those to of locations we Additionally, termination remote real effort reduce estate an work, several footprint. leases negotiate of to in our moved long-term as our

for quarter. address third I the financial Now will the highlights

cycled As we are all a reminder, as business XXXX, no prior comparisons in same have years’ acquisitions. there

and XXXX, business one segment reflect began restated reportable quarter the its reportable Additionally, as prior been of first as previously Tribune in managing periods change disclosed, segments. and to the one have business

the revenue or home decreased We to and $XX.X delivery XXXX, XX% declined of year. an of $XX.X provided XX% million revenue declined the is million XX.X% shopping. impacted associated on declined additional $X.X year. revenue a XX.X% were biggest satisfy from agreement, or partially $X.X XX.X%. X.X% in our the Cars.com decline in this digital-only $X.X XX.X% million concluded million declines $X.X offset which delivery the or public which year. An increased the with and million $X.X only pandemic. These advertising retail to BestReviews, advertising print $X.X declines million accelerating quarter as services in or transition reflecting which in the demand million in million by agreement increased by quarter the Other down services circulation, XX.X% offset related third million as or classified declined partially concluded revenue, single at of with exceeding or the $XX.X prior of were is year-over-year earlier continues Circulation California by commercial online decline prior $X.X or off million copy that to and included or advertising year, customers increase National with the this XX.X%. the properties decline basis. for XX%, For were Advertising equally decreased by second those million or $X.X this

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

QX. shareholders net income per a declines. XXXX of QX quarter For share year XXX attributable of the compared increase in $X.XX per quarter, $XX.X to in of to million operations period. spite this deliver Strong to million to control loss us compared our of and a in all was for $X.X third EBITDA prior Tribune reported in year, guided totaled of in we $X.XX in year the margin. prior income year-over-year $XX.X million $X.X million Adjusted in previously adjusted above adjusted Net QX the shareholders in nearly allowed EBITDA cost point of attributable compared to increase prior EBITDA basis continuing XXXX a Tribune from resulted XX.X% to net share the

remains sheet. $XX.X $XX.X to $XX the million with compared XXXX – year flow million for prior Turning Cash the million me, and and of quarter million our excuse $XX.X operations flow the to balance cash for year-to-date. from cash for flow quarter and for year-to-date strong

overall spending. on lower managing fronts by cash actively several balance our are driven We significantly primarily

We’ve leases employer favorable terms. defer are closely Act continue with taxes. vendor the rent terminate portion of for take to security social more landlords payments advantage we We to remitting terms. payment CARES negotiate And also as of managing and the reduced we

million, capital in $XXX in expenditures totaled $XXX With The for proposed increase $XX million is unrestricted the XXXX, million closely cash expects million total ended monitoring $X.X $XX full and year the impact will financial for year-over-year the year company also and in quarter $XX.X challenging quarter. results closing, million guidance of a strong a $XXX million during could $XXX we and million million respect result to million. $X.X trends profitability revenues to company. quarterly aggressive the In revenue the $XX.X driven is saw and with cash, restricted, million in $XX.X quarter which cost to to control. full EBITDA We’re to improved million which quarter, of the We quarter to which of are EBITDA by improved. the of adjusted $XX adjusted million our of unrestricted fourth quarter. legislation, of $XXX.X We in million report sequential revenues able

That and we the to on challenges the cautious our withstand of team to be and to excellent the remain and the coronavirus said, the well in balance and we impact debt. positioned character business. liquidity our However, marketing sheet on pandemic we solutions due future believe strengthen provide about overall solid duration are of the continuing journalism and featuring economy minimal of pandemic successful and our strong we

digital managing our our mindful While expenses, in right of subscriber we to products, in for products advertisers have newsroom continue and we order in investments digital make growth, the appropriate and consumers. ensure to

call Now we the up questions. to open will

Operator

Instructions] comes from your sir. Noble you, your Sir, Kupinski question Thank [Operator And your Please sir, question. line Markets. first from open. Capital is Michael ask

Michael Kupinski

on Thank you questions. for flow. over-delivering on Congratulations cash taking the

the did you a – kind doing through you are a in know job QX, of even reductions great it guys a QX maybe we cost into and quarter, us how flavor of cuts or an environment. basis expense quarter do in in as That’s a can annualized I give a well? to You just The expense much difficult of the flow go that trying you quarterly as relates that reductions third forward and get very sense I’m well? on additional as how did the in

Terry Jimenez

Yes, Mike, this is Terry.

some revenue we second dramatic QX the were taken significant, us, throughout through as going the cost about quarter. that situation with and certainly we quite as think happened For were pandemic, and actions the that we had

looked company. revenue Virginia, were got bigger a we’ve well ordinarily what had entered actions few be a would in areas and additional continuing those to lasting actions, we’ll less the it of in we on quarter those do into areas mellow We and and that saw of other some anticipate. some that to and alluded our effect third be versus the cost quarter to benefit costs we of but as in-house the continue and had get fixed our very So we of to most ongoing you’d Mike the the benefit the that which production to, QX the expensive as outsourcing, pandemic at, full take actions, thought as outside trends

Michael Kupinski

similar that a people an does know markets? And little other company talk can everybody offices prospect are sense lot you Terry New from other could that accelerate monetizing also, bit about that the some of papers home, the newspaper estate the how on in closed introduced New annualized working saved your that other they that York? us some of model? York. that And a that basis you there much then there maybe now newspapers you this Or of in – And real recently assets aspect. are a in have are follow Just give of and

Terry Jimenez

employees. to point offices for years, longer access are made six knowing from in in to the safe who that being – way we we’ve that a in time leases determination able still few those expiring our have much Yes, for if the at this next nine offices we’re knows and where out

determination and in of we we’ve the an continue and – elusive. and look have York, call so about status office is our the the to would not as bit those Virginia, to had it that New and a little as decisions So return a markets made at of still pandemic vaccine half we made evolves Orlando, Allentown to

flexibility the at us us how long-term, are gives way. looking more money us saves our for some a there reduce footprint, other obviously opportunities do which to – We’re also we along but

Michael Kupinski

are forth. give sense And those BestReviews probably pandemic the seems to of thoughts home is what Can so outlook, the back BestReviews kind at be with revenues your about performing things and certainly revenues the that is this people elevated kind like how still performing people and everything? to as from us one fit you and a And things work up of are that? opening are well, are and point staying the the it and of of filtering economies pandemic

Terry Jimenez

Yes.

the and QX. certainly as had it continued So in really in kicked second benefit quarter the in a significantly e-commerce

would in proportion grow generally. I think bigger over just to pandemic of just commerce outside of e-commerce time continue

in think QX while any and tethered see future. e-commerce, And up down And the to things e-commerce going QX we significantly time from for is helpful being kicked in event. so at e-commerce I that don’t

to a versus got and see continuing we we’ve for lot So grow that it of grow business. healthily optimism and

Michael Kupinski

if of the us that are redeploying might Can And that know be? but look – that might and give disappointed about sense you you you’ve just out what prospect doesn’t past value monetize acquisitions, the maybe this you’re kind were, kind M&A said some take asset that then asset think other got a you you might the want it that in elsewhere? you great I significant – looking then that where redeploy asset thoughts of is stock value might great And and and opportunities there there. asset about getting the and selling you’re the you you capital a of there really a us to reflect digital not get the at of that, gave capital there you at BestReviews and

Terry Jimenez

Yes.

grown In going all value an answer that. when had about But in to it not $XXX-ish the of terms I’m value of bought terms million we to of able the enterprise it, be value. value, of question, revenue the we EBITDA The investment. has that was revenue grown that business growth. that’s the Since significantly. we And commensurate the of time, with made has when also the felt right

been can got no X.X that of as quite any we see something to into years there’s But so the on cetera, asset ago, we if there’s to years value opportunity. terms think it’s talk in And nothing X.X always considerably, speak boards we little has than a grown ago, we an dispositions. the this that at more that et dispositions

Michael Kupinski

publishing make might assets that are at on looking at point. in looking that. cost of there this market assets anything of question, are And sense other like that or M&A, sense That the terms in makes at synergies or terms last newspaper

Terry Jimenez

we that overall things an would in or opportunity there’s it’s adjacencies add it’s value There’s at, good a if if really within area we look always company. us, operate the if could that think the markets we for to that

So we’re always open-minded to those things.

to focused head water. the we companies being to and gone the mode as most are through just think what survival able can keep we’ve above I pandemic really on do

struggling those And so the bit the about think the headwinds. assets, individual newspaper, little given that at stage this so companies to that as problematic I are think be have and one those most a more are you ones tend

we’re to value. that’s all open always right that. I at opportunities So, the right the say But can on

Michael Kupinski

And determine I ask would one just may as would that what what dividend? be would reinstating whether the see Board the more, if you or not hurdle a consider the might or benchmark

Terry Jimenez

I factors that there’s that. lot Well, of a think into go

what’s the of of outside broadly in control happening the of and what’s the So company the happening well outside industry. as with company’s as terms economy,

sure factors. those internal over think of make kind to those for the about I got we generate combine factors. we’ve positive And on to us is think together, considering continue of we’re factors, And external cash a think to things flow amount that then long-term. all we I so what the fair uncertainty as as And ability external the there’s

I think on more internal factors. confidence the we’ve got

some bit speak the until start of get I future on more more when about a lasting think to we’ll be a be. of pandemic, at So clouds probably really the that’s we the the disappearing could point what will of little effects when sense

Michael Kupinski

Great. Have great evening. a you. Thank

Terry Jimenez

Thank you.

Michael Lavey

you. Thank

Operator

Huber Arthur line Doug from question next your Research. your is And Sir, Instructions] open. of [Operator

You may ask question. your

Doug Arthur

Great. Yes.

subscriber X,XXX Just it the Terry, you sequentially the quarter, couple. in at digital third added, subscribers. looks a like looking number

took and Is home or from post slowed growth so QX. in boosted action stay bit a the quite seasonality at and third the QX. the that off slowed stay sequentially is Obviously, QX any home come you’ve may just that in at that some there pricing quarter, that much? have it you probably and QX So

Terry Jimenez

Yes.

of their acquired for and churn cycle normal what percentage, trial a of when trial the large regular because the we a them we we them, new terms it in we really of So acquisitions for of in, off what period. a But a as We that lot a period. that had saw And look especially we quarter we QX, came us. like first but come kind in of normal saw pricing from had also we the acquisition was that new bit And new after for did sustaining starts to they look a lot the customers. an half at pricing were starts, as little growth, third is we well opportunity of looked as the in there the did up rates. we at was felt increase year value increase coming the a more saw the equation

so that significant a And translated while of revenue. subscribers into more fewer generating amount

but is XX% grew on, so that’s digital subs the XX%, grew we where high in And year-over-year dislocation the revenue the range.

with there rate increase saw increase. we So associated some revenue the

Doug Arthur

Okay. That’s helpful. Thank you.

Michael Lavey

subscribers year-over-year. per rate XX% up average about is Our

Doug Arthur

the Okay. digital And kind and terms you outs ins of of advertising, on. going in of issue Cars got the still

Sort growth post-COVID of sort disappointed there, little performance? frame audience? digital the a on of you a advertising given advertisers? pro forma with you’re basis, are is particularly growth more that your of would kind you just seeing How Or issue in not a your

Terry Jimenez

one Yes. their couple and of advertiser had an slower a impact from their their an to products. businesses for they’ve demand, demand There’s factors,

we’ve the comes also little digital what less more translates advertiser a those growth in average so advertisements. from that the to lower since that you’ve is, demand much you ads bit for in and And and QX, rate demand audience more got the market And in had see while so supply volume for because base. great lower are the there’s the

think, And a than it’s a more so – of it’s I sustaining. really anything COVID dynamic a

a able we been longer initially I anticipating. hang think on I audience to chunk to large think than of were the we’ve

good the that’s news. And so I think

the demand with we continue back as up, a advertiser handsomely. reward to headwind able think and we’ll the as against you fight alluded have bit, that’ll rate quite equation Cars, kicks I as for to, be the so And And well.

Doug Arthur

Okay. Thank very you much.

Operator

our for would that today. speakers, all question be And

to the turn I’ll So Terry Mr. over Jimenez. call

Terry Jimenez

Great. Thank you.

and resources aligned that with you stream managing engaging all. thank your on have focused be to stay Thank and continued in Tribune we the our the interest audience Publishing we for we safe. everyone revenue and you While

Operator

call. concludes today’s participating. for conference all This you Thank

disconnect. You now may

Tribune Publishing (TPCO) 4 Nov 202020 Q3 Earnings call transcript