CNNE - Earnings call transcript Q2 2018

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

Operator

Good morning, ladies and gentlemen and welcome to the Cannae Holdings Second Quarter 2018 Earnings Conference Call.

During today's presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will be open for questions with instructions to follow at that time.

As a reminder, this conference call is being recorded. I would now like to turn the call over to Jamie Lillis, Investor Relations for Cannae Holdings. sir. go-ahead, Please

Jamie Lillis

and in Operator everyone. appreciate We Thank Second good Quarter participation our Call. XXXX your you, morning, Earnings Conference

today Bill Chairman, Chief Cox. are Brent me and Richard Financial Foley; Bickett; Officer, Joining President, Cannae's

a through PM available As will XX, on XX:XX a this Eastern replay call reminder, be August Time XXXX. of

not contain statements and I involve a that our would begin, you uncertainties. we intentions regarding statements that to remind or including that the forward-looking of forward-looking risks historical this expectations, hopes, Before future like conference about statements. Statements are call facts may strategies number are

Forward-looking operating statements available We statements, assumptions to as management's update and of statements results to based results as currently made such to any Because forward-looking well as statements are are differ projected. not are as those based actual materially on from Management. on undertake fact, information and by may whether obligation financial and no expectations beliefs, future a future The Cannae's other morning factors S-X but the our events to forward-looking and in and are SEC. risks result include, factors regarding of release with other risk dated the and press or filings information, not to statement uncertainties new risks which detailed of statements subject the otherwise. and information, limited are forward-looking sections this and other in Form

fund in close our As connection to the down of sell acquisition the to agreement & equity together entered Dun the well including commitment consortium therewith. definitive into ability ability and/or as investment pursuant our Bradstreet, our with to

over to Let Bill. me call now turn the

Bill Foley

Currently, in existing and sector Ceridian the human their Ceridian's years, strong common position long-term this an Cannae, public on Friday stock, pleased ownership of to Australian create has management in closing in initial Based The sectors in at the our $XX.XX executing pleased XX% I payroll meaningful pursuing past August and Lee position. Thomas CDAY's consortium our a billion. leader of million investment for share of and by their commitment Ceridian strive also growth our Steak we value definitive the new To a $X.X into has attractive value the and are price August Capital impressive acquire including monetizing market am announcement million. Cannae owns several we company combined position Thanks, representing investments shareholders made and Jamie. per X start, as successful market a potential. [ph] XX.X as software performance. entry Partners with and shares progress a we've HCM a for H. with $X.XX emerged agreement with offering XX, partnership Cannae's growth $XXX billion valued with investments deal CC our is sector & capital over and our Bradstreet. continued April. with strategy investment to on Dun last an is market

owning equity cash will agreed Importantly, $XXX and stock Ceridian D&B sales availability on between reasonable we X% we anticipate fee. syndication and between use have to of $XXX best syndicate which a efforts our million of receive to We our of commitment commitment the million our conditions. $XXX depending in expect $XXX market of with of and with on million fund potentially to credit and line hand, million

opportunity is see grow to for well. interconnectivity D&B a to experience terrific operating that note, providing & for business scale industries efficiencies partnership we across in by know like-minded enhanced and solution. improve a Looking and opportunity significant the continued investors forward, the investment make This a customer Cannae with an company, we their increase insight-driven model Of Dun positioned we believe success. that business company has Bradstreet's the

the call for As enhance we the and value now Brent of value to deliver our will that believe over D&B turn we Bickett. upon we execute shareholders. the strategy, I'll

Brent Bickett

have Cannae and the group the of T-System. that Bill. Bill will Thanks, we subsequent Ceridian which Today, review IPO restaurant success three businesses our Ceridian, with performance CDAY. achieved comprised include trading the of is and

this in its for Cannae shareholders. On $XXX the Ceridian of LifeWorks distributed IPO Morneau As LifeWorks to in Shepell company LifeWorks cash the million receive part closed its in venture and interest to July approximately our equity transaction on joint XXXX, announced and cash $XX the to April, July of in million sale month. to interest X, XX. later the expects

group. Turning restaurant to our

recall, to in in Currently on improve you interest with ABRH's American have Newport Holdings. the in team into the intent the we Holdings entered the management put a of with will cash Ribbon's reorganization flow, generation non-bonding discussions Despite letter continue delay, restaurant profitability to Blue group's our to we equity been As March respective of reorganize operations. hold. work

Rick room ultimately which shareholders. will we value discuss drive more As in drive will we believe see achieved detail, for our significant improvement operational to to be

Officer. X service as upon Executive company industry a Bob businesses Chief brings Bob has right Bob accelerate CEO documentation as of the set leadership revenue to skill to T-System's named having recently, right was in is company's work extend August the organic strategy services cycle in over and acquisition that our scaled years Turning healthcare he T-System's build to tech-enabled the notable served Cerner established market on partner leaders, encoding experience to capabilities. Most T-System. Wilhelm TriZetto. We Bob XX he spent business to Adreima positions including the management execute healthcare upon services T-System's into which announced new successfully growth the full where a organizations. and

segments. organizes itself T-Systems As a two into reminder,

EV first and clinical full full drive that software of which its operations their suite a platform, revenue. documentation documentation staff through solutions providing The completeness work, offers full is segment clinical

T the and Sheets serves T-sheet department XXX at solutions In on customers addition, and software their patented on Sheets a platform. company emergency for individual EVolvED platform while EVolvED at serving has sites T-Sheet T documentation. The customers XXX industry sites XXX XXX the standard

the full solution, as and and customers segment productivity area over customer provides coding revenue second well more coding is sites workflow and a optimized solutions. reimbursement outsource cloud-based to in-house helped coding a as cycle This compared as coding. compliance through self-service software solution The XXX accuracy, for T-Systems' of than which software-to-service improved service outsource solutions revenue XX offering

visitation Rick T-System This revenue, towards organic of revenue quarter the of XX.X% coding the revenue the of growth two increase driven second XX% was For led reflecting from large recorded in XXXX, over XXXX. coding growth approximately grow second higher the XXXX. continue review of with customer addition by extend by the quarter the of segments attractive end an of and customers patient and call same-site working company Wilhelm growth now to of management to in the to pursue to to the detail. company's and product I'll portfolio reach. forward our organically look results rep over rest more T-system the acquisitions Bob the the companies team We to turn to and

Richard Cox

the total, second both $XX.X up quarter revenues in ago To million the the second which Ceridian's growth X,XXX $XX.X quarter. quarter quarter from EBITDA in quarter. includes cloud-based the million and ago solutions second Brent. second the Ceridian X,XXX start the of XX.X% platform, million [ph] year past off, the results the to announced were year details the $XX compared on second Thanks, Thursday XXXX. generated Adjusted XXXX quarter found In was to More XX.X% the of of increase section $XXX.X the of which XX.X% In revenue increase million, cloud on as Investor quarter in bear can million million quarter, represents at from over end $XXX.X grew than or second financial which Relations on website. their now XXXX. be this of customers more $XXX.X live are an

million quarter as compared the Turning closure well overall $XX.X Baking, of of American second revenue to primarily a to to the Ribbon's under-performing The of Holdings as X.X%. in million second the $XXX.X Blue sales million Legendary XXXX restaurant store decline decline revenue quarter was of of X.X% at decline XXXX. group. in generated $XXX.X on XX same as in restaurants, related the

an index margin sales continue by declined O'Charley's margin by this declined [indiscernible] delivered Baker's strong sales than and Square XX MPD, quarter perform X.X%, which well, store performance EBITDA second and to from by the more XXXX. X.X% offset by having year, Of decline ABRH EBITDA of declined was X.X%. Square underperformed second Our which of X.X% basis to $XX.X brand margins was of This expanded Baker's delivered same-store X% growth quarter was X.X% second Box XXXX sales same decline of of or sales in the the while sales note, at Of store Billi-Gen XX [indiscernible]. store Black index EBITDA first the EBITDA same Index, second quarter points of X.X%. the million note, X.X%. quarter Box [ph] Black Index flat X.X% XXX unrelatively EBITDA underperformed of by of National same-store O'Charley's increase an quarter Regional of same family results and mid-scale million, compares representing in $X.X outperform

Brent team implementing improve include initiatives a these IT of starting manufacturing have expenditures, our real and continued and profitability, strategic and/or ABRH's of supply driving free impact initiatives our As designed chain, optimizing rooms The we further see range managing and cost highlighted, implementation to sales. to to their These assets. on management same and cash cost personnel broad consolidating ultimately initiatives store results flow unnecessary of is improvement. efficiencies renegotiating related the eliminating

to our second revenue $X.X are total share forward increase value quarter quarter to The quarter. margins. and EBITDA EBITDA $XX.X book XXXX points was quarter generated in $X.XX was $XX now representing from totaled XX, company to $XXX Ceridian margins $XX To in second payment second which to was question-and-answer of to paid was At ended cash our and are quarter incentive our and share from $XX.XX second I'll assignment in with XX, slight the begin common shares XXXX, continue the of by year-ago of portion compared million the as payment operator $XXX,XXX year-ago the after XXXX Cannae's increased $XX.X. turn to second we which enhancing cash, reflects company stock. the of XXXX, increase session. results purchase of value. quarter million results with we'll back call successful and billion The our and shareholder For while operational quarter with book which [indiscernible] down T-System's conclude, quarter million and the XXXX as December in million for the the that quarter. were per credit XXX,XXX cash in an million largely of our optimize IPO triggered June holding second cash a consumed compared of pleased the of basis allow facility XX.XX%, second and and We the the pleased XX with our we Ceridian our value million the to $XX results of the growing is look T-System of strive Cannae XXXX million April. ABRH XX.X% post with ASCXXX. of $XXX million Overall, XXXX, of was improving market

Operator

Instructions] the line this from your question-and-answer At will first of conducting proceed Stephens. John time, a comes Please question. session. Our with we be from question [Operator Campbell

John Campbell

guys. morning. Hi, Good

Brent Bickett

John. morning, Good

John Campbell

Hi.

So guess [ph] if I and at Ceridian, in add value value, a I if outside That's CDAY $XX I effect premium. the took the XX% in here out almost share of I stock around everything $XX of of the get to of market books position, change. the vicinity tax

other deal, thinking but And that your stock? D&B discount got you from know to from then to what aside some capital we just your set are that about secondly, right? the buybacks, are given implied the I thoughts First,

Brent Bickett

John. This is Brent,

Your about million tax basis. in times or shares is $XXX million Ceridian have we own so XX.X right. map We price,

to other $XX.XX, a We get federal around That up after there. in tax about does $XX. add to the have discounts share and per and break. all it XX% $XX he adds up That stuff

look to something to would future In capital that buying Dun We deal set a terrific value at. in found transaction. it's our for the think drive & so Bradstreet terms can we're aside obviously back of shares, we that going great pursue that us, we

John Campbell

as a give Can sense. you makes systems. kind key might margins Just revenue year. growth just growth. and And of you that how as carry that to anything then outlook? Okay, next out update then rate? the Can with on broader that regards low to double-digit call on look far And guys

margins of You're you get looking XXXX? for in kind expansion any into as

Brent Bickett

Yes.

him to the the next to platform in company and was said, to Importantly We to CEO this continue August help M&A that management somebody when the with the get they're which need to evaluate his to go. as we thesis we add-on it. five typically we put with in journey leadership, and years, who's business, we we in team could takes a our look wanted the strong But pursue on opportunities the those. organic think accelerate here Bob really new Yes, try is that some in to to Bob and we've company be accomplish we believe company's going and with it. us those we Bob with CEO. add-on But for to position but organically the our announced work tandem to still bought settling a and to saddle grow, again, execute objectives. we long this growth, going T-system, into we us but attractive lot work on the three of see however we'll for

John Campbell

guys. Thanks, Great.

Operator

Piper Jaffray. proceed Instructions] next [Operator from your question line the from comes Deleeuw question. Please with Jason Our of

Jason Deleeuw

on sure congrats I understand sources. the of the deal. kind all morning and to you. Thank I want D&B make just funding Good

cash of needed all, the Cannae you just couldn't to do right after much used fund for on first the to on and have LifeWorks keep hand for how just be cash does D&B? think how that So balance Cannae, much now is sheet

Bill Foley

filing that forth year and doing by month other the our of SEC, during or [indiscernible], this or closing. the time we're by closes a approved the think this of we with in perspective probably February If finally anticipate six through coming getting meeting shareholder next proxy, We next cash resources seven period. transaction March the

amount we to to we intend commitment keep settle always our decent of intend have really is million down maintained to We $XXX million. between enough million $XXX somewhere do What and to $XXX liquidity. cash a

hundred expressed position. as interest dollars otherwise required of our So quite not in several the million buying you think is already as hill funding steep of down we of terms might and have

the piece. really So not concerned sell we're about down

-- X% source fee be cash. earned portion of down. another That's also sell source that that We to on another

cash. having being to months shares. four right, sell and finally six We sell the whether just some generating stock stock, the to basically And sell situation restaurant to also anticipate the convert about or to at a three it relative of convert and to alternatives some proceeds resolution do next the over then different the forward XXX% to out a and where value receive the sale, we do a CDAY of

$XXX D&B. the So very cash to honestly, million accomplish to equity we're about commitment rates very, the not concerned

Jason Deleeuw

sources easily a equity as it rates plenty it like be way Okay. sounds here Thanks give for all alternatives commitment. But without about Cannae an here that funding where equity. and of additional be capital there's fund enough down like pretty able of you think to to the this take fair seems would maybe enough part your there to and could are Cannae of option? raising that Is to just you there

Bill Foley

It feel fairly kind quickly of million our these our more We've game this on it We desires actually rather of about five shares. acquisitions in working came direction. the that terms XX to like plan. the any want isn't closed. low, end and just came and fortunate at our based to cap have together of It's a get they months to of We'd or one months, shares D&B transaction be been upon depend six could very upon million we self-fund from structure shares We outstanding. really don't XX outstanding. through it's part

you for we're Fortunately of the with. it time aside were of us, we sort steps that was, the frame the competition involved call it negotiating if if time short because that,

more equity this. of intend So your we long don't but as to as question, issue part

Jason Deleeuw

and by good smart shareholders just of on D&B with the involved driving you. operations. team the in operations? and history be a value lot Will Cannae acquisitions there's management the then And these Thank improving operators for a being long

Bill Foley

a management present Chairman. like have program black a Cannae pretty CEO, night is the don't actually some individuals. I the CEO, They Executive going in the We're look a and will have we plan when that have CEO lot to a is going. that be would acting that we're They robust got CEO. bringing team other temporary

Jason Deleeuw

done bit Got much D&B investors but in color you there's press there kind Dun just little last release then think say, maybe about add commentary the in opportunity today more we've not of Bradstreet? it. is the with The in opportunity, else you & helping anything and a one. And can of the can this

Bill Foley

Well, siloed eight being you just as black think, series had LPS at a seven if you the look acquisition are acquisition, They've similarly cross-selling. back a sales efforts night this or the is [ph] Their last that's or of years. situated. CEOs over opposed company

element we leadership company. acquisition. little just that fairly things part business been has of generate And the that another year. of can to in can organization significant the X% an is get I We've a issue we're focused will the spent leadership at as bring those get a X% So, then we growing accomplished. believe enough bit the and some key to synergies time grow to with of our all business company the confident

Jason Deleeuw

Thank you all that. for

Operator

end the would call and Ladies reached the Mr. Bill like gentlemen, have of to session. And turn Foley for we the closing I to back question-and-answer remarks.

Bill Foley

much very appreciate your us joining we talking time to forward today. Thanks next and look for to you quarter. We

Operator

conference. today's concludes This

disconnect may your Thank lines this for your time. you participation. at You

Cannae (CNNE) 13 Aug 182018 Q2 Earnings call transcript