CNNE - Earnings call transcript Q1 2019

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Operator

Greetings, and welcome to the Cannae Holdings First Quarter 2019 Earnings Conference Call. At this time all participants are in the listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jamie Lillis, Investor Relations for Cannae Holdings. begin. may you you, Thank

Jamie Lillis

Thank you participation call. We your morning and our first good in conference everyone. quarter appreciate operator, XXXX earnings

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

As available Time XX:XX be call through a a XX, P.M. XXXX. replay reminder, May this will of on Eastern

not contain statements and would involve a that our I 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 or risks from management. on of result factors undertake fact, this information detailed Form are in and press events the regarding S-X and other by, not the and future may but risk whether statement information, obligation which filings financial and and no expectations beliefs, future information, was risks factors, release, otherwise. other forward-looking limited include the which new and forward-looking in sections are to, with The morning, of to subject statements other released uncertainties, and our Cannae's SEC. a

turn Let over Bill. me now the to call

William Foley

Dun first make highlighted & team of X, our our to start, significant positioning of the To continues value Jamie. February completion on the by deliver quarter you, for XXXX. Cannae progress Thank shareholders Bradstreet through the acquisition to meaningful

$X.X price equity Knight, total $XXX in done Lee preferred and Cannae's XX.X% in a Capital and billion approximately approximate with in billion, H. $X.X stock, As Thomas in funded purchase represents $X.X Partners debt, interest an equity. billion Partners, with $X equity DNB. this partnership in with million billion CC investment was Black a of reminder,

& potential Bradstreet's team I am Dun substantial very DNB's this of Chairman closely we Board company. Directors, that in working Executive As the management with see unlock of to

its cost expense As rate focused professional Jabbour, primarily $XXX Daffron million reductions, also organizational we've report I team pleased three, of basis our customers, and on President; net to of incharge achieving organizational our far on well responsibility that the transparency business I is moving as our have accountability call, whereby and we drive earnings employees of DNB's Steve Revenue a and we as and opportunity Anthony Anthony which a Coop and leadership saw for DNB's plan; cost these reinvigorate $XXX structure high already we new first, leadership; the it's $XXX be plan business quickly each related April, designed the on working design of ensure Each to million to as non-personnel to of are segments. led identified implementing for and execution Steve will outset, are organizational and by Steve Jabbour opportunities. CEO; well and reduction position inefficiencies Daffron three reducing the the two, enhancing Officer. outstanding labor revenue DNB's to discuss segments. reduction General run our with The provide reduction near-term greater structure This Manager P&L major include: new over fourth organization, structure Thus Anthony early value long-term completed as XXXX. DNB cost in and performance through initiatives, to quarter by DNB's million Chief on fees other am an the company expense is on to where with shareholders. year-end to strengthen new we've annualized am spending. are well Kevin as team growth. initiatives From an way goal DNB underway and major within and a and

We are our now aggressively moving cost Phase X forward with of plan.

our the ending - during our plan, March first the in quarter success evidence XX, As in from we the enhanced beyond. quarter XXXX April of and program, first over growth to have balance first revenue into the DNB's EBITDA of million XXXX. $XXX of both $XXX of quarter million commission of the increased improved which go-to-market including and strategy to sales productivity we XXXX and restructured respect With growth initiatives, the sales an

revenue From a can initiative strategic is reporting deliver point over a this accounting performance. several believe results basis. efforts years. acceleration DNB's the say at DNB's we cost-cutting take to growth coming lag that I our may be on perspective, are to one marked an quickly quarters it What this will While quarter accomplish, impacting we will

an modest As a in which our budget. on I we mentioned in decline earlier, were achieved with both quarter EBITDA internal improvement first line in revenues, of

team's order the with much in turn and pleased to more now drive profitability am will accomplish to to I improved With call over that, Brent. growth. we have I performance the While

Brent Bickett

execute borrowings revenue is Dun company by $XX.XX investment, are cash. our of ownership and led Cannae $XXX incurred raising price portfolio. growth as T-System. To capital of a market businesses as representing growth the reviewed common-stock in Currently, success stake XX.X software approximately Bill HCM $X.XX focus Bill. his cloud Group, Ceridian & for which the our that Bradstreet should owns our and to Restaurant payroll repaying & value position. and market Bradstreet Cannae and our comprised I'll in of of on additional a a year-over-year May achieved meaningful million first X, a team the come. which Dun to four Dun fund of leadership CDAY's management we a strong leader Overtime, Dayforce upon by has and Today on primary human XX.X% to Cannae holding Holdings revenues. shares per drive David continues closing emerge strategic million monetize Ceridian with XX.X% in share XXXX; restructuring Cannae's team Ossip include years CDAY Based their Thanks, billion. quarter balance start, of their and continuing objective evidenced sector expect Bradstreet, has quickly to in results Ceridian plan to position, near-term the of & Ceridian,

more of to Turning cash were to to the our brands Restaurant while reduce face satisfaction quarter to market flow. challenges the ABRH immune. Group; of as first industry increasing and management Despite expenses the and result the team country weather to initiatives implement wide range customer backdrop, a continued across our largely productivity, a a continues challenging not adverse

pace O'Charley's flow cash order monetization. and underperforming To in expenses, accelerate Bakers create reducing is controllable the of refranchising we Village at specifically margin at Inn restaurants. focus accomplish this to Our pursuing in a stores, Square, and rationalizing expansion to certain are improvement for optionality initiative

ABRH same-store progress brand flows O'Charley's where at are improving. team are management the made and our stabilizing has sales cash Importantly,

legendary due second they in in XXXX baking season to operating onboard improvement results. during challenges into Easter their holiday which improved the flow the the that operating and can XXXX Our brand is performance also strong This year. revenue impacted the encountered seeing seen be [ph] cash quarter this year-over-year margin falling performance from improved

monetization over progress explore profitability range Restaurant team expect opportunities. our of Looking to improving forward, of make our continued wide Group to the of a balance will XXXX, the we position which

Turning call, as expect a of a improve transitional to to Bob as EBITDA growth. implements revenue our T-System; we initiatives last Wilhelm on XXXX range mentioned to be we and year

people the a realigned Chief company's client for sustainable part his sales changes, Commercial product Officer and and position of leadership long-term and invest will to hired As in made the new growth. plan, organizations. development T-System Bob to has service company continue

accretive take in T-Systems product of cross-sell acquisitions to execute review financial opportunities. set year, detail. the throughout the to now over expect As these to to and to initiatives expand our the companies portfolio selectively results I'll hold more turn we Rick call add-on on drive

Rick Cox

Thanks, from represent Brent. start million Ceridian cloud X.X% To first both a increase of which XXXX. $XXX.X the of generated quarter inclusive first quarter revenue bureau off, and solutions, of

now were Investor quarter. million X,XXX released which ago quarter, total, from quarter First the quarter More X.X% million Dayforce at X,XXX of million on Powerpay, in XXXX. the In $XXX.X the financial end week quarter Relations on alive $XX.X website. of first cloud-based X to In up adjusted results $XXX.X are the on XX.X% first last of Dayforce both, can grew which the year first to EBITDA platform, XXXX their revenues, detail the and customers year as found May to on Ceridian's as include be section to quarter. ago compared the increased compared

of of in American total first Turning Holdings Ribbon the to compared the million our Blue quarter $XXX.X XXXX revenue in of Group; XXXX. quarter $XXX.X million to Restaurant first generated

same-store delivering continue sales the of to the be XX the Brands with X.X% outperformer Group Restaurant during quarter. growth Our

Easter, down X.X%, and same-store X.X%. were regional by outperformed Village O'Charley's, Box of brands the impacted negatively same-store and up sales, down Of Baker's negative other ending with Black the sales weather Our X.X%, timing XX same-store sales XXXX. for down note, quarter underperformed franchisee Black midscales underperformed to quarter index national Square Inn of results X.X%, the of $X.X million, same-store the increase sales overall were Square Inn, for and of compares Box sales EBITDA delivered sales increase first NPD Baker's the in same-store of X.X%, million first X.X%. EBITDA while same-store increase quarter family X.X%, the $X.X O'Charley's Village index of ABRH which and index

of first million, see total the to segments from we revenue XXX documentation quarter initiatives $X.X to T-System in respectively. profitability for the of increase benefits and million, the increased that profit long-term Application $X.X to so that EBITDA reduced XXXX, XXXX total ASC increased of first growth. revenue EBITDA quarter customer compared EBITDA XXXX $XX.X revenue will million our During the and quarter up continue first for and XXXX. achieve counts, same-store guest breakeven business of approximately we began of sales, generated million by $XX.X can and

accounting incurred addition, million the $X.X T-System and approximately of in expenses severance non-recurring fees quarter. first In

accounting quarter of first ASC documentation under XXXX, segment the of in organic year-over-year flat the revenue guidance XXX. the For T-System's was growth

approximately principally from a coding large cutting our full who to SaaS the outsource were segment revenues customer, down to solution While a software last X%, due transitioned solution year. coding

December As last million pleased share the in having with XXXX from revenue last as of recognition while for progress value & to T-System's XXX of In segment. shareholders. million to per to no $XX.XX which XX, position XXXX. as greater $XX.XX cash-on-hand On cash $X.XXX has the volatility our down year, in we billion on of ended We compared Bradstreet. make book of million partially implementation we the produced XXXX cash purchase Cannae's per with back or quarter, $X.XXX of holding we as that was on fund XXXX. first share highlighted to continue February, brands quarter begin or call billion session. ASC we impact are documentation March across XX, December Dun $XXX.X our for turn used long-term conclude, receipts order in to the a or XX, company value is $XXX to portfolio operator our our I'll now question-and-answer Cannae driver the To $XX.X

Operator

time, this comes first At session. you. with [Operator Please Our Stephens. John with proceed Instructions] conducting Thank from a we'll your question question. Campbell be question-and-answer

John Campbell

great seems pretty morning. - on of a Good like gates out guys hot. On the are you cost of it the kind side; DNB, I came mean start

to a On shift in time? are something And pretty what you Maybe that's seeing talk organic of just path strategy the guys are guys the you you there? rev go-to-market kind clear what can to growth doing in side, you're outlined? modest maybe the

William Foley

Thanks for question. the

unit of And cost We're all to rolled management a everything the new in approval. side, place. are for the great final doing by of we've really in ahead place, of - kind product the doing DNB up we're team leaders schedule. and guys our CEO was business not organized got On really our cutting job; and

system was or entire one their for revenue accountable so, profitability. their no And in the

may we out strong the have so basically the of feel or will slowly which analytics business we matrix that - each business international attached we then seeing or kind really for and a benefits get them of to And be they supporting this we unit, each Xx as that to units growth established have if be fairly And it's like they're revenue selling it start have we really two. but quarter data in also you're new the matrixed you're quickly, but our as not significant you we're on want unit, opportunities - ignored. X.Xx largely that and And and to analytics to going usually not in marketing sale. the providing, - the very of start

revenue representatives on has years, to program The models, commission that to enhance changed, and - over. other earning so really sales focus reselling to our recurring and done reps the is that - are now growth each we've system kind sales on the that as thing year focused seven revenue over long-term the and the same entire customer five on business same opposed commission been of

a very it's the again, change a company, of that leadership, continuing right So And by, we've right and surprising. of it's work it's confident the a Bradstreet putting streamlining be into & a little we quarters progress can we lot of into at make that as a of jobs. Dun & once base, Bradstreet and just believe the the a a we're that good Dun you'll - really probably go - will see is organization and in done then employee people and streamlining

John Campbell

have all longer that Co-CEO now structure? you so there you is the CEO, great color, appreciate sole I I detail. but Bill no is And Anthony did That's might misheard the say a

William Foley

Steve the really his the is onsite. Anthony - No, time he he is day-to-day sole is Daffron President. Black CEO. Steve but is and splits DNB; Knight between

John Campbell

Got permanent I I time kind you you've full but kind the do arrangement? answered How me. both the know kind And of you your for it. think sharing DNB, and as the org I of think changing ever Black game Knight last don't and you and think charts; decentralization of Anthony, in really do kind companies. a both, one take skin that have we've about at Bill, And is? heard might earlier this of demanding that see then on across his got

William Foley

business; to don't both say in want who he Daffron a is so the the is Nackashi, But he at I running been ever making to that's the Outside improve is Bradstreet he how and a entire to now mortgage to it, and guy is for companies out have candidate's Dun if sales operational and analytics running his companies, easily. Knight the then He's how Anthony organization. of is from - data Well, guy kind anything Black at and going years permanent-permanent. duties able company the platform to for the products, and & we many calls entire could and so is Black is cross-sell both got incorporate talking think strength companies. Anthony fairly has with Joe many, And about history; you and about process. sales both very President servicing his Mr. Knight, And

He's on eye overloaded. to doesn't he's job make to-date. doing an keeping I'm him of So, sure he capacity, a lot really the got I'm and with get happy

John Campbell

definitely machine. is he Yes, a

Thanks I So, time. appreciate the guys.

Operator

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

Nick Johnson

are accelerate. like target at want looking on Nick follow-up to Jason; revenue now. is guys for going a may DNB Is and there quick with that? you I he's long-term traveling just it out the growth; sounds This growth right that a said But be it's you for

William Foley

target organic including growth, growth X%, long-term the acquisitions. not is Our

- that's say first - of but our first about with And have quarter down over very long-term terms always to years; when or four the previous strong quarter plan. we sales the say they cycle. three because their that's fourth X% I two-year last quarters in were X% they in is about that down So, be a seem our consistent

year it's of been in on this already achieving to significant not into hope and synergies. we our cost-cutting terms and goal halfway we're really spending our and be revenue halfway, organic because we're year, growth time that's the almost but So be to positive going

Nick Johnson

job, a ahead a of I'm like So then guys little you're said even. sounds you on are pace the great bit cost-cutting, doing it

pace at you we to that accelerated cost sources look see? expect the are the should maybe, And we or that pace? how continue then can additional guys what So of savings

William Foley

is net-net another taken we The fruit $XX - of signed-off and the low million hanging these are that auditors, process net we've audited. the but million in and has people synergies. these with added which of added synergies; And audited are of really have $XX expense by external $XXX been million, our being was so care and

by is $XX we feel there those million after that or things but and million a the to being say, achieved can have going then a become synergies to $XX over about run rate like the the just specific. be And to million million, more another forward, And next difficult XX months expect little of to $XXX $XXX year over $XXX million, year. be We end of consolidation up centers, the old savings for had real year-end XX like has next this example, consolidation data over companies company years. the getting aggressive offices, of rid new leases estate, and signed the to expensive from people that the Short and were in And Jersey, in you New out fully occupied; B what buildings everyone's in Building which is now Hills, sublease. of Building of up neither A A, moved Building for - two one call, we've moving in

So be when it, sublease another will we synergy. that

for So that's this really of through, we're frankly right-sizing company has going process that XX the years. been kind mismanaged that it's

looks it is the So little what - a easy made - doing a it aggressive we're unbelievable like are we're and it's great job it's for it but it and guys doing us. they've

Nick Johnson

just over pipeline know in T-systems? have last great you And acquisitions M&A to talked last or you in me; to for about one guys that have are quarters and I the you update close guys great, That's for update moving to the getting few it the T-Systems, pipeline, hear. any if maybe M&A the

Brent Bickett

him that is an add-on I are our face-off of Sure, that of company has customers from that do denial M&A we have and on make strategic is the perspective, the specifically opportunities. Nick. to The at whether wait now really And we in, of phase leadership that areas you additional you a we put mentioned came opportunities, team operational patient we place. to company But needed we've a and operations; - began Yes, can focused company with we're the prepared during he Bob products in is kind areas. the that and management where that set cycle rev are thesis This the until the right some a to to the looking cross-sell. in you good coding complement now review as been comments, my services did Brent. he is need changes billing was can so and in when

we are that was again, that execute pipeline [ph] So to thesis but the gin-up we're these small-ish that it. starting again deals on to and are and beginning

Nick Johnson

that's Great. Well, all for me.

Brent Bickett

you, Thank Nick.

Operator

Ladies end and call the question-and-answer this for time, back to closing of gentlemen, the At like we've Foley session. Mr. to turn Bill reached comments. I'd the

William Foley

To are cost of success our well our reducing XXXX. DNB's to and year-end Bradstreet's conclude way pleased with we're already goal $XXX reducing the base achieved achieving by structure, expense very we've & Dun on million by

in to Dun optimistic need sales time you on shareholders, call quarter reinvigorate Bradstreet's that again, and be year. not but improve Additionally, have also our in further unlock for go-to-market turnaround we drive Thanks only this growth. reduce balance that August. and strategy costs over & forward we in meaningful to this We results and look see will the updating taken for successful our To we the improve investment sales steps the value your to improved are second truly today. of

Operator

today's conference. concludes This

participation. we And disconnect lines. your you thank for You may your

Cannae (CNNE) 9 May 192019 Q1 Earnings call transcript