CNNE - Earnings call transcript Q2 2019

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Operator

Greetings, and welcome to the Cannae Holdings’ Second 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.

It is now my pleasure to introduce your host, Jamie Lillis, Investor Relations for Cannae Holdings. Jaime. ahead, go Please

Jamie Lillis

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

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

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

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

results based management's based and management. are Because statements financial whether expectations as or result well future Forward-looking to and of materially no otherwise. not are differ undertake statements future on results, We information, on as fact, from by, assumptions operating made such a statements, to available projected. are update forward-looking events obligation as as currently actual information to may of beliefs, new any those and statements

The factors regarding uncertainties, limited and and in this statement but and risks include risk to information, Cannae's press the are filings are other statements risks morning, subject the other other which SEC. in which was sections with not our the release, released S-X and factors, of Form forward-looking detailed to, forward-looking and

Let me now turn the call over to Bill.

Brent Bickett

Thank you, Jamie.

stakeholders. to all Cannae's progress our portfolio for being of Dun our of positioning value improve progress on meaningful on team make is the will leadership Bill execution and under ultimately that to Our Bradstreet. made highlighted strategy the benefit continues Foley's creation by A

strong management, were DNBs and very view Company our cost structure was the DNB, Company's the acquired culture, had we It valuable success. a data and position. that competitive which impeding When was

Company streamlined more team the with this our we structure, confident that profitability sustainable view. more five months turnaround, significantly cost believe organizational our organic is We our a into and After right improve management return DNB's to growth. combined can and with structure team that in

Jabbou eliminated XXXX. our their significant had Steve quarter, focus by expenses headway far, have plans expense $XXX been $XXX Thus and been achieving approximately labor of on-track has inefficiencies, second annualized on Daffro in cost high consolidation. million annualized on target Anthony reduction to remain the fees year made the million and and cost professional reduction to facilities

phase second the focus legacy to on XXXX, upgrade of Looking additional of our efficiency the to retirement consolidation, will which and IT optimizing second we process automation, the or begin half facilities offshoring infrastructure, gains platforms. software is

Company. where the a also at at the needed much now transparency business have have expense we The structure Manager charge business the lacking at which a and accountability in structure was P&L organizational we Beyond segment previously reduction, drive General new level, will each implemented was responsibility. segment business of

our structure As part of also have this reorganized improve to realignment, sales also sales productivity, while we costs. reducing

improve moved for the to drive needed. organization solutions have are and an structure overall entire utilizing when account sales manager structure, they our By DNB’s of output. better cross selling We the and specialists simplifying can suite we selling product where responsible

million first Clear as million seen to turnaround to quarter DNB's quarter EBITDA the EBITDA of compared quarter. adjusted signs adjusted results first XX% $XXX.X by ago of the of XXXX approximately at a increased can be $XXX.X year first where and

in quarters growth adjusted EBITDA a expect rate increase XXXX. year-over-year to We over remaining

on will Rick lag, reporting detail. one a As more discuss which we quarter will DNB's a in results reminder, be

streams new to opportunities proprietary accelerate real to and to growth. see further data revenue and products extensive We DNB's utilize create

completed this of strategy, part As acquisition of Engines Lattice the on DNB Xst. July

sales for professionals. data integrated BXB and enhances leading Lattice a as and marketing position further solutions DNB's of provider analytic

tuck-in speed market long-term to solutions, revenue We customer and our acquisitions improve will can growth. continue evaluate that to expand

the payroll rate capital at force in Ceridian investment, largest by software second market XXXX as evidenced sector HCM day remains and Cannae's revenues. and their growth to human Moving XX.X% Holdings leader quarter a

to and growth we success. at and for growth team positions executed management continued continues The cloud believe drive Ceridian and upon meaningful Ceridian strategic their long-term revenue have plan, which successfully

portfolio cash. the to During at made $XX.XX the in Ceridian decision of DNB, second to as per We our holding we incurred million prudently quarter, two well rebalance borrowings to $XXX which selling by as of investment proceeds net share. we received our price increasing a fund Company million shares use approximately repay

Cannae shares at billion. position. XXXX Currently, upon representing of million stock, value on XX.X% a taken August per Cannae Ceridian's share Based Ceridian common market price Ceridian a $XX.XX cents owns approximately ownership $X.XX has closing X, XX.X of of

remain positive a with to incurred fund Ceridian's million outlook the repaying portfolio prudently rebalance DNB the of that on for near-term investment. our borrowings continue to business $XXX We very of the remaining objective will

index Nine Turning to growth Box, sales exceeded by basis XXX our same-store second solid in which our deliver restaurant a continues England the Black group, Ninety Brand almost to points. quarter, New the

ABRH. remains we Nine jewel Ninety in are the our teams at our restaurant starting impact Brand turnaround our positive the see initiatives to portfolio, management While of

has the Through cost closure restaurants in XX the million bringing XXXX. more the of total of number second the the team XX and XX third including the achieved than reductions second quarter quarter closures quarter, since forma in of pro

these Ana the Denver and led Santa closures efficiencies headquarters California Further also and reductions. family of divisions headcount and dining legendary the cost to plants vague reductions, IT

addition guest new marketing launched these In social Diligent actions, additional and and optimizing operational to Bakers media we at MUs our drive initiatives on to and brand Charley's also Square. channels counts focusing and have

to A improve. baking, profitability are legendary manufacturing efficiency continuing and

potential performance, half back cash executing to flow plan to aggressively we As brands for our we look order profitability be year, provide increased monetization. in our optionality improve the and will to of the continue to

his and goal EBITDA new management to Officer. a Turning Wilhelm sales T-system, has realigned significant the revenue end an end, and functions headway To and with Commercial Bob made of improving growth. this initiatives, Bob Chief hired with

to opportunities expanding cross offerings. product at turn will the As a then creative order drive in focus acquisitions looking his while initiatives sell add-on are to executed,

will now our Rick turn detail. call over the companies to the portfolio more financial to in results review I of

Richard Cox

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

adjusted quarters increased quarter. XX.X% as to ago $XX EBITDA year million compared to the First

cloud X,XXX which XXXX XXXX. In of the now second up million on $XXX.X Dayforce compared include quarter. the Powerpay are quarter, million to the based and second the the customers both to quarter revenues, year-ago In platform end live XX.X% grew from at Dayforce as of $XXX.X total, XXXX in

More last section on July be found website. XXth detail quarter on can released their results, were which on investor week relations Ceridian's, second of financial the

accounting we on the are perspective that Bradstreet will business. success is optimistic reporting team with lag for basis. results achieving very equity one reporting map outlook at Dun we As are the the our a pleased From the and will on Brent for discuss, and be using be accounting we and an we

closed are first acquisition this year, February Xth and portion the As results a for only on of the consolidating Dun quarter. we Bradstreet's of

on successor and XXXX net through of February the million. Bradstreet and of Dun accounting generated X, For XXXX. XX, loss March $XX.X period revenue $XXX.X total million

period was March revenue was adjusted which XXXX February Adjusted owned successor $XX.X million accounting EBITDA through during the $XXX.X and XXXX, DNB. XX, For X, million. Cannae

total of and XX, Bradstreet For million of Dun generated and the $XXX.X quarter full XXXX revenue ended loss $XXX.X net March million.

EBITDA million revenue XXXX million and adjusted XX, quarter generated, For million $XXX.X $XXX.X the in of XXXX. EBITDA $XXX.X adjusted of of $XXX.X DNB revenue adjusted compared full March million to of and ended

million restructuring Approximately ended XXXX of $XXX and expenses and quarter approximately EBITDA pension full related accounting the the million. taxes purchase severance exclude March The and expense, $XXX of fees, charges settlement merger to interest are acquisition XX, adjusted expense. effect transaction and related one-time

an restaurant million quarter XXXX XXXX. in Turning to million The the same-store group, sales for to $XXX.X in is X.X% aggregate Ninety in store decline combined Ribbon closures result American revenue Holdings other $XXX.X generated of second our quarter Nine. of the in decline compared revenue Blue planned brands than second largely of total of with

This total XXXX. revenue $XXX.X the of second in in million quarter

solid achieving X.X%. $XX.X quarter the Our growth $XX.X to million compared same-store last sales of of revenue million Brands delivered Ninety the year, in performance same of Nine

second the Ribbon year quarter compares XXXX EBITDA of EBITDA Holdings EBITDA quarter quarter a $XXX,XXX to XXXX compared Blue negative $X.X of of second the delivered second of XXXX. in American decline million in to which to as approximately well million million impairment charges the for trade in one-time names, primarily charges, of million restructure non-cash related in $X.X labor $X.X as higher and $X.X charges rates. up related ago The higher to severance

EBITDA EBITDA margin margins. the loss quarter million XXXX approximately to On had quarter or $X.X second quarter a XXXX EBITDA X.X% million Brand or Nine of of year-ago Ninety EBITDA second XX.X% compared of $X.X $XXX,XXX,

decline margin Nine’s Ninety EBITDA rates. related primarily higher labor is in

labor system costs. began Nine such roll to already management better Ninety out to As control a time management has

of by an for million. XX same-store by improve million third for management quarter During has XX by by XXXX, the headcount which quarter on jobs margins seven, reduced has action sales highlight. during underperforming annual operating O'Charley's total several seven total that savings to XXXX of store since Management $X stores to of the increases and XX cash taken provides the a stores And the XX and closed second of operating second Legendary Baking and $X.X flows Diligent initiatives annually. a quarter

improved has operating million. and efficiencies Baking flow operating by increased cash management margins Legendary Additionally of $X.X an with

actions. see to expect operating these by impacted positively We results our

in $XX.X the primarily $X.X of loss of the to XXXX of The XXXX. quarter and million margin generated revenue million has EBITDA EBITDA in of quarter $X.X a Turning compared to the for declines million and reduction related million to $X.X the EBITDA revenue T-System, total Company million in $XX.X $XXX,XXX second second revenue. is

on As volatility documentation produced we no revenue of impact ASC and the while quarter, implementation T-System’s has for recognition highlighted cash receipts, segment. last having XXX greater

approximately the and application $X.X respectively. is ASC reduced EBITDA For by second XXX quarter segments, business revenue, million documentation example,

XXXX, XXXX. million down was XXXX. to $X,XXX XX billion billion ended of December share, XX, cash, is with compared $X,XXX the $XX.XX June December per or of XXXX share and from $XX.XX XX, Company On per $XXX.X holding as second book as We quarter which $XX.X on Cannae's million or value

position of proceeds $XXX with portfolio driver to $XXX we million syndication continue fee, Dun shareholders. is from value decreased of $XXX Bradstreet million the in net to that a and $XX for pleased the The million, we long-term DNB of the CDAY the Cannae from To for for position acquisition taxes from across increases related from primarily $XX.X progress of as and sell, borrowing of our order are conclude, change million. in brands in make cash payment our million

questions now back our to turn our answer session. operator call to will I begin the and

Operator

you. Thank

to your will We [Operator Instructions] conduct answer now session. question and

from first Our Inc. coming from John today's Stephens Campbell question

Your now live. is line

John Campbell

the Hey guys, good continued morning. Congrats DNB. success with for

Brent Bickett

Thanks John

John Campbell

you next year. It for reduction year in guess I you ahead too mind. year. sense little like are areas have something for or out guess it seems bit million with big cost some sounds is Any specific stage? guys of around be of something might target $XXX this schedule, It at like next a I how the for cost take that just early might

Brent Bickett

Brent. Yes, John, are cost transactions other we management team this more pushing side that We year-end. are focus better we the have moving on $XXX is in we people think pace quickly million we then by done on on the the to side. found get to to and growth

that we accelerate some Yes, to to of million. us But too there of achieved for tried and line we north a is number. get probably it give sight that. is $XXX have early to So

John Campbell

event degree that just is monetization the forward timelines kind might possible you maybe Okay, there how can of whether pull broadly to of at views given mean, of way monetization and the talk guess around all? and both any updated If look. success. timing I that I any and

Brent Bickett

good can on we the that on side, Sure. are we the we cost we take. news, taking - Again, the thought out are cost

We basis are slight planned. on just we maintaining revenues, a what decrease better year-over-year was than a had that

evaluate The to an the expect it take of having and growth bit little did turn the timing be up get would would get know big of mode. into that you thing as low-single for the digits that bit we that time revenue a into real would we growth we take engine which little monetization of

happen. signs that early is seeing are we starting But to that

So in year to maybe versus frame earlier three would say would two I said around we you have the three. know

John Campbell

the for Thanks Great. updates.

Brent Bickett

welcome. are You

Operator

Thank you.

Our coming today next Deleeuw Jaffrey. question from is Jason Piper from

live. now is line Your

Jason Deleeuw

morning. Dun and good job on guys, Bradstreet. Hey Good

expecting you kind I anticipating for It technical my dropped understand sure of so for like like get line organic the to lot What already them? but the or you a I confidence. made there, but Bradstreet would that. acceleration to so to make Just rest see giving that are for good just sounds of want Just of is I the revenue you and this, are are missed on progress a the year? maybe benefits growth starting you sense on the just confidence Dun you difficulty,

Brent Bickett

because quarter, and and so goes seeing up in and What are quarter in we EBITDA we on significantly EBITDA growth second higher, the growth quarter XX% accelerate is first which through the the are costs should seeing saw showing it of and rate first that what the the rate. accelerating, of the we EBITDA year in basically grew terms in that as flow

new now said, positive year. interesting Revenues basis right roll growth we on to seeing the show are starting see is we through to some sales modestly, see into into year efforts get next realignment, more side as signs of year-over-year some the and but are sales that a what focused we are are we as with modestly starting that could get that on the down the we

just that to speed-to-market strategy, we side, are tuck-in that early signs start M&A that some of will to team we now using Steve and fruits still is what early as effort. that rest as the on of capability well. take year, where year, see market the But the But next accelerate we to but focused on is into are go seeing needed it as potentially the and sell

Jason Deleeuw

it Got about of good long-term a a revenue to growth still target X% think is is to kind for target Bradstreet? X% and Dun it and

Brent Bickett

then once see question is think what see and and monetization that timing give that is present that once detail more we initiatives themselves? of for, will we would That we objective we the are the we if

Jason Deleeuw

Bradstreet, and going the with would is want the on like and to on help kind is of kind growth, component strategy this it update mostly then the side, I revenue an on to is key missed mean on maybe the this and getting to Lattice Dun Great revenue like just Engines, this of just an there? but how I get update strategy a

Brent Bickett

Lattice we think a they and a customer lot a then growth were is with of and it higher - has them marketing in sold and way we sales higher satisfaction. would that Well at the rate advanced resell with to there data partner is use and a

more ingestion, their of their capabilities, broadly. type intelligence we matching to So decided out acquire we enterprise were in building data our data buy but artificial because capabilities, their could we across

we very capability a future. a the but acquisition the it growth not revenue think potential is from high has that So in viewpoint, from large is significant viewpoint that

Jason Deleeuw

designed has Got there. the it. then that with help you And portfolio? can other the just us Cannae help complex, think about strategy Is to in it investments also

Brent Bickett

driven a Fractal, we So partners to particularly founder example in exciting the cyber investment introduced is with our the just advanced security just and when think through DNB, an we some in of opportunity and Company security fascinating their for it and the AI platform were cyber world. insurance of and

capabilities interesting also yes, for very Big have they So, Data.

their next gen can platform systems. on maybe use are clearly with So expedite we to delivery there the tie team DNB some over how our

Jason Deleeuw

thinking the and EBITDA you And Bradstreet from rate to takes? help that puts for for it about after and like was how the ago quarter. just us point and kind report EBITDA was the was Like I'm just that first quarter. first a much have or off a like growth I then kind for of $XXX was of it year the whatever basis, about of think and last get Dun the saves first on of that cost And run jump on see kind million. the $XXX there, trying it the given to then quarter, Okay. question but adjusted million the on

Brent Bickett

February - X. in that keep And remember in we closed in Right. mind

comment rate my that higher, was growth second the will so greater in because you that XX% will the see significantly quarter flow be And through.

XXX. $XXX But I get we annual million terms to to was to on in better over of way June is, at saves expect think cost it and look basis the that we through are at realized an

second larger again, So growth you see quarter, a rate. will

revenues that first it almost year-over-year have efficiency. just we modestly since cost all, were more in assume the it down And quarter to is is

through EBITDA. synergies the So flowing the the effect of

Jason Deleeuw

a Sounds Thanks good. lot.

Brent Bickett

welcome. You are

Operator

you. Thank

We have the for back of reached would any session. the management to question-and-answer like I floor remarks. over to our end turn closing

Jamie Lillis

third updating time our you to call on in forward look your today. you November. for quarter We Thank

Operator

does That you. teleconference. today's conclude Thank

You you this line thank may We and day. wonderful for at a disconnect participation time your today. have your

Cannae (CNNE) 9 Aug 192019 Q2 Earnings call transcript