CNNE - Earnings call transcript Q4 2021

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Operator

Good afternoon, ladies and gentlemen and welcome to the Cannae Holdings Incorporated Fourth Quarter and Full Year 2021 Financial Results Conference Call. [Operator Instructions] As a reminder this conference call is being recorded and a replay is available through 11:59 p.m. Eastern Time on February 24, 2022. With that I would like to turn the call over to Jamie Lillis of Solebury Trout.

Jamie Lillis

Thank you, operator and all of you joining us on this call today.

Officer. have Massey; Bill Ducommun; and Coy Chief we Executive our and call our Rick Officer, Cannae's Financial the our Foley; Chairman, Chief Bryan On President David

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

statements or based The results assumptions results operating statements to currently differ may undertakes management. Forward-looking are as as company on well those obligation to actual no and such made forward-looking available forward-looking and materially was management's but filings from also as to risks limited update are detailed Because are beliefs SEC. result afternoon future the The and other which quarterly and of expectations in financial any include information our based not on in and by will statements to this statements otherwise. with as projected. Today's and future fact subject factors non-GAAP our which include events to whether of shareholder uncertainties financial are the measures. remarks are risks letter information new released references to a other not statements

then information line the Cannae's I brief financial questions. who GAAP to open and to financial open Foley information in non-GAAP call between like now for a would letter. will reconciliation to our Bill the few provided including shareholder information turn remarks Additional Chairman, with over is the

Bill Foley

Thanks Jamie.

and $X.X Paysafe, business large businesses acquire early several we with opportunities. similar Sightline. billion Trebia between to transformation SystemX. Alight, the in the Over interests All these year moats possess last exited and utility characteristics, in SPAC, companies markets, closed and a XXXX, addressable the In wide the combination deployed we nearly

both through strategic increased with teams acquisitions. partner management actually organic, will growth to value We and

to growth active can seen management in where Bradstreet’s be to organic Dun the continued approach X.X%. & QX Our accelerate results in

fortunate to Optimal Blue now this million to receive through of in Cannae or D&B for interest D&B shares approximately & in sale received of shares interest Dun are Knight We shares of also week. XX.X holds million XX.X of increase In in our our Blue, our cash. Bradstreet. Cannae exchange Optimal Black $XXX.X the million XX.X% and

Given we've of and million our of discount shares share million value, X% authorization. May shares X.X to the nearly on steep Since or have our have outstanding fair repurchased been remain XXXX with we plan. aggressive X.X repurchase shares our

begin corporate stock private forward, a private companies our encouraged the put will and and significant transformation management work interest, outs Looking the continue within company their the unlock more like that operator by we'll strategies. back we question-and-answer now the on strength turn emphasize and value the focus can companies. we continue we I'll to unique those unlock – call investments on carve with ownership, to I'm to exists will to and where partner management to portfolio execute with take unique of in buybacks teams our to portfolio, session. Sightline, and our

Operator

Markets. Our we'll [Operator this is our Please session. be Capital of sorry first we'll Lee question-and-answer – RBC with time, Kenneth proceed At you. begin Instructions] from question. Thank question your

Kenneth Lee

question. my taking for thanks Hi,

to drawing on repurchases. want appetite share facilities debt on for for or taking your financing Just gauge Thanks.

Bill Foley

and even adequate At repurchase question, with we for the tax program. on Yes, hand on continue our have cash on, payments thanks so after, to the the present share time cash Ken. hand,

down that to can share of take lines undrawn credit we million do purchases. We also have in about aid $XXX of

borrowing be in the believe what we're XX% to see buying to continue to our another don't So, buybacks. mind for frankly, level value. monetization stock can a have then we we our we occurring if shares about And current philosophy is XX% event stock or Sightline we with if intrinsic prices, future, of

So, – I we conference care except our own. with we're buy in to we're back every as the buyback I That's goal. don't stock I'll going said shares program. committed And share owning… my end the up I if to

Kenneth Lee

You will sole be owner. the

Bill Foley

be great a the I'll sole owner company. of

Kenneth Lee

one just see its investment Very portfolio Thanks you Very there. may. as investments think how to holding has about of hold potential for over term. Thanks. helpful. I But the know near I a helpful And liquidity tended want again. to follow-up Cannae that longer-term the a source if period.

Rick Massey

yes, we've of as months believe that events. acquiring over we to still now, sell we’re we've And right Again, what the on Ceridian balance market last where particular future the these of do sort the of that the we're shares early. been have within Well, the but for Unfortunately, over assets steadily are not back see that the trying eight a XX potential liquidity point XX been that our being prospects by portfolio. pairing and we've our be about company whipsawed that too guys we fairly investment, we at philosophy with months. million now some last sort executed we're we

at we of and in large of we and locked end were end are XX, up a February million. number some March, of We Alight at on unlocked in couple the of odd a Alight shares have investments, the

then that will And repurchases including we other share and we different, the either investments we be two a SPACs capital some both We back from interesting of again, I form that six-month hand that are other on raise July, investments But or where of locked than pair a have in in to we're for companies. of cash and we're in portion investment of going redeployed on, it's up the up time capital number believe them we following have remaining the in be of these of additional trust. and until from sometime a de-SPAC. our to lockup the have some to it small these ideas SystemX looking

you? help that does So,

Kenneth Lee

It does. much. definitely Thank you does. very It

Bill Foley

Good questions, Ken.

Operator

next of is Please from with Our John proceed question Stevens. question. your Campbell

John Campbell

Hey Good guys. afternoon.

Rick Massey

John. Hey

Bryan Coy

John. Hi

John Campbell

this a a lingering Hey, so the items so couple I've haven't chance letter. which including, letter. looks been if that it this proceeds guys shareholder guys it you guess, just the like as last afternoon, far keep to this of deal of other monetization out I you kind as for then calls as as if And good and as through sales of Optimal some about like to quarter But of maybe Blue it to from can a out bouncing we cash think had get announcement, and outline like expecting events, earnings talk was called in shareholder most of fully that couple far but guys you you guys around guys. of kind feels proceeds expected smaller the kind recent about stuff, can outlays what gross quarter. you're you But a talk cash did simple, the of I quarter net-net

Rick Massey

primarily outlays next be cash have as on buybacks we are this Yes, stock going XXX – that be to don't opposed to for within any really to are XX, to going investments in million proceeds the that XX, the $XXX.X received investments amounts the come from small horizon on we the we quarter, distributions connection that from Really Blue with Optimal miscellaneous, days. various other current than in really sale. the get

Optimal simple so Blue out pretty that's quarter, Blue it's and really, And Optimal in. a

Bill Foley

buybacks. Stock

Rick Massey

out. buybacks stock And

John Campbell

we've their sense. letter, funding And shareholder how outside really been guys. could But Okay. months where in attractive excited That the just, recognizing to value kind Sightline there. the provided what thinking over seems makes investment And you journey? time? unfolds guys then that about you us following maybe are talk guys of you're in to about you that like those couple see what then last for a We're of

Bill Foley

Yes.

XXXX, Their EBITDA up they but negativity EBITDA that frame. August, everything after time we of $X that in certain about sign can we budget And changes they you believe have September do adequate been can just regulation for next positivity funding much in their So, now for There's in the really midyear, so app negative is to be million off-site. to need were pretty sometime negative years. cross they to couple XXXX.

their in that's to believe up this to don't growth significant the have year. they for And app. add to be to You casino cashless going sign actually

year, but growth it's year, with of about million ended It's in $XX million growth it. they close another to XXX% we're significant think revenue. last or be this $XX be going to XXXX, I not year. next So expecting going year, then to And

have you is early Rick, So, to monetization anything and sometime going to some late IPO in do on us. on we're for Rick, be our Sightline? company to on target have a ready be time sort add transaction, add of That's sort frame would event this that Sightline? XXXX, do for of Sightline. you thinking XXXX, anything

Rick Massey

nicely, good. great It's on management. It's button. the really Right all growing

but met lot probably him, conference, – at the did, think, I our You I know Ken at you did. think a of I well, people weren't

think a I sharp guy, CEO. and public he Really, make did. great will really Oppenheimer company

John Campbell

Yes. That's all Last one for hear. me. great to

confidence you're Optimal you're with mean for I D&B, of the D&B on but not that's down doubling accepting vote sure. mean some necessarily Just it, mean on a I I Blue shares transaction.

time? sole maybe what Jabbour you CEO resources so view opportunity about got just if the just again could curious it you're there. D&B, you're long-term putting remind I'm do who's the there, over us now You excited guys so as more talk, about why you

Bill Foley

was for been XX of mismanaged company now involved a years, D&B XXXX. it we've Well, with February since and

business years The a out baseline. company bringing back really the was and synergies about of to the first X.X getting

Chairman of I just XX Knight. have XX-month you management the frame. Executive We was XX- And Anthony As replaced, out really Executive recall, has or managers that we Jabbour Black team. think, Chairman of become Board. in our formulated XX I then time elected first of now

developed products So, sale And & six we proceeds They've about the took acquisitions, spend position really future XX% going part we to point Dun Bradstreet. up be And And don't wouldn't for from we and his Dun with that's We good bright daily our their Bradstreet. growing I like at a more & and Dun that XX organically like with and liquidate we at prospects goal tuck-in penetration. really and new what's I Otherwise, taken marketplace stock. & without & be now he's attack last innovation, Dun prospects. believe, made we're And couple into of the for are common that's to gone really the information. plans & a regard disruptive I'm Dun locked and & one in D&B year Optimal the believe, the Blue have new to really stock enthusiastic time to But that the see have develop is products. the about many going continue in & of Dun the on And inorganically. Bradstreet. into sales pipeline. Bradstreet were position internally from change going new we workload – investment, And Bradstreet Dun We of Bradstreet, products, Bradstreet. because is great like inside, – a have way the we months. so our this of getting non-public the really can have to

John Campbell

good a That's insight. Bill. Thanks,

Operator

Ian of Instructions] is [Operator from question. proceed next Oppenheimer. Zaffino Our Please question with your

Ian Zaffino

and much. did Bill, multiples, very done? talk exit the ago your maybe you then the walk initial well? you if transpired the you How XX Thanks. don't you there And I What to as sort get Blue. Hey, Thank in can, but Optimal have maybe a us multiple bit just maybe upon of to little sort price? can multiple them, through months know get if of agree about Great. you deal

Bill Foley

And THL financial the I I really Blue Also, turned no what did, Knight the revolving specifically we involved. a, Optimal the because we our on not Board, And sponsor Xx negotiate what negotiation all in? Black to recall the I always when to Optimal I get around was to was I I'm a but Black it us the I the with left during of I of conflict value. you the multiple, situation. be would of did do disposition Board. it on it of kind Blue I the handling on were a Knight. am And transaction longer because this investment would the felt relative went best as discussions. be in

Bryan Coy

about we flat. trailing XX times was trailing paid in, coming XX times and out. got We It coming about

Bill Foley

XX-month period. course, So, grown I entity, double an was other a the of to thing that don't the from, – my I it Blue a multiple. We're did. But public EBITDA in and exactly XX% sale ownership we which had stock controlled prospects, private that if the same transaction were have and And that subsidiary improved convert public attracted of me Knight. non-public know, monetization could was a receive owner subsidiary Black in minority. Optimal a And a that of we felt is interest ownership company, I we in of cash what a

made & we about cash, interest and received we can redeploy a of Xx, private So, we other that owner an public entity, public taxes and ownership investments. Dun by have, and in in we of also and with. Bradstreet, repurchase redeploy in part months which on significant, we're on XX that which all a longer our rather company can that's can did We it a owned gains additional minority pay are no now a have the interest shares pretty we cash company,

rationale. So that's whole the

Rick Massey

mortgage rates. where you of during XX-year months, think was see October, course like the Bill this thing, when then. heavy saw Bill is loaded, mortgage it Yes, started one say today over past XX-year the that that. process fixed can you And Optimal back this, September, something bps very few to above XX that all it probably about back just would negotiation. Blue I I Ian. sensitive rate is And whispering the we're started

And happy originations the he slow he came to appears so, and and going was because true. were down my in fact, to be office this at be out getting Bill, said in that, time to

Ian Zaffino

us Bill, don't work? or you that an piqued you mentioned curiosity another of give something as Hey before. was it kind Good. what example as you've that Okay. that? sort Would kind as be thing Can corporate what of said thinking carve-out. through maybe that like that to far this I think And Would private my you're this a the like purchase relates investment? Like a be it exactly be? SPAC? would of how mechanics will

Bill Foley

Yes.

approaches. both Ian, So,

generally Alight. true corporate opportunities company, not you in facing true overhang a when big we is stock do it's company, that's And our SystemX the carve-out What owned partners you in what's management, and ownership, SPAC, found whereby a with because the company with equity. equity It's our looking or that's it's transaction a private with we're with, the at invest are you've that's not speaking future. much or with for we're different the a So, company public corporation that got true SPAC Paysafe. so and smaller SPAC some dealing private by so we

maybe we've if move in for from or So, subsidiaries stranded that but some some with the several like away public aren't in that and we partnering a But of have mind like corporation in your may a you or tried a with with is partnership excellent company, particular you and carve-out private of or we're it's majority investments but equity some CEO's and we've that some the CEOs, ownership. of step-child businesses rather but in my don't really to investment empire. company, these And your of our their to them ownership, control, of at piece really a acquire looking if empire they empire, look can at to have to those propose go got total then appropriate retain current you're opportunity. CEO even we assets an experience corporations, in sell that to place, either entities of and

a good – our as pipes position and do. are have SPAC not to with to conclusion can't best But that. And said, to deploy. not. we're that's going backstops we'll with what But to that We're these believe very SPACs the investment I base to our and our we'd then it back good doing two we afraid significant like We're not if happy of these be redemptions that money to now. really to that's come of happy do a going raise get with rather shareholder that's kind be The going of high. the transactions So not the will We're mindset we'll that happens if we in careful. transactions. still we're outcome, give We'd investors.

Ian Zaffino

mix been you to but that it December as obviously Bryan do as Blue, maybe of on us in it. NAV? update because have kind maybe might far. I give get Okay. one I there's relates the quiet Thanks. the so movement Can the an involved a we'll then he's and And XX, an something But or think you been year-to-date know you have question, just final XX February And Optimal be it here liked lines? on on of

Bryan Coy

in out But Ian. Sure, today. comes out value should fees there to If now the it a taxes price. to should be which right upside and fair not about as now, there There share, shortly. right closing today's net summary, be XX% one of of is a $XX.XX it's out there

Ian Zaffino

very care Great. you Thank you. much. Take Okay. guys. Thank

Bryan Coy

Thank you.

Bill Foley

Thanks Ian.

Operator

end the the Mr. Foley remarks. to I of turn session. the reached question-and-answer over have for We will now closing call back

Bill Foley

We're Thank and excited we opportunities with year for this the pipeline navigate in you, market. as operator. ahead difficult dynamic our the

nimble see remain long-term to forward our adapt you time on first as and we We again look will market again approach opportunities quarter earnings we create our Thanks value. to for shareholder strive your the speaking call. that today. to We XXXX the in with

Operator

This concludes conference. today's

may great participation, your your and a you Thank lines for day. at time. have You disconnect this

Cannae (CNNE) 18 Feb 222021 Q4 Earnings call transcript