CNNE - Earnings call transcript Q1 2022

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Cannae Holdings Inc.

First Quarter 2022 Financial Results Conference Call. [Operator Instructions].

As a reminder, the conference call is being recorded, and a replay is available through 11:59 p.m. Eastern Time on May 16, 2022. like SOLEBURY the TROUT. would Rory over I of Rumore that, to call turn to With Thank you.

begin. may You

Rory Rumore

Thank you, operator, and good afternoon.

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

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

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

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

William Foley

shares tensions Rory. Within million conditions, shifting We macroeconomic XXXX. first and focus geopolitical equity presented you, backdrop, repurchased remains challenging Cannae X quarter a of of in unchanged. our Thank market the a that quarter

the in our XXXX X.X repurchase we our totaled X.X% since Our repurchase first approved million quarter shares share program activity of shares. or of outstanding

capital on also balanced our a execute. companies work We will we'll focus that to to teams shares help take while approach management and profile, them our to with to allocation a continue investment continue with searching for fit private repurchasing

We portfolio's very company's with the strong performance our are proud economic first of environment a performance difficult against fundamental each quarter. in

repurchase through begin to opportunities. back turn We and investments our to given remain now compression present in are management portfolio periods for typically risk creating private our of our and I'll session. through I the question-and-answer program committed repurchase and investment volatility career also valuations to cycles pullback with we the with companies. excited seen have of value new to the But potential appetite. teams call many through further of also my best our the to work transform the operator

Operator

Instructions]. [Operator

Our first question Stephens. line comes Campbell the from of with John

John Campbell

how buybacks Bill, what clear looks that themselves, should balanced talked thinking investments. pace are market we in maybe with that potential buybacks there from private If private to and approach of kind kind the you balancing to no about here? investments of company new be like of present a

William Foley

mean, I really stock depressed. Well, price our is

buybacks. discount take down And our a share to a at significantly opportunity I'm is to This going value. strong so our good emphasize count fair to

companies we're to to invest -- different So for different looking in. ways

relative early with we're new pending to regard to SPACs. investments, stages. X a have We couple But other our outstanding of things

point. capital at buying allocating use this of our to So the shares that's we're going -- be our back. That's best capital,

John Campbell

on makes I And have a Yes, the gotten in side multiples obviously, sense. the the mean, insane. -- then public bit

investments. kind of your of to tied lot a have obviously guys portfolio public You investment

not chomping lot a of that. unload a know I it not to So you're probably bit

little bit margin looks It So the down loan. a about talk like guys could on maybe capacity. the debt you drew if you

just debt buybacks and into that company and So willingness to kind investments. draw your maybe of private feed both about talk your capacity to

William Foley

fan big debt we $XX one investments we about a on of million, drawn I not our down have I'm But think, of really to buy taking Yes. are make -- back or shares. against to revolvers.

about $XX.X We million holding company have hand. of on cash

And so million. our totals -- our gross $XXX.X liquidity total

pretty to Rick So point. never revolver some back. and I'll to that our we'd that's and may be of talking I But Duke. at to And $XX, available thought we Brian just get reallocate good shares a investment. capacity frankly, buying

John Campbell

Yes.

then a quite the sure. question. imagine value just was in corporate below bit book sitting very summary? liability housekeeping point you What this that a I the maybe And at are guys tax kind the for Bryan, of You for in for guys. book looking attractive step-up

Bryan Coy

as with Dun to you deferred well. bit the shares we end, go from Bradstreet in big a The step-up had to down Ceridian value had well. & got, caused the sales mark-to-market as shares additional deferred that deal . quarter The dropped a that quite so change

Operator

Ian comes of with And line Zaffino question next the our from Oppenheimer.

Ian Zaffino

a medium term? SystemX about there Can you some through you talk sale. your a shareholders as basic as I Cannae conversions maybe whether reported bit? Deal share investment million like guess SystemX you term Maybe closes, X.X about now thinking little into as or and us get near far long your term, just walk

William Foley

question. Yes, that's a good

for this, I the June investment until late majority locked think up June, of so. or XX SystemX As of part we're on our

final unlocked And million X.X was million X.X some have did it we when shares about the that in we that shares. were being taken business a or result However, investment made totaled public. of a

that to our capital. our higher quite I blackout to period earnings So that actually $XX few trading release than or to lockup and shares mark, a a with above prior sell its bit the prior some felt to SystemX traded opportunity that, take prior to raise would it and

about million XX And days so the we did, last so. we sold shares or X.X over

like market So we're earnings, And we investment. the now out XXth. the SystemX blacked the released on I are because or and not in believe, XXth we

strong numbers are released, really margins it's terrific to a is EBITDA see the growth -- management and a come team. first you'll -- there's growth. -- fantastic. is And -- have translating also out It's strong its the growth We quarter EBITDA when

And we So don't a of the we that the portion investment like to dispose in large of near intend future. investment.

to a for end we dispose time, we of some shares June. SystemX But to pretty of expires ride time may period once good of So the additional time. from want lockup at our

Ian Zaffino

Great. a That's Okay. be color. probably. now, very this might for helpful Bryan, question you

through . cash, Just maybe helpful. Any to color be losses, would us recognize it walk noncash?

Bryan Coy

Ceridian other Sure. significant million, in other and the we that We $XXX two that was about the The be to Paysafe $XXX share was continuing gain the offset down very And our $XXX was cash Blue price by noncash there. million items the way. wrote million depressed. with investment by the Optimal had on mark-to-market was transaction

Operator

And next Markets. Lee Kenneth RBC question our Capital . from with comes

Kenneth Lee

Wondering given companies And could further side? right the whether having currently upon around company between if seeing you any market meaningful about now? just gaps and just on backdrop. you Are some what opportunities we're in thoughts expand it comments is current private potential conversations market the valuations private public

William Foley

-- question. months. has Yes. heavily I'm That's actually the this very couple been over in a engaged of going Rick to let last effort good Rick

Rick, you this one? don't why So to respond

Richard Massey

that for heard out American type far, the in are from would I I've in we One backdrop Capital seen and market GARP there are of the -- juiciest you. seeing I Irving, Okay. say small-cap Two was an companies. -- so area questions sort what the

of on Some -- number bathwater. that cash we've thrown companies crazy, a of there very them seen multiples there those in not capital. went out of invested off, have the growth return that been flow. attractive at but And GARP, actually terms sold And they've with trading

like on partners. bringing a to as share capital. on some something those option. Cannae capital planning and and actually like lot, one we in Trasimene lot help a those. them working on we don't we work would would that's but But So on are have And This general to be of that put

where selling -- -- got Cannae we of -- doing, you described that at we're since thinking think doesn't Cannae don't a capital own. that's about anything an all that and borrow in to of as -- lot in unfortunate Bill excited we doesn't And we've we state are where put he's what because terms in. it, I So

not -- Dun sell be, those it'd where way in on they're to below crazy another and go they to heard and You and It's SST, Alight but Bradstreet. him be deal. & ought Paysafe, do

and of but back shares make Did those sense. selling I answer buying some -- some So might questions? your

John Campbell

Got much. all you you. That's I Yes, did. helpful. have you Thank Very . now. for very

Operator

Research. Singular Our next the Chris line with of from question Sakai comes

Richard Massey

aboard. aboard. Chris, us. following Thanks Welcome welcome for

Joichi Sakai

Great.

Okay. Thanks that. for

that sort Just to have could possibly you what you question, would to you in sort company. last borrow that guys of a mentioned of idea how much Do borrow that instance? any acquire on piggyback

Richard Massey

the sure of of depend the Absolutely. the or the past on over so gotten expensive LBO, have lot days almost obviously, many would are part more a are target. the markets, high-yield leverage those But which frozen. aware, I'm well XX It in you absolutely

So anytime I pull know that the stuff. levered except is don't LBO to soon, off a highest going really anybody quality for

Joichi Sakai

Right.

I talk improving -- how the the guess, Are from revenue pandemic you the there? about, as you Can group? things you Are seeing seeing seeing are Okay. restaurant subsides, you that?

William Foley

operating had labor, very We was really to following commodity it and prices spike difficult trying year-over-year and terms margins in your after -- really shortage very some improvement. same-store a a to growth. the for open restaurant seeing of of keep restaurant -- business are restaurants nice in and we . January moving started Yes, But of improvement forward. January, in terms the we sales see

a XXXX So and despite February, January have year. to restaurant we're anticipating in part the bad to, of strong

And so we're happy.

family years, -- the system We store last the reduced we've our and the baking company, the our taken and also sold -- business business. we've in XX also count pie the several Over system. significantly Charlie dining off

rest year. seeing businesses X that doing chains, numbers Charlie's well. out balance the chain, the improvements those you really fairly in not so of reflected chain quarter. But perhaps some going and the good And XX forward pretty are the the the came first in start in -- during It's other

for business. in with the we're pretty of So happy restaurant a time lot first years, we're actually -- the

Operator

Stephens. from John with Campbell the next Our question comes of line

John Campbell

You've this all this right? And these past. it this Bill, shoot me assets, for myself -- joked ask hand-selected in about hand-selected investments. at to thought in not the me But I portfolio and question. you kind They're I valued getting question. you're you you of going had these But I've appropriately. think investors Vegas probably

X% the X% You own shares today. or of

this with Knight here to the look At have yourself, monetization a for going Black does you buying You're future. yourself? what event hopefully, something point just become in at

William Foley

this -- have bring it's still much really to gets point, credit of potentially an start drawing a little really investment. back point, at low are Well, that's But advantage in the of down the and number, be enough why talking money. to be shares And maybe our shares. . of going just down our a to best and we buying taking we interesting lines about if dislocation lot that a actually about out really you marketplace I of I too and it. some is significant actually number can Because afford. buying It's it a guess back

Richard Massey

John, for question. the that's asking you what get

John Campbell

I'm way that the on Yes. match Exactly, could find help funds exactly. cohort you sure investor an could up. you on some

So I all got. That's all right.

Operator

you. Thank

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

William Foley

thanks today. joined and our you, to call Thank everyone who

opportunities look volatility calls. remain you investment today for We portfolio, and buying our shares on second on driving again market may the While across our finding operational XXXX speaking will monetizing with again our time. investments. earnings quarter to and improvements forward Thanks back focused we exceptional your persist,

Operator

concludes today's call. conference This

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

Cannae (CNNE) 10 May 222022 Q1 Earnings call transcript