CNNE - Earnings call transcript Q2 2024

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Operator

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

Second Quarter 2024 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 August 15, 2024. With that, I would like to turn the call over to Jamie Lillis, of Solebury Strategic Communications. Please go ahead.

Jamie Lillis

all for and us. operator, you, of joining you Thank

risks would Caswell, we and Officer. But On following listeners our I the or are facts, today, remarks about call Ryan this including forward-looking of before Cannae's to Cannae's involve strategies that future Statements expectations, a that conference contain uncertainties. that statements. begin, Financial are intentions the regarding call statements forward-looking Q&A the may number hopes, Chief have statements President; and and not historical remind our Bryan we like Coy,

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

to information the Additional call information, provided financial to the information like our reconciliation GAAP would over financial a now shareholder turn to including non-GAAP between in is letter. I Ryan.

Ryan Caswell

call. on afternoon, thank our conference quarter joining Good for and us Jamie. you, everyone, Thank second you

on details. some as call He key and financial and second be past with finish will detailed of some before discussion a will during strategy is unable the I calls, quarter. Consistent want off, some high-level to commentary our First quarter next of portfolio call turning traveling. on is to that Bill events more provide we he the earnings with to the join today note back companies

net We to or to continue of plan portfolio strategic the our NAV. asset value executing discount grow both share working on to NAV price also focus our close our designed to while

Our investments, through companies; private including: will and X have our our introduced working levers, additional in either and performance businesses our recently strategic new produce shareholders We gap main transaction, providing -- making each or and believe repurchases. spent share has close our improving enact and between grow and strategic valuation management cash flow. price our primarily pillars the teams these time portfolio portfolio stock companies this considerable the cash capital that of and to about strategy X of through returns to drive NAV; improve optimistic operations remain dividend cash combination value the quarter our flows of will NAV. We the with

example, and we was Professional able Services to For management from D&B, appreciate to Alight's regards conversion and up on time strategic team transactions, and from consider management Alight will the value. drive required continue drive and work the believe sale improve line. With the for to and each billion Bill the shareholder growth, work $X.X of close business of effort with over flow transaction to which cash D&B instrumental an revenue such free the get we significant Board, Payroll of This consideration. all and their to to Board team

to and performed optimizing expense portfolio Cannae's of their all which team with the Mill of respective during We were not Minden given unable we required expected Group their spent targets believe our results investment. of to million we plans believe we and optimistic will that and to the to a NAV. Unfortunately, has remains with future, considerable and quarter, products, Sightline position And their the on management took impairment on value been refining the time the on book its maximize market about this basis, regards companies the the impair second investment. company, our get date our sales while management Restaurant and also increase we to quarter cash focused adoption key $XXX of strategic cash expectation. flow the valuation Sightline and

Moving on investment to pipeline. our

continue believe investment our attractive to We we increase look that for opportunities new will NAV.

primarily in focused investments on platform We the markets. private are

In Since some Cannae at stated and of that would to date a with like we opportunities participation investment may a a JANA new in push more change acquisition bit company capital creating out investments. I JANA capital opportunities. solution. Cannae's as catalyst the QX, made potential acquirer capital an time Cannae. we alongside sale opportunities. In the through spent how process unlock there time fund stock companies the an we same first plan to company the investment see potential target the and a catalyst while company, where source any we value, potential specific now to and public as our to on undervalued considerable QX, investment target position larger participate partnership our certain as JANA plays As before, can or Partners at is provide looking for and situations, redeploying the if JANA. from take to potential the are any additional for public tool investment for announcement detail capital with provides in Cannae in our resulting at of team there

now be paying public discuss Cannae. I the shareholders. remain of XX, we want to $X.XX per like I opportunities will our On our don't produce discuss with returns that we nature, specifics share. September optimistic While its given that partnership capital of second dividend for will situation to acquisition JANA to would attractive

to shares capital our Between of in second we and to our the XX our have shares million bringing We year-to-date XXXX. the in following buybacks, back back shareholders we dividend QX, $XXX shares. bought XXX,XXX million in tender also X.X quarter over the in share bought returned million purchases

companies. Turning our portfolio to

points to acknowledging to inquiries. of second with up parties fourth generated at the received an largest consecutive Monday, of XX a and year. On X.Xx, ago Bradstreet down to is the equated be inbound quarter. second year-over-year end basis Our in has to those margin, organic adjusted organic as quarter quarter, revenue second representing interest in it expects growth quarter the prior year year of the X.X% D&B second million, a which from compared the at to which to growth, XX.X% as assist growth. The compared X.X% issued EBITDA mid-single-digit company in holding, and and Dun retained advisers has this quarter X.X% & $XXX acceleration growth at Leverage statement that $XXX D&B has moved third today X.Xx million reported by management

We any going will this forward. matter make not comments on

sale Alight company Payroll CEO. Post million closing used to referenced Alight repurchased the Scholl thank commitment that to a Tuesday simpler the story that and the member believe million and transaction business, $XXX this second the Stephan will as EBITDA half holding, X.Xx. year, proceeds of Our his buyback a contract, announced down Alight equity as the comments and the successor. will for for a revenue step We accelerated second leaving $XX of the by Board a Professional for the is recurring of he effective want announced and revenue full XXXX mid-term already have Services a $XX of business largest is second the XXXX shares quarter, target repay adjusted CEO to XX% mid-June is share have in The million XX%. names between reaffirmed margins. and for net range million Alight, and bringing down Alight and Board to under a after XX% Stephan impact the that previously $XX company made leverage adjusted remaining vision has and and public management margin they more of forecasts repurchase with of in EBITDA EBITDA This margin of the authorization. We higher that positive share evidenced XX% debt

second at X% $XXX Looking which the from Alight's discontinued in operations, prior the year. continuing million in operations exclude quarter, results, million XXXX company the $XXX down the from quarter generated

the $XXX from margin EBITDA quarter Second million, or the XX.X% representing in was to quarter. $XXX operations a margin continuing XXXX adjusted million a XX.X% XXXX compared

full Turning as This table success in earned ownership most revenue our the League and the XXth League of table. translating the in place the to ended well Premier the first team grew Cherries by League June season. months the $XXX is million million, AFC The Bournemouth, XX% approximately from XXXX uptick points. Black Knight to Premier as more finished XX, ended corresponding placement both higher XX primarily Football. revenue Bournemouth income year driven at a AFC sponsorship have Premier from In XXXX. The also for revenue and increase the in June earned growth in Bournemouth's in XX% hospitality than improvements period $XXX XX of in was a as higher to for XX,

momentum, Looking and relegated both the sporting finished XXth XX%, commercial forward, in to FC perspective. At place own club we Lorient, X season. where from Ligue the positive the was we continue to upcoming for see and

of at the frustrated remaining to contemplated while interest, X. our FC, X. Hibernian Premier stake potential XX season return in for team results, resources finished the is Lorient believe we XX% to valuation our and in Scottish the have we the stake is scenario, team with quickly out to reduced While the a place the we arrangement FC put this buy talent Furthermore, are the League. has remaining Ligue Ligue which in and clubs the Xth call

better community BKFC to and given outcomes, deliver belief create and model and interconnected our can that experiences player the improved continue improve holding group. an out We build enhance commercial across pathways, fan best revenues also ownership profitability company the sporting multi-club

Bezbatchenko player success we roles across President. Prior and part and to pathways Tim opportunities leadership June, first portfolio League group. of Tim optimize announced commercial as in improve recruiting BKFC, development, Soccer. that enhance Major enjoyed will strategy, the been work has our with player tremendous BKFC's clubs standardize Tim and hired to within that in As

few quarter. Lastly, updates Group I a given provide the previous on the during would Restaurant work like Minden Mill the to and

that bourbon, whiskey already Ground begun continue first XXXX Minden a well is inventory at the release scaled aging. market. The has called received of liquors it X-plus in May acquisition. released and brown distillery make additional an by years Minden which and Mill We fourth track rye was malt progress of Mill as quarter product, And American the vodka for brands acquired on ultra-premium single its to development a require more High from Vodka,

on the to Group. Moving Restaurant

discussed are store strategic and the Following last in continued with our have quarter, locations realignment reducing overhead. corporate we reduction

laid This the off of group's the employees third-party spending we headquarters. quarter, approximately process and the reducing corporate are in of and XX% downsizing

EBITDA second quarter. year quarter prior of has produced was work the more than positive as already Our second XXXX results twice that adjusted

to turn long-term is guest improving at and counts and Our Group Mill their management our actions increasing the both which will the on improve key store team profitability believe the values. I the We cash focused at will Bryan. Restaurant flow now and to is levels. respective over flows at the call locations, corporate Minden increase and cash

Bryan Coy

Thanks, Ryan. balance briefly the P&L, I'll and cover liquidity. sheet

the The the prior increase million of include pace counts the well in the compared of write-down prior or include Second reduction a and for products, March on were on restaurant their sheet reduction shares Cannae new on liquidity locations second quarter comprised Since flow combined a With of development a XX% were of we've now impairment $X.X well comp operator end from a as we compared hopeful today's costs. Cannae quarter shares Restaurant of close Cannae's recorded those light termination outstanding has The a professional XXXX SystemX. I'll resulting it. estate as related an also share, Cannae second and has use XXXX. Cannae of margin NAV the million the financial notably the million of cash and stock shareholders. nothing capacity book operational on liquidity Sightline, price the by year the near to remainder utilized in the investment. better in prepared. The investments a revenues for decreases from and at $XX $XX depreciation were was Same-store sales loan today, the impairment future to down had of and other corporate as impairments 'XX, significant expenses we through operations, while fees. These or XXXX as down is restaurant the million related decreased charge and and slightly to which than quarter-over-quarter. year the revenues bonus Q&A has you average Dayforce's real $XX.XX. With losses of in operating results to the expenses, level. in restaurant million little we'll investments, quarter, guest to $XX this in new negative further back XXX,XXX higher noncash $XXX position, Cannae business and a quarter this Dayforce XXXX detail shares corporate we're or well number product that presently revenues method locations as dropping during billion increased at well said, in uncertainty Recognized value over approximately restaurant quarter. million our gross investments liquidity. the XX% that and reflecting legacy XX.X closing reflect aggregate of the XX, at Group of million Sightline marketable a cash or reduction to completing operating XX.X% today turn costs, team. Cannae's of X-wall corporate, behind of pre-IPO liquidity results, of which Notably, immediate second with the matures and expenses. These remaining year-over-year. company lower $XX traction of investments sales facility. equity point in losses with challenged the that charge of XXX leaving as growth with balance offset of the also to to more of improvement note second now and million, basis pressure securities results, company compared billion continued by personnel be The the lack call in approximately offset give revenues, as existing in caused drawn $XX operating of for the greater as value and that continue our to our held bit checks. Cost SIP begin the expenses the of And basis work higher $X.X remain shares X term drivers on-site realized million in down quarter for the future based fell to the on with XX% fees million Dayforce a its their Sightline impairment rationale At gain we the could position out operational to of to on book that, of see our Cannae we're solid. quarter. In remaining forecast capital valuation an $XX.XX of $X.X to $XXX IPO. We'll under to has per the sold begins I'll the debt management proceeds only XX.X% on from returns capital the aggregate session. portfolio

Operator

Stephens. take will we Campbell And with John Instructions] question [Operator our first from

Jonathan Bass

on John. Bass Jonathan It's for

So comment I D&B takeout on know rumors. you the can't directly

refresh for deeply D&B, why your high hear on here. to so at investment love level valuation guys discounted view and the you a is a I'd So just thesis

Ryan Caswell

the or we what So today? I thesis investment kind when you to how we trying -- is I'm valuation I not apologize. view at? the are get made that of -- get

Jonathan Bass

Yes. That's right.

thesis Just if maybe got could. just what why the and was you your when in maybe -- thesis, your why, not D&B you just

Ryan Caswell

it done thought that assets, initially business, believe data for lot we could thanks penetration. -- invest so cost we the improve -- think lot done No, market to well a we team things. clarification. we of we those revenue the enact great have business was obvious think of that in can as the savings some the invested a in kind of Anthony have had there business as and we undervalued that And the When in we was Yes. an product great growth. We

to business deal doing at that think they're D&B. things a But revenue the of the If you is the we're growth. With X.X% kind doing path business value said, -- of the our the in what growth look right kind of they're on kind the flat is and well business was acquisition where create since trades. additional the where at of to being organic they've the we at EBITDA turned as -- frustrated the time as all right team was

Jonathan Bass

Bournemouth which really it. at had to They And table, it season seems turning of is prior nicely a the then a is here. improvement finishing Got And guys' out there. the the from your like nice mid-level solid playing strategy year.

the at then the off looks as you this two speak on consider new what guys investment point, And done, touch maybe next to just wanted taking has you to and year that, could of the you expect here of club guys would to I the the So shortly? here. One, over ownership course after start its level season some the given club table? things

Ryan Caswell

middle question, still first window. the the on in So transfer of we're the

needs kind kind for the what So be. kind view of of the have exact club and before position players real of kind that of it's the will we of determine to still importance capital -- of of we're capital the need still we selling exact -- makeup squad so the capital the think the of -- given needs club, a I buying

that hold taking window. And to Bournemouth But will in broadly more there I we of investment -- at of think to things the be Bournemouth some still are month the based obviously, that. I lot we then season. trying would There Black that we'll on a next changes. to an the what ownership will at price, over the think on out can do we and came amount think is, So value. more lot the over do Football more unless, table, that incredible a figure create us is Knight that offered off there But and think are off it. have to what happens looking in we're terms there do I think are term, if up someone don't we shareholder about of near

Operator

And we Ian Zaffino from Oppenheimer. will next our take question with

Ian Zaffino

Great. payroll the this, like still like Maybe potential sales. you on something is and money might this, of change, the I management as like take Any said, about with consider? look maybe there? then TMV and capital, do Alight The got that strategic sale then think way the look please. you've you you thoughts if news guess you here, that to you it at at I

Ryan Caswell

I'll answer ways. that in two

terms don't public company. mean, something day like a In every there's a Obviously, sale out I -- or it. a that. it's for specific I of price there

-- So remarks. talk I allocation can terms would in to of more think broadly, say of about the interested, in come -- they as prepared if people I are that we clearly obviously, mentioned some capital we how them. But we

Bradstreet think we As to capital of public shareholders. Clearly, Dun company have investments, and into & reallocate our into from about or capital returns Alight some positions. of we are those of investments new investments the biggest some to

the depending kind capital. have allocating and all that to different things So the that about just are as that of on when going think we'll think we of about cadence on kind is,

Ian Zaffino

the follow-up of that a do Okay. might would but I kind capital buying And maybe stock to other prioritize as be then as many buying into guess as read capital how guess there stock opportunities? you not allocation. versus returning Or be far back shareholders? is there I you're

Ryan Caswell

capital and tender shareholders dividend. think X to Yes. between of Look, returned quarters first bit a the the we've over the quite I

to capital, shares. I think first shareholders on bought quarter. And we about return every back in it's dividend the the million it's obviously, consistent we X.X because quarter, like instituting

is which us. we're So big for -- chunk a

closes our into including at allocation. we -- look say, the both But where companies view don't case-by-case investments. we kind to have strategy those. I buyback, public on have I returns NAV. specific how of, on basis and as think the capital And are as kind that a from a So we private a investments see we're It's capital it of, that that we of growing how letting that more settle the And I'll where capital. the discount we that those of But combination are of kind we believe basically can and at well shareholders as reallocate want the is we that see trading allocate of are. a a decision we out believe as look we investments most some likely to we those combination share company is stock of it's believe where both make of things.

Operator

next will Kenneth we [Operator with take Markets. RBC Capital Instructions] question from And Lee our

Kenneth Lee

you would follow-up Just -- if to monetization newer can't given a D&B towards lean of there just much too your the this But the strategic review. there put portfolio returning towards environment? that question kind holdings, a towards or public once previous on potentially on finer repurchases sizable just at was perhaps current you realized and one it, point the point, excess allocating the investments bulk and about talk of of cash

Ryan Caswell

we to Look, going businesses. about when a combination investments what I kind up actually the dividends But as of think something well in buybacks think kind it's kind and of and comes on. we of is believe general, share have both that the in of as

and all think comes the it's percentage So about the when is that things. those two allocation have of a we'd think to but combination of that, situation what up, I

Kenneth Lee

you. Got

along talk Cannae much some here? the realize follow-up, of What in context sort investment But want equity investments playbook Okay. or about RapidX could broadly can't sense the like could about for could in get better partnership. future investment co-investment the the terms And Just we other a here. is how investment emerge. or too potential see with makes going the sort in expect is transaction of this of one I we then firms? where forward? And JANA a partnership of and investment. this transactions More you What's of my to potential a

Ryan Caswell

I capital we're what of What partner did look of I you -- what business understand the done with kind similar privates so size, I take to that with could -- mean base. I business -- it's on another but solution? And then whether the the opportunity would needs, at. be our be it mean, past. we've to or different looking -- I No, businesses other depends depending would that size it the we mean, an think think look, we of on in it D&B acquisition firms, capital ideally,

I the to So Cannae the attractive plays TBD and JANA it's partnership, skills of change given bit as utilizing stage and a the find playbook but again, is enact how so capital out partner relying potential early investments. the exact to and -- how it a of source acquisition on

Kenneth Lee

Okay.

Got anything it you get you. the one got -- terms just sounded Okay. right, changed as And of if took to charge the was a a And if any one, a in specifics a understanding terms may. adoption there. regards impairment the quick just Sightline impairment? I of changing new of in it to last lack there for or progress drove I terms also in of the product. Was potential in better industry that the of with by of if I conditions industry impairment, kind the quarter development want driving there. there And that

Bryan Coy

that Ken. take want. they wanted. not their if that you it's products not little the some getting legacy were more one, backwards, can -- I a traction It's bit of Ryan, It's of

get While put in quite they're they of run. short pressure as flow the those profitability well. can bit of from and development on operations in far a developing as new the as cash two a combination product them But

Operator

questions further no have we closing call to that appears will it for time. I this back Ryan now the turn remarks. at Caswell And

Ryan Caswell

steps we time excited you narrowing to of we confident create for opportunities value remain position on with taken we lead which are price the X your year have months of discount. We the share right significant our shareholders. believe us will again to we path for first growth the in success, our and that operator. Cannae NAV you, and To through that front the a Thank Thank are to for today. conclude, have

Operator

participation. Quarter does Holdings Earnings you This Thank Second conclude your Cannae for Call. XXXX today's

You time. at may any disconnect

Cannae (CNNE) 8 Aug 242024 Q2 Earnings call transcript