CNNE - Earnings call transcript Q4 2024

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Cannae Holdings Fourth 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 March 10, 2025.

With that, I would like to turn the conference over to Jamie Lillis of Solebury Strategic Communications. ahead. go Please

Jamie Lillis

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

Cannae's today, Financial Caswell; call the President, Officer. we Chief On our have Ryan Coy, and Bryan

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

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

uncertainties references The shareholder letter, subject risks afternoon detailed measures. will the quarterly our which SEC. limited filings to in other and was financial include other Today's risks released the our not are forward-looking also and which this to, and to with but non-GAAP factors include, are in remarks statements

Additional is the between provided information, including non-GAAP information a to GAAP in letter. financial reconciliation financial information our shareholder

over Ryan. the to I call would turn like now to

Ryan Caswell

Jamie. you, Thank

new our increase in designed improving intrinsic valuation trade. that narrow each X believe grow primarily will shares companies. On and would net in and and performance returning value in consisted then we capital before to the call plan call stock year value over companies, this more detailed select our the to financials. our plan our NAV portfolio an of our strategic companies portfolio to going or out I ago, price, to The that laid of Bryan increase to review have a making like highlight I through of of and taken long-term investments We asset we discount area actions into Coy this plan will private the significant Cannae, drive the shareholders. NAV go will a turn to

with work teams and companies to to cash closely improve operations, continue portfolio and long-term flows positioning. actively we our their existing First, management and

For divisions, example, we which with $X.X and remaining professional billion its significantly business repurchase shares and worked dividend. and services to Alight the of to capital the simplified initiate on provided the a payroll company delever, allow sale

to which X new We members, new also better success. all added business position Board for transition a worked CEO the future and with experienced on of Alight we believe the

managing with and on significant GBP year focus XX is million XXXX. example performance fiscal time increasing flow, with AFC and improving From infrastructure again are Bournemouth Bournemouth increase cash XX% increased to commercial a Black or the XXXX improvements. expected we Another perspective, AFC on-field a commercial in Football and in spent and activity revenues specific Knight nearly

the in League Manchester longest traditional From in streak club United. its ever, top achieved unbeaten sixth Arsenal, ranking League, perspective, Premier in a Premier Manchester place highest sporting in has sits and and Newcastle Tottenham, history City, the AFCB contenders

training infrastructure open new we an next a world-class team from perspective, month, And will first facility.

made We both grow several believe and ability interim higher and are In private cash flows returns our investment our value optimistic NAV. about we creation Cannae. which its future and provide will to drive generate investments, to portfolio on new we XXXX,

investments terms as and help JANA in investment that XX% equity a as is was new source on to with of for JANA's we strategic well significant investments and believe interest these potential opportunities. of JANA cash provides has in create upside, One Partners distributions Cannae ability working

and opportunity we investment, initial potential public on multiple to investment continue targets. our JANA first situations our Since collaborate worked live regarding with on

investment We about going partnership forward. and opportunities are our optimistic

also a with the a products Watkins in demonstrated strong XXX-year-old company Company, brand growth flavoring a majority consistent stake long-term profitability. acquired and We that has

with and XXXX and in EBITDA up ended high company to single digits mid-single the digits the in results improve. sales expect The XXXX

we related our Additionally, preferred security. distributions have received cash to

We Watkins excited about also forward. prospects are going

Lastly, has in The in we newly XXXX. Dutch shareholders in approximately Cannae XXXX. million of which million to returned dividend $XXX significant additional repurchases will X.X and auction, returning continue million Cannae second our dividend instituted an returning shareholders quarterly resulted shares initiated shareholders. to quarter share a through our was XXXX, in to the quarterly XXXX, $XX this repurchased capital dividend, and in In

XXXX, Finally, the Cannae. external and Bill of brought our internalized as manager CEO in back we Foley

key internalization, with align are Cannae the believe further these shares. and primarily Cannae compensated We of part shareholders. As management management our now actions

that we forward, away investments use our buybacks is company these company from public our to continue and share share Going some of plan to capital as a rebalance to recovered portfolio sales. from public prioritize of plan

our management Cannae of NAV of plan that return believe discount price we and in and will outsized plan portfolio our close to portfolio to laser-focused we down and than hold share remain will Additionally, the shares, for on invest we and team hold proceeds XX% companies potential Board growth drive NAV. Collectively, capital use our increase Cannae more the to NAV. and to and our new existing outstanding executing pay the debt in shareholders

of quarter. quarter $XXX XXXX, more the prior the & million I'm X% to Dun $X.X in prior was portfolio down detail, a the of few year's of with fourth constant quarter. fourth EBITDA Adjusted starting fourth now growth organic million going a talk $XXX for D&B. million, to less companies to equating currency reported to compared revenue bit year's Bradstreet our about than

by unprofitable a management the numbers were exit certain delayed While to noted quarter strategic affected that and timing these below of was deals, process. consensus, decision partnerships D&B ongoing the

time private. EBITDA The the to expanded versus million, of is $XXX and X.Xx the floating For and improved rate from debt. up its adjusted the achieved take full fixed also reducing net by million X% XXXX, growth organic our at adjusting company to capital their year structure D&B which leverage revenue $XXX

company announced the in to discussions discussions were it share first that those XXXX. -- strategic the ongoing, expects quarter Finally, ongoing the outcome of and of its

and from $XXX a operations from XXXX, Alight, total which the million fourth leverage net XXXX, flow. to of quarter expects also high cash $XXX increase decrease Alight's quarter. debt growth to fourth free in posted XXXX was continuing X.Xx, quarter revenue to mid- a which outlook $XXX EBITDA XXXX. in was growth the X.X% Alight fourth end quarter and for Turning fourth their quarter the single-digit XXXX paydown. million Adjusted of the reflects EBITDA of million at X% provided in double-digit adjusted a

of new company record growth fiscal growth or CSI, in grew acquisitions, year with nonpersonnel half single-digit On pro a recent to continues of building higher recurring sign Services, by pool. range solid first had revenue the revenue high offset annual the and revenue expenses. grew Computer integrating in onetime mid-single quarter the EBITDA forma XXXX. logos, Adjusted following its another the basis, digits in

Whiskey Bean Mill Mill XXXX. products. earlier following Evil selling of and as the develops, launched half Rye Nevada launches Minden Minden the Bourbon, also initial coffee Nevada In it Minden in Ground continues liqueur high and XXXX, Mill plan second its vodkas began company successfully Distilling on release

points best-of-class XX several in products claim seen track, in both ratings and high to gold have XXXX starting are expect Sales of XX to in and hit significant receiving These as the awards. we products growth a also market.

financial position. the to to touch Brian turn call over our on now I'll

Bryan Coy

Ryan. Thanks,

revenue. casual revenue quarter operating total brands quarter lower continue restaurant restaurant portion sector as in or lower of was to comparable, revenue as 'XX fourth fourth Cannae's XXXX than in away-from-home shrinking as in year general X% fight $XXX closures for reflects and both aggregate many store The headwinds decrease a the primarily prior food well budget. dining in on million the their the

XX is a brand, same-store same-store more headwinds, in increase much the concentrated guest which geographically, increase sales the the count average check resulting in for fourth slight achieved their quarter revenues 'XX. an exceeded guest as in Notably,

restaurant basis the expenses XX% 'XX the quarter fourth of were Restaurant million operating XXX fourth XXXX. importantly, revenue operations. a $XXX prior quarter basis operating XX revenue, XXXX. year of XXX but of lower comprises the the to million total over basis Turning a the fourth approximately improvement points quarter, Cost restaurant point XX% of quarter point of expenses third $XX and improvement in or than from

restaurant Management also from costs, at Our the to scrutinize including focusing the location. in and to group support in streamlining exit early find continues team recently administration brand further level. and the savings negotiated menu center costs rationalization an 'XX reduce staff support and store are at on

in apparent savings We XXXX. expect more these to be

of gain down that million reflect Personnel Cannae other the fees for lower operating agreement, the our management you'll in support noted quarter on $XX exit wind note and restaurant XXXX management a recognized the external fourth $XX.X center the million above. office from reported costs expenses. early of

Cannae sale previous by avoiding from the and back tax carry Alight This in sale allowing XXX,XXX tax gains tax Dayforce was to losses the offset significant December against of Paysafe, of Cannae and years. shares from XX which of in of shares in million from and losses shares 'XX sales from harvested Dayforce payments

SystemX year, in equity million as and quarter the well a losses which the current year as were significant improved material fourth not from reduction repeated which $XX losses of XXXX, prior Net Football. in the method Knight from of were from Alight, investments Black included results period

securities we in dividends Alight. totaling XXXX, $XXX $XX from received sold and D&B, select million In public million

division Direct remaining and million or a its business. received Cannae in $XX cost Additionally, Wine ownership from sale still of fulfillment the of retains Xx the XX%

million in million on has approximately loan our corporate net weighted million Cannae Today, debt X.XX%. on of $XXX at or margin $XXX short-term the million $XX a and FNF average and cash investments, of $XX over note

We $X on also margin listed of our and loan have of securities. capacity billion undrawn million $XX hold

or an of billion $XX.XX approximately per aggregate closed share to NAV. discount to equates net on asset XX% $X.X after-tax today at Our value and basis, $XX.XX Cannae shares a Cannae

to operator question-and-answer I'll call the turn back now begin our the to session.

Operator

Stephens. first John from Campbell The [Operator Instructions] from question comes

John Campbell

year. EPL X so this Starting know it position outside here a great placements season to like single like I get good maybe there's point been a of lot -- the It you League top far. looks just a in season of is on like are a It's It Champions looks X. left. guys looks the Bournemouth.

get of want You don't yourself. to ahead

the maybe up Award can into assuming mean top see, just Europa you at stay for guys you're Monetary with placements. just bump to to starting also higher Per or level, the But for what X, off the maybe Champions qualifications League time? where or club European And then the League expect just talk impact you'd the those maybe over

Ryan Caswell

John. Yes. Thanks question, the for

well. I as exceptionally think stated, been Bournemouth has obviously you performing

competitions. European the all for mix the in are We

I they they terms will -- think financial impact additional different could have revenue and dollars media media on that perspective day leagues additional There's hosting from of a would revenues significant significant could multiple both each a those a as the have as the receive well match matches. financial impact. in from club,

Obviously, for I only good. X So that's that's year. think all

the Football, we trajectory think think value think I the it we means to enterprise at competition. from what ability and bigger from of showing least and the just European the it, Knight about question, Bournemouth in and value play as an Black

which table we've go. can and lot get Bournemouth our consistent we of and credibility being paid the We shows a think what kind League, invested than there's a to plan lot season upper of that have assuming value lends the think more Premier really there, it in has of view a mid- or of Again, we to and team.

of a to more we're obviously there's team what season excited and done, the has lot So work a go. lot but about really

want don't get over on But we the entire regardless, impressed really of to So ahead team that. with ourselves there.

John Campbell

as color. mean appreciate for of I ones great here looks got about you've earmarked it dividend annually. then allocation just a capital $XX million like or X And that's the that. Yes, quick kind on so whole. I

flow? of just from how to Maybe operating funding are starting through then the some you have holdings cash, dividends close and your of cash that out there, you

Ryan Caswell

important. think the managing investments and in allocating as cash about about to as think prepared holding company I capital think we the flow remarks, we have, Look, investments really we and is generating that the

that think cash about the but both just cover think flow as produce. to investments for to way also dividend, We the people our a

right? -- we dividend the or operating covering from and operating are I ways a the put So together, away cash the expenses still

thinking to I And so point flag there. this is room are think portfolio this our And kind in capital of we that and our we public need but still at work a as other portfolio just away have stock the focus some some we primarily exactly and go potentially of to how -- form year and it companies we we rebalancing through -- and on it But wasn't of return we look from as question, shareholders that more is of we're I to the use buybacks. your ours. about think definitely the

John Campbell

kind And to Yes, that's second that's question. going of was what great. the I

So guys $XXX and million of investment said reported I so I balance. you cash think mean, short-term you -- or

You got on $XX million dividend. the

got So dry front. some you've on powder that

might And stock I depends where get thoughts that this for on if a a year? don't it's the something all able efforts, Is Just but to to on buybacks? a you've the guess active hoping know get more little considered I just on expand level kind looking be it front. you're little to it on how just as you contingent on really sits? you of the certain monetization bit I'm appetite

Ryan Caswell

something definitely and have that we It's considering. are considered

to some do of part -- it think I company is holding be cash. going we have

We right? debt, have definitely also But -- buybacks. some our we capital share prioritize for will prioritizing using are we

We think continue that cheap. stock is to the

quarters depends within first of review, and biggest should our events its Bradstreet the of the they on We holdings. obviously, Dun some about & the now, think size on a I potential those of of there which outcome monetization quarter. talked strategic ongoing And have said be an of some couple

I that. more than really to speak it So can't

and our significant over and of use portion company But buy back we to, proceeds of those we some I to a are monetize investments think stock. public very aware want time,

and is last are definitely stock price. things buybacks us was how other Now it priority exactly depends means as It something year. going a are much on that but what depends Cannae it on for that share that on,

Operator

next from Ian Oppenheimer. question from comes The Zaffino

Ian Zaffino

Okay.

for Knight and Black us what Football, could maybe about it could the As think funding look as like? you that far help maybe capital

Ryan Caswell

Yes.

they key in far But thus is are capital dynamic. of Bournemouth. the think investment levers are and funding, I some we that there the investment. are somewhat funded biggest the couple a them of Well, the -- probably AFC in acquisition have

the of on As that and believe, their ongoing But this addition last we've we commercial year talked call improvement we saw is to performance on the Bournemouth. players we and this AFC revenues. about AFC of in dependent historically, Bournemouth financial sell

high-quality to continue have we developed we So believe very salable assets.

we there. want we've think necessarily don't We created to a sell value lot them, of but that

stadium is a Those about that kind think needs those facility. some much lever in Bournemouth. which And have we of kind as needs. other is the of capital teams, of So AFC the comparison. are we are training big the of is the the other smaller but And kind the of one and infrastructure,

continuing we what Bournemouth perform the some enterprise to do of more But to want will will value are from We to a historically. we sure believe team. put grow we sporting AFC It that into less make capital going be than look the perspective, have forward. that done we and

have while kind need the to are of that a we and around to that. trying P&L of I the we'll capital reduce reduce specific number for kind don't or And manage very is, you, appropriately of size so do conscious what

Ian Zaffino

to is Okay. And question Alight. in the then maybe self about how thinking something alternatively us back? those like Or the monetize are your company maybe it Bill the Or walk the stepped company a down. kind why have that? it through you stake? is along position strategic a And Maybe on buying to there in or an something opportunity like do to sale of have market you maybe do sell or lines

Ryan Caswell

Yes.

from down the Alight. stepped role at Bill Chairman So

of Board is he is still Alight. and Alight with involved very the However, on

people members and positioning the of will kind very new strategic Board have of of team the and known to that additive we Some believe Bill the and are be Alight. value growth long-term the

forward. In the think terms and options about going are about how we how think of investment the we what

that today. Alight off release -- stock was he where like and Board, supporters there and of Bill's a be release we is we of continue press to the noted don't think I particularly press the in stepping Alight,

very there believe of the year, Board the changes is probably better of do, the transaction in business terms which positioned that In to is they question business. and answered management a obviously them. else of But succeed that team, additions the with with is or and the that the can payroll business is we in set changes well that processing strategically the up. something a by basically strategic that last to Like simplified it has we what sold some

and set very everything is for stand-alone them be to up So we successful. think continue

Operator

from comes Kenneth Markets. Capital from next question Lee The RBC

Kenneth Lee

on And remarks, some are prepared the in think there mentioned one that I potential some Just you live there. deals JANA the partnership. on discussions

of Wonder if would in give How discussions bit environment you little you characterize in the current could terms the it activity? of a more color just level how here? is and active

Ryan Caswell

that I them want there into We at situations could Ken. of a say some very And would very of incredibly are principals JANA again, them. to think are are, additive the get speak few they I we discussions but be for to have that discussing don't Thanks, Cannae. targets some with very the active. them we been what believe regularly. specifics We with and -- specific

them. in Cannae. so for material And we very we again, active with we're ongoing that And are and transaction a will find we forward, as optimistic dialogue move

Kenneth Lee

the capital for Got And question Knight FC you. the incremental on there. potential maybe to you there. then mentioned previous Black investment one And around the BK, some

looking you're to, specifically example, player upcoming any Or Would window? there? the for other be summer relation there for in capital like that transfers that for needs areas were

Ryan Caswell

obviously, of you own hit we is flow. -- area are do XX% those other -- in Ligue Lorient There -- recall, only operating on cash The -- X. you so the Yes. if

have put-call could such We them that going summer with there's that the that of business. a buy a an arrangement possibility forward XX% we additional this

other couple both we've other We've in a one and been the we the to reduce time the smaller team at lot another also Football, performance will that Bournemouth. or Black better league, AFC at and right developing together cost connects strategic believe, dollars, developing, team investing management of where teams better across looked we that all the hiring are, but in much of believe smaller particular, capital Knight clubs right infrastructure drive and a the

those you know I third then infrastructure, I it others. been around to we I alluded are is is one do didn't And thinking This a X think whether that new stadium. about whether we say, stadium. So the we've the earlier, just something redevelop,

as buckets So And we -- more besides the of other I'll path of well. operating again, cash the what others, are flow term are those those than call continue the down some teams. that but near the

Kenneth Lee

how Got still stages early you. for what Bournemouth, one, you the there potential early relatively And that going be? it to plans are the potentially -- of in in stadium stage the planning and in that's there terms last AFC the there? Is the financing

Ryan Caswell

I redevelop planning question. we we're in question big then I the on existing honing there's to determine the once construction, answer a And is, is. do actual It new do Yes. long runway. the think -- build that a you And the first the mean stadium and that, we stadium? an or

view existing of there. one. whether call, a the and the off we'll new we're have our from stadium then -- redeveloping I I better -- And would the again kind on a building kind of we're or But next within next fall rest think whether guess of

Operator

conference over remarks. to for question-and-answer back would session. Caswell This concludes Ryan like closing our to turn the I

Ryan Caswell

We In our you to and you believe again excited on call to Thank ahead we earnings your shareholders. May. quarter time strategy, opportunities today. will with again value forward our are the confident look conclusion, in XXXX our first speaking deliver you, operator. we in for with which Thank

Operator

for The Thank conference attending has you presentation. now concluded. today's

now disconnect. may You

Cannae (CNNE) 24 Feb 252024 Q4 Earnings call transcript