Cannae Reports Second Quarter 2018 Results With $1.08 Billion Book Value of Portfolio Company Investments, or $15.03 Per Share
Highlights
-
On
April 30, 2018 ,Ceridian HCM Holding Inc. (NYSE: CDAY) announced the closing of its initial public offering of 24,150,000 shares of common stock (which included the over-allotment option) priced at$22.00 per share - Following the closing of the Ceridian IPO, Cannae owned 37,135,921 shares representing a 27% stake in Ceridian
-
Based upon the CDAY closing price of
$35.19 as ofAugust 10, 2018 , Cannae's position is worth$1.31 billion -
On
July 27, 2018 ,Lifeworks Corporation Ltd. was sold toMorneau Shepell for$325 million of which Cannae will receive approximately$56 million in cash proceeds for its interest -
On
August 1, 2018 ,Bob Wilhelm , an experienced healthcare services executive, was named T-System's new Chief Executive Officer -
On
August 8, 2018 , Cannae entered into a definitive agreement in partnership with an investment consortium includingCC Capital andThomas H. Lee Partners to acquireDun & Bradstreet (NYSE: DNB) in a transaction valued at$6.9 billion . Cannae's commitment is$900 million of the purchase price. Cannae agreed to use its reasonable best efforts to syndicate at least$600 million of its equity commitment -
Total book value of portfolio company investments was
$1.080 billion , or$15.03 per share, as of June 30, 2018 compared to total book value of$1.059 billion , or$14.95 per share, at December 31, 2017
Ceridian
-
Ceridian Cloud revenue of
$127.8 million , was up 35.5% year-over-year -
Total revenue which includes both
Cloud and Bureau solutions, delivered second quarter revenue of$179.3 million , a 13.8% increase over the second quarter 2017 results of$157.5 million - Excluding the effect of foreign currency fluctuations, Cloud revenue increased 33.4% year-over-year and total revenue increased 12.4% year-over-year
-
Operating loss was
$11.3 million , as compared to an operating profit of$0.9 million in the second quarter of 2017. Excluding$25.3 million of IPO and debt refinancing related expenses, operating profit would have been$14.0 million -
Adjusted EBITDA of
$33.6 million and EBITDA margin 18.7%, reflecting an$11.0 million increase over the second quarter of 2017 Adjusted EBITDA of$22.6 million and EBITDA margin of 14.3% - 3,308 Dayforce customers were live on the platform at the end of the second quarter of 2018, up from 2,690 at the end of the second quarter of 2017
$276.2 million in total revenue and a pretax loss of$5.9 million for the second quarter, versus$287.6 million in total revenue and a pretax loss of$1.6 million in the second quarter of 2017-
EBITDA of
$8.6 million and EBITDA margin of 3.1% for the second quarter, versus EBITDA of$10.6 million and EBIDTA margin of 3.7% in the second quarter of 2017 -
Same store sales decreased 1.5% in the second quarter, as Ninety Nine
same stores sales increased by 0.9%, O'Charley's declined by 2.8%,
Village Inn declined by 1.0% andBakers Square declined by 4.2%
T-System
$16.4 million in total revenue and a pretax loss of$1.4 million for the second quarter of 2018-
EBITDA of
$4.2 million and an EBITDA margin of 25.6% for the second quarter of 2018
“I am pleased with our second quarter results and the progress that we
achieved positioning Cannae to deliver continued growth and value for
shareholders,” commented Chairman
Mr. Foley continued, “I am also pleased with our announcement on
“The restaurant group delivered operational improvement through the second quarter despite what remains a challenging industry backdrop for casual dining. Initiatives have been put in place to reduce expenses, increase productivity, and improve customer satisfaction levels across our brands. Importantly, we continue to see significant room for further margin improvement and are working with ABRH’s management team to deliver profitability that is more in line with peers.”
Mr. Foley concluded, “Turning to T-System, we announced on
Conference Call
As previously announced, Cannae will host a conference call today,
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company’s website at http://investor.cannaeholdings.com/. The online replay will remain available for a limited time beginning immediately following the call.
About
Cannae holds majority and minority equity investment stakes in a number
of entities, including
Use of Non-GAAP Financial Information
Generally Accepted Accounting Principles (GAAP) is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, the Company has provided non-GAAP financial measures, which it believes are useful to help investors better understand its financial performance, competitive position and prospects for the future. These non-GAAP measures include earnings before interest, taxes and depreciation and amortization (EBITDA), and earnings before interest, taxes and depreciation and amortization as a percent of revenue (EBITDA margin).
Adjusted EBITDA is defined as net income or loss before interest, taxes, depreciation, and amortization, as adjusted to exclude net income or loss from discontinued operations, sponsor management fees, non-cash charges for asset impairments, gains or losses on assets and liabilities held in a foreign currency other than the functional currency of a company subsidiary, non-cash share-based compensation expense, severance charges, restructuring consulting fees, and IPO transaction costs. Adjusted EBITDA margin is determined by calculating the percentage Adjusted EBITDA is of Total Revenue.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| (Dollar in millions) | |||||||||||||||
| Operating (loss) profit | $ | (11.3 | ) | $ | 0.9 | $ | 16.0 | $ | 11.8 | ||||||
| Depreciation and amortization | 14.2 | 13.0 | 28.1 | 26.1 | |||||||||||
| EBITDA from continuing operations | 2.9 | 13.9 | 44.1 | 37.9 | |||||||||||
| Sponsorship management fees | 11.5 | 0.5 | 12.0 | 1.0 | |||||||||||
| Intercompany foreign exchange loss (gain) | — | 2.1 | (2.8 | ) | 2.9 | ||||||||||
| Share-based compensation | 12.0 | 4.3 | 14.7 | 8.5 | |||||||||||
| Severance charges | 1.1 | 1.6 | 3.0 | 3.5 | |||||||||||
| Restructuring consulting fees | 2.4 | 0.2 | 2.5 | — | |||||||||||
| IPO transaction costs | 3.7 | — | 3.7 | — | |||||||||||
| Adjusted EBITDA | $ | 33.6 | $ | 22.6 | $ | 77.2 | $ | 53.8 | |||||||
Any non-GAAP measures should be considered in context with the GAAP financial presentation and should not be considered in isolation or as a substitute for GAAP net earnings. Further, Cannae's non-GAAP measures may be calculated differently from similarly titled measures of other companies. Reconciliations of these non-GAAP measures to related GAAP measures are provided below.
Forward-Looking Statements and Risk Factors
This press release contains forward-looking statements that involve a
number of risks and uncertainties. Statements that are not historical
facts, including statements regarding our expectations, hopes,
intentions or strategies regarding the future are forward-looking
statements. Forward-looking statements are based on management's
beliefs, as well as assumptions made by, and information currently
available to, management. Because such statements are based on
expectations as to future financial and operating results and are not
statements of fact, actual results may differ materially from those
projected. We undertake no obligation to update any forward-looking
statements, whether as a result of new information, future events or
otherwise. The risks and uncertainties which forward-looking statements
are subject to include, but are not limited to: changes in general
economic, business and political conditions, including changes in the
financial markets; our potential inability to find suitable acquisition
candidates, acquisitions in lines of business that will not necessarily
be limited to our traditional areas of focus, or difficulties in
integrating acquisitions; significant competition that our operating
subsidiaries face; compliance with extensive government regulation of
our operating subsidiaries; risks associated with our split-off from
This press release should be read in conjunction with the risks detailed
in the “Statement Regarding Forward-Looking Information,” “Risk Factors”
and other sections of the Company’s Form 10-Q,10-K and other filings
with the
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CANNAE HOLDINGS, INC. |
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SECOND QUARTER SEGMENT INFORMATION |
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(In millions) |
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|
(Unaudited) |
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| Consolidated |
Restaurant |
T-System |
Corporate |
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| Three Months Ended | ||||||||||||||||
| June 30, 2018 | ||||||||||||||||
| Restaurant revenue | $ | 276.2 | $ | 276.2 | $ | — | $ | — | ||||||||
| Other operating revenue | 27.7 | — | 16.4 | 11.3 | ||||||||||||
| Total operating revenue | 303.9 | 276.2 | 16.4 | 11.3 | ||||||||||||
| Cost of restaurant revenue | 240.1 | 240.1 | — | — | ||||||||||||
| Personnel costs | 90.3 | 11.0 | 8.5 | 70.8 | ||||||||||||
| Depreciation and amortization | 15.3 | 10.7 | 4.1 | 0.5 | ||||||||||||
| Other operating expenses | 25.1 | 17.9 | 3.7 | 3.5 | ||||||||||||
| Total operating expenses | 370.8 | 279.7 | 16.3 | 74.8 | ||||||||||||
| Operating (loss) earnings | $ | (66.9 | ) | $ | (3.5 | ) | $ | 0.1 | $ | (63.5 | ) | |||||
| Interest and investment income | $ | 1.6 | $ | — | $ | — | $ | 1.6 | ||||||||
| Interest (expense) income | (0.2 | ) | (3.8 | ) | (1.5 | ) | 5.1 | |||||||||
| Realized gains and losses | 66.5 | 1.4 | — | 65.1 | ||||||||||||
| Total other income (expense) | 67.9 | (2.4 | ) | (1.5 | ) | 71.8 | ||||||||||
| Earnings (loss) before tax | $ | 1.0 | $ | (5.9 | ) | $ | (1.4 | ) | $ | 8.3 | ||||||
| Income tax expense (benefit) | $ | 2.8 | $ | — | $ | (0.3 | ) | $ | 3.1 | |||||||
| Loss from equity investees | (19.6 | ) | — | — | (19.6 | ) | ||||||||||
| Non-controlling interests | (2.6 | ) | (2.7 | ) | — | 0.1 | ||||||||||
| Net loss attributable to Cannae common shareholders | $ | (18.8 | ) | $ | (3.2 | ) | $ | (1.1 | ) | $ | (14.5 | ) | ||||
| EPS attributable to Cannae common shareholders - basic | $ | (0.26 | ) | |||||||||||||
| EPS attributable to Cannae common shareholders - diluted | $ | (0.26 | ) | |||||||||||||
| Cannae weighted average shares - basic | 71.1 | |||||||||||||||
| Cannae weighted average shares - diluted | 71.1 | |||||||||||||||
| Earnings (loss) before tax | $ | 1.0 | $ | (5.9 | ) | $ | (1.4 | ) | $ | 8.3 | ||||||
| Interest (expense) income | $ | (0.2 | ) | $ | (3.8 | ) | $ | (1.5 | ) | $ | 5.1 | |||||
| Depreciation and amortization | 15.3 | 10.7 | 4.1 | 0.5 | ||||||||||||
| EBITDA | $ | 16.5 | $ | 8.6 | $ | 4.2 | $ | 3.7 | ||||||||
| EBITDA margin | 5.4 | % | 3.1 | % | 25.6 | % | 32.7 | % | ||||||||
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CANNAE HOLDINGS, INC. |
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|
SECOND QUARTER SEGMENT INFORMATION |
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|
(In millions) |
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|
(Unaudited) |
||||||||||||
| Consolidated |
Restaurant |
Corporate |
||||||||||
| Three Months Ended | ||||||||||||
| June 30, 2017 | ||||||||||||
| Restaurant revenue | $ | 287.6 | $ | 287.6 | $ | — | ||||||
| Other operating revenue | 7.9 | — | 7.9 | |||||||||
| Total operating revenue | 295.5 | 287.6 | 7.9 | |||||||||
| Cost of restaurant revenue | 248.6 | 248.6 | — | |||||||||
| Personnel costs | 44.1 | 12.8 | 31.3 | |||||||||
| Depreciation and amortization | 11.6 | 11.0 | 0.6 | |||||||||
| Other operating expenses | 26.5 | 15.6 | 10.9 | |||||||||
| Total operating expenses | 330.8 | 288.0 | 42.8 | |||||||||
| Operating loss | $ | (35.3 | ) | $ | (0.4 | ) | $ | (34.9 | ) | |||
| Interest and investment income | $ | 1.3 | $ | — | $ | 1.3 | ||||||
| Interest expense | (1.4 | ) | (1.2 | ) | (0.2 | ) | ||||||
| Total other (expense) income | (0.1 | ) | (1.2 | ) | 1.1 | |||||||
| Loss before tax | $ | (35.4 | ) | $ | (1.6 | ) | $ | (33.8 | ) | |||
| Income tax benefit | $ | (22.6 | ) | $ | — | $ | (22.6 | ) | ||||
| (Loss) earnings from equity investees | (6.8 | ) | 0.1 | (6.9 | ) | |||||||
| Earnings from discontinued operations, net of tax | 145.3 | — | 145.3 | |||||||||
| Non-controlling interests | (0.7 | ) | (0.7 | ) | — | |||||||
| Net earnings (loss) attributable to Cannae common shareholders | $ | 126.4 | $ | (0.8 | ) | $ | 127.2 | |||||
| EPS attributable to Cannae common shareholders - basic | $ | 1.79 | ||||||||||
| EPS attributable to Cannae common shareholders - diluted | $ | 1.79 | ||||||||||
| Cannae weighted average shares - basic | 70.6 | |||||||||||
| Cannae weighted average shares - diluted | 70.6 | |||||||||||
| Loss before tax | $ | (35.4 | ) | $ | (1.6 | ) | $ | (33.8 | ) | |||
| Interest expense | $ | (1.4 | ) | $ | (1.2 | ) | $ | (0.2 | ) | |||
| Depreciation and amortization | 11.6 | 11.0 | 0.6 | |||||||||
| EBITDA | $ | (22.4 | ) | $ | 10.6 | $ | (33.0 | ) | ||||
| EBITDA margin | — | % | 3.7 | % | — | % | ||||||
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CANNAE HOLDINGS, INC. |
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YTD SEGMENT INFORMATION |
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(In millions) |
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|
(Unaudited) |
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| Consolidated |
Restaurant |
T-System |
Corporate |
|||||||||||||
| Six Months Ended | ||||||||||||||||
| June 30, 2018 | ||||||||||||||||
| Restaurant revenue | $ | 550.0 | $ | 550.0 | $ | — | $ | — | ||||||||
| Other operating revenue | 47.8 | — | 33.3 | 14.5 | ||||||||||||
| Total operating revenue | 597.8 | 550.0 | 33.3 | 14.5 | ||||||||||||
| Cost of restaurant revenue | 480.9 | 480.9 | — | — | ||||||||||||
| Personnel costs | 114.4 | 23.0 | 17.4 | 74.0 | ||||||||||||
| Depreciation and amortization | 30.2 | 21.4 | 8.3 | 0.5 | ||||||||||||
| Other operating expenses | 46.3 | 33.8 | 7.4 | 5.1 | ||||||||||||
| Total operating expenses | 671.8 | 559.1 | 33.1 | 79.6 | ||||||||||||
| Operating (loss) earnings | $ | (74.0 | ) | $ | (9.1 | ) | $ | 0.2 | $ | (65.1 | ) | |||||
| Interest and investment income | $ | 2.9 | $ | — | $ | — | $ | 2.9 | ||||||||
| Interest (expense) income | (3.2 | ) | (7.5 | ) | (1.5 | ) | 5.8 | |||||||||
| Realized gains and losses | 66.5 | 1.4 | — | 65.1 | ||||||||||||
| Total other income (expense) | 66.2 | (6.1 | ) | (1.5 | ) | 73.8 | ||||||||||
| (Loss) earnings before tax | $ | (7.8 | ) | $ | (15.2 | ) | $ | (1.3 | ) | $ | 8.7 | |||||
| Income tax benefit | $ | (1.2 | ) | $ | — | $ | (0.6 | ) | $ | (0.6 | ) | |||||
| (Loss) earnings from equity investees | (20.7 | ) | 0.1 | — | (20.8 | ) | ||||||||||
| Non-controlling interests | (6.8 | ) | (6.8 | ) | — | — | ||||||||||
| Net loss attributable to Cannae common shareholders | $ | (20.5 | ) | $ | (8.3 | ) | $ | (0.7 | ) | $ | (11.5 | ) | ||||
| EPS attributable to Cannae common shareholders - basic | $ | (0.29 | ) | |||||||||||||
| EPS attributable to Cannae common shareholders - diluted | $ | (0.29 | ) | |||||||||||||
| Cannae weighted average shares - basic | 70.8 | |||||||||||||||
| Cannae weighted average shares - diluted | 70.9 | |||||||||||||||
| (Loss) earnings before tax | $ | (7.8 | ) | $ | (15.2 | ) | $ | (1.3 | ) | $ | 8.7 | |||||
| Interest (expense) income | $ | (3.2 | ) | $ | (7.5 | ) | $ | (1.5 | ) | $ | 5.8 | |||||
| Depreciation and amortization | 30.2 | 21.4 | 8.3 | 0.5 | ||||||||||||
| EBITDA | $ | 25.6 | $ | 13.7 | $ | 8.5 | $ | 3.4 | ||||||||
| EBITDA margin | 4.3 | % | 2.5 | % | 25.5 | % | 23.4 | % | ||||||||
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CANNAE HOLDINGS, INC. |
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YTD SEGMENT INFORMATION |
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|
(In millions) |
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|
(Unaudited) |
||||||||||||
| Consolidated |
Restaurant |
Corporate |
||||||||||
| Six Months Ended | ||||||||||||
| June 30, 2017 | ||||||||||||
| Restaurant revenue | $ | 560.4 | $ | 560.4 | $ | — | ||||||
| Other operating revenue | 10.4 | — | 10.4 | |||||||||
| Total operating revenue | 570.8 | 560.4 | 10.4 | |||||||||
| Cost of restaurant revenue | 484.8 | 484.8 | — | |||||||||
| Personnel costs | 60.5 | 25.7 | 34.8 | |||||||||
| Depreciation and amortization | 23.0 | 21.7 | 1.3 | |||||||||
| Other operating expenses | 44.2 | 31.1 | 13.1 | |||||||||
| Total operating expenses | 612.5 | 563.3 | 49.2 | |||||||||
| Operating loss | $ | (41.7 | ) | $ | (2.9 | ) | $ | (38.8 | ) | |||
| Interest and investment income | $ | 2.3 | $ | — | $ | 2.3 | ||||||
| Interest expense | (3.4 | ) | (3.2 | ) | (0.2 | ) | ||||||
| Realized gains and losses | 5.1 | — | 5.1 | |||||||||
| Total other income (expense) | 4.0 | (3.2 | ) | 7.2 | ||||||||
| Loss before tax | $ | (37.7 | ) | $ | (6.1 | ) | $ | (31.6 | ) | |||
| Income tax benefit | $ | (24.4 | ) | $ | — | $ | (24.4 | ) | ||||
| (Loss) earnings from equity investees | (10.2 | ) | 0.1 | (10.3 | ) | |||||||
| Earnings from discontinued operations, net of tax | 147.7 | — | 147.7 | |||||||||
| Non-controlling interests | (2.7 | ) | (2.7 | ) | — | |||||||
| Net earnings (loss) attributable to Cannae common shareholders | $ | 126.9 | $ | (3.3 | ) | $ | 130.2 | |||||
| EPS attributable to Cannae common shareholders - basic | $ | 1.80 | ||||||||||
| EPS attributable to Cannae common shareholders - diluted | $ | 1.80 | ||||||||||
| Cannae weighted average shares - basic | 70.6 | |||||||||||
| Cannae weighted average shares - diluted | 70.6 | |||||||||||
| Loss before tax | $ | (37.7 | ) | $ | (6.1 | ) | $ | (31.6 | ) | |||
| Interest expense | $ | (3.4 | ) | $ | (3.2 | ) | $ | (0.2 | ) | |||
| Depreciation and amortization | 23.0 | 21.7 | 1.3 | |||||||||
| EBITDA | $ | (11.3 | ) | $ | 18.8 | $ | (30.1 | ) | ||||
| EBITDA margin | — | % | 3.4 | % | — | % | ||||||
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CANNAE HOLDINGS, INC. |
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CONDENSED CONSOLIDATED BALANCE SHEETS AND ADJUSTED BOOK VALUE SUMMARY |
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|
(In millions) |
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| June 30, 2018 |
December 31, |
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| in millions | (Unaudited) | (Unaudited) | |||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 77.7 | $ | 245.6 | |||||||
| Equity securities | — | 17.7 | |||||||||
| Other current assets | 117.7 | 86.9 | |||||||||
| Total current assets | $ | 195.4 | $ | 350.2 | |||||||
| Ceridian equity investment | $ | 409.0 | $ | 383.9 | |||||||
| Other equity method investments | 70.6 | 41.0 | |||||||||
| Property and equipment, net | 201.9 | 218.8 | |||||||||
| Software & intangible assets | 201.4 | 214.5 | |||||||||
| Goodwill | 202.0 | 202.7 | |||||||||
| Other non-current assets | 79.6 | 76.1 | |||||||||
| Total assets | $ | 1,359.9 | $ | 1,487.2 | |||||||
| Current liabilities: | |||||||||||
| A/P & other current liabilities | $ | 114.3 | $ | 127.6 | |||||||
| Notes payable, current | 1.4 | 122.2 | |||||||||
| Total current liabilities | $ | 115.7 | $ | 249.8 | |||||||
| Notes payable, non-current | $ | 11.0 | $ | 12.7 | |||||||
| Other non-current liabilities | 62.2 | 71.6 | |||||||||
| Total liabilities | $ | 188.9 | $ | 334.1 | |||||||
| Additional paid in capital | $ | 1,155.4 | $ | 1,130.2 | |||||||
| Retained earnings | 0.1 | 0.2 | |||||||||
| Accumulated other comprehensive loss | (75.5 | ) | (71.0 | ) | |||||||
| Non-controlling interests | 91.0 | 93.7 | |||||||||
| Cannae shareholder's equity | $ | 1,171.0 | $ | 1,153.1 | |||||||
| Total liabilities and equity | $ | 1,359.9 | $ | 1,487.2 | |||||||
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Adjusted Book Value Summary |
June 30, |
December 31, |
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|
(Unaudited) |
(Unaudited) | |||||||||
|
Ceridian |
$ | 418.3 | $ | 398.5 | |||||||
| LifeWorks | 38.5 | — | |||||||||
| American Blue Ribbon Holdings | 229.1 | 109.9 | |||||||||
| T-System | 203.9 | 204.6 | |||||||||
| Del Frisco's Restaurant Group | — | 17.7 | |||||||||
| Holding company cash and short-term investments | 67.4 | 215.4 | |||||||||
| Other | 122.8 | 113.3 | |||||||||
| Cannae Book Value | $ | 1,080.0 | $ | 1,059.4 | |||||||
| Outstanding Cannae shares | 71.9 | 70.9 | |||||||||
| Cannae Book Value per Share | $ | 15.03 | $ | 14.95 | |||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180813005150/en/
Source:
Solebury Trout
Jamie Lillis, 203-428-3223
Managing Director
jlillis@soleburyir.com