Cannae Holdings, Inc.

Q1 2024 Earnings Conference Call

5/9/2024

spk00: Good afternoon, ladies and gentlemen, and welcome to the Kani Holdings, Inc. First Quarter 2024 Financial Results Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the company's prepared remarks, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference call is being recorded and a replay is available through 1159 p.m. Eastern Time on May 16th 2024. With that, I would like to turn the call over to Jamie Lilis of Solberry Strategic Communications. Please go ahead.
spk03: Thank you, Operator, and all of you for joining us. On the call today, we have our Chairman and Chief Executive Officer Bill Foley, Kani's President Ryan Caswell, and Brian Coy, our Chief Financial Officer. Before we begin, I would like to remind listeners that this conference call and the Q&A following are for
spk02: more remarks. The statements may contain forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements that recognize expectations, hopes, intentions, or strategies regarding the future are not for the purposes of the conference call, as well as assumptions made by the committee and information currently available to management. Because such statements are based on and are not historical facts, the actual results may differ materially from those projected. The questions are specific to include, but are not limited to, the risks and other
spk03: factors that are
spk02: not
spk03: historical facts. I would now like to turn the call over to Bill.
spk04: Thank you, Jamie. Since returning as CEO of Kani in February, I have been focused on executing a strategic plan designed to both grow the net asset value, or NAV, of our portfolio and close our share price discount to NAV. Our strategy is three main levels, including improving the performance and valuation of our portfolio companies, making
spk02: new investments in our market, making new investments in our economy, making new investments in our economy, and making new investments in our economy. I believe that the strategy is to improve the performance of our portfolio companies that will grow NAV and, no matter how appropriate they are, return capital
spk04: to shareholders, which until today was done primarily through Kani share repurchases at a discount to NAV. I believe that strategy. First, I would like to discuss the performance of our two largest specifics of each company's quarter, but I want to highlight a few key points. Dunner-Brass Street produced a .3% -over-year organic growth, which is up from the first quarter of last year. But more importantly, Anthony and his team continue to invest in new products and continue to build confidence in hitting their midterm target of 5 to 7% organic growth. I would like to say that this is a pretty good turn around from a business that had negative growth when we acquired it. We continue to believe that there is significant upside in DNB's stock price and we're encouraged by the DNB's board of directors, of which I am the chairman, to authorize a share repurchase program for up to 10 million shares of Dunner-Brass Street common stock. In the first quarter, the stock price is up from the first quarter of last year to an affiliate of HIG Capital for up to $1.2 billion. The sale values the segment at approximately 10 times its estimated 2023 EBITDA and 24 times its estimated unlevered free cash flow. We worked with Stefan for more than six months on this transaction, and we were excited to get it announced as it should greatly simplify Alight's business, improve profitability, reduce their leverage to less than 3X debt to EBITDA, and allow the company to buy back more shares. I am confident in the leadership of both DNB and Alight, and we look forward to their continued progress in 2024, which we believe eventually will translate into improving stock price performance and growing our NAV. I'm very proud of our work at AFC-born business, our football club. In the first full season under our ownership, the cherries have all already achieved their highest price from the first quarter of the year league point total in the 125
spk02: -year
spk04: history of the club,
spk02: and the season is not over yet. In returning to capital returns to shareholders, we completely re-established our previous system and announced that we had just 10% of the total stock. We're in, we repurchased 9.7 million shares of Alight and Alight, and Alight is now a common stock. The stock is representing 13
spk04: % of the shares outstanding for approximately 222 million dollars. We bought the shares back at a premium to where they are trading today.
spk02: We believe that it was a sign of the effect of the effective use of capital given the quantity
spk04: of shares acquired in such a compressed time frame. However, our stock price performance post tender illustrates that we also need to grow our NAV through the increase. Since starting our share repurchase program, we've
spk02: repurchased approximately 34% of our dividend of 12 cents per share per quarter. We initially will fund the dividends, including the one next month, to the sale of the fastest over time. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
spk04: Thank you.
spk02: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
spk04: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
spk02: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you.
spk04: Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. And there's actually some important ideas that are coming up on the board.
spk02: So, I want to pick back up on them. I really appreciate it. I have nothing else to ask that for them. What I asked you in your first question.
spk04: Thanks. Yeah, so we are looking at a lot of different opportunities, particularly in Europe. Really not Africa or South America, but particularly in Europe, teams that could, it could be feeder teams or development squads for one of our primary league teams, such as Bournemouth or Hibernian or Lorient. And again, we probably see, being very careful, we want to make sure that whatever we buy or buy into, that cash flows, that it's sustainable. It's not going to be an investment that requires additional capital infusions. And they need to be teams
spk02: that are geographically plentiful. So, I think that's a good question. So, I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. For the first time, I think that's a good question. So, I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. So, I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. And I think that's a good question. So, I think that's a good question. And I think that's a good question. And I think that's a good question. belated witness of the There's Scandinavian teams,
spk04: Eastern European teams in very stable situations. Probably not a La Liga team
spk02: or a Serie A team. They're a little bit expensive, but we have opportunities
spk04: in both of those leagues. So I'd say it's a very patient approach, and we're trying to be careful, and we want to really develop our multi-gap that will result in a mark to our valuation, which will be a great positive for this business.
Disclaimer

This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

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