Cannae Holdings, Inc. (NYSE: CNNE) reported Q1 EPS of ($0.02). Revenue for the quarter came in at $292.4 million versus the consensus estimate of $298 million.

Highlights

• On February 8, the Company announced the completion of the previously announced acquisition of Dun & Bradstreet ("DNB"). The Company invested approximately $500 million in equity into DNB representing an approximate 24% equity position. Cannae funded its equity investment with cash on hand and $250 million in borrowings under its credit facilities
• DNB management has made substantial progress on its $200 million cost reduction plan target by having taken action on approximately $93 million of annualized cost savings as of March 31, 2019
• DNB restructured its go-to-market sales strategy in the first quarter of 2019, which is expected to improve productivity and deliver accelerated revenue growth in upcoming quarters
• Total book value of portfolio company investments was $1.154 billion, or $15.99 per share, as of March 31, 2019 compared to total book value of $1.125 billion, or $15.58 per share, at December 31, 2018

Ceridian

• Dayforce revenue increased 27.6% to $132.8 million from $104.1 million in the first quarter of 2018
• Cloud revenue, which includes both Dayforce and Powerpay, increased 21.8% to $154.6 million from $126.9 million in the first quarter of 2018
• Total revenue, which includes revenue from both Ceridian’s Cloud and Bureau solutions, increased 7.9% to $203.7 million from $188.8 million in the first quarter of 2018
• Excluding the effect of foreign currency fluctuations, Dayforce revenue increased 28.6% year-over-year, Cloud revenue increased 23.7% year-over-year, and total revenue increased 9.5% year-over-year
• Operating profit was $27.4 million compared to $28.0 million in the first quarter of 2018. Pretax income from continuing operations increased 111.3% from $8.0 million in the year ago quarter to $16.9 million
• Adjusted EBITDA increased 7.1% to $49.8 million from $46.5 million in the first quarter of 2018. Adjusted EBITDA margin was 24.4% compared to 24.6%, in the first quarter of 2018
• 3,851 Dayforce customers were live on the platform at the end of the first quarter of 2019, up from 3,154 at the end of the first quarter of 2018

Restaurant Group

• $257.8 million in total revenue and a pretax loss of $8.1 million for the first quarter, versus $273.8 million in total revenue and a pretax loss of $9.3 million in the first quarter of 2018
• EBITDA of $2.6 million and EBITDA margin of 1.0% for the first quarter, versus EBITDA of $5.1 million and EBITDA margin of 1.9% in the first quarter of 2018
• Same store sales decreased 2.8% in the first quarter, as Ninety Nine same stores sales increased by 0.5%, O'Charley's declined by 3.7%, Village Inn declined by 4.9% and Bakers Square declined by 5.7%

T-System

• On a GAAP basis, T-System generated $12.2 million in total revenue and a pretax loss of $4.9 million for the first quarter, versus $15.4 million in total revenue and a pretax loss of $0.8 million in the first quarter of 2018
• EBITDA of $0.0 million and an EBITDA margin of 0.0% for the first quarter, versus EBITDA of $2.8 million and an EBITDA margin of 18.2% for the first quarter of 2018

“With the completion of the Dun & Bradstreet acquisition, we continue to make significant headway positioning the Company to deliver meaningful value for our shareholders,” commented Chairman William P. Foley, II. “Through the first quarter, the DNB management team has quickly implemented a wide range of cost reduction initiatives designed to reduce labor inefficiencies within the organization as well as high cost professional fees and other non-personnel related spending. This has resulted in $93 million of annualized expense saves through the first quarter and we remain firmly on track to deliver the $200 million of targeted cost savings that we outlined at the time of the acquisition. We have also restructured DNB’s go-to-market sales strategy and are optimistic that we can drive improved sales efficiency and growth over the upcoming quarters.”

Mr. Foley continued, “During the first quarter, Ceridian continued to generate strong revenue growth from its Cloud services business, highlighted by 27.6% growth in Ceridian’s Dayforce business. Cannae currently owns 32.7 million shares in Ceridian representing a 23.3% ownership stake, now worth $1.63 billion based upon Ceridian’s closing price of $49.83 on May 8, 2019.

Turning to our restaurant group, while the casual dining sector remains challenging, the ABRH management team is making meaningful progress reducing expenses as they focus on improving the group’s profitability and cash flow. Initiatives include reducing labor costs, rationalizing underperforming stores, identifying brands where a move to a franchise model makes economic sense and improving the customer experience to stabilize same store sales. As the group’s margins and cash flow improve through the year, we will be in a position to evaluate various monetization opportunities designed to create value for our shareholders.”

Mr. Foley concluded, “The T-System team has made progress re-aligning the business and has begun to execute on initiatives designed to improve sales efficiencies in both the coding and documentation business and to add executive talent across the company. In addition to the structural improvements to the business, we are working with Bob Wilhelm and his team to start executing on potential acquisition candidates to enhance T-System’s product breadth and accelerate growth.”

For earnings history and earnings-related data on Cannae Holdings, Inc. (CNNE) click here.