Greetings, and welcome to the Cannae Holdings’Inc. Third Quarter 2019 Earnings Conference Call. At this time all participants are in the listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Shannon Devine, Investor Relations for Cannae Holdings. Thank you. You may begin.

Thank you, operator, and good morning everyone. We appreciate your participation in our third quarter 2019 earnings conference call. Joining me today are Cannae's Chairman, Bill Foley, President, Brent Bickett; and Chief Financial Officer, Rick Cox. As a reminder, a replay of this call will be available through 11:59 P.M. Eastern Time on November 19, 2019. Before we begin, I would like to remind you that this conference call may contain Forward-Looking Statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about 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 the risks and other factors detailed in our press release, which was released this morning, and in the statement regarding forward-looking information, risk factors, and other sections of Cannae's Form 10-K and other filings with the SEC. Additionally, during today’s call we will discuss non-GAAP measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. A reconciliation of these non-GAAP measures to the most comparable GAAP measures can be found in our earnings release. Now let me now turn the call over to Bill.

Thank you, Shannon. I am very pleased with the execution our team delivered through the third quarter as we position our portfolio through continued value creation, benefiting all of Cannae’s shareholders. A significant highlight of the quarter was the success of our Dun & Bradstreet management team has achieved just eight months into our turnaround. Led by Anthony Jabbour and Steve Daffron’s leadership, the D&B team has successfully executed cost actions on $192 million of annualized savings, through September 30, 2019 as part of D&B’s $200 million cost reduction plan. These cost actions have driven sharp improvement to D&B’s profitability, which are now more in line with its peers. I am confident that we will surpass our cost savings goals and we'll update you on our outlook for future cost saves on our fourth quarter call. In addition to the reorganization of D&B’s sales structure and compensation plan, that is also having a positive impact on our new sales revenues, both of which experienced an acceleration in the third quarter. For the third quarter ending September 30, 2019, D&B generated adjusted revenue of $450 million, an increase of 8.5% versus the prior year quarter. Lattice, our acquisition contributed about 1.1% of the increase and moving some larger contracts forward from the fourth quarter also contributed. Nonetheless, we achieved more than 4% organic revenue growth. Equally impressive, adjusted EBITDA for the third quarter of 2019 totaled $194 million, a 52.8% increase over the prior year quarter, and adjusted EBITDA margin expanded to 43.1%, a 1,280 basis point improvement compared to prior year quarter. Rick will review the D&B third quarter results in more detail in a moment. Looking forward, D&B’s extensive proprietary data continues to provide opportunities to further drive revenue growth through cross-selling existing products and services and bringing to market new product offerings as we work to exploit opportunities across D&B’s extensive customer base. Before I turn the call over to Brent, I would also like to announce that we've added two experienced executives to Trasimene Capital Management's leadership team. First Rick Massey has joined Trasimene as a Senior Managing Director. I have known Rick for almost 17 years and he is an experienced M&A practitioner, and an accomplished investor. In addition, we have brought on Brad Ridgeway, as our Restaurant Management Operator who will oversee all of our Restaurant Group and assist them in optimizing their cost structure, improving their operations, and supporting improved future monetization events. I couldn't be more pleased to have Brad and Rick join our team. With that, I'll now turn the call over to Brent.

Thanks Bill. Today Cannae consists of four primary businesses; Ceridian, Dun & Bradstreet, our Restaurant Group, and T-System. Bill reviewed the success our team has achieved with D&B, so I'll review the balance of our portfolio. To begin, Ceridian HCM Holdings continues to be an outstanding performer in the payroll and human capital markets business segment. For the quarter ended September 30, 2019, Ceridian’s total revenue increased by 14%, Cloud revenue increased by 26.2%, and Dayforce revenues increased by 30.5% all on a constant currency basis. There are now 4,169 customers live on the Dayforce platform, up from 3,465 at the end of the third quarter of 2018, which reflects a strong market demand for Dayforce and we expect to see continued revenue growth heading into the fourth quarter and into 2020. We believe David Ossip and Ceridian’s management team has Ceridian well positioned for continued long-term growth and success. During the quarter, we made the decision to again prudently rebalance our portfolio by selling 2 million Ceridian shares at a price of $56.30 per share . This resulted in 112 million of proceeds and we recorded a gain of $82.2 million. The cash received was partially used to repay borrowings under the FNF revolving credit facility. Today, Cannae owns 28.7 million shares of Ceridian common stock representing an approximate 20% ownership position. Based upon Ceridian’s closing price of $54 per share on November 11, 2019, Cannae’s stake in Ceridian has a market value of $1.55 billion. Turning to the Restaurant Group, the team continues to implement previously discussed initiatives, targeted at expense reduction and improved store operations that lead to better store performance. Year-to-date through the third quarter, the team has achieved more than 10 million in pro forma cost reductions, including the closure of 11 stores during the…

Thanks Brent. To start off, Ceridian generated third quarter revenue of $202.3 million inclusive of both cloud and bureau solutions, which represents a 13.6% increase from the third quarter of 2018. Third quarter adjusted EBITDA increased 27.5% to $46.4 million as compared to the year ago quarter More detail on Ceridian's, third quarter financial results, which were released last week on November 7 can be found on the investor relations section of their website. As Bill discussed, we are very pleased with the success that our team is achieving at Dun & Bradstreet and remain optimistic with the outlook for the business. Of note, we will no longer be reporting Dun & Bradstreet on a one quarter lag and will now report results on a current quarter basis. For the third quarter of 2019, Dun & Bradstreet generated total GAAP revenue of $408.2 million and a net loss of $54.9 million in the quarter. Adjusted revenue for the 2019 third quarter grew 8.5% to $450.4 million as compared to $415.1 million in the year ago quarter. Adjusted EBITDA grew 52.8% to $194 million as compared to $127 million in the 2018 third quarter. Adjusted EBITDA excludes the effect of purchase accounting and transaction related expenses at approximately $71 million of which approximate $33.3 million are onetime charges related to transaction related expenses. Turning to American Blue Ribbon Holdings, which includes O'Charley's, Village Inn, and Baker's Square as well as Legendary Baking generated total revenue of $168.1 million in the third quarter of 2019 compared to $193.8 million in the third quarter of 2018. The decline in revenue is largely result of closing 55 stores over the last four quarters of which 11 closings occurred in the third quarter. American Blue Ribbon Holdings delivered third quarter 2019 EBITDA of negative $8.8…

Thank you. We will now to conduct your question and answer session. [Operator Instructions] Our first question today's coming from Jason Deleeuw with Piper Jaffray. Please proceed with your question.

Thanks guys for taking the question and congratulations on the great work so far with Dun & Bradstreet. I just wanted to know how you're feeling about the 3% to 5% revenue growth target at Dun & Bradstreet, so you're at 4% organic now. I mean you're just starting to get the benefit from the sales productivity drivers across selling. It sounds like you've got new products that could be rolling out. How are you feeling about the 3% to 5%, could it be better than that, or what should we be expecting?

Well, Jason thanks, and we're going to maintain our guidance or our view on the 3% to 5% as we move through the fourth quarter. As you may recall, Dun & Bradstreet in the past had signed numerous contracts in the fourth quarter and really kind of that was the biggest quarter of the year. And so, it impacted the first quarter in terms of not having quite the signings, and then the second, third, and fourth quarters were built overtime. We've attempted to move some of those larger contracts and term them out. In other words, make them three and five year, seven year term contracts, and move them forward. And that was part of the revenue growth in the third quarter. We still feel like we're going to even though the fourth quarter last year was a successful quarter for the company, we feel like we can get to that 3% to 5% growth rate again. And in the first quarter, it should be much easier. So in a few more quarters, I'll be able to give you more color on our other revenue growth, especially as we move through the recapitalization of the company over the next 12 months to reduce our interest expense and reduce our overall debt structure. And that will enable us to then start moving forward and looking more aggressively at acquisitions. And there are many tie-in and bolt on acquisitions more than I've ever seen in any other business in the Dun & Bradstreet space. So, we really couldn't be happy about Dun & Bradstreet. We're probably going to at the end of the next quarter increase our synergy target, but we'll leave it at 200 million for the time being, and I believe you're going to be very pleased with the results as they're generated from Dun & Bradstreet.

Great. Thanks for all that. And then in terms of the timing for that recapitalization of the company, is there any help that you can give us on that? Is that 2020 sometime event?

Our goal is to do some pretty significant events in 2020, but as you know it's all process. So the process has been started, and we're talking to informally to several different investment banks about the proper way to attack our capital structure and we have several meetings, and now we'll be moving forward with taking action, but it – and really in the best case, it's probably an April, May, June type of activity that we'll there will be able to undertake.

Sounds good. And then just the last one with the share repurchase authorization, the 5 million shares that are out there, and you're still obviously doing good work here with Dun & Bradstreet, but the question's always what's next. And so, I'm just trying to get your philosophy on the share repurchases. How you're thinking about that? And then uses of cash and other opportunities for Cannae investments?

Well, on the latter part of the question, we are really being active relative to looking at various other investment opportunities, and generally we're targeting investments that are in the $125 million to $500 million range, and we're running screens and obviously the logical source of some of that cash would be our Ceridian stock. So, we're being very active especially with the addition of Rick to our management team. He's got a lot of experience in M&A. In terms of the buyback, we have really targeted a price below $30 is kind of our buyback targets, and I just noticed today we've moved above 30. So we have purchased shares back in the third quarter, and we're committed to keep on buying shares back, but we also want to balance that with the really amazing acquisition opportunities that we're uncovering. So it's just going to be a balancing act as it has been with all of our other companies, the same story.

Great. Thank you very much.

Thank you. Our next question comes from the line of John Campbell with Stephens Inc. Please proceed with your question.

Hey, guys. Good morning.

Hey, John.

I'd just like to echo the congrats and really nice work on D&B. You guys seem to be way ahead of schedule. So a few more questions there and kind of where we go from here. So first, I know we probably shouldn't just run rate or kind of annualize the 3Q results. I know there's probably some seasonality there. So, if you guys can refresh us kind of on the seasonality of D&B and then maybe talk to the EBITDA lift in the quarter from the pull forward contractual Rev?

Well, the EBITDA lift was really a result of the increased revenues and also the continued incorporation of the cost saves. So, by the time we got to the third quarter, a lot of the cost saves were really being annualized in. And so, this EBITDA lift is not a one time event. This is -- we're on a really good track to grow EBITDA significantly for the foreseeable future. On the revenue side, the business is lumpy, and that traditionally the fourth quarter has been a very, very strong quarter. And then because they were doing annual contracts and paying commissions at year end, the first quarter and second quarters sometimes we're not quite – were not as strong, and you saw that in our first two quarters, although we didn't know the business until February 9. (Audidt End) So we're trying to smooth those revenues out by implementing longer-term contracts, paying commissions at a different fashion than they were paid in the past. And it really kind of removes some of the lumpiness. We're not we're not there yet and that's why we feel like the 3% to 5% is a good target for the fourth quarter, because again it was a strong quarter. And then after that we feel like we're going to have a really good first quarter because we're rolling over a weak quarter a year ago and then it should settle down to this 3% to 5% percent type range.

Okay. That's helpful. And then the 4% organic growth that's obviously exclusive of the 1.5%, I think you guys called out for Lattice, and then, that also excludes the pull forward revenue from 4Q. Is that's right?

That's correct. Yes, that's correct. So we – the 8.5% total growth, but about 1.1 or 1.2 for Lattice and a few extra percent from kind of moving contracts forward, a big -- but they were the big contracts. The ones we wanted to get term on as opposed to be annual contracts.

Okay. And then finally for me, just kind of higher level question. I mean obviously with just eight months of work you've got a new leadership team in place, you got a new strategy, you've got an already materially higher margins, you've got rev growth clearly point in the right direction. I think the answer to this is probably pretty clear at this stage, we thought I'd ask more directly. Does the degree of success so far, where you guys stand today versus where you thought you might have been eight months ago. Do you feel like you've pull forward the timeline for monetization?

Absolutely, I mean, eight months ago, our target was really a couple of years. And we're, way ahead of schedule. And we're already beginning to execute on that plan. And we are over levered. So we want to do transactions to reduce our leverage, and then give us flexibility in terms of acquisitions, because the Lattice acquisition, we actually went to our capital partners, and got contributions to acquire Lattice. And since then I put the brakes on acquisitions, just pending getting over getting our capital structure squared away. So believe me, the management team is all in on working on the capital structure.

It's very exciting, guys. Congrats guys.

Thank you.

Thank you.

Thank you. Our next question comes in line of David Eller with Wells Fargo. Please proceed with your question.

Hey, good morning. Thanks for taking the question. I just wanted to go back to pull forwards. Were there any customers that chose to move earlier? Or was all of the activity related to kind of moving forward your term licenses as you as you talked about earlier?

No. It really is just a collaborative effort with the customers, and we attack some of the larger customers to move them forward out of the fourth quarter. So we could focus in on some of the smaller customers in the fourth quarter to make sure we knew them. But -- and there was really no particular cost benefits to the customers from moving forward. We just wanted to convert them to term contracts, and they were -- they're all more than willing to do it. I believe if you talk to our customer base, it didn't say it's a new Dun & Bradstreet, that they haven't seen this kind of responsiveness to their request, to their data request, or just sales requests. So we're feeling really good about what's going on Dun & Bradstreet. There was a --its never an easy fix, but this one's come together very, very quickly.

Okay. And then on the organic side, could you just talk about pricing trends in that business? I know historically, there were some pricing degradation that had creeped out over the last couple years. But if you could just talk about either pricing or volume trends that you've seen so far this year, since you found the business?

Well, they're both good. We have stopped the deal, cutting -- the deal cutting that went on consistently in Dun & Bradstreet just to close the transaction, so commission could be earned. So we're not – prices are not been degraded at all at this point in time, and customers being very responsive, relative to new product offerings and cross sell opportunities that we're presenting. So we're -- and we changed the whole sales organization, the whole sales structure, it's no longer sell what you sold last year, it's sell what you sold last year, but also, here are five new products in the analytics area that will help you in terms of your terms of doing business. And that's really where the growth is coming is these cross sell of other products. And we just started, as you can see, the third quarter was our first quarter of having revenue growth. So we're, we're feeling good.

And then earlier in the call, I think you talked about the number of M&A opportunities that you see for bolt-ons just being a large pool there, potential opportunities, but then you also talked about kind of pulling back on doing M&A as you look to delever the balance sheet, but just could you provide a little bit more color given strong debt markets right now, some of the puts and takes as you evaluate your M&A appetite and your M&A pipeline?

Well, I've never seen more M&A opportunities that I see in this space, it's not like Black Knight with a limited group of opportunities in the mortgage space or the loan origination space. And it really isn't like Ceridian. So it's a different situation. Dun & Bradstreet is a 200-year old company that lost its way. And we have eight to 12 potential acquisitions in each one of our business lines. And it's just a matter of picking and choosing and getting the capital structure in line. So we have adequate cash to execute on the acquisition opportunity. So we're looking at acquisitions all the time. I'm just holding the guys back until we do some work on the capital structure, because we are over-levered and we want to move that overall leverage down below 5%. If we can get it to 4.6% or 4.7%, we feel like would have more room to do acquisitions.

Okay. Thanks for all the questions. I appreciate all the answers.

Thank you, ladies and gentlemen, that concludes our question and answer session. I'll now turn the floor back to management for any final comments.

To conclude, we are very pleased with the third quarter results highlighted by the significant progress that our D&B management has achieved. And just eight months they have nearly completed their goal of delivering $200 million of expenses while also re-accelerating revenue growth and driving significant margin expansion. We have the right team and the right strategy in place to successfully turn around this iconic company with almost 200 years of history. We look forward to updating you on our fourth quarter call in February. Thank you for your time today.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.