Tribune Publishing Company's (TPUB) CEO Jack Griffin on Q1 2015 Results - Earnings Call Transcript

Tribune Publishing Company (TPUB) Q1 2015 Earnings Conference Call May 6, 2015 11:00 AM ET

Executives

Jenni Gilmer - Manager, Investor Relations

Jack Griffin - Chief Executive Officer

Sandy Martin - Chief Financial Officer

Analysts

Lance Vitanza - CRT Capital Group.

Hamed Khorsand - BWS Financial

Matthew Brooks - Macquarie

Barry Lucas - Gabelli & Company.

Michael McCaffery - Shenkman Capital

Operator

Good morning, and welcome to the Tribune Publishing 2015 First Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference call over to Ms. Jenni Gilmer, Manager of Investor Relations. Please go ahead ma’am.

Jenni Gilmer

Thank you, and welcome to our 2015 first quarter earnings conference call. Joining me on the call are Jack Griffin, Chief Executive Officer; and Sandra Martin, Chief Financial Officer.

Before we begin, I would like to remind you that management will make forward-looking statements during the course of this call and our actual results could differ materially. Statements containing words such as may, believes, anticipate, expect, intend, plan, will, continue, estimate or similar expressions are forward-looking statements. Differences in our actual results from those described in these forward-looking statements may result from actions taken by the company, as well as from risks and uncertainties beyond the company’s control. Some of the risks and uncertainties that could impact our business are included in publicly filed documents, including our Annual Report on Form 10-K filed with the SEC on March 25, 2015.

I should also mention that our remarks today will include references to non-GAAP financial measures, including adjusted EBITDA and pro forma adjusted EBITDA. And we will have provided reconciliations to the most comparable GAAP measures in our earnings press release, which is available on our website at investor.tribpub.com.

Now, I’d like to turn the call over to Jack Griffin.

Jack Griffin

Thank you, Jenni, and good morning, everyone. Welcome to our first quarter 2015 earnings conference call. This period represents our second full quarter as a stand-alone publicly traded company.

Financial results were in line with our expectations and reflect solid early progress on the five point transformation plan I discussed on our March 4 earnings conference call. On that call, we issued annual guidance for 2015 adjusted EBITDA in the range of $160 million to $170 million. We are reaffirming that guidance today.

Joining me is Sandra Martin, who was recently appointed Chief Financial Officer of Tribune Publishing. Sandy, as you know, is an experienced financial leader and media executive, who has been a valued and trusted member of our executive leadership team. Sandy was instrumental in taking our company public last August and she also help complete our acquisitions in Illinois and in Maryland last year. We are very pleased to have Sandy in the CFO position.

At the top of this call, I want to take a moment to acknowledge significant editorial achievements of a number of our teams. Since our last quarterly call two months ago, the Los Angeles Times earned two Pulitzer Prizes; one for criticism and one for feature writing.

In addition, the LA Times, Chicago Tribune and The Baltimore Sun, all were named finalists in several other key Pulitzer categories. And The Baltimore Sun has been instrumental over the past several weeks in driving national and international coverage of the recent unrest in Baltimore.

Original premium journalism is the cornerstone of Tribune Publishing. It is gratifying when our peers and our audiences recognize the outstanding work of our editorial teams.

Now turning to our first quarter financial results. In Q1, we reported total revenue of $396 million. That compares to $417 million in the prior year quarter, a declined 4.9%. We experienced an increase in circulation revenue, which was $109 million, up 2% from the prior year, as well as year-over-year increases in Digital Marketing Services and Content Syndication. Pro forma adjusted EBITDA is the financial measure we use to compare our performance as a stand-alone company to the year-ago period in which we were division of Tribune Media.

In the first quarter of 2015, pro forma adjusted EBITDA was $30 million as compared to $28 million in the prior year quarter. By the fourth quarter of 2015, we will be able to begin making year-over-year comparisons as a stand-alone company in both periods. In the first quarter of this year, our company generated $21 million in operating cash flow and we had very strong performance on the expense side.

On a same-store basis, total operating expenses were $17 million lower than the year ago quarter. This reflects a decline of 6% year-over-year. On a GAAP basis, total operating expenses for the quarter were down $10 million from last year, a reduction of 3%.

Turning to advertising. Total advertising revenue was $220 million in the quarter, a decline of 5.7% versus the prior year quarter. This performance is in line with our newspaper industry peers. This advertising performance for our company represents a sequential improvement over our fourth quarter 2014 results when advertising revenues were down approximately 10% versus the prior year. First quarter 2015 advertising revenues benefited somewhat from the shift of the Easter Season from Q2 of last year to Q1 of this year.

Total digital revenues were $49 million in the first quarter of 2015 after adjusting for the impact of modified affiliate agreements. This performance represents a year-over-year increase of 7%. Digital revenue accounts for 12% of total company revenue. On the consumer side, total digital subscribers were 661,000 at the end of the first quarter. Total digital-only subscribers were 67,000 at the end of the quarter.

Revenues for Digital Marketing Services were $6.4 million in the quarter, up nearly 40% versus the prior year. We continued to make solid progress in this important area. Additionally, we recently added new leadership to our branded content unit and re-branded this activity as Tribune Content Solutions. Branded content or native advertising, as it's also known, is expected to be an important growth area for our company as we move forward.

On our Q4 earnings call, I outlined our five-point transformation plan for Tribune Publishing. I will take a few minutes now to update you on the progress we are making.

The first pillar of that plan is accelerating our transition to digital. In the first quarter of this year, we continued to see strong gains in mobile traffic, due in part to the full suite of new apps we launched in the fourth quarter of last year.

We introduced a suite of new Apple Watch apps across all of our major brands. This was the most comprehensive rollout on new wearables from any major publisher. We created and distributed more video than ever before on our screens, as well as on third-party platforms such as Hulu and Roku. As a result, video views grew 35% in the quarter. And we continued to strengthen our programmatic efforts, allowing marketers to leverage the significant scale of our digital brands and products.

Lowering our cost structure is the second tenant of our transformation plan. As noted earlier, we continued to exercise disciplined cost management. In addition to the zero-based budgeting exercise conducted in the fourth quarter of last year, we recently implemented a companywide strategic sourcing initiative to achieve purchasing efficiencies across the company. Strategic sourcing harnesses the collective purchasing power of our entire company to reduce what we pay for outside goods and services.

The third major leg in our transformation plan is diversifying our revenue base. As previously mentioned, Digital Marketing Services and Content Syndication were up in the quarter versus the prior year. As mentioned, Digital Marketing Services’ revenues grew 40% over the prior year and that team significantly grew its client base, to include a range of marketers in diverse industries such as health and wellness, education, finance, travel and many more. And Tribune Content Agency, our syndicated content business, also continued to see year-over-year revenue and client growth and now accounts 2,000 clients in more than 100 countries.

Reenergizing our national advertising sales organization is the fourth leg of our five-point transformation plan. In the first quarter, under the leadership of Chief Revenue Officer, Michael Rooney, and our publishers, we restructured our local and national sales teams, installing new sales leadership in New York, California, Chicago and Maryland. We implemented a new strategy for our preprint business, establishing a dedicated but limited team to support existing clients, which frees up a majority of our other sales executive teams to pursue new advertising business for our company. And we integrated previously disparate print and digital teams, ensuring that we go to market offering the full continuum of multi-platform solutions to marketers.

We had several notable wins in the fourth quarter - in the first quarter. Including, we won back Samsung, which returned to the LA Times with a six-page spread to promote its next-generation of the Galaxy smartphone. We created an integrated digital and print campaign for HSBC in Los Angeles in support of that financial company’s new deposits campaign. And we closed on significant digital-only campaigns for United Airlines across Chicago Tribune’s digital apps.

The final point of our strategy and transformation plan is to selectively pursue accretive acquisitions that leverage our scale, infrastructure and management teams. 2014 was an active year for Tribune Publishing on this front, when we broaden our footprint with strategic acquisitions in Illinois, Connecticut and Maryland. We will continue to pursue this strategy in 2015.

Now to provide more insight into our Q1 financials, I will turn the call over to Sandy Martin.

Sandy Martin

Thank you, Jack. As Jack mentioned, first quarter results included revenues from acquired properties that totaled $17 million. Q1 Commercial Print and Delivery revenues were $33 million, compared to $45 million in the prior year quarter. Revenues declined in this important category, Commercial Print and Delivery, primary due to changes in contractual agreements in both Chicago and Los Angeles, and we discussed these on previous calls.

We’re actively marketing to commercial clients to fill capacity on our seven printing presses, and two of these printing presses operated by Tribune Publishing are amongst the largest and best equipped in the country. We finished first quarter with pro forma adjusted EBITDA of $30 million versus $28 million in the prior year quarter. We included an $8 million benefit recognized in Q1 from our changes to certain post-retirement plans, as this was part of our profitability plans since spin.

Net cash provided by operating activities for 2015 Q1 was $21 million. We ended our first quarter on March 29 with $40 million of cash on the balance sheet and nothing drawn on the revolver. Current liquidity, which includes cash on our borrowing capacity on the ABL revolver, is approximately $120 million.

With this operator, I would now like to open up the call for questions from the analysts, please.

Question-and-Answer Session

Operator

Yes, ma’am. We will now begin the question-and-answer session. [Operator Instructions] At this time, we will just pause momentarily to assemble roster. The first question we have comes from Lance Vitanza of CRT Capital Group. Please go ahead.

Lance Vitanza

Hi. Thanks for taking the question. I guess I wanted to start Sandy with the $8 million gain. Presumably that's a one-time item?

Sandy Martin

It is a one-time item. It’s part of our profitability initiatives when we spun. We're looking at a number of one-time items, Lance. And as we look at adjusted EBITDA, we are looking to sort of use that as an income measure, and over time there will be more things like this. This was just a piece of our post-retirement plans that we changed and that was in the plan from the beginning.

Lance Vitanza

Right. I understand. But I guess, presumably the $8 million represents cash savings that will accrue to the company over some period of time. And I guess I'm trying to better understand what that timeframe is. Should we think about this as representing $8 million of savings per year, or is it $8 million for now until the end of - I mean, forever, or what's the right sort of framed reference point to think about that cash - the eventual cash savings?

Sandy Martin

So each year - this was a balance sheet reserve for plan for post-retirement benefits. Each year it will be about $0.5 million savings to the expense line, as well as cash. That was post-retirement benefit payments of cash over time.

Lance Vitanza

So am I - is it right to think about it then basically you’ve got $0.5 million of savings per year and you're kind of capitalizing that today into an $8 million non-cash item?

Sandy Martin

That's right. Just the balance sheet. We are looking at all aspects of profitability and strengthening the balance sheet. But you’ve got it right.

Lance Vitanza

Okay. And then that was - what you're saying is that when you constructed the $160 million to $170 million EBITDA guidance, you had this in mind. So if we wanted to think about EBITDA guidance on more of a cash basis, then I suppose we could really be thinking $152 million to $162 million?

Sandy Martin

We don't look at it that way, because we use pro forma adjusted EBITDA as a profit, tight measure [ph] and we’re looking at a number of different things, Lance, that are similar to this that are going to build sort of that EBITDA margin percentage over time.

Lance Vitanza

Right, okay. All right. Thank you very much. I’ll get back in queue.

Sandy Martin

Sure. Thanks.

Operator

Next, we have Hamed Khorsand of BWS Financial.

Hamed Khorsand

Hi, good morning. Could you talk about your initiatives on digital front? It didn't seem like you really added any subscribers this past quarter. It was very minimal.

Jack Griffin

Sure. The net add to subscribers was small in the 6,000 range. We are in a period of a ton of testing, price testing, offer testing. And as you know, the net gain is a function of how many new customers you bring in and what the churn rate is. And so, as I think I made clear in the last call, we are very early days in this part of the business. And the experimentation and the testing that goes on is going to make that number - it’ll make the number a little volatile for a while. And I think if you look at the history of any of our peers who started this earlier will see a similar pattern of stops and starts. And so you'll find the right combination of price, term and offer. So you're right, the net add was small, but we remain very encouraged about that line of business.

Hamed Khorsand

How much are you spending on the digital front?

Sandy Martin

Spending specifically, we’re making investments through capital as well as marketing and promotion on P&L, but we haven't shared details of that.

Jack Griffin

Yes, I would add that as we talk about accelerating our transition to digital, the intersection of the legacy business and the digital business becomes more connected. And so thinking about digital-only spending, we look - we do look at it on an expense basis and on a capital basis, but as we transform the company, we’re putting more and more of our effort and our resources into digital products, digital infrastructure, consumer interfaces. And as you can see in the period, we reduced expenses year-over-year significantly and that takes into account the increased investment in digital. So that's our plan and that's what we're executing on.

Hamed Khorsand

Okay. I’m just trying to figure out what kind of return we can expect if you're not seeing much traction at the subscriber end. Okay. My other question is during your remarks you reaffirmed EBITDA guidance. Should we assume that you're also reaffirming revenue guidance as well?

Jack Griffin

Yes, we don't have any reason to change any of the guidance that we issued on our last call.

Hamed Khorsand

Okay. That's it for me. Thank you.

Sandy Martin

Thanks, Hamed.

Operator

Next we have Matthew Brooks of Macquarie.

Sandy Martin

Hi, Matt.

Matthew Brooks

Good morning guys. I've got a couple of questions, if it's okay. So firstly, I'm looking at the revenues and sort of related to the previous question. Are you able to say how many digital subscribers you had this time last year?

Jack Griffin

We saw an increase of about 25% year-over-year. So I just do that math.

Matthew Brooks

Similar growth than what you saw at the end of last year.

Jack Griffin

Right. So the absolute numbers are small. And as I've said, we are early days in this, and we’ve built the products. We’ve build the teams. We’ve built the user interfaces, and we have no reason not to - we have no reason to expect that it’s not going to work. It's going to just take some time as we work through all of the permutations that I talked about earlier.

Matthew Brooks

Got it. Are we about to have any sort of understanding of the digital advertising that you have, is that mostly related to classifieds or is there more even split among your retail national classifieds kind of classifications [ph] to print? How can we sort of understand that?

Jack Griffin

That's a great question. And I can characterize it generally this way. As I mentioned in my remarks, we recently added new leadership to, what we call, our custom content team. And if you look at - wherever it is digital advertising growth in traditional media, it's coming from branded content native advertising custom solutions. And we’re early days in that. So that team is up and running now. We’re seeing a very encouraging pipeline in that part of the advertising stream. And our digital platforms are built for it. They are not built for the old banners and towers, but they are built for premium advertising.

And so our big job in 2015 and going forward is to grow that piece of the business, which would fall into the typical digital display category as opposed to the classified category. The history of Tribune Publishing, as a division of Tribune Media, was that it was highly reliant on digital classified. As you know, the company had founder economics on Cars.com and other classified ventures businesses and CareerBuilder.

As the spun company, we no longer have the founder economics, and that's reflected in the results. And so we are taking many, many steps to diversify our digital sources of advertising. You can see the growth we’re experiencing in Digital Marketing Services. And it's a very deliberate effort on our part to get further away from being dependent on digital classified, while digital classified still remains an important part of the digital revenue streams.

Matthew Brooks

On the digital classifieds, are you able to say anything about [indiscernible] in terms of the revenues that have made in the last quarter? May be any indication of how it's growing?

Jack Griffin

We don't break that business out separately, but we’re very encouraged about what we're seeing there in terms of the performance. I regret I can't give you a specific number. But we are seeing strong growth year-over-year and we have a very explicit strategic plan for that business and we are very encouraged about its prospects.

Matthew Brooks

Okay. And can you say anything about your mobile advertising. I imaging that’s relatively small, but maybe you’re getting some traction there. And any comments you might have in terms of reaction to the new Watch app? I've used your new Watch app and it's pretty neat, it works pretty well. It’s a bit strange listen to series [ph] read a story, but I imagine that will improve over time.

Jack Griffin

Yes, I mean the only - we’ll take those in reverse order. The only reaction I can give you to the Watch apps is anecdotal and people think it’s very interesting and cutting edge. We'll see if and how it scales, but if we think about the whole digital proposition, as you know, the innovation and experimentation that goes on is critical to our being able to execute on our plan to transform the company into more of a digital company.

Matthew Brooks

And just one final question. Your comp was up a little bit compared to the last quarter this time last year. I was wondering if you can make any comments on that. I would imagine that in terms of cost reductions for any type of that line has to come down?

Jack Griffin

Yes. And I would ascribe the year-over-year increase in compensation to the acquired properties that we had in the first quarter of this year and not the first quarter of last year.

Matthew Brooks

But on a percent of revenue is going up as well there?

Jack Griffin

So, on the core business, the same-store sales business, we've been very aggressive about reducing compensation expense. The acquired properties, for example, the business in Illinois, the first quarter is our first full quarter owning that business. So we expect to see our acquisitions come into line with overall trends that exist in the core business and start to mirror those as we get into the year.

Sandy Martin

Keep in mind - I'll add to what Jack talked about on compensation. Keep in mind that in the pre-spin world, we had corporate allocations of $35 million, about 60% of that goes into our regular compensation and the rest gross sort of into other G&A. So we've got some comparability noise year-over-year. So it's not a real clean comparison there, Matt.

Operator

Next we have Barry Lucas of Gabelli & Company.

Barry Lucas

Thanks and good morning. Jack, could you talk about any regional variances between the big properties in L.A., Chicago, Baltimore and what have you?

Jack Griffin

Thank you, Barry, for the question. And thank you for joining the call as well. We don't breakout our business units that way, but I can talk about them generally. I sort of think of the business in three buckets. I think of it as the Chicago Tribune media group and the LA Times media group and then the East Coast properties. So the East Coast properties are smaller individually than the other two. And so those tend to mirror what you see from like properties with some of our peers that are public. The ad revenue declines tend to be smaller than in the bigger properties. But what we have in the bigger properties to offset that is very large commercial print and delivery businesses, particularly here in Chicago, and of course the larger digital scale that big businesses like the L.A. Times and the Chicago Tribune bring to us.

But I think the key point for us is that - if you look across our portfolio, all of our properties are profitable. And we’re encouraged about the management teams at each one of them and the potential that we have to execute on this transformation plan that we've discussed in detail.

Barry Lucas

Great, thanks. And could you talk a little bit more about the strategic sourcing initiative, maybe if you were to look at the total expense bucket, what portion is addressed by this initiative. Roughly how much do you think you could pull out over electronic trade [ph]?

Jack Griffin

Sure, Barry. I'd be happy to talk about it. And I know you follow Meredith, and this is an initiative I brought into Meredith about 10 years ago. And we brought in the outside firm here A.T. Kearney. And I think if you look at the Meredith experience, they are extremely effective at taking costs out of the core business on an annual basis, on a same-store basis. And a big part of that's due to the way they acquire outside goods and services. And that's what's going on here now for the very first time.

If you go back even a year ago, most of our business units were free to procure outside services on their own. And now it goes through a rigorous process of vetting and multiple bids and at least three different sets of eyes on a contract. We have about - if you include paper and newsprint, we have about $1 billion in outside spend. Presently the procurement initiative is limited to about a third of that. And then over time, we will roll it out across the entire outside spend.

And the best practices in the procurement industry demonstrates that if you do it right and you’re committed to it and it is strategic, you can take out every year on a same-store basis a few points of the outside spend, notwithstanding inflation and notwithstanding the general upward pressures on cost.

Barry Lucas

Thanks for that, Jack.

Jack Griffin

You bet, Barry. Thanks for the question.

Operator

Next we have Lance Vitanza, CRT Capital Group.

Lance Vitanza

Hi. Just a couple of more questions here. The first is the sequential improvement in ad trends that you saw, and I think you kind of touched on this during the prepared remarks. But could you talk a little bit more about how much of that is market conditions, may be showing some improvement versus just better execution on your part and so forth?

Jack Griffin

Sure, Lance. I'd be happy to address that. It will be in precise by necessity and definition.

Lance Vitanza

Sure.

Jack Griffin

But I would sort of characterize it this way. In the first quarter - we’ve talked about this before. In Los Angeles, the business that we get from the movie and entertainment category is pivotal. And when it's a good Oscar season like it was this year, that helps us. So we benefited from that in L.A. and that team up there did a great job of executing.

So if you look across our portfolio and I mentioned this, we've got a new Chief Revenue Officer in Los Angeles, Michael Rooney. He has been in the chair at the national level only since about the middle of November. And Michael has changed out essentially the entire leadership team at the national level. We’ve put in a new Head of Advertising in Baltimore. We have Nancy Meyer in Orlando, who is a new publisher down there and she did a tremendous job at the Hartford Courant. And so we’re putting the management team in place and we’re getting to the point where we’re beyond the hard work of standing up the company, building the team and getting to execution.

So as Michael’s team gets into place - I mean I mentioned some of the national advertising wins. And at a local level, we have - our teams are just vigilantly focused on advertising revenue of all types. And in a business as big as ours, that's sort of the coin of the realm. And I'm encouraged about our ability to increasingly execute our plan from an advertising standpoint as we get the right people in place, the right structure in place, the right products and tools in place and the right incentives in place. And so we’ve overhauled essentially all of those things. And we’re executing well and we will continue to execute well.

Lance Vitanza

Great. The other - two other questions. The first of which is, the EBITDA guidance, obviously seasonally slow in Q1 with only $30 million relative to $160 million to $170 million. Could you remind me what the cadence of the EBITDA over the balance of the year is likely to be, generally speaking? I understand that Q4 obviously is a big quarter, but how should we think about it relative to Q1 as we kind of progress through the year?

Jack Griffin

Sure. So you hit it right that the fourth quarter is the biggest quarter. So in EBITDA, it tends to be relative to the first quarter like 2:1. And so our businesses by definition weighted toward the back-end. I will say everything that I just spoke of in terms of the team and the execution, by the time we hit the third and fourth quarters will be in an even better position to execute, and we'll be up against weaker comps. Our back half of 2014, as we’re setting up the company and coming out of spin - you all watch the numbers, so we'll be up against those with a great team and great products and momentum. But there is no question it’s weighted towards the second half.

And we think about a business that's as big as ours, the revenue visibility is very limited by definition because we’re closing every day and digital is closing every minute. But we've got a very good handle on the cost side. We've got very explicit growth plans on the revenue side, and the calibration of the two, we feel confident about and reaffirming that guidance.

Lance Vitanza

Great. And my last question is just the M&A pipeline. Could you talk a little bit about how that looks? And I would think that that’s a pretty important growth driver for the company going forward. Any update there on conditions or what you're saying?

Jack Griffin

Sure, I'll do my best without being specific as I can’t be. But I will characterize it this way. It's a very important part of our plan. We are always looking at opportunities and we’re very deeply disciplined about the opportunities that we look at and the way that we look at them. And I'll just characterize that in the following way.

We see opportunity in the industry as a function of our big flagships to do, what we call, bolt-on strategic adjacent acquisitions that are within 100 miles or so where we have a big physical plant and allow us to execute like we did in Maryland, like we are doing in Illinois, where we can leverage the management team. We can leverage the physical plant. We can leverage the distribution to create very meaningful cost side synergies and pay sellers a reasonable multiple and make the combination of the activities be accretive to our company on a cost synergy basis alone. And whatever revenue synergies we get are gravy. And that's the way we think about it. We’re very disciplined about it. We’re very focused on it and we will continue that past year for as for as we can see.

Lance Vitanza

Thanks very much.

Jack Griffin

Thank you.

Operator

Michael McCaffery, Shenkman Capital.

Michael McCaffery

Thanks for taking my question. Could you just - as it relates to Q1 and the two acquisitions that you made in the back half of 2014. Can you give a pro forma year-over-growth incorporating those two acquisitions, or at least just how much did those acquisitions contribute in the first quarter of ‘15?

Sandy Martin

We've actually given you the pieces to that. We’ve sort of talked about revenue from the acquisitions was $17 million. And acquired expenses, we gave you the pieces of that, so $3 million to $4 million was first quarter. Now keep in mind, landmark acquisition in Baltimore was clearly a sort of traditional acquisition that's going to contribute to adjusted EBITDA. The Chicago suburban papers, as well as the renegotiation of the Sun-Times, we said that would be sort of on an annualized basis accretive $1 million to $2 million - slightly accretive $1 million to $2 million.

Jack Griffin

Yes, in that - I'll sort of add to that. In the last earnings call, the way that we set the table and I'll sort of reiterate it, is that we had big resets of commercial print and delivery contracts in Chicago with the Chicago Sun-Times city paper concurrent with the acquisition of the suburban papers from that company. And then in California, where we no longer have the distribution contract for the Orange County Register, where previously the Las Angeles Times delivered the Orange County Register. So those two - those downstrokes in commercial print and delivery for 2015 from an EBITDA standpoint are essentially offset by the year-over-year incremental contribution from the acquired properties.

Michael McCaffery

Okay. And then just a follow-up on Lance’s earlier question, as far as some of the - arguably one-time items that are non-cash, that are part of the EBITDA guidance for the full-year. Is there a range you can give for what to expect from similar type items throughout the year? I can appreciate that they are part of your ongoing - what you had in the plan as far as a separate stand-alone company. But I guess I'm just kind of following what Lance was asking as far as from the guidance that was given how to think about a real cash EBITDA number for the full-year or a range?

Sandy Martin

Yes, that’s great.

Jack Griffin

So, great question. And let me try to address it on top of the way Sandy characterized it. We’re two full quarters into being a stand-alone public company. We inherited the balance sheet that we’re dealing with and cleaning up, and we feel that we have now a very such strong balance sheet and we’re committed to maintaining that. There will be from time to time, one-time items that benefit us, just like there were one-time items that have hurt us.

As I look forward this year, I do not see any material one-time items that will come out into the EBITDA line. So it's a one-time good guy for us that we were planning on. And as we go through the rest of the year - I mean Lance’s question address the seasonality of the business, and as we get into the second half of the year and we'll have two quarters under our belt, then we'll be able to be even more precise about what we say. But it is a one-time good guy and we don't see any of them - any more of those in the current year.

Operator

That will conclude our Q&A session today. I would now like to turn the conference call back over to Ms. Sandy Martin, Chief Financial Officer. Ms. Martin the floor is yours ma’am.

Sandy Martin

Thank you very much for your interest in our company. And we look forward - we will be going to conferences and talking to investors here over the next few weeks. So look forward to meeting each of you on the road. Thanks. Bye.

Operator

And we thank you ma’am and to the rest of the management team for your time also today. The conference call has now concluded. Again, we thank you all for attending today’s presentation. At this time, you may disconnect your lines. Thank you and take care everyone.