cnne-20240331

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☑						QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐						TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-38300

CANNAE HOLDINGS, INC.

______________________________________________________________________________________________________________________________________________________

(Exact name of registrant as specified in its charter)

Delaware

82-1273460

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification Number)

1701 Village Center Circle,

Las Vegas,

Nevada

89134

(Address of principal executive offices)

(Zip Code)

(702) 323-7330

___________________________________________________________________

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Each Exchange on Which Registered

Cannae Common Stock, $0.0001 par value

CNNE

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 30, 2024 there were 62,772,438 shares of the Registrant's common stock outstanding.

FORM 10-Q

QUARTERLY REPORT

QUARTER ENDED MARCH 31, 2024

TABLE OF CONTENTS



			Page
Part I: FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements
A. Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 202 3			1
B. Condensed Consolidated Statements of Operations for the three -month periods ended March 31 , 2024 and 2023			2
C. Condensed Consolidated Statements of Comprehensive (Loss) Earnings for the three -month periods ended March 31, 2024 and 2023			3
D. Condensed Consolidated Statements of Equity for the three -month periods ended March 31, 2024 and 2023			4
E. Condensed Consolidated Statements of Cash Flows for the three -month periods ended March 31, 2024 and 2023			5
F. Notes to Condensed Consolidated Financial Statements			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			19
Item 3. Quantitative and Qualitative Disclosure About Market Risk			29
Item 4. Controls and Procedures			29
Part II: OTHER INFORMATION
Item 1. Legal Proceedings			29
Item 1A. Risk Factors			29
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			29
Item 3. Defaults Upon Senior Securities			29
Item 4. Mine Safety Disclosures			29
Item 5. Other Information			29
Item 6. Exhibits			30

Table of Contents

Part I: FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

CANNAE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)


	March 31, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	238.3	$	106.2
Short-term investments	45.8		15.6

Other current assets	26.2		29.5


Income taxes receivable	25.3		26.0


Total current assets	335.6		177.3
Investments in unconsolidated affiliates	1,678.3		1,718.8
Equity securities, at fair value	152.7		290.9
Lease assets	141.3		143.5
Property and equipment, net	57.2		58.7
Goodwill	53.4		53.4
Deferred tax asset	29.0		82.0
Other intangible assets, net	16.3		16.8

Other long-term investments and non-current assets	146.0		145.3

Total assets	$	2,609.8	$	2,686.7
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and other accrued liabilities, current	$	70.1	$	74.2
Lease liabilities, current	13.9		13.9
Deferred revenue	15.3		16.9
Notes payable, current	1.9		2.5


Total current liabilities	101.2		107.5
Lease liabilities, long-term	139.7		142.2
Notes payable, long-term	77.4		102.5



Accounts payable and other accrued liabilities, long-term	26.4		25.3

Total liabilities	344.7		377.5
Commitments and contingencies - see Note H
Equity:
Cannae common stock, 0.0001 par value; authorized 115,000,000 shares as of March 31, 2024 and December 31, 2023; issued of 94,245,481 and 92,844,329 shares as of March 31, 2024 and December 31, 2023, respectively and outstanding of 72,441,834 and 70,367,088 shares as of March 31, 2024 and December 31, 2023, respectively	—		—
Preferred stock, 0.0001 par value; authorized 10,000,000 shares; issued and outstanding, none as of March 31, 2024 and December 31, 2023	—		—
Retained earnings	804.6		901.3
Additional paid-in capital	1,984.7		1,977.0
Less: Treasury stock, 21,803,647 and 22,477,241 shares as of March 31, 2024 and December 31, 2023, respectively, at cost	(490.5)		(533.9)

Accumulated other comprehensive loss	(16.5)		(19.9)
Total Cannae shareholders' equity	2,282.3		2,324.5
Noncontrolling interests	(17.2)		(15.3)
Total equity	2,265.1		2,309.2
Total liabilities and equity	$	2,609.8	$	2,686.7

See Notes to Condensed Consolidated Financial Statements

Table of Contents

CANNAE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

(Unaudited)


	Three months ended March 31,
	2024		2023

Revenues:
Restaurant revenue	$	106.5	$	148.5
Other operating revenue	4.2		5.8
Total operating revenues	110.7		154.3
Operating expenses:
Cost of restaurant revenue	94.2		131.6
Personnel costs	23.2		15.6
Depreciation and amortization	3.3		5.1
Other operating expenses	30.6		24.7

Total operating expenses	151.3		177.0
Operating loss	(40.6)		(22.7)
Other income (expense):
Interest, investment and other income	2.1		2.8
Interest expense	(2.6)		(4.4)
Recognized (losses) gains, net	(8.6)		52.1
Total other (expense) income	(9.1)		50.5
(Loss) earnings before income taxes and equity in losses of unconsolidated affiliates	(49.7)		27.8
Income tax expense	53.4		2.6
(Loss) earnings before equity in earnings (losses) of unconsolidated affiliates	(103.1)		25.2
Equity in earnings (losses) of unconsolidated affiliates	11.3		(32.1)


Net loss	(91.8)		(6.9)
Less: Net loss attributable to noncontrolling interests	(1.9)		(2.8)
Net loss attributable to Cannae Holdings, Inc. common shareholders	$	(89.9)	$	(4.1)




Earnings per share
Basic


Net loss per share	$	(1.27)	$	(0.05)
Diluted


Net loss per share	$	(1.27)	$	(0.05)
Weighted Average Shares Outstanding
Weighted average shares outstanding Cannae Holdings common stock, basic basis	70.8		76.1
Weighted average shares outstanding Cannae Holdings common stock, diluted basis	70.9		76.1

See Notes to Condensed Consolidated Financial Statements

Table of Contents

CANNAE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) EARNINGS

(In millions)

(Unaudited)


	Three months ended March 31,
	2024		2023

Net loss	$	(91.8)	$	(6.9)
Other comprehensive earnings (loss), net of tax:
Unrealized (loss) earnings of investments in unconsolidated affiliates (1)	(0.7)		1.2


Reclassification adjustments for unrealized gains and losses of unconsolidated affiliates, net of tax, included in net earnings (2)	4.1		—
Other comprehensive earnings	3.4		1.2
Comprehensive loss	(88.4)		(5.7)
Less: Comprehensive loss attributable to noncontrolling interests	(1.9)		(2.8)
Comprehensive loss attributable to Cannae Holdings, Inc. common shareholders	$	(86.5)	$	(2.9)

_________________________________

(1)Net of income tax (benefit) expense of $(0.2) million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively.

(2)Net of income tax expense of $1.1 million for the three months ended March 31, 2024.

SEC Form 10-Q filed by Cannae Holdings Inc.