Revenue Growth of 9.1% Year-over-Year
Reaffirms FY 2024 Guidance
Emerald Holding, Inc. (NYSE: EEX) (“Emerald” or the “Company”),
America’s largest producer of trade shows and their associated
conferences, content and commerce, today reported financial results
for the first quarter ended March 31, 2024.
Financial Highlights
- Revenues of $133.4 million for the first quarter 2024, an
increase of $11.1 million, or 9.1% over Q1 2023, primarily due to
growth in events and a new acquisition.
- Organic Revenues, a non-GAAP measure, which takes into account
the impact of acquisitions, scheduling adjustments and discontinued
events, if any, of $128.6 million for the first quarter 2024, an
increase of $13.5 million, or 11.7%, from $115.1 million for the
first quarter 2023 (Refer to Schedule 1 for a reconciliation to
revenues, the most directly comparable GAAP measure)
- Net income of $11.0 million for the first quarter 2024,
compared to net income of $7.1 million for the first quarter
2023
- Adjusted EBITDA, a non-GAAP measure, of $40.8 million for the
first quarter of 2024, compared to $36.5 million for the first
quarter 2023; Adjusted EBITDA excluding insurance proceeds, a
non-GAAP measure, of $39.8 million for the first quarter 2024,
compared to $36.5 million for the first quarter 2023 (Refer to
Schedule 3 for a reconciliation to net (loss) income, the most
directly comparable GAAP measure)
- Ended the quarter with $186.8 million in cash and full
availability of its $110.0 million revolving credit facility
- For the full year 2024, the Company expects to generate between
$415 million and $425 million of revenue and between $110 million
and $115 million of Adjusted EBITDA
Operational Highlights
- Emerald’s core trade show business is strong with
year-over-year growth in revenue driven by increases in exhibitors,
attendees and pricing
- In January 2024, Emerald acquired Hotel Interactive, a producer
of hosted buyer events serving the hospitality, senior living and
casino industries via the BITAC series of events
- Subsequent to quarter end, Emerald completed the mandatory
conversion of its Series A Convertible Participating Preferred
Stock into shares of common stock.
Hervé Sedky, Emerald’s President and Chief Executive Officer,
said, “2024 is off to a strong start, driven by our unwavering
commitment to customer centricity and year-round engagement. This
focus has not only fueled early re-bookings into 2025 but has also
provided us with excellent forward visibility into our revenue
trajectory. In the seasonally-significant first quarter alone, we
hosted successful shows with record attendance in some of our
strongest categories, including KBIS, Prosper, and the
International Pizza Expo. After completion of the first quarter and
with the visibility we have into the remainder of the year, we
believe the company is on track to deliver on our growth and
profitability targets for the year of between $415 million and $425
million of revenue and between $110 million and $115 million of
Adjusted EBITDA. As we move forward, our steadfast focus remains on
delivering consistent growth and building on the value of our
irreplaceable portfolio of in-person B2B events, as well as our
content and commerce business. Together, we plan to continue to
maximize value for our customers and shareholders, driving towards
a future where our events are not just moments in time but
transformative experiences that leave a lasting impact."
David Doft, Emerald’s Chief Financial Officer, added, “We
delivered another quarter of solid organic revenue growth,
supported by strong trends in exhibitor counts and pricing. Our
customers rely on Emerald’s events to generate new leads and
transact in high volumes, leading them to view our shows as an
investment rather than an expense. As we grow our revenues, we
expect to better leverage our operating cost base to drive even
greater profitability and free cash flow generation. Additionally,
last week marked a significant milestone for us as we completed the
conversion of our outstanding convertible preferred stock into
common stock. This milestone not only simplifies our capital
structure but also positions Emerald as an even more attractive
investment opportunity as all shareholders can now share equally in
the free cash generation of the business.”
First Quarter
2024 Financial Performance and Highlights
Three Months Ended March
31,
2024
2023
Change
% Change
(unaudited, dollars in
millions, except percentages and per share data)
Revenues
$
133.4
$
122.3
$
11.1
9.1
%
Net income
$
11.0
$
7.1
$
3.9
54.9
%
Net cash provided by operating
activities
$
7.3
$
8.9
$
(1.6
)
(18.0
%)
Diluted income (loss) per share
$
0.00
$
(0.04
)
$
0.04
NM
Non-GAAP measures:
Adjusted EBITDA
$
40.8
$
36.5
$
4.3
11.8
%
Adjusted EBITDA excluding event
cancellation insurance proceeds
$
39.8
$
36.5
$
3.3
9.0
%
Free Cash Flow
$
4.8
$
5.2
$
(0.4
)
(7.7
%)
Free cash flow excluding event
cancellation insurance proceeds, net
$
3.8
$
5.2
$
(1.4
)
(26.9
%)
- First quarter 2024 revenues were $133.4 million, an increase of
$11.1 million or 9.1% versus the first quarter 2023, driven
primarily by organic growth of $13.5 million as well as $2.8
million in revenue from acquisitions. In addition, scheduling
adjustments of $4.1 million in the first quarter of 2023 as
compared to $2.0 million in the first quarter of 2024 contributed
to higher revenue in the first quarter 2024. This growth was offset
by prior year discontinued event revenues of $3.1 million.
- First quarter 2024 Organic Revenues from the Connections
reportable segment were $118.6 million, an increase of $13.6
million or 13.0% versus the first quarter 2023, due primarily to
higher volume of exhibitors and improved pricing.
- First quarter 2024 Organic Revenues from the All Other category
were $10.0 million, a decrease of $0.1 million or 1.0% versus the
first quarter 2023, due primarily to a $0.8 million decrease in
Content revenues offset by a $0.7 million increase in Commerce
revenues.
- First quarter 2024 Adjusted EBITDA was $40.8 million, compared
to $36.5 million for the first quarter 2023. Excluding event
cancellation insurance proceeds, first quarter 2024 Adjusted EBITDA
was $39.8 million, compared to Adjusted EBITDA ex-insurance of
$36.5 million for the first quarter 2023.
- First quarter 2024 net income was $11.0 million, compared to
net income of $7.1 million for the first quarter 2023 principally
as a result of higher Adjusted EBITDA and increased add backs for
interest expense, provision for income taxes, stock based
compensation and other items, offset by a lower add back for
depreciation and amortization.
For a discussion of the Company’s presentation of Organic
revenues and Adjusted EBITDA, which are non-GAAP measures, see
below under the heading “Non-GAAP Financial Information.” Refer to
Schedule 1 for a reconciliation of Organic revenues to revenues
(discussed in the first paragraph of this section), the most
directly comparable GAAP measure, and refer to Schedule 3 for a
reconciliation of Adjusted EBITDA to net income (discussed in the
second paragraph of this section), the most directly comparable
GAAP measure.
Cash Flow
- First quarter 2024 net cash provided by operating activities
was $7.3 million, compared to $8.9 million in the first quarter
2023 due to increased non-recurring costs during the current year,
largely from acquisition integration and restructuring costs.
- First quarter 2024 capital expenditures were $2.5 million,
compared to $3.7 million in the first quarter 2023.
- First quarter 2024 Free Cash Flow excluding event cancellation
insurance proceeds, net, which the Company defines as net cash
provided by operating activities less capital expenditures, event
cancellation insurance proceeds and taxes paid on event
cancellation insurance proceeds, was $3.8 million, compared to $5.2
million in the first quarter 2023. The calculation of first quarter
2024 Free Cash Flow excluding event cancellation insurance
proceeds, net, includes non-recurring acquisition related
transaction costs of $0.3 million, acquisition integration,
restructuring-related transition costs of $4.8 million, and
non-recurring legal, audit and consulting fees of $0.3 million. The
calculation of first quarter 2023 Free Cash Flow excluding event
cancellation insurance proceeds, net, includes acquisition related
transaction costs of $0.7 million, integration-related transition
costs of $1.7 million, and non-recurring legal and consulting fees
of $1.8 million. The total of these items is $5.4 million and $4.2
million for the quarters ended March 31, 2024 and 2023,
respectively.
For a review of the Company’s presentation of Free Cash Flow,
which is a non-GAAP measure, see below under the heading “Non-GAAP
Financial Information.” Refer to Schedule 4 for a reconciliation of
Free Cash Flow to net cash provided by operating activities
(discussed in the first paragraph of this section), the most
directly comparable GAAP measure.
Conference Call Webcast
Details
As previously announced, the Company’s leadership will hold a
conference call to discuss its first quarter 2024 results at 8:30
am EDT on Tuesday, May 7, 2024.
The conference call can be accessed by dialing 1-800-717-1738
(domestic) or 1-646-307-1865 (international). A telephonic replay
will be available approximately two hours after the call by dialing
1-844-512-2921, or for international callers, 1-412-317-6671. The
passcode for the replay is 11155815. The replay will be available
until 11:59 pm (Eastern Time) on May 14, 2024.
Interested investors and other parties can access the webcast of
the live conference call by visiting the Investors section of
Emerald’s website at http://investor.emeraldx.com. An online replay
will be available on the same website immediately following the
call.
About Emerald
Emerald’s talented and experienced team grows our customers’
businesses 365 days a year through connections, content, and
commerce. We expand connections that drive new business
opportunities, product discovery, and relationships with over 140
annual events, matchmaking, and lead-gen services. We create
content to ensure that our customers are on the cutting edge of
their industries and are continually developing their skills. And
we power commerce through efficient year-round buying and selling.
We do all this by seamlessly integrating in-person and digital
platforms and channels. Emerald is immersed in the industries we
serve and committed to supporting the communities in which we
operate. As true partners, we create experiences that inspire,
amaze, and deliver breakthrough results. For more:
http://www.emeraldx.com/.
Non-GAAP Financial
Information
This press release presents certain “non-GAAP” financial
measures. The components of these non-GAAP measures are computed by
using amounts that are determined in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”). A reconciliation of non-GAAP financial measures used in
this press release to their nearest comparable GAAP financial
measures is included in the schedules attached hereto.
Organic Revenue
We define “Organic revenue growth” and “Organic revenue decline”
as the growth or decline, respectively, in our revenue from one
period to the next, adjusted for the revenue impact of: (i)
acquisitions and dispositions, (ii) discontinued events and (iii)
material show scheduling adjustments. We disclose changes in
Organic revenue because we believe it assists investors and
analysts in comparing Emerald’s operating performance across
reporting periods on a consistent basis by excluding items that we
do not believe provide a fair comparison of the trends underlying
our existing event portfolio given changes in timing or strategy.
Management and Emerald’s board of directors evaluate changes in
Organic revenue to evaluate our historical and prospective
financial performance and understand underlying revenue trends of
our events.
Adjusted EBITDA
We use Adjusted EBITDA because we believe it assists investors
and analysts in comparing Emerald’s operating performance across
reporting periods on a consistent basis by excluding items that we
do not believe are indicative of our core operating performance.
Management and Emerald’s board of directors use Adjusted EBITDA to
assess our financial performance and believe it is helpful in
highlighting trends because it excludes the results of decisions
that are outside the control of management, while other measures
can differ significantly depending on long-term strategic decisions
regarding capital structure, the tax jurisdictions in which we
operate, and capital investments. Adjusted EBITDA should not be
considered as an alternative to net income as a measure of
financial performance or to cash flows from operations as a
liquidity measure.
We define Adjusted EBITDA as net income before (i) interest
expense, net, (ii) provision for income taxes, (iii) depreciation
and amortization, (iv) stock-based compensation, (v) goodwill and
other intangible asset impairment charges and (vi) other items that
management believes are not part of our core operations.
We have also presented Adjusted EBITDA excluding event
cancellation insurance proceeds in order to illustrate the amount
of Adjusted EBITDA from continuing operations.
Note: Schedule 3 provides reconciliations for 2024 and 2023
Adjusted EBITDA to net income, however, it is not possible, without
unreasonable efforts, to estimate the impacts of show scheduling
adjustments, acquisitions and the amount and timing of receipt of
event cancellation insurance proceeds and certain other special
items that may occur in 2024 as these items are inherently
uncertain and difficult to predict. As a result, the Company is
unable to quantify certain amounts that would be included in a
reconciliation of 2024 projected Adjusted EBITDA to projected net
income without unreasonable efforts and has not provided
reconciliations for these forward-looking non-GAAP financial
measures.
Free Cash Flow
We present Free Cash Flow because we believe it is a useful
indicator of liquidity that provides information to management and
investors about the amount of cash generated from our core
operations that, after capital expenditures, can be used to
maintain and grow our business, for the repayment of indebtedness,
payment of dividends and to fund strategic opportunities. Free Cash
Flow is a supplemental non-GAAP measure of liquidity and is not
based on any standardized methodology prescribed by GAAP. Free Cash
Flow should not be considered in isolation or as an alternative to
cash flows from operating activities or other measures determined
in accordance with GAAP.
We have also presented Free Cash Flow excluding event
cancellation insurance proceeds, net in order to illustrate the
amount of Free Cash Flow from continuing operations.
Other companies may compute these measures differently. No
non-GAAP metric should be considered as an alternative to any other
measure derived in accordance with GAAP.
Cautionary Statement Concerning
Forward-Looking Statements
This press release contains and our earnings call will contain
certain forward-looking statements, including, but not limited to,
our ability to return our business to pre-COVID levels; our
guidance with respect to estimated revenues and Adjusted EBITDA;
our ability or inability to obtain insurance coverage relating to
event cancellations or interruptions; and our ability to
successfully identify and acquire acquisition targets; our
expectations arising from the ongoing impact of COVID-19 on our
business; and how we integrate and grow acquired businesses. These
statements involve risks and uncertainties, including, but not
limited to, economic, competitive, governmental and technological
factors outside of the Company’s control that may cause its
business, industry, strategy, financing activities or actual
results to differ materially. See “Risk Factors” and “Cautionary
Note Regarding Forward-Looking Statements” in the Company’s most
recently filed periodic reports on Form 10-K and Form 10-Q and
subsequent filings. The Company undertakes no obligation to update
or revise any of the forward-looking statements contained herein,
whether as a result of new information, future events or
otherwise.
Emerald Holding, Inc.
Condensed Consolidated
Statements of Income and Comprehensive Income
(unaudited, dollars in
millions, share data in thousands, except loss per share
data)
Three Months Ended March 31,
2024
Three Months Ended March 31,
2023
Revenues
$
133.4
$
122.3
Other income, net
1.0
—
Cost of revenues
47.5
43.2
Selling, general and administrative
expense
55.5
48.8
Depreciation and amortization expense
7.1
13.5
Operating income
24.3
16.8
Interest expense
12.1
8.0
Interest income
2.3
1.1
Other expense
—
0.1
Income before income taxes
14.5
9.8
Provision for income taxes
3.5
2.7
Net income and comprehensive income
attributable to Emerald Holding, Inc.
$
11.0
$
7.1
Accretion to redemption value of
redeemable convertible preferred stock
(10.7
)
(10.1
)
Participation rights on if-converted
basis
(0.2
)
—
Net income (loss) and comprehensive income
(loss) attributable to Emerald Holding, Inc. common
stockholders
$
0.1
$
(3.0
)
Basic income (loss) per share
0.00
(0.04
)
Diluted income (loss) per share
0.00
(0.04
)
Basic weighted average common shares
outstanding
63,039
67,280
Diluted weighted average common shares
outstanding
65,205
67,280
Emerald Holding, Inc.
Condensed Consolidated Balance
Sheets
(dollars in millions, share
data in thousands, except par value)
March 31, 2024
December 31, 2023
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
186.8
$
204.2
Trade and other receivables, net of
allowances of $1.5 million and $1.4 million, as of March 31, 2024
and December 31, 2023, respectively
123.1
85.2
Prepaid expenses and other current
assets
16.5
21.5
Total current assets
326.4
310.9
Noncurrent assets
Property and equipment, net
1.6
1.5
Intangible assets, net
175.0
175.1
Goodwill, net
565.7
553.9
Right-of-use assets
8.3
8.8
Other noncurrent assets
3.4
3.7
Total assets
$
1,080.4
$
1,053.9
Liabilities, Redeemable Convertible
Preferred Stock and Stockholders’ Deficit
Current liabilities
Accounts payable and other current
liabilities
$
61.1
$
46.6
Income taxes payable
1.9
0.2
Cancelled event liabilities
0.8
0.6
Deferred revenues
175.3
174.3
Contingent consideration
0.1
0.2
Right-of-use liabilities, current
portion
4.0
4.0
Term loan, current portion
4.2
4.2
Total current liabilities
247.4
230.1
Noncurrent liabilities
Term loan, net of discount and deferred
financing fees
398.7
398.7
Deferred tax liabilities, net
5.5
3.1
Right-of-use liabilities, noncurrent
portion
8.0
8.9
Other noncurrent liabilities
12.3
8.5
Total liabilities
671.9
649.3
Commitments and contingencies
Redeemable convertible preferred stock
7% Series A Redeemable Convertible
Participating Preferred Stock, $0.01 par value; authorized shares
at March 31, 2024 and December 31, 2023: 80,000; 71,403 shares
issued and outstanding; aggregate liquidation preference of $492.6
million at March 31, 2024 and December 31, 2023
499.2
497.1
Stockholders’ deficit
Common stock, $0.01 par value; authorized
shares at March 31, 2024 and December 31, 2023: 800,000; 63,053 and
62,915 shares issued and outstanding at March 31, 2024 and December
31, 2023, respectively
0.6
0.6
Additional paid-in capital
550.0
559.2
Accumulated deficit
(641.3
)
(652.3
)
Total stockholders’ deficit
(90.7
)
(92.5
)
Total liabilities, redeemable convertible
preferred stock and stockholders’ deficit
$
1,080.4
$
1,053.9
Schedule
1
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF
REVENUES TO ORGANIC REVENUES
Three Months Ended March
31,
Change
Consolidated
2024
2023
$
%
(dollars in millions)
(unaudited)
Revenues
$
133.4
$
122.3
$
11.1
9.1
%
Deduct:
Acquisition revenues
(2.8
)
—
Discontinued events
—
(3.1
)
Scheduling adjustments(1)
(2.0
)
(4.1
)
Organic revenues
$
128.6
$
115.1
$
13.5
11.7
%
Three Months Ended March
31,
Change
Connections
2024
2023
$
%
(dollars in millions)
(unaudited)
Revenues
$
123.4
$
112.2
$
11.2
10.0
%
Deduct:
Acquisition revenues
(2.8
)
—
Discontinued events
—
(3.1
)
Scheduling adjustments(1)
(2.0
)
(4.1
)
Organic revenues
$
118.6
$
105.0
$
13.6
13.0
%
Three Months Ended March
31,
Change
All Other
2024
2023
$
%
(dollars in millions)
(unaudited)
Revenues
$
10.0
$
10.1
$
(0.1
)
(1.0
%)
Deduct:
Acquisition revenues
—
—
Discontinued events
—
—
Scheduling adjustments
—
—
Organic revenues
$
10.0
$
10.1
$
(0.1
)
(1.0
%)
Notes:
- For the three months ended March 31, 2024, represents revenues
from two events that staged in the first quarter of fiscal 2024,
but staged after the first quarter in fiscal 2023, offset by
revenues from three events that staged in the first quarter of
fiscal 2023 but are scheduled to stage later in fiscal 2024.
Schedule
2
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF
REVENUES TO DISAGGREGATED REVENUES
Three Months Ended March
31,
2024
2023
(dollars in millions)
(unaudited)
Connections
$
123.4
$
112.2
Content
4.7
5.5
Commerce
5.3
4.6
Total Revenues
$
133.4
$
122.3
Schedule
3
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF
NET INCOME TO ADJUSTED EBITDA
Three Months Ended March
31,
2024
2023
(dollars in millions)
(unaudited)
Net income
$
11.0
$
7.1
Add:
Interest expense, net
9.8
6.9
Provision for income taxes
3.5
2.7
Depreciation and amortization
7.1
13.5
Stock-based compensation
2.5
2.1
Other items(1)
6.9
4.2
Adjusted EBITDA
$
40.8
$
36.5
Deduct:
Event cancellation insurance proceeds
1.0
—
Adjusted EBITDA excluding event
cancellation insurance proceeds
$
39.8
$
36.5
Notes:
- Other items for the three months ended March 31, 2024 included:
(i) $0.3 million in acquisition-related transaction costs; (ii)
$4.8 million in acquisition integration and restructuring-related
transition costs, including one-time severance expense of $3.0
million; (iii) $0.3 million in non-recurring legal, audit and
consulting fees and (iv) $1.5 million in expense related to the
remeasurement of contingent consideration. Other items for the
three months ended March 31, 2023 included: (i) $0.7 million in
acquisition-related transaction costs, (ii) $1.7 million in
transition expenses and (iii) $1.8 million in non-recurring legal,
audit and consulting fees.
Schedule
4
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF
NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
Three Months Ended March
31,
2024
2023
(dollars in millions)
(unaudited)
Net Cash Provided by Operating
Activities
$
7.3
$
8.9
Less:
Capital expenditures
2.5
3.7
Free Cash Flow
$
4.8
$
5.2
Event cancellation insurance proceeds
(1.0
)
—
Free cash flow excluding event
cancellation insurance proceeds, net
$
3.8
$
5.2
Schedule
5
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF
REPORTABLE SEGMENTS RESULTS TO INCOME BEFORE TAXES
Three Months Ended March
31,
2024
2023
(dollars in millions)
(unaudited)
Revenues
Connections
$
123.4
$
112.2
All Other
10.0
10.1
Total revenues
$
133.4
$
122.3
Other income, net
Connections
$
1.0
$
—
All Other
—
—
Total other income, net
$
1.0
$
—
Adjusted EBITDA
Connections
$
56.1
$
49.4
All Other
0.2
(0.3
)
Adjusted EBITDA (excluding General
corporate expenses)
$
56.3
$
49.1
General corporate expenses
(15.5
)
(12.6
)
Interest expense, net
(9.8
)
(6.9
)
Depreciation and amortization expense
(7.1
)
(13.5
)
Stock-based compensation expense
(2.5
)
(2.1
)
Other items
(6.9
)
(4.2
)
Income before taxes
$
14.5
$
9.8
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507516039/en/
Emerald Holding, Inc. Investor Relations
investor.relations@emeraldx.com 1-866-339-4688 (866EEXINVT)
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