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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Emerald Holding Inc | NYSE:EEX | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 4.74 | 0 | 12:00:02 |
From Dec 2022 to Dec 2024
Revenue Growth of 16% Year-over-Year
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 third quarter ended September 30, 2023.
Financial Highlights
Operational Highlights
Hervé Sedky, Emerald’s President and Chief Executive Officer, said, “We are very pleased with the continued double-digit growth we’re seeing in our live events business. Trade shows remain a durable and high-return part of our customers’ marketing budgets, providing exhibitors with an unparalleled opportunity to access a large number of quality buyers at their industry’s must-attend event. Our focus on delivering increasing value to customers has translated to higher re-bookings along with sustained strength in pricing - trends which are reflected in our sales pacing data as we continue to book reservations for shows up to a year in advance. The performance of our content business was somewhat muted in the quarter, driven by cautious ad spending trends within the technology sector, where we have broad exposure. Nevertheless, we expect content to be a positive contributor to our results over time, offering not only opportunities for profitable growth but also synergies with our broader portfolio as we leverage the data and marketing resources of our media assets to grow our shows.”
David Doft, Emerald’s Chief Financial Officer, added, “Revenue and profitability trends in our core trade show business remain strong, as customers continue to value the high return on investment of live events. Our strong performance drove year-to-date revenue growth of 21% year-over-year, while Adjusted EBITDA increased over 85% versus the prior year. Importantly, we believe that 2024 sales pacing indicates that we can sustain double-digit top-line growth into next year with strong operating leverage, a testament to the strength and durability of our business model and the importance of our brands in their respective end markets. In our content business, reduced ad spend in the tech sector put modest downward pressure on our top line and as a result, we anticipate our FY 2023 revenue guidance will now be in the range of $385 million to $395 million. Our core trade show segment, which comprises the bulk of our operations, continues to support a strong full year performance, with Emerald set to achieve Adjusted EBITDA in the range of $95 million to $100 million in 2023. Our focus continues to be on maximizing value for our customers, which ultimately leads to stronger, more sustainable growth in per-share value for Emerald’s stockholders.”
Third Quarter 2023 Financial Performance and Highlights
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
Change
% Change
2023
2022
Change
% Change
(unaudited, dollars in millions, except percentages and per share data)
Revenues
$
72.5
$
62.4
$
10.1
16.2
%
$
281.3
$
232.3
$
49.0
21.1
%
Net income
$
10.7
$
93.0
$
(82.3
)
NM
$
9.7
$
108.4
$
(98.7
)
NM
Net cash provided by operating activities
$
8.5
$
153.5
$
(145.0
)
(94.5
%)
$
24.7
$
198.7
$
(174.0
)
(87.6
%)
Diluted (loss) income per share
$
—
$
0.41
$
(0.41
)
NM
$
(0.33
)
$
0.40
$
(0.73
)
NM
Non-GAAP measures:
Adjusted EBITDA
$
10.8
$
149.7
$
(138.9
)
(92.8
%)
$
61.9
$
214.5
$
(152.6
)
(71.1
%)
Adjusted EBITDA excluding event cancellation insurance proceeds
$
8.0
$
(1.3
)
$
9.3
NM
$
59.1
$
31.7
$
27.4
86.4
%
Free Cash Flow
$
5.5
$
150.9
$
(145.4
)
(96.4
%)
$
15.3
$
191.2
$
(175.9
)
(92.0
%)
Free cash flow excluding event cancellation insurance proceeds, net
$
2.7
$
(0.1
)
$
2.8
NM
$
12.5
$
8.4
$
4.1
48.8
%
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 (loss) income (discussed in the second paragraph of this section), the most directly comparable GAAP measure.
Cash Flow
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.
Emerald Extends and Expands Share Repurchase Program Emerald’s Board of Directors approved an extension and expansion of the Company’s share repurchase program that allows for the repurchase of $25.0 million of our common stock through December 31, 2024. Since the beginning of 2022, the Company has bought back 7.9 million shares of common stock. Prior to this expansion, Emerald had $3.0 million remaining available under its prior repurchase authorization.
Conference Call Webcast Details As previously announced, the Company’s leadership will hold a conference call to discuss its third quarter 2023 results at 8:30 am EDT on Monday, November 6, 2023.
The conference call can be accessed by dialing 1-877-407-9039 (domestic) or 1-201-689-8470 (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 13742126. The replay will be available until 11:59 pm (Eastern Time) on November 15, 2023.
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 (loss) income before (i) interest expense, (ii) income tax benefit, (iii) depreciation and amortization, (iv) stock-based compensation, (v) deferred revenue adjustment, (vi) goodwill and other intangible asset impairment charges, and (vii) 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 2023 and 2022 Adjusted EBITDA to net loss, 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 2023 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 2023 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 (Loss) Income and Comprehensive (Loss) Income (unaudited, dollars in millions, share data in thousands, except loss per share data)
Three Months Ended September 30, 2023
Three Months Ended September 30, 2022
Nine Months Ended September 30, 2023
Nine Months Ended September 30, 2022
Revenues
$
72.5
$
62.4
$
281.3
$
232.3
Other income, net
2.8
151.0
2.8
182.8
Cost of revenues
25.9
22.7
101.9
83.3
Selling, general and administrative expense
41.6
48.7
132.2
127.6
Depreciation and amortization expense
8.8
14.7
35.2
43.0
Goodwill impairment charge
—
—
—
6.3
Intangible asset impairment charge
—
—
—
1.6
Operating (loss) income
(1.0
)
127.3
14.8
153.3
Interest expense
12.1
6.8
31.5
15.5
Interest income
1.6
0.8
5.0
1.1
Loss on extinguishment of debt
—
—
2.3
—
Other expense
0.1
0.1
0.3
0.2
(Loss) income before income taxes
(11.6
)
121.2
(14.3
)
138.7
(Benefit from) provision for income taxes
(22.3
)
28.2
(24.0
)
30.3
Net income and comprehensive income attributable to Emerald Holding, Inc.
$
10.7
$
93.0
$
9.7
$
108.4
Accretion to redemption value of redeemable convertible preferred stock
(10.7
)
(9.9
)
(31.2
)
(28.7
)
Participation rights on if-converted basis
—
(54.7
)
—
(51.9
)
Net (loss) income and comprehensive (loss) income attributable to Emerald Holding, Inc. common stockholders
$
(0.0
)
$
28.4
$
(21.5
)
$
27.8
Basic (loss) income per share
—
0.42
(0.33
)
0.40
Diluted (loss) income per share
—
0.41
(0.33
)
0.40
Basic weighted average common shares outstanding
63,586
68,433
64,317
69,479
Diluted weighted average common shares outstanding
63,586
68,643
64,317
69,588
Emerald Holding, Inc. Condensed Consolidated Balance Sheets (dollars in millions, share data in thousands, except par value)
September 30, 2023
December 31, 2022
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
200.3
$
239.1
Trade and other receivables, net of allowances of $1.6 million and $1.5 million, as of September 30, 2023 and December 31, 2022, respectively
78.6
74.9
Prepaid expenses and other current assets
49.4
17.8
Total current assets
328.3
331.8
Noncurrent assets
Property and equipment, net
1.7
2.2
Intangible assets, net
182.7
204.8
Goodwill, net
553.9
545.5
Right-of-use assets
10.6
10.6
Other noncurrent assets
3.8
3.5
Total assets
$
1,081.0
$
1,098.4
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit
Current liabilities
Accounts payable and other current liabilities
$
46.2
$
58.1
Income taxes payable
—
1.2
Cancelled event liabilities
0.7
3.3
Deferred revenues
175.8
151.2
Contingent consideration
0.3
3.5
Right-of-use liabilities, current portion
4.3
4.9
Term loan, current portion
4.2
—
Total current liabilities
231.5
222.2
Noncurrent liabilities
Term loan, net of discount and deferred financing fees
398.8
413.9
Deferred tax liabilities, net
2.4
1.8
Right-of-use liabilities, noncurrent portion
9.9
10.4
Other noncurrent liabilities
9.2
10.8
Total liabilities
651.8
659.1
Commitments and contingencies
Redeemable convertible preferred stock
7% Series A Redeemable Convertible Participating Preferred Stock, $0.01 par value; authorized shares at September 30, 2023 and December 31, 2022: 80,000; 71,403 and 71,417 shares issued and outstanding; aggregate liquidation preference of $492.6 million and $475.9 million at September 30, 2023 and December 31, 2022, respectively
494.9
472.4
Stockholders’ deficit
Common stock, $0.01 par value; authorized shares at September 30, 2023 and December 31, 2022: 800,000; 62,890 and 67,588 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively
0.6
0.7
Additional paid-in capital
568.1
610.3
Accumulated deficit
(634.4
)
(644.1
)
Total stockholders’ deficit
(65.7
)
(33.1
)
Total liabilities, redeemable convertible preferred stock and stockholders’ deficit
$
1,081.0
$
1,098.4
Schedule 1 Emerald Holding, Inc. UNAUDITED RECONCILIATION OF REVENUES TO ORGANIC REVENUES
Three Months Ended September 30,
Change
Nine Months Ended September 30,
Change
2023
2022
$
%
2023
2022
$
%
(dollars in millions) (unaudited)
Revenues
$
72.5
$
62.4
$
10.1
16.2
%
$
281.3
$
232.3
$
49.0
21.1
%
Add (deduct):
Acquisition revenues
(4.0
)
(10.8
)
Discontinued events
(1.2
)
(2.3
)
Scheduling adjustments(1)
—
(5.1
)
—
2.0
Organic revenues
$
68.5
$
56.1
$
12.4
22.1
%
$
270.5
$
232.0
$
38.5
16.6
%
Notes:
Schedule 2 Emerald Holding, Inc. UNAUDITED RECONCILIATION OF REVENUES TO DISAGGREGATED REVENUES
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
(dollars in millions) (unaudited)
Trade shows
$
48.6
$
37.6
$
200.8
$
166.7
Other events
12.7
12.2
46.5
30.6
Subscription software and services
5.4
4.6
15.9
13.1
Other marketing services
5.8
8.0
18.1
21.9
Total Revenues
$
72.5
$
62.4
$
281.3
$
232.3
Schedule 3 Emerald Holding, Inc. UNAUDITED RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
(dollars in millions) (unaudited)
Net income
$
10.7
$
93.0
$
9.7
$
108.4
Add (deduct):
Interest expense, net
10.5
6.0
26.5
14.4
Loss on extinguishment of debt
—
—
2.3
—
(Benefit from) provision for income taxes
(22.3
)
28.2
(24.0
)
30.3
Goodwill impairment charge(1)
—
—
—
6.3
Intangible asset impairment charge(2)
—
—
—
1.6
Depreciation and amortization
8.8
14.7
35.2
43.0
Stock-based compensation
1.9
1.3
5.9
5.0
Deferred revenue adjustment
—
0.2
—
0.6
Other items(3)
1.2
6.3
6.3
4.9
Adjusted EBITDA
$
10.8
$
149.7
$
61.9
$
214.5
Deduct:
Event cancellation insurance proceeds
2.8
151.0
2.8
182.8
Adjusted EBITDA excluding event cancellation insurance proceeds
$
8.0
$
(1.3
)
$
59.1
$
31.7
Notes:
Schedule 4 Emerald Holding, Inc. UNAUDITED RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
(dollars in millions) (unaudited)
Net Cash Provided by Operating Activities
$
8.5
$
153.5
$
24.7
$
198.7
Less:
Capital expenditures
3.0
2.6
9.4
7.5
Free Cash Flow
$
5.5
$
150.9
$
15.3
$
191.2
Event cancellation insurance proceeds
(2.8
)
(151.0
)
(2.8
)
(182.8
)
Free cash flow excluding event cancellation insurance proceeds, net
$
2.7
$
(0.1
)
$
12.5
$
8.4
Schedule 5 Emerald Holding, Inc. UNAUDITED RECONCILIATION OF REPORTABLE SEGMENTS RESULTS TO (LOSS) INCOME BEFORE TAXES
Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
(dollars in millions) (unaudited)
Revenues
Commerce
$
44.6
$
33.9
$
135.8
$
109.9
Design, Creative, and Technology
19.3
23.0
125.4
108.1
All Other
8.6
5.5
20.1
14.3
Total revenues
$
72.5
$
62.4
$
281.3
$
232.3
Other income, net
Commerce
$
2.8
$
2.4
$
2.8
$
8.0
Design, Creative, and Technology
—
—
—
25.3
All Other
—
—
—
0.9
Total other income, net
$
2.8
$
2.4
$
2.8
$
34.2
Adjusted EBITDA
Commerce
$
27.0
$
16.0
$
73.1
$
57.8
Design, Creative, and Technology
2.7
2.5
38.6
57.0
All Other
(3.2
)
(3.1
)
(5.1
)
(8.3
)
Subtotal Adjusted EBITDA
$
26.5
$
15.4
$
106.6
$
106.5
General corporate and other expenses
(15.7
)
(14.3
)
(44.7
)
(40.6
)
Other income, net
—
148.6
—
148.6
Interest expense, net
(10.5
)
(6.0
)
(26.5
)
(14.4
)
Loss on extinguishment of debt
—
—
(2.3
)
—
Goodwill impairment charges
—
—
—
(6.3
)
Intangible asset impairment charges
—
—
—
(1.6
)
Depreciation and amortization expense
(8.8
)
(14.7
)
(35.2
)
(43.0
)
Stock-based compensation expense
(1.9
)
(1.3
)
(5.9
)
(5.0
)
Deferred revenue adjustment
—
(0.2
)
—
(0.6
)
Other items
(1.2
)
(6.3
)
(6.3
)
(4.9
)
(Loss) income before taxes
$
(11.6
)
$
121.2
$
(14.3
)
$
138.7
View source version on businesswire.com: https://www.businesswire.com/news/home/20231106327011/en/
Emerald Holding, Inc. Investor Relations investor.relations@emeraldx.com 1-866-339-4688 (866EEXINVT)
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