8-K
Emerald Holding, Inc. (EEX)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): May 03, 2023 |
|---|
Emerald Holding, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-38076 | 42-1775077 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 100 Broadway, 14th Floor | ||
| New York, New York | 10005 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: (949) 226-5700 | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value $0.01 per share | EEX | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
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. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 3, 2023, Emerald Holding, Inc. (the “Company”) issued a press release announcing the financial results of the Company for the first quarter ended March 31, 2023. Copies of the press release and presentation are being furnished as Exhibit 99.1 and Exhibit 99.2, respectively, attached hereto and incorporated by reference herein. The Company will also make the financial results presentation available on its website.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibit.
| Exhibit No. | Description |
|---|---|
| 99.1<br><br>99.2<br><br>104 | Press Release of the Company, dated May 3, 2023.<br><br>First Quarter 2023 Financial Results Presentation.<br><br>Cover Page Interactive Data File (embedded within the inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EMERALD HOLDING, INC. | |||
|---|---|---|---|
| Date: | May 3, 2023 | By: | /s/ Stacey Sayetta |
| Stacey Sayetta<br>General Counsel and Corporate Secretary |
EX-99
Exhibit 99.1
Emerald Reports First Quarter 2023 Financial Results
Organic Revenue Growth of 17% Year-over-Year
Repurchased 5.1 Million Shares in First Quarter
NEW YORK, N.Y. – May 3, 2023 – 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, 2023.
Financial Highlights
• Revenues of $122.3 million for the first quarter 2023, an increase of $23.8 million, or 24.2%, primarily on growth in events that staged in both Q1 2023 and Q1 2022
• Organic Revenues, a non-GAAP measure, which takes into account the impact of acquisitions and scheduling adjustments, of $122.1 million for the first quarter 2023, an increase of $17.7 million, or 17.0%, from $104.4 million for the first quarter 2022 (Refer to Schedule 1 for a reconciliation to revenues, the most directly comparable GAAP measure)
• Net income of $7.1 million for the first quarter 2023, compared to $16.1 million for the first quarter 2022
• Adjusted EBITDA, a non-GAAP measure, of $36.5 million for the first quarter of 2023, compared to $49.3 million for the first quarter 2022; Adjusted EBITDA excluding insurance proceeds, a non-GAAP measure, of $36.5 million for the first quarter 2023, compared to $25.6 million for the first quarter 2022 (Refer to Schedule 3 for a reconciliation to net income, the most directly comparable GAAP measure)
• Bought back 5.1 million shares, or 7.5% of common stock outstanding, at an average price of $3.34 per share during the first quarter 2023
• Ended the quarter with $217.3 million in cash and full availability of its $110.0 million revolving credit facility
• For the full year 2023, the Company continues to expect to generate in excess of $400 million of revenue and $100 million of Adjusted EBITDA
Operational Highlights
• Post-COVID recovery cycle driving continued growth in exhibitor and attendee counts
• Successfully staged 35 in-person trade shows, conferences and other events in the first quarter as the Company builds back from the COVID-19 pandemic and customers eagerly returned to in-person events
• Acquired Lodestone Events, producer of the successful Overland Expo series of vehicle-based, adventure travel consumer shows, in January 2023 for initial cash consideration of $9.5 million
Hervé Sedky, Emerald’s President and Chief Executive Officer, said, “Emerald is off to an excellent start in 2023, with strong demand from exhibitors and attendees, contributing to the ongoing rebound in live events. The business continues to benefit from strong post-COVID-19 tailwinds across our business that we expect to persist well beyond 2023. In addition, the work we’ve done to grow the business through strategic acquisitions, operational efficiencies, and product enhancements have made us both a larger and more dynamic organization. Notably, we have an exciting pipeline of new event launches that leverage our scale and expertise in must attend live events and further our strategy of targeting new audiences in high-growth industries. Moving forward, we expect that our customers and shareholders alike will benefit from the new and improved Emerald as we continue to deliver premium marketing value to customers and attractive cash flow growth to investors.”
David Doft, Emerald’s Chief Financial Officer, added, “As we cycle past the prior-year COVID-19 impacts, we believe that our results are beginning to reflect the true embedded growth potential of the Emerald platform. This quarter, we delivered 17% year-over-year growth in Organic Revenue and 30% Adjusted EBITDA margins. Looking ahead, we have multiple levers to drive substantial revenue growth as well as margin improvement through higher attendee counts, increased demand for exhibitor space, enhancements to Emerald’s product offering, and strategic acquisitions. During the first quarter, we took advantage of a dislocation in the share price to repurchase 5.1 million shares of common stock. Along with acquisitions and continued investments into our business, this is yet another example of where we are deploying capital in areas where it can most effectively drive value for shareholders.”
First Quarter 2023 Financial Performance and Highlights
| Three Months Ended<br>March 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | Change | % Change | ||||||||
| (unaudited, dollars in millions, except percentages and per share data) | |||||||||||
| Revenues | $ | 122.3 | $ | 98.5 | $ | 23.8 | 24.2 | % | |||
| Net income | $ | 7.1 | $ | 16.1 | $ | (9.0 | ) | (55.9 | %) | ||
| Net cash provided by<br> operating activities | $ | 8.9 | $ | 33.0 | $ | (24.1 | ) | (73.0 | %) | ||
| Diluted (loss) income per share | $ | (0.04 | ) | $ | 0.04 | $ | (0.08 | ) | NM | ||
| Non-GAAP measures: | |||||||||||
| Adjusted EBITDA | $ | 36.5 | $ | 49.3 | $ | (12.8 | ) | (26.0 | %) | ||
| Adjusted EBITDA excluding event cancellation insurance proceeds | $ | 36.5 | $ | 25.6 | $ | 10.9 | 42.6 | % | |||
| Free Cash Flow | $ | 5.2 | $ | 29.8 | $ | (24.6 | ) | (82.6 | %) | ||
| Free Cash Flow excluding event cancellation insurance proceeds, net | $ | 5.2 | $ | 6.1 | $ | (0.9 | ) | (14.8 | %) |
• First quarter 2023 revenues were $122.3 million, an increase of $23.8 million or 24.2% versus the first quarter 2022, driven by revenue growth in events that staged in both periods as well a revenue from three events that staged in the first quarter of 2023 but staged later in the prior year.
• First quarter 2023 Organic Revenues were $122.1 million, an increase of $17.7 million or 17.0% versus the first quarter 2022, due primarily to a $17.4 million increase in revenues from events that traded in both periods, $1.2 million from increased subscription software revenues and $0.3 million from newly launched events and partially offset by softness in other marketing services.
• First quarter 2023 net income was $7.1 million, compared to $16.1 million for the first quarter 2022.
• First quarter 2023 Adjusted EBITDA was $36.5 million, compared to $49.3 million for the first quarter 2022. Excluding event cancellation insurance proceeds, first quarter 2023 Adjusted EBITDA was $36.5 million, compared to Adjusted EBITDA ex-insurance of $25.6 million for the first quarter 2022.
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 2023 net cash provided by operating activities was $8.9 million, compared to $33.0 million in the first quarter 2022.
• First quarter 2023 capital expenditures were $3.7 million, compared to $3.2 million in the first quarter 2022.
• First quarter 2023 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 $5.2 million, compared to $6.1 million in the first quarter 2022. The calculation of first quarter 2023 Free Cash Flow excluding event cancellation insurance proceeds, net, includes acquisition related transaction costs of $0.7 million, acquisition integration and restructuring-related transition costs of $1.7 million, and non-recurring legal, audit and consulting fees of $1.8 million. The calculation of first quarter 2022 Free Cash Flow excluding event cancellation insurance proceeds, net, includes acquisition related transaction costs of $0.8 million, integration-related transition costs of $0.1 million, and non-recurring legal and consulting fees of $0.4 million. The total of these items is $4.2 million and $1.3 million for the quarters ended March 31, 2023 and 2022, respectively.
• During the first quarter 2023, the Company made common stock repurchases of $16.9 million and acquired Lodestone Events for an aggregate amount of $9.5 million, which represented the initial cash payment. Given the cash outflow for the common stock repurchases and the Lodestone Events acquisition, Emerald ended the first quarter 2023 with $217.3 million of cash as compared to the fiscal year 2022 ending cash balance of $239.1 million.
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 Share Repurchase Program
The Company bought back 5.1 million shares of common stock, or 7.5% of common stock outstanding, for $16.9 million during the first quarter 2023, equating to an average price of $3.34 per share. Since the beginning of 2021, the Company has bought back 10.5 million shares of common stock.
Conference Call Webcast Details
As previously announced, the Company’s leadership will hold a conference call to discuss its first quarter 2023 results at 8:30 am EDT on Wednesday, May 3, 2023.
The conference call can be accessed by dialing 1-888-886-7786 (domestic) or 1-416-764-8658 (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 31699661. The replay will be available until 11:59 pm (Eastern Time) on May 10, 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 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 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 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.
Contact
Emerald Holding, Inc.
Investor Relations
investor.relations@emeraldx.com
1-866-339-4688 (866EEXINVT)
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<br>March 31, 2023 | Three Months Ended<br>March 31, 2022 | |||||
|---|---|---|---|---|---|---|
| Revenues | $ | 122.3 | $ | 98.5 | ||
| Other income, net | — | 23.7 | ||||
| Cost of revenues | 43.2 | 34.2 | ||||
| Selling, general and administrative expense | 48.8 | 46.6 | ||||
| Depreciation and amortization expense | 13.5 | 14.3 | ||||
| Goodwill impairment charge | — | 6.3 | ||||
| Intangible asset impairment charge | — | 1.6 | ||||
| Operating income | 16.8 | 19.2 | ||||
| Interest expense | 8.0 | 3.9 | ||||
| Interest income | 1.1 | — | ||||
| Other expense | 0.1 | — | ||||
| Income before income taxes | 9.8 | 15.3 | ||||
| Provision for (benefit from) income taxes | 2.7 | (0.8 | ) | |||
| Net income and comprehensive income attributable to Emerald Holding, Inc. | $ | 7.1 | $ | 16.1 | ||
| Accretion to redemption value of redeemable convertible preferred stock | (10.1 | ) | (9.2 | ) | ||
| Participation rights on if-converted basis | — | (4.4 | ) | |||
| Net (loss) income and comprehensive (loss) income attributable to Emerald Holding, Inc. common stockholders | $ | (3.0 | ) | $ | 2.5 | |
| Basic (loss) income per share | (0.04 | ) | 0.04 | |||
| Diluted (loss) income per share | (0.04 | ) | 0.04 | |||
| Basic weighted average common shares outstanding | 67,280 | 70,171 | ||||
| Diluted weighted average common shares outstanding | 67,280 | 70,280 |
Emerald Holding, Inc.
Condensed Consolidated Balance Sheets
(dollars in millions, share data in thousands, except par value)
| Year Ended December 31, 2022 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | 217.3 | $ | 239.1 | ||
| Trade and other receivables, net of allowance of 1.5 million, as of March 31, 2023 and December 31, 2022 | 104.8 | 74.9 | |||
| Prepaid expenses and other current assets | 10.8 | 17.8 | |||
| Total current assets | 332.9 | 331.8 | |||
| Noncurrent assets | |||||
| Property and equipment, net | 2.0 | 2.2 | |||
| Intangible assets, net | 198.3 | 204.8 | |||
| Goodwill, net | 553.9 | 545.5 | |||
| Right-of-use assets | 10.0 | 10.6 | |||
| Other noncurrent assets | 3.4 | 3.5 | |||
| Total assets | 1,100.5 | $ | 1,098.4 | ||
| Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit | |||||
| Current liabilities | |||||
| Accounts payable and other current liabilities | 54.7 | $ | 58.1 | ||
| Income taxes payable | 2.3 | 1.2 | |||
| Canceled event liabilities | 2.9 | 3.3 | |||
| Deferred revenues | 161.8 | 151.2 | |||
| Contingent consideration | 3.7 | 3.5 | |||
| Right-of-use liabilities, current portion | 4.8 | 4.9 | |||
| Total current liabilities | 230.2 | 222.2 | |||
| Noncurrent liabilities | |||||
| Term loan, net of discount and deferred financing fees | 414.2 | 413.9 | |||
| Deferred tax liabilities, net | 2.8 | 1.8 | |||
| Right-of-use liabilities, noncurrent portion | 9.4 | 10.4 | |||
| Other noncurrent liabilities | 12.3 | 10.8 | |||
| Total liabilities | 668.9 | 659.1 | |||
| Commitments and contingencies | |||||
| Redeemable convertible preferred stock | |||||
| 7% Series A Redeemable Convertible Participating Preferred Stock, 0.01 par value; authorized shares at March 31, 2023 and December 31, 2022: 80,000; 71,417 shares issued and outstanding; aggregate liquidation preference of 484.2 million and 475.9 million at March 31, 2023 and December 31, 2022, respectively | 482.5 | 472.4 | |||
| Stockholders’ deficit | |||||
| Common stock, 0.01 par value; authorized shares at March 31, 2023 and December 31, 2022: 800,000; 62,845 and 67,588 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively | 0.6 | 0.7 | |||
| Additional paid-in capital | 585.5 | 610.3 | |||
| Accumulated deficit | (637.0 | ) | (644.1 | ) | |
| Total stockholders’ deficit | (50.9 | ) | (33.1 | ) | |
| Total liabilities, redeemable convertible preferred stock and stockholders’ deficit | 1,100.5 | $ | 1,098.4 |
All values are in US Dollars.
Schedule 1
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF REVENUES TO ORGANIC REVENUES
| Three Months Ended<br>March 31, | Change | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | % | |||||||
| (dollars in millions)<br>(unaudited) | |||||||||
| Revenues | $ | 122.3 | $ | 98.5 | 24.2 | % | |||
| Add (deduct): | |||||||||
| Acquisition revenues | (0.2 | ) | — | ||||||
| Scheduling adjustments(1) | 5.9 | ||||||||
| Organic revenues | $ | 122.1 | $ | 104.4 | 17.0 | % |
All values are in US Dollars.
Notes:
(1) For the three months ended March 31, 2023, represents revenues from three events that staged in the first quarter of fiscal year 2023, but staged later in fiscal year 2022, offset by revenues from one event that staged in the first quarter of fiscal year 2022, but is scheduled to stage later in fiscal 2023.
Schedule 2
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF REVENUES TO DISAGGREGATED REVENUES
| Three Months Ended<br>March 31, | ||||
|---|---|---|---|---|
| 2023 | 2022 | |||
| (dollars in millions) <br>(unaudited) | ||||
| Trade shows | $ | 97.1 | $ | 78.6 |
| Other events | 14.2 | 9.1 | ||
| Subscription software and services | 5.2 | 4.2 | ||
| Other marketing services | 5.8 | 6.6 | ||
| Total Revenues | $ | 122.3 | $ | 98.5 |
Schedule 3
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA
| Three Months Ended<br>March 31, | |||||
|---|---|---|---|---|---|
| 2023 | 2022 | ||||
| (dollars in millions) <br>(unaudited) | |||||
| Net income | $ | 7.1 | $ | 16.1 | |
| Add (deduct): | |||||
| Interest expense, net | 6.9 | 3.9 | |||
| Provision for (benefit from) income taxes | 2.7 | (0.8 | ) | ||
| Goodwill impairment charge(1) | — | 6.3 | |||
| Intangible asset impairment charge(2) | — | 1.6 | |||
| Depreciation and amortization | 13.5 | 14.3 | |||
| Stock-based compensation | 2.1 | 2.1 | |||
| Deferred revenue adjustment | — | 0.2 | |||
| Other items(3) | 4.2 | 5.6 | |||
| Adjusted EBITDA | $ | 36.5 | $ | 49.3 | |
| Deduct: | |||||
| Event cancellation insurance proceeds | — | 23.7 | |||
| Adjusted EBITDA excluding event cancellation insurance proceeds | $ | 36.5 | $ | 25.6 |
Notes:
(1) For the three months ended March 31, 2022, represents non-cash charges of $6.3 million for goodwill in connection with the Company’s interim testing of goodwill for impairment resulting from the change in operating segments and reporting units that occurred in the first quarter of 2022.
(2) Intangible asset impairment charges for the three months ended March 31, 2022 represent non-cash charges of $1.6 million for certain indefinite-lived intangible assets in connection with the Company’s interim testing of intangibles for impairment.
(3) 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 acquisition integration and restructuring-related transition costs, including one-time severance expense of $0.5 million and (iii) $1.8 million in non-recurring legal, audit and consulting fees. Other items for the three months ended March 31, 2022 included: (i) $4.3 million in non-cash expense related to the remeasurement of contingent consideration; (ii) $0.4 million in non-recurring legal, audit and consulting fees; (iii) $0.8 million in acquisition-related transaction costs and (iv) $0.1 million in transition expenses.
Schedule 4
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
| Three Months Ended<br>March 31, | |||||
|---|---|---|---|---|---|
| 2023 | 2022 | ||||
| (dollars in millions)<br>(unaudited) | |||||
| Net Cash Provided by Operating Activities | $ | 8.9 | $ | 33.0 | |
| Less: | |||||
| Capital expenditures | 3.7 | 3.2 | |||
| Free Cash Flow | $ | 5.2 | $ | 29.8 | |
| Event cancellation insurance proceeds | — | (23.7 | ) | ||
| Free cash flow excluding event cancellation insurance proceeds net | $ | 5.2 | $ | 6.1 |
Schedule 5
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF REPORTABLE SEGMENTS RESULTS TO INCOME BEFORE TAXES
| Three Months Ended<br>March 31, | ||||||
|---|---|---|---|---|---|---|
| 2023 | 2022 | |||||
| (dollars in millions) <br>(unaudited) | ||||||
| Revenues | ||||||
| Commerce | $ | 70.0 | $ | 56.7 | ||
| Design, Creative, and Technology | 46.7 | 37.5 | ||||
| All Other | 5.6 | 4.3 | ||||
| Total revenues | $ | 122.3 | $ | 98.5 | ||
| Other income, net | ||||||
| Commerce | $ | — | $ | 1.1 | ||
| Design, Creative, and Technology | — | 21.9 | ||||
| All Other | — | 0.7 | ||||
| Total other income, net | $ | — | $ | 23.7 | ||
| Adjusted EBITDA | ||||||
| Commerce | $ | 39.4 | $ | 31.8 | ||
| Design, Creative, and Technology | 13.1 | 32.6 | ||||
| All Other | (0.9 | ) | (2.3 | ) | ||
| Subtotal Adjusted EBITDA | $ | 51.6 | $ | 62.1 | ||
| General corporate and other expenses | (15.1 | ) | (12.8 | ) | ||
| Interest expense, net | (6.9 | ) | (3.9 | ) | ||
| Goodwill impairment charges | — | (6.3 | ) | |||
| Intangible asset impairment charges | — | (1.6 | ) | |||
| Depreciation and amortization expense | (13.5 | ) | (14.3 | ) | ||
| Stock-based compensation expense | (2.1 | ) | (2.1 | ) | ||
| Deferred revenue adjustment | — | (0.2 | ) | |||
| Other items | (4.2 | ) | (5.6 | ) | ||
| Income before taxes | $ | 9.8 | $ | 15.3 |
Emerald Holding, Inc. First Quarter 2023 May 3, 2023 Exhibit 99.2
Notes Forward-Looking Statements The information provided in this presentation is for general informational purposes only. This document contains certain forward-looking statements regarding Emerald Holding, Inc. and its subsidiaries (the “Company”), including, without limitation, the Company’s ability to continue staging live events and scale its business beyond pre-COVID levels; expectations regarding interest rates and economic conditions and the Company’s 2022 and 2023 financial guidance expectations. These statements are based on management’s current expectations as well as estimates and assumptions prepared by management as of the date hereof, and although they are believed to be reasonable, they are inherently uncertain and not guaranteed. These statements involve risks and uncertainties outside of the Company’s control that may cause actual results, performance, or achievements, to differ materially and there can be no assurance that the projected results and forward-looking statements in this presentation will prove to be accurate. Forward looking statements include all statements that are not historical facts and can be identified by terms such as “anticipate,” “believes, “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or similar expressions and the negatives of those terms. In particular, statements regarding the post-pandemic recovery for live events, expected free cash flow generation, and the multiple avenues to return to organic growth are each forward-looking statements among others. 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 disclaims any obligation to update or revise any of the forward-looking statements contained herein, whether as a result of new information, future events or otherwise, or with respect to ongoing insurance recovery amounts. Past results are not indicative of future performance.
Key Q1 2023 Takeaways Event revenues are progressing toward, and in some cases exceeding, pre-pandemic levels, highlighting sustained demand for events; Emerald set up for future growth as post-COVID-19 recovery cycle continues Trajectory of recovery and company growth supports outlook for $400+ million in Revenue and $100+ million in Adjusted EBITDA in FY 2023 Emerald continues to launch and acquire new products and services that are complementary to its core business to better support customers year-round Acquired Lodestone Events in January 2023 Repurchased 5.1 million shares, or 7.5% of common stock outstanding, in Q1 to take advantage of value dislocation Continue to generate positive free cash flow, supported by low-CAPEX requirements and working capital dynamics of events business where cash is collected in advance of an event staging
Revolutionizing the Trade Show Model Integrating technology and first party data to create a next-generation B2B platform Connections (91% of Q1 2023 revenues(1)) – Collection of leading B2B trade shows and conferences that bring together industry-specific communities Emerald’s Core Services Content – B2B websites and publications that provide industry specific business news and information across 20 sectors Commerce – SaaS software enabling year-round B2B buying and selling which averages $1 billion per month of wholesale gross transaction volume (1) Includes revenues from Trade Shows and Other Events.
Enduring Value of Trade Shows (1) Source: CEIR, Omnichannel Marketing Insights Report 1 (https://www.tsnn.com/news/ceir-launches-optimistic-first-report-omnichannel-marketing-insights-series). (2) Source: Gartner, What Marketing Budgets Look Like in 2022 (https://www.gartner.com/en/articles/what-marketing-budgets-look-like-in-2022). (3) Source: PwC, Global Entertainment & Media Outlook 2022-2026 (https://www.marketingcharts.com/industries/business-to-business-226291). In-person trade shows and events continue to be an integral part of businesses’ marketing budgets, and among the highest ROI. 40% of businesses say B2B exhibitions provide the highest value for their marketing objectives(1) 18% Of Chief Marketing Officers cite customer acquisition, retention and engagement as their #1 priority in 2022, up from 10% in 2021(2) 17.6% 2021-2026 CAGR projected for B2B trade show market size(3) Generate leads and sales Introduce new products Build brands Strengthen relationships Educate the market Service customers Fulfill procurement needs Source new suppliers Reconnect with existing suppliers Identify trends Learn about new products / services Network with industry peers Value to Exhibitors Value to Attendees
Three Pillars of Value Creation Emerald’s focus is on maximizing value of operations and expanding offerings Daily content and insights across 20 industries Scaled B2B marketplace Increased cadence of online offerings Emerald Xcelerator Targeted accretive M&A Partnership opportunities 365-Day Engagement Hired a head of product to action the holistic consolidated customer database 3-year brand operating plans across portfolio Value-based pricing structure Customer Centricity Portfolio Optimization Improved customer retention Higher revenue per customer Focused investment in evolving brands New revenue streams Powerful first party data Improved cross selling efforts New event and content launches in growth categories Platform acquisitions in new growth categories Tuck-in acquisitions in existing strategic categories
Acquisitions and New Event Launches Driving Portfolio Optimization Strategic expansion into high growth industries and categories Community platform for creating relationships across the mental health ecosystem Fosters connections between mental health innovators and corporate leaders seeking solutions for their organizations and employees Select New Event Launches New event launches expected to contribute 1-2 percentage points of organic revenue growth per year Launching in 2023 8 Social 3rd Party Direct & Retail Digital Recent Acquisitions Leading B2B media company in the cannabis industry with portfolio of media brands + widely attended annual expo B2B e-commerce SaaS platform Premier global B2B event and thought leadership platform in the advertising, media and technology sectors Leading product database and integrator service provider for commercial AV Leading national trade show focused on educational spaces and equipment Subscription-based photography business education and e-learning service + conference Wholesale online marketplace platform to be combined with Emerald’s iconic NY NOW brand Producer of Overland Expo adventure travel shows B2B event dedicated to the Latin food and beverage sector Strengthens Emerald’s portfolio of leading food & beverage brands Launching Sept. 2023 Educational platform that bridges business and Web3 innovation Will host second iteration at Retail Innovation Conference and Expo (RICE) with a focus on retail sector applications Returning in June 2023 Leveraging the expertise of the Lodestone team, launching a consumer adventure travel and lifestyle show in June 2023 Leads into Emerald’s high profile Outdoor Retailer event Launching in June 2023
9 Adj. EBITDA(1) Free Cash Flow(2) Net Income (Loss) Diluted Income Per Share ($ in Millions) ($ in Millions) (1) See slide 13 of this presentation for a reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted EBITDA excluding event cancellation insurance proceeds. (2) The calculation of first quarter 2023 Free Cash Flow excluding event cancellation insurance proceeds, net, includes acquisition related transaction costs of $0.7 million, acquisition integration and restructuring-related transition costs of $1.7 million, and non-recurring legal, audit and consulting fees of $1.8 million. The calculation of first quarter 2022 Free Cash Flow excluding event cancellation insurance proceeds, net, includes acquisition related transaction costs of $0.8 million, integration-related transition costs of $0.1 million, and non-recurring legal and consulting fees of $0.4 million. The total of these items is $4.2 million and $1.3 million for the quarters ended March 31, 2023 and 2022, respectively. Earnings Results Revenues of $122.3 million Diluted earnings per share of ($0.04) Net income of $7.1 million Adjusted EBITDA of $36.5 million(1) Free cash flow of $5.2 million(2) Q1 2023 results reflect impact of Lodestone acquisition and share repurchases Highlights and Developments Staged 35 in-person events as post-COVID rebound continued to drive attendance Acquired Lodestone Events in January 2023 Events accounted for 91% of Q1 revenues Balance Sheet (as of 3/31/2023) $217.3 million of cash and cash equivalents Full availability on $110 million revolver. Net debt of $198.0 million, including $415.3 million outstanding term loan balance Repurchased 5.1 million shares of common stock in Q1 2023 at average price of $3.34 per share Emerald experienced year over year growth across all categories as recovery momentum continues ($ in Millions) Dotted lines include insurance proceeds Dotted lines include insurance proceeds ex insurance ex insurance $49.3 $29.8 Q1 2023 Financial Highlights and Current Liquidity Position
On average, revenue per event is progressing toward normalized levels Guidance implies 25% EBITDA margins, with room for continued improvement to pre-COVID margins of ~35%+ Year-to-date Free Cash Flow consistent with expected seasonal patterns 10 2023 Guidance Signals Covid Recovery and Company Growth Revenue ($ in Millions) Adjusted EBITDA ex-Insurance(2) ($ in Millions) (1) See slide 14 of this presentation for a reconciliation of Net Cash (Used in) Provided by Operating Activities to Free Cash Flow. (2) See slide 13 of this presentation for a reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted EBITDA excluding event cancellation insurance proceeds. 2023 Guidance FY 2023 Revenue to exceed $400 million FY 2023 Adjusted EBITDA to exceed $100 million FY 2023 Free Cash Flow to exceed $60 million before benefits of working capital(1) $400.0 Guidance
Conservative Balance Sheet and Strong Liquidity: Capital Structure As of March 31, 2023 Convertible Preferred Shares Issued $400M of Convertible Preferred Stock in 2020 during COVID business disruption Shares have an accumulated accreting return of 7% per annum on liquidation preference paid in-kind Emerald can force conversion of preferred shares after June 29, 2023, if common stock price exceeds $6.16 for 20 consecutive trading days (1) Debt includes outstanding gross balance of term loan. (2) Consolidated trailing twelve month EBITDA as of March 31, 2023 as defined in Amended and Restated Senior Secured Credit Facilities. Debt Full availability on $110 million revolver $415.3 million term loan balance outstanding as of March 31, 2023 following prepayment of $100 million in December 2022 Common Shares Outstanding 62.8M Preferred Shares Liquidation Preference per Share as of March 31, 2023 $6.78 Initial Conversion Price / 3.52 Common Shares per Converted Preferred Share = 1.93 shares Convertible Preferred Shares Outstanding × 71.4M Additional Common Shares from Preferred Conversion = 137.5M Total Shares (as-converted basis) 200.3M Debt(1) $415.3M Cash and Cash Equivalents $217.3M Net Debt $198.0M Trailing Twelve Month EBITDA(2) $102.9M Net Debt / EBITDA 1.9x
Appendix
Three Months Ended March 31, 2023 2022 (dollars in millions) (unaudited) Net income $ 7.1 $ 16.1 Add (deduct): Interest expense, net 6.9 3.9 Provision for (benefit from) income taxes 2.7 (0.8) Goodwill impairment charge(1) — 6.3 Intangible asset impairment charge(2) — 1.6 Depreciation and amortization 13.5 14.3 Stock-based compensation 2.1 2.1 Deferred revenue adjustment — 0.2 Other items(3) 4.2 5.6 Adjusted EBITDA $ 36.5 $ 49.3 Deduct: Event cancellation insurance proceeds — 23.7 Adjusted EBITDA excluding event cancellation insurance proceeds $ 36.5 $ 25.6 Adjusted EBITDA UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA For the three months ended March 31, 2022, represents non-cash charges of $6.3 million for goodwill in connection with the Company’s interim testing of goodwill for impairment resulting from the change in operating segments and reporting units that occurred in the first quarter of 2022. Intangible asset impairment charges for the three months ended March 31, 2022 represent non-cash charges of $1.6 million for certain indefinite-lived intangible assets in connection with the Company’s interim testing of intangibles for impairment. 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 acquisition integration and restructuring-related transition costs, including one-time severance expense of $0.5 million and (iii) $1.8 million in non-recurring legal, audit and consulting fees. Other items for the three months ended March 31, 2022 included: (i) $4.3 million in non-cash expense related to the remeasurement of contingent consideration; (ii) $0.4 million in non-recurring legal, audit and consulting fees; (iii) $0.8 million in acquisition-related transaction costs and (iv) $0.1 million in transition expenses.
Free Cash Flow UNAUDITED RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW Three Months Ended March 31, 2023 2022 (dollars in millions) (unaudited) Net Cash Provided by Operating Activities $ 8.9 $ 33.0 Less: Capital expenditures 3.7 3.2 Free Cash Flow $ 5.2 $ 29.8 Event cancellation insurance proceeds — (23.7 Free cash flow excluding event cancellation insurance proceeds net $ 5.2 $ 6.1