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): November 03, 2022 |
|---|
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 November 3, 2022, Emerald Holding, Inc. (the “Company”) issued a press release announcing the financial results of the Company for the third quarter ended September 30, 2022. In addition, on November 3, 2022, the Company also made available on its website a presentation detailing results for the third quarter ended September 30, 2022. Copies of the press release and presentation are being furnished as Exhibit 99.1 and 99.2, respectively, attached hereto and are incorporated by reference herein.
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 November 3, 2022.<br><br>Third Quarter 2022 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: | November 3, 2022 | By: | /s/ Stacey Sayetta |
| Stacey Sayetta<br>General Counsel and Corporate Secretary |
EX-99.1
Exhibit 99.1
Emerald Reports Third Quarter 2022 Financial Results
NEW YORK, N.Y. – November 3, 2022 – Emerald Holding, Inc. (NYSE: EEX) (“Emerald” or the “Company”), a leading U.S. business-to-business platform producer of trade shows, events, conferences, marketing and B2B software solutions, today reported financial results for the third quarter ended September 30, 2022.
Highlights
• In the third quarter of 2022, Emerald successfully traded 25 in-person trade shows, conferences and other events, serving more than 79,000 attendees and 3,900 exhibiting companies
• Revenues of $62.4 million for the third quarter 2022, a decrease of $14.1 million, or 18.4%, from $76.5 million in revenue for the third quarter of 2021, reflecting the impact of the temporarily increased number of events that staged in the third quarter of 2021 having been postponed from their typical dates earlier in the year due to COVID-19
• Organic Revenues, a non-GAAP measure which takes into account the impact of COVID-19 related postponements and cancellations as well as acquisitions, of $56.6 million for the third quarter of 2022, an increase of $14.2 million, or 33.5%, from $42.4 million for the third quarter of 2021 (Refer to Schedule 1 for a reconciliation to revenues, the most directly comparable GAAP measure)
• Net income of $93.0 million for the third quarter 2022, compared to net loss of $9.0 million for the same quarter in 2021
• Adjusted EBITDA, a non-GAAP measure, of $149.7 million for the third quarter 2022, compared to $8.6 million for the third quarter 2021; Adjusted EBITDA excluding insurance proceeds, a non-GAAP measure, of ($1.3) million for the third quarter 2022, compared to $7.5 million for the third quarter 2021 (Refer to Schedule 3 for a reconciliation to net income, the most directly comparable GAAP measure)
• Adjusted EBITDA for the third quarter 2021, which included $13.3 million from events that had been postponed from their typical dates earlier in the year due to COVID-19, would have been ($4.7) million on a normalized basis
• Continuing positive cash generation as bookings for returning events accelerate and insurance litigation settlement received
• Cash provided by operations of $153.5 million for the third quarter 2022, compared to $9.6 million for the third quarter 2021
• Emerald generated free cash flow excluding event cancellation insurance proceeds and other items, a non-GAAP measure, of $6.2 million for the third quarter 2022 as compared to $8.2 million for the third quarter 2021 (Refer to Schedule 4 for a reconciliation to net cash provided by operations, the most directly comparable GAAP measure)
• Company received insurance litigation settlement proceeds of $149.3 million; bringing the total insurance proceeds from 2020 and 2021 cancelled and impacted events to $372.9 million
• Emerald bought back 1.6 million shares of common stock at an average price of $3.74 per share during the third quarter 2022
• Emerald’s Board of Directors approved an extension and expansion of the Company’s share repurchase program which allows for the repurchase of $20.0 million of the Company’s common stock through December 31, 2023
• Emerald ended the quarter with $366.1 million in cash and full availability of its $110 million revolving credit facility
Third Quarter 2022 Financial Performance
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | Change | % Change | 2022 | 2021 | Change | % Change | |||||||||||||||
| (unaudited, dollars in millions, except percentages and per share data) | ||||||||||||||||||||||
| Revenues | $ | 62.4 | $ | 76.5 | $ | (14.1 | ) | (18.4 | %) | $ | 232.3 | $ | 104.4 | $ | 127.9 | 122.5 | % | |||||
| Net income (loss) | $ | 93.0 | $ | (9.0 | ) | $ | 102.0 | NM | $ | 108.4 | $ | (70.8 | ) | $ | 179.2 | NM | ||||||
| Net cash provided by<br> operating activities | $ | 153.5 | $ | 9.6 | $ | 143.9 | 1,499.0 | % | $ | 198.7 | $ | 36.3 | $ | 162.4 | 447.4 | % | ||||||
| Diluted income (loss) per share | $ | 0.41 | $ | (0.25 | ) | $ | 0.66 | NM | $ | 0.40 | $ | (1.35 | ) | $ | 1.75 | NM | ||||||
| Non-GAAP measures: | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 149.7 | $ | 8.6 | $ | 141.1 | 1,640.7 | % | $ | 214.5 | $ | (6.4 | ) | $ | 220.9 | NM | ||||||
| Adjusted EBITDA excluding event cancellation insurance proceeds | $ | (1.3 | ) | $ | 7.5 | $ | (8.8 | ) | NM | $ | 31.7 | $ | (23.9 | ) | $ | 55.6 | NM | |||||
| Free Cash Flow | $ | 150.9 | $ | 7.7 | $ | 143.2 | 1,859.7 | % | $ | 191.2 | $ | 32.1 | $ | 159.1 | 495.6 | % |
Hervé Sedky, Emerald’s President and Chief Executive Officer, said, “The continued strong fundamentals in B2B trade shows provide clear evidence of the strength of the post-COVID recovery taking place in our industry. Exhibitor and attendee counts, as well as space rates are all on the rise across the vast majority of our shows, reflecting the irreplaceable value that in-person events offer our customers in the form of high-quality lead generation and return on investment for marketing budgets. Emerald is exceptionally well-positioned to take advantage of the recovery given the investments we’ve made in our technology stack and our unparalleled first-party data advantages. We remain focused on our three strategic priorities of portfolio optimization, customer centricity, and 365-day engagement as we continue to scale the Emerald platform using all available internal and external growth levers. We believe the attractive cash flow-generating features of our business, portfolio of must-attend events, and balance sheet position Emerald to outpace the industry’s growth trajectory and put us on course to be the leading consolidator of trade shows. On a personal level, I never lose sight of our customers and their needs, especially those of small businesses that often get overlooked.”
David Doft, Emerald’s Chief Financial Officer, added, “Our strong balance sheet and liquidity position, supported by significant free cash flow generation, give us the foundational elements to continue investing in Emerald through M&A and organic growth. Over the past two years, we have substantially added to our portfolio through strategic acquisitions in e-commerce and high-growth brands while also investing in our in-house resources to drive the incremental value our customers get from the Emerald platform including both our core trade show business and our complementary data, content, and marketplace offerings. As we progress into next quarter and beyond, we expect to see less variability in our comparable period results as the timing of events impacted by COVID has normalized. Notably, Q3 2022 had fewer shows than the prior year period as several events typically held in the first half of 2021 shifted to Q3 2021, as COVID restrictions began to be lifted across the country. Excluding the proceeds received from event cancellation insurance as well as the litigation settlement, we remain on track to generate in excess of $300 million of revenue, and $50 million of Adjusted EBITDA, while the impact of higher interest rates are expected to affect free cash flow, which we now expect to fall between $60 million and $70 million in 2022. We also continue to track towards $100 million or more of Adjusted EBITDA in 2023, where we are already selling events into the third quarter.”
Financial & Operational Results, Quarter Ended September 30, 2022
For the third quarter of 2022, Emerald reported revenues of $62.4 million compared to revenues of $76.5 million for the third quarter of 2021, a decrease of $14.1 million or 18.4%. The primary driver of the higher revenue in 2021 was $32.8 million in revenues related to an unusually large number of events in the third quarter of 2021, representing events that typically stage in the first half of the year that were moved to the third quarter in 2021 due to COVID-19. Events that staged in the third quarter of 2022 but had been cancelled in the prior year due to COVID-19 generated incremental revenues of $3.2 million. Organic revenues were $56.6 million in the third quarter of 2022, representing organic revenue growth of $14.2 million, or 33.5%, as compared to the prior year third quarter organic revenues of $42.4 million. The growth was due primarily to an $11.9 million, or 38.3%, increase in revenues from events that traded in both the third quarter of 2022 and 2021, $2.1 million from newly launched events and $1.0 million from increased subscription software revenues offset by softness in other marketing services. Acquisitions that closed after the third quarter of 2021 generated incremental revenues of $2.6 million. Organic revenues were $152.2 million for the nine months ended September 30, 2022, representing organic growth of $45.2 million, or 42.2%, as compared to organic revenues of $107.0 million in the prior year. The growth was due primarily to a $37.8 million, or 54.3%, increase in revenues from events that traded in both the nine months ended September 30, 2022 and 2021, $4.5 million from newly launched events and $2.8 million from increased subscription software revenues.
The Company recognized net income of $93.0 million for the third quarter of 2022 compared to net loss of $9.0 million for the third quarter of 2021. The improvement was primarily attributable to the $149.9 million increase in Other income, net, related to the insurance litigation settlement proceeds received in the third quarter of 2022, offset by increased income tax expense. A decrease in revenues and
net income related to 2021 events that were postponed until the third quarter in the prior year due to COVID-19 was offset by strong organic growth in events that traded in the third quarter of both 2022 and 2021.
For the third quarter of 2022, Adjusted EBITDA was $149.7 million, compared to $8.6 million for the third quarter of 2021. The increase in Adjusted EBITDA of $141.1 million was mainly due to the insurance litigation settlement proceeds offset by lower Adjusted EBITDA related to the timing of third quarter 2021 and 2022 trade shows described above. Excluding the insurance litigation settlement proceeds, Adjusted EBITDA for the third quarter of 2022 would have been ($1.3 million), compared to Adjusted EBITDA excluding event cancellation insurance proceeds of $7.5 million for the third quarter of 2021. When normalized for the $13.3 million impact of events that had been postponed from their typical dates earlier in the year due to COVID-19, Adjusted EBITDA for the third quarter of 2021 would have been negative $4.7 million.
For a discussion of the Company’s presentation of Organic revenues and Adjusted EBITDA, including Adjusted EBITDA excluding event cancellation insurance proceeds, 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 and Adjusted EBITDA excluding event cancellation insurance proceeds to net loss (discussed in the second and third paragraphs of this section), the most directly comparable GAAP measure.
Insurance Litigation Settlement
On August 3, 2022, the Company reached an agreement to settle outstanding insurance litigation relating to 2020 and 2021 coverage under its event cancellation insurance policies. As a result, the Company received a total settlement of $149.3 million, of which, $148.6 million was recognized as Other income, net during the third quarter of 2022. Total Other income, net, for the quarter of $151.0 million, included the settlement amount of $148.6 million and insurance claim payments of $2.4 million, which were received in July.
In total, since the beginning of the pandemic, Emerald submitted insurance claims of approximately $348.4 million, which represents the net amount of expected gross revenues less avoided costs for cancelled events scheduled to take place during 2020 and 2021. Insurance claim payments received total $223.6 million. Including the litigation settlement amount, total payments received are $372.9 million. Other income, net, including the litigation settlement amount, totals $367.1 million.
Cash Flow
Net cash provided by operating activities was $153.5 million in the third quarter of 2022, compared to $9.6 million in the comparable period of the prior year. This increase is primarily due to the receipt of insurance litigation settlement proceeds of $149.3 million during the third quarter of 2022.
Capital expenditures were $2.6 million for the third quarter of 2022, compared to $1.9 million for the third quarter of 2021.
Free Cash Flow, which the Company defines as net cash provided by operating activities less capital expenditures, was $150.9 million in the third quarter of 2022, compared to $7.7 million in the third quarter of 2021. Excluding the insurance litigation settlement proceeds and other items, Free Cash Flow for the third quarter of 2022 was $6.2 million, compared to $8.2 million for the third quarter of 2021. Consistent with the impact on Adjusted EBITDA, Free Cash Flow for the third quarter of 2021 was inflated due to the temporarily high number of events that staged during the period that had been postponed from their typical dates earlier in the year due to COVID-19.
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 $20.0 million of our Common Stock through December 31, 2023. The Company bought back 1.6 million shares of common stock at an average price of $3.74 per share during the third quarter 2022. Since the beginning of 2021, the Company has bought back 5.3 million shares of common stock. Prior to this expansion, Emerald had $9.2 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 2022 results at 8:30 am EDT on November 3, 2022.
The conference call can be accessed by dialing 1-888-999-5318 (domestic) or 1-848-280-6460 (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 is11152746. The replay will be available until 11:59 pm (Eastern Time) on November 10, 2022.
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, (iii) material show scheduling adjustments and (iv) event cancellations for which the Company has received, or expects to receive, claim proceeds from its event cancellation insurance policy. 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, (vii) material show scheduling adjustments, where applicable, and (viii) 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 2022 and 2021 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 2022 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.
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 expectations arising from the severe impact of COVID-19 and related variants on our business; our ability to continue staging live events and return our business to pre-COVID levels; our guidance with respect to estimated revenues and Adjusted EBITDA, including Adjusted EBITDA excluding event cancellation insurance proceeds; our ability to recover insurance proceeds under current policies and the timing of any such recoveries; the timing for rescheduled trade show events; and our ability to successfully identify and acquire acquisition targets and 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 (Loss) Income and Comprehensive (Loss) Income
(unaudited, dollars in millions, share data in thousands, except loss per share data)
| Three Months Ended<br>September 30, <br>2022 | Three Months Ended<br>September 30, <br>2021 | Nine Months Ended<br>September 30, <br>2022 | Nine Months Ended<br>September 30, <br>2021 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | $ | 62.4 | $ | 76.5 | $ | 232.3 | $ | 104.4 | ||||
| Other income, net | 151.0 | 1.1 | 182.8 | 17.5 | ||||||||
| Cost of revenues | 22.7 | 33.7 | 83.3 | 41.3 | ||||||||
| Selling, general and administrative expense | 48.7 | 38.8 | 127.6 | 102.7 | ||||||||
| Depreciation and amortization expense | 14.7 | 12.2 | 43.0 | 36.1 | ||||||||
| Goodwill impairment charges | — | — | 6.3 | — | ||||||||
| Intangible asset impairment charges | — | — | 1.6 | — | ||||||||
| Operating income (loss) | 127.3 | (7.1 | ) | 153.3 | (58.2 | ) | ||||||
| Interest expense | 6.8 | 3.9 | 15.5 | 12.0 | ||||||||
| Interest income | 0.8 | — | 1.1 | 0.1 | ||||||||
| Other expense | 0.1 | — | 0.2 | 0.1 | ||||||||
| Income (loss) before income taxes | 121.2 | (11.0 | ) | 138.7 | (70.2 | ) | ||||||
| Provision for (benefit from) income taxes | 28.2 | (2.0 | ) | 30.3 | 0.6 | |||||||
| Net income (loss) and comprehensive income (loss) attributable to Emerald Holding, Inc. | $ | 93.0 | $ | (9.0 | ) | $ | 108.4 | $ | (70.8 | ) | ||
| Accretion to redemption value of redeemable convertible preferred stock | (9.9 | ) | (9.0 | ) | (28.7 | ) | (26.3 | ) | ||||
| Participation rights on if-converted basis | (54.7 | ) | — | (51.9 | ) | — | ||||||
| Net income (loss) and comprehensive income (loss) attributable to Emerald Holding, Inc. common stockholders | $ | 28.4 | $ | (18.0 | ) | $ | 27.8 | $ | (97.1 | ) | ||
| Basic income (loss) per share | 0.42 | (0.25 | ) | 0.40 | (1.35 | ) | ||||||
| Diluted income (loss) income per share | 0.41 | (0.25 | ) | 0.40 | (1.35 | ) | ||||||
| Basic weighted average common shares outstanding | 68,433 | 71,033 | 69,479 | 71,719 | ||||||||
| Diluted weighted average common shares outstanding | 68,643 | 71,033 | 69,588 | 71,719 |
Emerald Holding, Inc.
Condensed Consolidated Balance Sheets
(dollars in millions, share data in thousands, except par value)
| December 31,<br>2021 | |||||
|---|---|---|---|---|---|
| Assets | |||||
| Current assets | |||||
| Cash and cash equivalents | 366.1 | $ | 231.2 | ||
| Trade and other receivables, net of allowances of 1.5 million and 1.2 million, as of September 30, 2022 and December 31, 2021, respectively | 82.8 | 46.4 | |||
| Prepaid expenses | 18.6 | 12.5 | |||
| Total current assets | 467.5 | 290.1 | |||
| Noncurrent assets | |||||
| Property and equipment, net | 4.0 | 3.7 | |||
| Intangible assets, net | 216.7 | 236.7 | |||
| Goodwill | 545.5 | 514.2 | |||
| Right-of-use assets | 14.5 | 15.1 | |||
| Other noncurrent assets | 2.6 | 2.6 | |||
| Total assets | 1,250.8 | $ | 1,062.4 | ||
| Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Deficit | |||||
| Current liabilities | |||||
| Accounts payable and other current liabilities | 65.0 | $ | 48.3 | ||
| Income taxes payable | 28.0 | — | |||
| Cancelled event liabilities | 4.4 | 9.8 | |||
| Deferred revenues | 166.7 | 118.1 | |||
| Contingent consideration | 28.5 | 5.1 | |||
| Right-of-use liabilities, current portion | 4.9 | 4.7 | |||
| Term loan, current portion | 5.7 | 5.7 | |||
| Total current liabilities | 303.2 | 191.7 | |||
| Noncurrent liabilities | |||||
| Term loan, net of discount and deferred financing fees | 507.6 | 510.9 | |||
| Deferred tax liabilities, net | 2.0 | 1.5 | |||
| Right-of-use liabilities | 11.5 | 13.3 | |||
| Other noncurrent liabilities | 10.2 | 32.1 | |||
| Total liabilities | 834.5 | 749.5 | |||
| Commitments and contingencies | |||||
| Redeemable convertible preferred stock | |||||
| 7% Series A Convertible Participating Preferred stock, 0.01 par value; authorized shares September 30, 2022 and December 31, 2021; 80,000; 71,417 and 71,442 shares issued and outstanding; aggregate liquidation preference 467.7 million and 444.1 million at September 30, 2022 and December 31, 2021, respectively | 462.4 | 433.9 | |||
| Stockholders’ deficit | |||||
| Common stock, 0.01 par value; authorized shares at September 30, 2022 and December 31, 2021: 800,000; 67,642 and 70,026 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 0.7 | 0.7 | |||
| Additional paid-in capital | 619.7 | 653.2 | |||
| Accumulated deficit | (666.5 | ) | (774.9 | ) | |
| Total stockholders’ deficit | (46.1 | ) | (121.0 | ) | |
| Total liabilities, redeemable convertible preferred stock and stockholders’ deficit | 1,250.8 | $ | 1,062.4 |
All values are in US Dollars.
Schedule 1
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF REVENUES TO ORGANIC REVENUES
| Three Months Ended<br>September 30, | Change | Nine Months Ended<br>September 30, | Change | |||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | % | 2022 | 2021 | % | |||||||||||||||
| (dollars in millions)<br>(unaudited) | ||||||||||||||||||||
| Revenues | $ | 62.4 | $ | 76.5 | ) | (18.4 | %) | $ | 232.3 | $ | 104.4 | 122.5 | % | |||||||
| Add (deduct): | ||||||||||||||||||||
| Acquisition revenues | (2.6 | ) | (4.8 | ) | ||||||||||||||||
| COVID-19 prior year cancellations(1) | (3.2 | ) | (75.3 | ) | ||||||||||||||||
| COVID-19 prior year postponements(2) | — | (32.8 | ) | — | ||||||||||||||||
| Scheduling adjustments | — | (1.3 | ) | — | 2.6 | |||||||||||||||
| Organic revenues | $ | 56.6 | $ | 42.4 | 33.5 | % | $ | 152.2 | $ | 107.0 | 42.2 | % |
All values are in US Dollars.
Notes:
(1) Represents the increase in 2022 revenues as a result of events that staged in the current year and were cancelled due to COVID-19 in the prior year.
(2) Represents the decrease in revenues from events that staged in the first half of 2022 but were postponed due to COVID-19 in the prior year and staged in the third quarter of 2021.
(3) For the three months ended September 30, 2021, represents prior year revenues from events that are scheduled to stage in the fourth quarter of fiscal year 2022. For the nine months ended September 30, 2021, represents the impact of revenue from events that staged in the fourth quarter of 2021 and during the nine months ended September 30, 2022, offset by revenue from events that staged in the nine months ended September 30, 2021 and are scheduled for the fourth quarter of 2022.
Schedule 2
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF REVENUES TO DISAGGREGATED REVENUES
| Three Months Ended September 30, | Nine Months Ended<br>September 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||
| (dollars in millions) <br>(unaudited) | ||||||||
| Trade shows | $ | 37.6 | $ | 56.4 | $ | 166.7 | $ | 62.0 |
| Other events | 12.2 | 8.9 | 30.6 | 12.8 | ||||
| Subscription software and services | 4.6 | 3.7 | 13.1 | 9.4 | ||||
| Other marketing services | 8.0 | 7.5 | 21.9 | 20.2 | ||||
| Total Revenues | $ | 62.4 | $ | 76.5 | $ | 232.3 | $ | 104.4 |
Schedule 3
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | ||||||||
| (dollars in millions) <br>(unaudited) | |||||||||||
| Net income (loss) | $ | 93.0 | $ | (9.0 | ) | $ | 108.4 | $ | (70.8 | ) | |
| Add (deduct): | |||||||||||
| Interest expense, net | 6.0 | 3.9 | 14.4 | 11.9 | |||||||
| Provision for income taxes | 28.2 | (2.0 | ) | 30.3 | 0.6 | ||||||
| Goodwill impairment charge(1) | — | — | 6.3 | — | |||||||
| Intangible asset impairment charge(2) | — | — | 1.6 | — | |||||||
| Depreciation and amortization | 14.7 | 12.2 | 43.0 | 36.1 | |||||||
| Stock-based compensation | 1.3 | 2.4 | 5.0 | 8.2 | |||||||
| Deferred revenue adjustment | 0.2 | 0.3 | 0.6 | 1.4 | |||||||
| Other items(3) | 6.3 | 1.6 | 4.9 | 5.6 | |||||||
| Scheduling adjustments | — | (0.8 | ) | — | 0.6 | ||||||
| Adjusted EBITDA | $ | 149.7 | $ | 8.6 | $ | 214.5 | (6.4 | ) | |||
| Deduct: | |||||||||||
| Event cancellation insurance proceeds | 151.0 | 1.1 | 182.8 | 17.5 | |||||||
| Adjusted EBITDA excluding event cancellation insurance proceeds | $ | (1.3 | ) | $ | 7.5 | $ | 31.7 | $ | (23.9 | ) |
Notes:
(1) For the nine months ended September 30, 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 nine months ended September 30, 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 September 30, 2022 included: (i) $3.7 million in gains related to the remeasurement of contingent consideration; (ii) $0.6 million in transaction costs, primarily in connection with the Advertising Week and Bulletin acquisitions; (iii) $1.6 million in non-recurring legal, audit and consulting fees; (iv) $0.8 million in transition expenses and (v) $7.0 million in insurance settlement related expenses. Other items for the three months ended September 30, 2021 included: (i) $1.1 million in expense related to the remeasurement of contingent consideration; (ii) $0.4 million in non-recurring legal, audit and consulting fees and (iii) $0.1 million in transition costs in connection with previous acquisitions. Other items for the nine months ended September 30, 2022 included: (i) $9.5 million in gains related to the remeasurement of contingent consideration; (ii) $3.4 million in transaction costs, primarily in connection with the MJBiz, Advertising Week and Bulletin acquisitions; (iii) $2.0 million in non-recurring legal, audit and consulting fees; (iv) $1.9 million in transition expenses and (v) $7.0 million in insurance settlement related expenses. Other items for the nine months ended September 30, 2021 included: (i) $2.6 million in expense related to the remeasurement of contingent consideration; (ii) $2.2 million in non-recurring legal, audit and consulting fees; (iii) $0.4 million in transition costs in connection with previous acquisitions and (iv) $0.4 million in transaction costs in connection with PlumRiver LLC, EDspaces and Sue Bryce Education acquisitions.
Schedule 4
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (dollars in millions) (unaudited) | ||||||||||||
| Net Cash Provided by Operating Activities | $ | 153.5 | $ | 9.6 | $ | 198.7 | $ | 36.3 | ||||
| Less: | ||||||||||||
| Capital expenditures | 2.6 | 1.9 | 7.5 | 4.2 | ||||||||
| Free Cash Flow | $ | 150.9 | $ | 7.7 | $ | 191.2 | $ | 32.1 | ||||
| Event cancellation insurance proceeds | (151.0 | ) | (1.1 | ) | (182.8 | ) | (17.5 | ) | ||||
| Other items | 6.3 | 1.6 | 4.9 | 5.6 | ||||||||
| Free cash flow excluding event cancellation insurance proceeds and other items | $ | 6.2 | $ | 8.2 | $ | 13.3 | $ | 20.2 |
Schedule 5
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF REPORTABLE SEGMENTS RESULTS TO INCOME (LOSS) BEFORE TAXES
| Three Months Ended<br>September 30, | Nine Months Ended<br>September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (dollars in millions) <br>(unaudited) | ||||||||||||
| Revenues | ||||||||||||
| Commerce | $ | 33.9 | $ | 38.8 | $ | 110.3 | $ | 48.3 | ||||
| Design, Creative, and Technology | 23.0 | 34.8 | 108.1 | 48.0 | ||||||||
| All Other | 5.5 | 2.9 | 13.9 | 8.1 | ||||||||
| Total revenues | $ | 62.4 | $ | 76.5 | $ | 232.3 | $ | 104.4 | ||||
| Other income, net | ||||||||||||
| Commerce | $ | 2.4 | $ | 1.1 | $ | 8.0 | $ | 7.8 | ||||
| Design, Creative, and Technology | — | — | 25.3 | 9.2 | ||||||||
| All Other | — | — | 0.9 | 0.5 | ||||||||
| Total other income, net | $ | 2.4 | $ | 1.1 | $ | 34.2 | $ | 17.5 | ||||
| Adjusted EBITDA | ||||||||||||
| Commerce | $ | 16.0 | $ | 17.2 | $ | 57.6 | $ | 19.9 | ||||
| Design, Creative, and Technology | 2.5 | 4.2 | 57.0 | 7.3 | ||||||||
| All Other | (3.1 | ) | (0.5 | ) | (8.1 | ) | (0.1 | ) | ||||
| Subtotal Adjusted EBITDA | $ | 15.4 | $ | 20.9 | $ | 106.5 | $ | 27.1 | ||||
| General corporate and other expenses | (14.3 | ) | (11.5 | ) | (40.6 | ) | (34.0 | ) | ||||
| Other income, net | 148.6 | — | 148.6 | — | ||||||||
| Interest expense, net | (6.0 | ) | (3.9 | ) | (14.4 | ) | (12.0 | ) | ||||
| Goodwill impairment charges | — | — | (6.3 | ) | — | |||||||
| Intangible asset impairment charges | — | — | (1.6 | ) | — | |||||||
| Depreciation and amortization expense | (14.7 | ) | (12.2 | ) | (43.0 | ) | (36.1 | ) | ||||
| Stock-based compensation expense | (1.3 | ) | (2.4 | ) | (5.0 | ) | (8.2 | ) | ||||
| Deferred revenue adjustment | (0.2 | ) | (0.3 | ) | (0.6 | ) | (1.4 | ) | ||||
| Other items | (6.3 | ) | (1.6 | ) | (4.9 | ) | (5.6 | ) | ||||
| Income (loss) before taxes | $ | 121.2 | $ | (11.0 | ) | $ | 138.7 | $ | (70.2 | ) |
Emerald Holding, Inc. Third Quarter 2022 November 3, 2022 Exhibit 99.2
Notes Forward-Looking Statements This document contains certain forward-looking statements regarding Emerald Holding, Inc. (the “Company”), including, without limitation, the Company’s ability to continue staging live events and scale its business up to and beyond pre-COVID levels; the Company’s 2022 event revenue expectations; the Company’s 2022 and 2023 financial guidance expectations; and the Company’s ability to recover proceeds under its current event cancellation insurance policy and the timing and amount of any such insurance recoveries. These statements are based on management’s current expectations as well as estimates and assumptions prepared by management that, although they are believed to be reasonable, are inherently uncertain. These statements involve risks and uncertainties outside of the Company’s control that may cause actual results to differ materially. In particular, statements regarding the potential continuing impact of the pandemic outbreak of COVID-19 on the Company’s business and the expected return to organic growth; timing of receipt of proceeds relating to of the Company’s insurance litigation settlement and; projected recurring revenue from customer retention rates are each forward-looking statements. 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, or with respect to ongoing insurance recovery amounts.
Key 3Q 2022 Takeaways Event revenues are progressing toward, and in some cases exceeding, pre-pandemic levels, highlighting sustained demand for events; Emerald expects that almost one quarter of planned 2022 trade shows will exceed pre-pandemic revenues Trajectory of recovery on pace with forecast and supports outlook for $100+ million in EBITDA in 2023 Year-over-year Revenue comparison reflects impact of elevated trade show activity in Q3 of 2021 due to COVID-related shifts in timing of events from the first half of 2021 to Q3 2021 Events were back in their normal time slots in 2022, which means many events that staged in 3Q 2021, staged in the first half of this year Emerald continues to launch and acquire new products and services that are complementary to core business to better support customers year-round – including the recent acquisitions of Advertising Week and Bulletin 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 events staging
Revolutionizing the Trade Show Model Integrating technology and first party data to create a next-generation B2B platform Connections (85% of YTD 2022 revenues(1)) – Collection of leading B2B trade shows and conferences that bring together industry-specific communities Emerald’s Core Services 140+ Events | 1.9MM Active Customers | 15MM Website Visitors Content – B2B websites and publications that provide industry specific business news and information across 19 sectors Commerce – SaaS software enabling B2B buying and selling which averages over $1 billion per month of wholesale gross transaction volume (1) Through September 30, 2022. 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 19 industries Scaled B2B Marketplace Increased Cadence of Online and Hybrid Events Emerald Xcelerator Targeted Accretive M&A 365-Day Engagement 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 sell 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 Educational platform that bridges business and Web3 innovation Connects C-suite financial and technology executives with blue chip Web3 companies providing decentralized solutions Launching in 2023 Launching in October 2022 Food services event co-located with International Pizza Expo 176 exhibiting companies + 4,600 attendees Launched March 2022 8 Social 3rd Party Direct & Retail Digital Recent Acquisitions Over Prior 18 Months 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 with a global presence 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 Launching in November 2022 Media and events platform connecting researchers, entrepreneurs, investors, policymakers and healthcare professionals to responsibly grow the business of psychedelics
Year-to-Date 2022 Key Highlights 74 Trade Shows 282,000 Attendees 13,300 Exhibiting Companies Transaction closed June 2022 Premier global B2B event and thought leadership platform with a global presence Select 3Q 2022 Trade Shows Introduced new Emerald Xcelerator division in 2022 dedicated to launching dynamic brands that curate year-round communities through face-to-face and digital experiences Transaction closed July 2022 Leading wholesale marketplace connecting over 3,000 independent brands with over 26,000 retailers
10 Year-to-Date 2022 Financial Highlights and Current Liquidity Position Adj. EBITDA(1) Free Cash Flow(2) Net Income (Loss) Diluted Income (Loss) Per Share ($ in Millions) ($ in Millions) (1) See slide 14 of this presentation for a reconciliation of Net Income (Loss) to Adjusted EBITDA. (2) Excludes certain one-time items. See slide 15 of this presentation for a reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow. Earnings Results (YTD 9/30/2022) Revenues of $232.3 million Diluted earnings per share of $0.40 Net income of $108.4 million Adjusted EBITDA of $214.5 million(1) Free cash flow of $191.2 million(2) Free cash flow in 2021 reflects a working capital benefit from reopening of events and an insurance benefit in 2022 Highlights and Developments (YTD 9/30/2022) Company received $149.3 million from insurance litigation settlement bringing total proceeds from 2020 and 2021 cancelled and impacted events to $372.9 million Hosted 74 in-person trade shows Events accounted for 85% of revenues Acquired Advertising Week global event platform in June 2022 Acquired Bulletin online marketplace in July 2022 Balance Sheet (as of 9/30/2022) $366.1 million of cash and cash equivalents Full capacity available on $110 million revolving credit facility Repurchased 2.8 million shares of common stock in 2022 year-to-date Emerald experienced year over year growth across all categories as recovery momentum continues ($ in Millions) $214.5 ($23.9) Dotted lines include insurance proceeds $32.1 Dotted lines include insurance proceeds $191.2 ex insurance $20.2 $13.3 ex insurance ex insurance
On average, revenue per event is progressing toward normalized levels 74 trade shows staged YTD through 9/30/2022, compared to 42 for the same period of 2021. Qualified attendees and exhibiting companies trending toward pre-COVID levels Several 2022 events have exceeded pre-COVID revenues 2021 marked a return to positive free cash flow 11 COVID Recovery Driving Significant Re-Acceleration of Business Revenue ($ in Millions) YTD 2020 YTD 2021 Adjusted EBITDA ex-Insurance(2) ($ in Millions) (1) Free Cash Flow guidance excludes one-time items. See slide 15 of this presentation for a reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow. (2) See slide 14 of this presentation for a reconciliation of Net Income (Loss) to Adjusted EBITDA. YTD 2022 $300.0 (Full-Year Guidance) $50.0 (Full-Year Guidance) Guidance (All Excluding Event Cancellation Insurance Proceeds) FY 2022 Revenue to exceed $300 million FY 2022 Adjusted EBITDA to exceed $50 million FY 2022 Free Cash Flow to be $60 to $70 million(1) FY 2023 Preliminary Expectations Adjusted EBITDA to exceed $100 million
Common Shares Outstanding 67.6M Preferred Shares Liquidation Preference per Share as of Sept 30, 2022 $6.55 Initial Conversion Price / 3.52 Common Shares per Converted Preferred Share = 1.86 shares Convertible Preferred Shares Outstanding × 71.4M Additional Common Shares from Preferred Conversion = 132.9M Total Shares (as-converted basis) 200.5M Conservative Balance Sheet and Strong Liquidity: Capital Structure As of September 30, 2022 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 term loan outstanding balance plus current portion, unamortized discount of $1.0 million and unamortized deferred financing fees of $1.3 million. (2) Consolidated trailing twelve month EBITDA as of September 30, 2022 as defined in Amended and Restated Senior Secured Credit Facilities. Debt(1) $515.3 Cash and Cash Equivalents $366.1 Net Debt $149.2 Trailing Twelve Month EBITDA(2) $72.0 Net Debt / EBITDA 2.1x
Appendix
Adjusted EBITDA UNAUDITED RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA For the nine months ended September 30, 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 nine months ended September 30, 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 September 30, 2022 included: (i) $3.7 million in gains related to the remeasurement of contingent consideration; (ii) $0.6 million in transaction costs, primarily in connection with the Advertising Week and Bulletin acquisitions; (iii) $1.6 million in non-recurring legal, audit and consulting fees; (iv) $0.8 million in transition expenses and (v) $7.0 million in insurance settlement related expenses. Other items for the three months ended September 30, 2021 included: (i) $1.1 million in expense related to the remeasurement of contingent consideration; (ii) $0.4 million in non-recurring legal, audit and consulting fees and (iii) $0.1 million in transition costs in connection with previous acquisitions. Other items for the nine months ended September 30, 2022 included: (i) $9.5 million in gains related to the remeasurement of contingent consideration; (ii) $3.4 million in transaction costs, primarily in connection with the MJBiz, Advertising Week and Bulletin acquisitions; (iii) $2.0 million in non-recurring legal, audit and consulting fees; (iv) $1.9 million in transition expenses and (v) $7.0 million in insurance settlement related expenses. Other items for the nine months ended September 30, 2021 included: (i) $2.6 million in expense related to the remeasurement of contingent consideration; (ii) $2.2 million in non-recurring legal, audit and consulting fees; (iii) $0.4 million in transition costs in connection with previous acquisitions and (iv) $0.4 million in transaction costs in connection with PlumRiver LLC, EDspaces and Sue Bryce Education acquisitions. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (dollars in millions) (unaudited) Net income (loss) $ 93.0 $ (9.0 ) $ 108.4 $ (70.8 ) Add (deduct): Interest expense, net 6.0 3.9 14.4 11.9 Provision for income taxes 28.2 (2.0 ) 30.3 0.6 Goodwill impairment charge(1) — — 6.3 — Intangible asset impairment charge(2) — — 1.6 — Depreciation and amortization 14.7 12.2 43.0 36.1 Stock-based compensation 1.3 2.4 5.0 8.2 Deferred revenue adjustment 0.2 0.3 0.6 1.4 Other items(3) 6.3 1.6 4.9 5.6 Scheduling adjustments — (0.8 ) — 0.6 Adjusted EBITDA $ 149.7 $ 8.6 $ 214.5 (6.4 ) Deduct: Event cancellation insurance proceeds 151.0 1.1 182.8 17.5 Adjusted EBITDA excluding event cancellation insurance proceeds $ (1.3 ) $ 7.5 $ 31.7 $ (23.9 )
Free Cash Flow UNAUDITED RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (1) Includes Other items. Other items for the three months ended September 30, 2022 included: (i) $3.7 million in gains related to the remeasurement of contingent consideration; (ii) $0.6 million in transaction costs, primarily in connection with the Advertising Week and Bulletin acquisitions; (iii) $1.6 million in non-recurring legal, audit and consulting fees; (iv) $0.8 million in transition expenses and (v) $7.0 million in insurance settlement related expenses. Other items for the three months ended September 30, 2021 included: (i) $1.1 million in expense related to the remeasurement of contingent consideration; (ii) $0.4 million in non-recurring legal, audit and consulting fees and (iii) $0.1 million in transition costs in connection with previous acquisitions. Other items for the nine months ended September 30, 2022 included: (i) $9.5 million in gains related to the remeasurement of contingent consideration; (ii) $3.4 million in transaction costs, primarily in connection with the MJBiz, Advertising Week and Bulletin acquisitions; (iii) $2.0 million in non-recurring legal, audit and consulting fees; (iv) $1.9 million in transition expenses and (v) $7.0 million in insurance settlement related expenses. Other items for the nine months ended September 30, 2021 included: (i) $2.6 million in expense related to the remeasurement of contingent consideration; (ii) $2.2 million in non-recurring legal, audit and consulting fees; (iii) $0.4 million in transition costs in connection with previous acquisitions and (iv) $0.4 million in transaction costs in connection with PlumRiver LLC, EDspaces and Sue Bryce Education acquisitions. Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 (dollars in millions) (unaudited) Net Cash Provided by Operating Activities $ 153.5 $ 9.6 $ 198.7 $ 36.3 Less: Capital expenditures 2.6 1.9 7.5 4.2 Free Cash Flow (1) $ 150.9 $ 7.7 $ 191.2 $ 32.1