8-K
Emerald Holding, Inc. (EEX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, 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): September 14, 2022 (September 14, 2022)
Emerald Holding, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 001-38076 | 42-1775077 |
|---|---|---|
| (State or other jurisdiction<br><br><br>of incorporation) | (Commission<br><br><br>File Number) | (I.R.S. Employer<br><br><br>Identification No.) |
| 100 Broadway, 14th Floor<br><br><br>New York, NY | 10005 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (949) 226-5700
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><br><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 7.01 Regulation FD Disclosure.
On September 14, 2022, Emerald Holding, Inc. (“Emerald” or the “Company") issued a press release announcing the Company’s receipt of insurance litigation settlement proceeds. A copy of the press release is furnished herewith as Exhibit 99.1.
On September 14, 2022, Emerald also released an investor presentation (the "Investor Presentation") regarding current operations and financial results. The Investor Presentation will be used from time to time in meetings with investors. A copy of the Investor Presentation is furnished herewith as Exhibit 99.2.
The information disclosed pursuant to this Item 7.01 (including Exhibits 99.1 and 99.2) shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liability of that section and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibit.
| Exhibit No. | Description |
|---|---|
| 99.1<br><br><br>99.2<br><br><br><br><br><br>104 | Press Release of the Company, issued September 14, 2022.<br><br><br>Emerald Holding, Inc. Investor Presentation, dated September 2022.<br><br><br><br><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.
| Date: September 14, 2022 | EMERALD HOLDING, INC. | |
|---|---|---|
| By: | /s/ Stacey Sayetta | |
| Stacey Sayetta | ||
| General Counsel and Corporate Secretary |
eex-ex991_98.htm
Exhibit 99.1
Emerald Receives Final Proceeds Relating to Insurance Litigation Settlement
Company Receives Proceeds of $149.25 Million in Connection with Previously Announced Insurance Litigation Settlement, Bringing Total Proceeds Received Under Event Cancellation Policies to $372.9 Million
NEW YORK, NY. (September 14, 2022) — Emerald Holding, Inc. (NYSE: EEX) (“Emerald” or the “Company”) today announced that it has received proceeds totaling $149.25 million related to its previously announced insurance litigation settlement for canceled events under the Company’s 2020 and 2021 event cancellation insurance policies. Of the $149.25 million, $148.54 million is expected to be recognized as Other Income, net for the third quarter of 2022.
In total, Emerald has submitted insurance claims under its 2020 and 2021 event cancellation insurance policies 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. Including the $149.25 million litigation settlement payment, Emerald has received total proceeds under the 2020 and 2021 event cancellation insurance policies of $372.9 million.
Hervé Sedky, Emerald’s CEO commented, “We are pleased to have received the final proceeds relating to the settlement of our insurance litigation. The incremental cash not only helps further improve our already strong liquidity position but also allows us to focus all of our attention on building our business moving forward.”
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/.
Contacts
Emerald Holding, Inc Investor Relations
investor.relations@emeraldexpo.com
1-866-339-4688 (866EEXINVT)
Media Beth Cowperthwaite SVP, Communications 203-606-6243 Beth.Cowperthwaite@emeraldx.com
Emerald Holding, Inc. Investor Presentation September 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 beyond pre-COVID levels and the Company’s 2022 revenue and Adjusted EBITDA guidance. 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, are inherently uncertain. These statements involve risks and uncertainties outside of the Company’s control that may cause actual results 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. 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. 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. 2
Investment Highlights Our leading B2B events provide high ROI marketing and lead generation for businesses of all sizes: Leverage the network effect of our events, content and ecommerce software, driving traffic to each other and generating powerful first party intent data. Post-Pandemic Recovery Play in Live Events: Emerald plans to scale its business beyond pre-pandemic baseline through new products and services; almost one quarter of planned 2022 trade shows expected to exceed pre-pandemic revenues. Multiple Organic and Inorganic Growth Avenues including 1) post-pandemic recovery, 2) ongoing event yield optimization and commercial initiatives, 3) new event launches, 4) improved content alignment, 5) fast-growing B2B SaaS commerce business, and 6) build on track record of accretive acquisitions. Strong Balance Sheet Supported by Substantial Free Cash Flow Generation: Expected $70 million of free cash flow in 2022; net proceeds of $148.5 million from insurance litigation settlement received in September 2022 contribute to lower net debt and enhanced liquidity. Seasoned Management Team: Emerald led by experienced and highly aligned management team with deep industry and public company expertise. 3
Revolutionizing the Trade Show Model Integrating technology and first party data to create a next-generation B2B platform Connections – 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 4
Enduring Value of Trade Shows 5 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 “It’s great to be back at the show after a two-year hiatus. The traffic and excitement at the booth has been energizing and a great reminder how important it is to be visible in order to give someone new the opportunity to discover your brand.” – 2022 Summer Outdoor Retailer exhibitor testimonial “Surf Expo is an integral part of the surf industry fabric. The digital world is providing great efficiencies but at the same time eroding personal interactions and relationships. Surf Expo offers the antidote, with the gathering of the tribe, the celebration of our passion and trade. Brands, media and retailers all have a responsibility to support this endeavor” – 2022 Surf Expo attendee testimonial In-person trade shows and events continue to be an integral part of businesses’ marketing budgets, and among the highest ROI. (1) Source: Bizzabo Event Marketing 2019: Benchmarks and Trends Report. (2) Source: CEIR, https://archive.foliomag.com/ceir-exhibitors-spend-24b-annually-events/. (3) Source: Statista Survey: SME Marketing 2016.
Multiple Entry Points to Customer Engagement Cycle Emerald offers several organic and inorganic growth avenues through 365-day engagement 6 365-Day Engagement Emerald strives for its customers to be engaged 365 days a year with our communities and products Capture new audiences and revenue streams outside of trade shows Provide gateways to other Emerald offerings by seamlessly integrating live and digital channels Leverage first-party data on customer engagement to continuously enhance value and ROI to exhibitors and attendees
New Capabilities Driving Tangible Outcomes The new workforce and work styles require a new approach Content Commerce Build awareness Reach the right prospects Generate qualified leads Generate meetings Educate and build buyer intelligence Generate opportunities that lead transactions Access contracts with open POs Enable repeat transactions Improved NPS scores Customer acquisition growth Improved retention Increased cross-selling Emerald’s Building Blocks 140+ Events | 1.9MM Active Customers | 15MM Website Visitors AI Recommendations Drive Success Emerald’s NEW Capabilities Connections 7 Outcomes Qualified and Ready To Purchase
Year-Round Buying and Selling First-Party Data Technology Stack Enables Full Customer Journey Proprietary technology and first-party data deliver actionable insights and measurable results to customers Live Events and Digital Content Transactions Core Services Data-Driven Lead Generation Conferences Trade Shows B2B Media Webinars 365-Day Engagement 8 Matchmaking Qualified Leads AI Recommendations Customer Database Immersive Experiences Augmented Talks Augmented Expos Face-2-Face Always-On B2B eCommerce Platform 3D Virtual Showrooms
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 9 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 Targeting high growth industries including mental health, decentralized finance and cannabis 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 10 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
Financial Results
Year-to-Date 2022 Key Highlights 12 Transaction closed June 2022 Premier global B2B event and thought leadership platform with a global presence Select 2Q 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
13 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 17 of this presentation for a reconciliation of Net Income (Loss) to Adjusted EBITDA. (2) See slide 18 of this presentation for a reconciliation of Net Cash Provided by (Used In) Operating Activities to Free Cash Flow. Emerald experienced year over year growth across all categories as recovery momentum continues ($ in Millions)
On average, revenue per event is returning toward normalized levels 59 trade shows staged in 1H 2022, compared to 10 in 1H 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 14 COVID Recovery Driving Significant Re-Acceleration of Business Revenue ($ in Millions) 1H 2020 1H 2021 Adjusted EBITDA ex-Insurance(1) ($ in Millions) (1) See slide 17 of this presentation for a reconciliation of Net Income (Loss) to Adjusted EBITDA. 1H 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 exceed $70 million FY 2023 Preliminary Expectations Adjusted EBITDA to exceed $100 million
Conservative Balance Sheet and Strong Liquidity: Capital Structure As of June 30, 2022 15 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 $1.1 million and unamortized deferred financing fees of $1.5 million.
Appendix
Adjusted EBITDA 17 UNAUDITED RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA (1) For the six months ended June 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 three months ended June 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 June 30, 2022 included: (i) $10.0 million in gains related to the remeasurement of contingent consideration; (ii) $2.0 million in transaction costs, primarily in connection with the MJBiz, Advertising Week and Bulletin acquisitions; (iii) $0.8 million in non-recurring legal, audit and consulting fees and (iv) $0.2 million in transition expenses. Other items for the three months ended June 30, 2021 included: (i) $1.1 million in expense related to the remeasurement of contingent consideration; (ii) $1.2 million in non-recurring legal, audit and consulting fees; (iii) $0.3 million in transition costs in connection with previous acquisitions and (iv) $0.2 million in transaction costs in connection with PlumRiver LLC and Sue Bryce Education acquisitions. Other items for the six months ended June 30, 2022 included: (i) $5.8 million in gains related to the remeasurement of contingent consideration; (ii) $2.9 million in transaction costs, primarily in connection with the MJBiz, Advertising Week and Bulletin acquisitions; (iii) $1.2 million in non-recurring legal, audit and consulting fees and (iv) $0.3 million in transition expenses. Other items for the six months ended June 30, 2021 included: (i) $1.5 million in expense related to the remeasurement of contingent consideration; (ii) $1.8 million in non-recurring legal, audit and consulting fees; (iii) $0.3 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.
Free Cash Flow 18 UNAUDITED RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW