Emerald Expositions Reports Second Quarter 2017 Financial Results
Emerald Expositions Events, Inc. (NYSE:EEX) (“Emerald”) today reported financial results for the second quarter ended June 30,
2017.
- Revenues increased 14.0% to $74.1 million, with organic growth of 4.6%, supplemented by acquisitive
growth
- Net loss increased by approximately $5.4 million to a net loss of $5.8 million, partly reflecting
costs incurred in the planned relocation of the Outdoor Retailer show in 2018
- Adjusted EBITDA, a non-GAAP measure, increased 17.3% to $29.1 million
- Adjusted Net Income, a non-GAAP measure, increased 62.0% to $12.8 million
- Completed the acquisition of the SIA Snow Show in May for purchase consideration of approximately $16
million
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Three Months
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Six Months
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Ended June 30,
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Ended June 30,
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| (in millions, except percentages and per share data) |
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2017 |
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2016 |
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Change |
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% Change |
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2017 |
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2016 |
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Change |
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% Change |
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Revenues
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$ |
74.1 |
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$ |
65.0 |
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$ |
9.1 |
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14.0 |
% |
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$ |
209.8 |
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$ |
192.8 |
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$ |
17.0 |
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8.8 |
% |
| Net (loss) income |
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$ |
(5.8 |
) |
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$ |
(0.4 |
) |
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$ |
(5.4 |
) |
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1350.0 |
% |
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$ |
22.5 |
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$ |
27.8 |
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$ |
(5.3 |
) |
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(19.0 |
)% |
| Diluted EPS |
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$ |
(0.08 |
) |
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$ |
(0.01 |
) |
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$ |
(0.07 |
) |
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700.0 |
% |
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$ |
0.33 |
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$ |
0.44 |
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$ |
(0.11 |
) |
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(25.0 |
)% |
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| Non-GAAP measures: |
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| Adjusted EBITDA |
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$ |
29.1 |
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$ |
24.8 |
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$ |
4.3 |
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17.3 |
% |
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$ |
102.0 |
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$ |
96.4 |
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$ |
5.6 |
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|
5.8 |
% |
| Adjusted Net Income |
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$ |
12.8 |
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$ |
7.9 |
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$ |
4.9 |
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62.0 |
% |
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$ |
51.3 |
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$ |
43.7 |
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$ |
7.6 |
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17.4 |
% |
| Adjusted Diluted EPS |
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$ |
0.18 |
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$ |
0.12 |
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$ |
0.06 |
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50.0 |
% |
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$ |
0.75 |
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$ |
0.69 |
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$ |
0.06 |
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|
8.7 |
% |
| Free Cash Flow |
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$ |
20.6 |
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$ |
39.5 |
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$ |
(18.9 |
) |
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(47.8 |
)% |
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$ |
49.1 |
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$ |
68.9 |
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$ |
(19.8 |
) |
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(28.7 |
)% |
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Second Quarter and Year-to-Date 2017 Financial Performance
“We delivered a very solid financial performance this quarter, with a 14% increase in revenue, including mid-single digit
organic revenue growth, and an Adjusted EBITDA increase of 17%,” said David Loechner, President and Chief Executive Officer of
Emerald. “Additionally, our acquisition of the SIA Snow Show in the quarter was a significant coup as it brings together the two
leading US trade shows in the winter lifestyle & outdoor sports sector, Outdoor Retailer and the SIA show.”
Financial & Operational Results
For the second quarter of 2017, Emerald reported revenues of $74.1 million compared to revenues of $65.0 million for the second
quarter of 2016, an increase of approximately $9.1 million, or 14.0%. The increase in revenues reflected organic growth of 4.6%,
with the balance driven by acquisitions.
Cost of revenues of $21.6 million for the second quarter of 2017 increased by 10.2%, or approximately $2.0 million, from $19.6
million for the second quarter of 2016. This increase was mainly attributable to $1.4 million of incremental costs associated with
acquisitions, with the remaining $0.6 million attributable to a small show launch and modest other cost growth.
Selling, General & Administrative expense (SG&A) of $34.5 million for the second quarter of 2017 increased by 51.3%, or
approximately $11.7 million, from $22.8 million for the second quarter of 2016. The 2017 second quarter expense included
approximately $8.5 million of one-time costs to settle various contractual commitments associated with the relocation of the
Outdoor Retailer show from Salt Lake City to Denver in 2018. In addition, transaction costs of $1.1 million were $0.4 million
higher than the second quarter of 2016, and we also incurred $0.4 million of one-time IPO related costs in the quarter. The
SG&A of acquisitions contributed approximately $1.4 million of incremental costs, and the remaining $1.0 million increase in
SG&A mainly reflected higher compensation and marketing costs.
Net loss for the second quarter of 2017 increased by approximately $5.4 million to a loss of $5.8 million from $0.4 million in
the second quarter of 2016. The variance was largely driven by the increased settlement costs and transaction costs noted above in
SG&A, and also $6.1 million of charges related to the refinancing of the Company’s credit facility after our initial public
offering, partly offset in the quarter’s interest expense by lower interest paid on the Company’s debt.
For the second quarter of 2017, Adjusted EBITDA was $29.1 million compared to $24.8 million for the second quarter of 2016, an
increase of approximately $4.3 million or 17.3%. This performance reflected the period’s strong revenue growth and modest margin
improvement.
For a discussion of our presentation of Adjusted EBITDA, which is a non-GAAP measure, see below under the heading “Non-GAAP
Financial Information”. For a reconciliation of Adjusted EBITDA to net income see Appendix I attached hereto.
Cash Flow
Net cash provided by operations decreased by approximately $19.1 million to $20.9 million in the second quarter of 2017 compared
to $40.0 million in the second quarter of 2016. The Company estimates that the previously noted one-time contract settlement costs
for Outdoor Retailer, higher transaction costs, and certain IPO related cash flows accounted for approximately $8.5 million of the
decrease, while cash taxes of $1.6 million were $0.4 million higher than in the second quarter of 2016. Cash interest payments were
approximately $8.2 million lower than the same quarter last year, although this benefit was offset by $6.1 million of refinancing
charges. The balance of the adverse variance in net cash from operations, approximately $12.3 million, was partly due to lower cash
collections for several of the third quarter shows, where revenues are projected to be lower this year due to the factors
highlighted during our last quarter’s results call. The balance of the shortfall was due to timing and other normal operating
factors.
Capital expenditures were $0.3 million for the second quarter of 2017, compared to $0.6 million for the second quarter of
2016.
Free Cash Flow, which we define as net cash provided by operating activities less capital expenditures, was $20.6 million for
the second quarter of 2017, compared to $39.5 million in the second quarter of 2016.
For a discussion of our presentation of Free Cash Flow, see below under the heading “Non-GAAP Financial Information”. For a
reconciliation of Free Cash Flow to net cash provided by operating activities, see Appendix I attached hereto.
Financial Position
On May 3, 2017, the Company applied the net proceeds of $159.1 million from the April 28, 2017 initial public offering to reduce
amounts outstanding under its term loan facility. On May 22, 2017, we refinanced our credit facility to reduce the interest rate
payable, significantly extend the maturity profile, achieve more favorable terms and increase the revolver commitments. The new
$565.0 million 7-year term loan B has an interest rate of LIBOR + 300 basis points, which is 75 basis points lower than our
previous rate, with a step-down to LIBOR + 275 basis points upon achieving a first lien net leverage ratio of 2.75 times. We also
established a new $150 million 5-year revolving credit facility, representing an increase of $50 million over the Company’s
previous revolving credit facility.
As of June 30, 2017, Emerald’s cash and cash equivalents were $9.9 million and gross debt was $565.0 million. Net debt (gross
debt less cash and cash equivalents) was $555.1 million and Emerald’s net debt leverage ratio at the end of the quarter was 3.4
times Acquisition Adjusted EBITDA for the twelve months ended June 30, 2017 of $164.4 million. The Company has conservatively
chosen not to include the pro forma Adjusted EBITDA of the SIA Snow Show, acquired in May, in the Acquisition Adjusted EBITDA at
June 30, 2017.
For a discussion of our presentation of Acquisition Adjusted EBITDA, which is a non-GAAP measure, see below under the heading
“Non-GAAP Financial Information”. For a reconciliation of Acquisition Adjusted EBITDA to net income see Appendix I attached
hereto.
Capital Allocation
On May 24, 2017, we announced the acquisition of the SIA Snow Show from the SnowSports Industries America (SIA) for cash
consideration of approximately $16 million. This acquisition brings together the industry’s two premier winter sports trade show
brands, Outdoor Retailer and the Snow Show, under the Emerald umbrella at a single January event. The first combined winter show
will be held in Denver in January 2018.
“It was no small feat to bring together these long-established shows,” noted Mr. Loechner. “This combining of the shows is what
the industry has requested for many years, and the fact that this will happen as soon as January 2018 has been very well received
by the market since our announcement of the acquisition in May. Importantly, this acquisition provides a more certain path for our
move to a three-shows-per-year format, solves a venue problem that arose this year that was not of our making, and advances Outdoor
Retailer’s long-term leadership position in this market space.”
On July 31, 2017, the Board of Directors approved the payment of a cash dividend of $0.07 per share for the quarter ending
September 30, 2017 to holders of the Company’s common stock. The dividend is expected to be paid on or about August 31, 2017 to
stockholders of record on August 17, 2017.
Outlook (forward-looking statement)
For the year ending December 31, 2017, Emerald management expects reported and organic revenues to trend towards the lower end
of the previously provided guidance, and Adjusted EBITDA to trend just below the midpoint of the previously provided guidance,
outlined below:
- Total revenue growth of 7.5% to 9.5%, or $348 million to $355 million
- Organic revenue growth of zero percent to 2.0%
- Adjusted EBITDA of $154 million to $160 million, or growth of 1.2% to 5.2%
The above outlook assumes no further acquisitions or unanticipated events. See discussion of non-GAAP financial measures at the
end of this release.
Conference Call and Webcast Details
The Company will hold a conference call to discuss its second quarter 2017 results at 11:00 am EDT on August 3, 2017. The
conference call can be accessed by dialing 1-877-407-9039 (domestic) or 1-201-689-8470 (international). A telephonic replay will be
available approximately two hours after the call by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The
passcode for the replay is 13665556. The replay will be available until 11:59 pm EDT on August 10, 2017.
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.emeraldexpositions.com. The online replay will be available on the same website immediately
following the call.
About Emerald Expositions
Emerald is the largest operator of business-to-business trade shows in the United States by net square footage
(“NSF”), with most of our trade shows dating back several decades. Emerald currently operates more than 50 trade shows, as well as
numerous other events. In 2016, Emerald’s events connected over 500,000 global attendees and exhibitors and occupied over 6.5
million NSF of exhibition space.
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 Appendix I attached hereto.
We use Adjusted EBITDA and Acquisition Adjusted EBITDA because we believe they assist 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 and Acquisition
Adjusted EBITDA to assess our financial performance and believe they are helpful in highlighting trends because they exclude 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.
Further, our executive incentive compensation is based in part on Acquisition Adjusted EBITDA. In addition, we use Acquisition
Adjusted EBITDA for purposes of calculating compliance with our debt covenants in our senior secured credit facilities. Adjusted
EBITDA and Acquisition Adjusted EBITDA should not be considered as alternatives 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) loss on extinguishment of debt, (iii) income tax
expense, (iv) depreciation and amortization, (v) stock-based compensation, (vi) deferred revenue adjustment, (vii) intangible asset
impairment charge, (viii) unrealized loss on interest rate swap and floor, net, (ix) the Onex management fee (which ended prior to
the Company’s initial public offering) and (x) other items that management believes are not part of our core operations. We define
Acquisition Adjusted EBITDA as Adjusted EBITDA for each period presented as further adjusted for the results of shows associated
with acquisitions made during such period as if they had been completed as of the first day of the period presented.
In addition to net income presented in accordance with GAAP, we present Adjusted Net Income because we believe it assists
investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items
that we do not believe are indicative of our core operating performance. Our presentation of Adjusted Net Income adjusts net income
for (i) loss on extinguishment of debt, (ii) stock-based compensation, (iii) deferred revenue adjustment, (iv) intangible asset
impairment charge, (v) the Onex management fee, (vi) other items that management believes are not part of our core operations,
(vii) amortization of deferred financing fees and discount, (viii) amortization of (acquired) intangible assets and (ix) tax
adjustments related to non-GAAP adjustments.
We use Adjusted Net Income as a supplemental metric to evaluate our business’s performance in a way that also considers our
ability to generate profit without the impact of certain items.
For example, it is useful to exclude stock-based compensation expenses because the amount of such expenses in any specific
period may not directly correlate to the underlying performance of our business, and these expenses can vary significantly across
periods due to timing of new stock-based awards. We also exclude professional fees associated with debt refinancing, the
amortization of intangible assets and certain discrete costs, including deferred revenue adjustments, impairment charges and
transaction costs (including professional fees and other expenses associated with acquisition activity) in order to facilitate a
period-over-period comparison of our financial performance. This measure also reflects an adjustment for the difference between
cash amounts paid in respect of taxes and the amount of tax recorded in accordance with GAAP. Each of the normal recurring
adjustments and other adjustments described in this paragraph help to provide management with a measure of our operating
performance over time by removing items that are not related to day-to-day operations or are noncash expenses.
Adjusted Net Income is a supplemental non-GAAP financial measure of operating performance and is not based on any standardized
methodology prescribed by GAAP. Adjusted Net Income should not be considered in isolation or as an alternative to net income, cash
flows from operating activities or other measures determined in accordance with GAAP. Also, Adjusted Net Income is not necessarily
comparable to similarly titled measures presented by other companies.
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 certain forward-looking statements, including full year guidance with respect to revenue and
Adjusted EBITDA. These statements are based on management’s expectations as well as estimates and assumptions prepared by
management that, although they believe to be reasonable, are inherently uncertain. 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 prospectus dated April 27, 2017 and
filed with the Securities and Exchange Commission pursuant to Rule 424(b)(4) of the Securities Act of 1933, as amended, on May 1,
2017. 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.
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Emerald Expositions Events, Inc.
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Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income
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(unaudited, in thousands, except earnings per share)
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Three Months
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Three Months
|
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Six Months
|
|
|
Six Months
|
|
|
Ended June 30,
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|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
Ended June 30,
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2017
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|
2016
|
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|
2017
|
|
|
2016
|
| Revenues |
|
$ |
74,139 |
|
|
$ |
64,974 |
|
|
$ |
209,793 |
|
|
$ |
192,770 |
| Cost of revenues |
|
|
21,569 |
|
|
|
19,564 |
|
|
|
58,158 |
|
|
|
51,408 |
| Selling, general and administrative expense |
|
|
34,545 |
|
|
|
22,782 |
|
|
|
66,510 |
|
|
|
49,174 |
| Depreciation and amortization expense |
|
|
10,827 |
|
|
|
9,931 |
|
|
|
21,402 |
|
|
|
19,874 |
| Operating income |
|
|
7,198 |
|
|
|
12,697 |
|
|
|
63,723 |
|
|
|
72,314 |
| Interest expense |
|
|
16,849 |
|
|
|
13,260 |
|
|
|
26,497 |
|
|
|
26,295 |
| Loss on extinguishment of debt |
|
|
216 |
|
|
|
— |
|
|
|
216 |
|
|
|
— |
| (Loss) income before income taxes |
|
|
(9,867 |
) |
|
|
(563 |
) |
|
|
37,010 |
|
|
|
46,019 |
|
(Benefit) from/provision for income taxes
|
|
|
(4,053 |
) |
|
|
(193 |
) |
|
|
14,477 |
|
|
|
18,213 |
| Net (loss) income and comprehensive (loss) income |
|
$ |
(5,814 |
) |
|
$ |
(370 |
) |
|
$ |
22,533 |
|
|
$ |
27,806 |
| Basic (loss) earnings per share |
|
$ |
(0.08 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.34 |
|
|
$ |
0.45 |
| Diluted (loss) earnings per share |
|
$ |
(0.08 |
) |
|
$ |
(0.01 |
) |
|
$ |
0.33 |
|
|
$ |
0.44 |
| Basic weighted average common shares outstanding |
|
|
69,102 |
|
|
|
61,860 |
|
|
|
65,484 |
|
|
|
61,854 |
| Diluted weighted average common shares outstanding |
|
|
69,102 |
|
|
|
61,860 |
|
|
|
68,393 |
|
|
|
63,072 |
| |
|
Emerald Expositions Events, Inc.
|
|
Condensed Consolidated Balance Sheets
|
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(in thousands, except par value)
|
| |
|
|
June 30,
|
|
|
December 31,
|
|
|
2017
|
|
|
2016
|
|
|
(Unaudited) |
|
|
|
|
| Assets |
|
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
9,945 |
|
|
|
$ |
14,942 |
|
|
Trade and other receivables, net of allowance for doubtful accounts of
$523 and $693 as of June 30, 2017 and December 31, 2016, respectively
|
|
|
70,031 |
|
|
|
|
57,576 |
|
| Prepaid expenses |
|
|
14,011 |
|
|
|
|
23,044 |
|
| Total current assets |
|
|
93,987 |
|
|
|
|
95,562 |
|
| Noncurrent assets |
|
|
|
|
|
|
|
| Property and equipment, net |
|
|
3,626 |
|
|
|
|
3,778 |
|
| Goodwill |
|
|
971,537 |
|
|
|
|
930,321 |
|
| Other intangible assets, net |
|
|
540,298 |
|
|
|
|
541,172 |
|
| Other noncurrent assets |
|
|
2,010 |
|
|
|
|
1,686 |
|
| Total assets |
|
$ |
1,611,458 |
|
|
|
$ |
1,572,519 |
|
| Liabilities and Shareholders’ Equity |
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
| Accounts payable and other current liabilities |
|
$ |
36,446 |
|
|
|
$ |
28,234 |
|
| Deferred revenues |
|
|
160,979 |
|
|
|
|
171,644 |
|
| Term loan, current portion |
|
|
5,650 |
|
|
|
|
8,744 |
|
| Total current liabilities |
|
|
203,075 |
|
|
|
|
208,622 |
|
| Noncurrent liabilities |
|
|
|
|
|
|
|
| Term loan, net of discount and deferred financing fees |
|
|
550,135 |
|
|
|
|
693,322 |
|
| Deferred tax liabilities, net |
|
|
151,046 |
|
|
|
|
140,049 |
|
| Other noncurrent liabilities |
|
|
1,616 |
|
|
|
|
2,758 |
|
| Total liabilities |
|
|
905,872 |
|
|
|
|
1,044,751 |
|
| Commitments and contingencies |
|
|
|
|
|
|
|
| Shareholders’ equity |
|
|
|
|
|
|
|
|
Common stock, $0.01 par value; authorized shares: 800,000; issued and
outstanding shares: 72,202 and 61,860 at June 30, 2017 and
December 31, 2016, respectively
|
|
|
722 |
|
|
|
|
619 |
|
| Additional paid-in capital |
|
|
670,570 |
|
|
|
|
510,334 |
|
| Retained earnings |
|
|
34,294 |
|
|
|
|
16,815 |
|
| Total shareholders’ equity |
|
|
705,586 |
|
|
|
|
527,768 |
|
| Total liabilities and shareholders’ equity |
|
$ |
1,611,458 |
|
|
|
$ |
1,572,519 |
|
| |
|
Appendix I
|
|
Emerald Expositions Events, Inc.
|
|
Reconciliation of Non-GAAP Financial Measures (Unaudited)
|
|
(in thousands)
|
| |
|
|
Three months
|
|
|
Six months
|
|
|
Twelve months
|
|
|
ended June 30,
|
|
|
ended June 30,
|
|
|
ended
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
2016 |
|
|
June 30, 2017 |
|
December 31, 2016 |
|
|
(dollars in thousands) |
|
|
(dollars in thousands) |
|
|
(dollars in thousands) |
| Net (loss) income |
|
$ |
(5,814 |
) |
|
$ |
(370 |
) |
|
$ |
22,533 |
|
$ |
27,806 |
|
|
$ |
16,894 |
|
$ |
22,167 |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
16,849 |
|
|
|
13,260 |
|
|
|
26,497 |
|
|
26,295 |
|
|
|
51,602 |
|
|
51,400 |
| Loss on extinguishment of debt |
|
|
216 |
|
|
|
— |
|
|
|
216 |
|
|
— |
|
|
|
12,996 |
|
|
12,780 |
| (Benefit) from/provision for income taxes |
|
|
(4,053 |
) |
|
|
(193 |
) |
|
|
14,477 |
|
|
18,213 |
|
|
|
10,360 |
|
|
14,096 |
| Depreciation and amortization |
|
|
10,827 |
|
|
|
9,931 |
|
|
|
21,402 |
|
|
19,874 |
|
|
|
41,575 |
|
|
40,047 |
| Stock-based compensation |
|
|
564 |
|
|
|
866 |
|
|
|
1,146 |
|
|
1,621 |
|
|
|
2,423 |
|
|
2,898 |
| Deferred revenue adjustment |
|
|
24 |
|
|
|
— |
|
|
|
518 |
|
|
— |
|
|
|
821 |
|
|
303 |
|
Management fee
|
|
|
— |
|
|
|
188 |
|
|
|
188 |
|
|
375 |
|
|
|
563 |
|
|
750 |
| Other items(1) |
|
|
10,480 |
|
|
|
1,078 |
|
|
|
14,990 |
|
|
2,229 |
|
|
|
20,452 |
|
|
7,690 |
| Adjusted EBITDA |
|
$ |
29,093 |
|
|
$ |
24,760 |
|
|
$ |
101,967 |
|
$ |
96,413 |
|
|
$ |
157,686 |
|
$ |
152,131 |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Acquisitions(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,760 |
|
|
6,409 |
| Acquisition Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
164,446 |
|
$ |
158,540 |
| (1) |
|
Other items for the three months ended June 30, 2017 included: (i) $8.5 million in
contract termination costs (ii) $1.1 million in transaction costs in connection with certain acquisition transactions that were
completed or pending in 2017 and 2016, (ii) $0.3 million in legal, audit and consulting fees related to the IPO and other
related activities and (iii) $0.6 million in transition costs. Other items for the three months ended June 30, 2016 included:
(i) $0.8 million in transaction costs incurred in connection with certain acquisition transactions that were pending as well as
acquisitions that were pursued but not completed in the period and (ii) $0.3 million in transition costs, primarily related to
information technology and facility rental charges for terminated leases. Other items for the six months ended June 30, 2017
included: (i) $8.5 million in contract termination costs, (ii) $2.7 million in transaction costs in connection with certain
acquisition transactions that were completed or pending in 2017, (iii) $3.0 million in legal, audit and consulting fees related
to the IPO and other related activities and (iv) $0.8 million in transition costs. Other items for the six months ended June
30, 2016 included: (i) $1.6 million in transaction costs incurred in connection with certain acquisition transactions that were
pending as well as acquisitions that were pursued but not completed in the period and (ii) $0.6 million in transition costs,
primarily related to information technology and facility rental charges for terminated leases. Other items for the twelve
months ended June 30, 2017 included: (i) $8.5 in contract termination costs (ii) $5.1 million in transaction and contingent
compensation costs related to acquisitions that were pending or completed in 2016 and 2017, (iii) $4.5 million in legal, audit
and consulting fees related to the IPO and other related activities and (iv) $2.4 million in transition costs. Other items for
the twelve months ended December 31, 2016 included (i) $4.0 million in transaction costs incurred in connection with certain
acquisition transactions that were completed or pending and those that were pursued but not completed during 2016, (ii) $1.3
million in legal and consulting fees related to the IPO, and (iii) $2.3 million in transition costs, primarily related to
information technology and facility rental charges for terminated leases. |
| |
| (2) |
|
Reflects the Adjusted EBITDA of acquisitions completed in 2016 and to date in 2017, with the
exception of SIA Snow Show as discussed above, where the results of such acquisitions have not been captured in our
consolidated financial statements for the twelve-month period ended June 30, 2017.
|
| |
|
|
Three months
|
|
|
Six months
|
|
|
|
ended June 30,
|
|
|
ended June 30,
|
|
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
|
(dollars in thousands) |
|
|
(dollars in thousands) |
|
| Net (loss) income |
|
$ |
(5,814 |
) |
|
$ |
(370 |
) |
|
$ |
22,533 |
|
|
$ |
27,806 |
|
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Refinancing charges |
|
|
6,151 |
|
|
|
— |
|
|
|
6,151 |
|
|
|
— |
|
| Loss on extinguishment of debt |
|
|
216 |
|
|
|
— |
|
|
|
216 |
|
|
|
— |
|
| Stock-based compensation |
|
|
564 |
|
|
|
866 |
|
|
|
1,146 |
|
|
|
1,621 |
|
| Deferred revenue adjustment |
|
|
24 |
|
|
|
— |
|
|
|
518 |
|
|
|
— |
|
|
Management fee
|
|
|
- |
|
|
|
188 |
|
|
|
188 |
|
|
|
375 |
|
| Other items(1) |
|
|
10,480 |
|
|
|
1,078 |
|
|
|
14,990 |
|
|
|
2,229 |
|
| Amortization of deferred financing fees and discount |
|
|
2,942 |
|
|
|
1,755 |
|
|
|
3,854 |
|
|
|
2,796 |
|
| Amortization of (acquired) intangible assets |
|
|
10,302 |
|
|
|
9,500 |
|
|
|
20,421 |
|
|
|
19,000 |
|
| Tax adjustments related to non-GAAP adjustments(2) |
|
|
(12,113 |
) |
|
|
(5,164 |
) |
|
|
(18,756 |
) |
|
|
(10,156 |
) |
| Adjusted Net Income |
|
$ |
12,752 |
|
|
$ |
7,853 |
|
|
$ |
51,261 |
|
|
$ |
43,671 |
|
| Basic earnings per share |
|
$ |
0.18 |
|
|
$ |
0.13 |
|
|
$ |
0.78 |
|
|
$ |
0.71 |
|
| Diluted earnings per share |
|
$ |
0.18 |
|
|
$ |
0.12 |
|
|
$ |
0.75 |
|
|
$ |
0.69 |
|
| Basic weighted average common shares outstanding |
|
|
69,102 |
|
|
|
61,860 |
|
|
|
65,484 |
|
|
|
61,854 |
|
| Diluted weighted average common shares outstanding |
|
|
72,175 |
|
|
|
63,151 |
|
|
|
68,393 |
|
|
|
63,072 |
|
| (1) |
|
Represents other items described in Note 1 above. |
| |
| (2) |
|
Reflects application of U.S. federal and state enterprise tax rate of 39.5% for the
three and six months ended June 30, 2017 and a rate of 39.0% for the three and six months ended June 30, 2016. |
| |
|
|
Three months
|
|
Six months
|
|
|
ended June 30,
|
|
ended June 30,
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
(dollars in thousands) |
|
(dollars in thousands) |
| Net Cash Provided by Operating Activities |
|
$ |
20,910 |
|
$ |
40,044 |
|
$ |
49,719 |
|
$ |
69,971 |
| Less: |
|
|
|
|
|
|
|
|
|
|
|
|
| Capital expenditures |
|
291 |
|
|
593 |
|
576 |
|
1030 |
| Free Cash Flow |
|
$ |
20,619 |
|
$ |
39,451 |
|
$ |
49,143 |
|
$ |
68,941 |
Emerald Expositions Events, Inc.
Philip Evans, 1-866-339-4688 (866EEXINVT)
Chief Financial Officer
investor.relations@emeraldexpo.com
View source version on businesswire.com: http://www.businesswire.com/news/home/20170803005335/en/