Emerald Holding(US:EEX)2022-02-24 21:01Acquisitions and Growth Strategy - Emerald acquired and integrated 22 industry-leading events for approximately $866 million since the Onex Acquisition in June 2013[17]. - The company completed two acquisitions in 2021, including Sue Bryce Education and MJBiz, enhancing its portfolio in high-growth sectors[21][22]. - The company completed the acquisition of MJBiz on December 31, 2021, which focuses on the cannabis industry and includes the MJBizCon trade event[87]. - The acquisition of GLM significantly increased the scale and breadth of the company's trade show portfolio, including major brands like NY NOW and Surf Expo[185]. - The company intends to pursue acquisitions with attractive valuation multiples, having historically completed acquisitions at EBITDA purchase multiples typically in the mid-to-high single digits[185]. Financial Performance - Revenue for 2021 was $145.5 million, an increase from $127.4 million in 2020, representing a growth of approximately 14.3%[160]. - The net loss for 2021 was $78.1 million, compared to a net loss of $633.6 million in 2020, indicating a significant improvement[160]. - Basic net loss per share attributable to common stockholders was $(1.64) in 2021, compared to $(9.09) in 2020[160]. - The company recorded non-cash goodwill impairments of $7.2 million and non-cash intangible asset impairments of $24.3 million and $8.4 million for certain trade names and customer relationships, respectively[106]. - The company had a total of 375,154 shares repurchased during the fourth quarter of 2021, with an average price of $4.46 per share[155]. Impact of COVID-19 - The ongoing effects of COVID-19 have had a material negative impact on Emerald's financial results and liquidity, which may continue beyond the pandemic[25]. - The company experienced a severe impact from COVID-19, leading to the cancellation or postponement of a significant portion of its event calendar for 2020 and the first half of 2021, which negatively affected financial results and liquidity[191]. - The ongoing impact of COVID-19 has significantly affected the company's revenue from live events, with attendance levels remaining below pre-pandemic levels[65]. - The company’s event cancellation insurance does not cover losses due to outbreaks of communicable diseases, including COVID-19[70]. Revenue Sources and Business Model - In 2021, 71% of Emerald's revenue was generated from in-person events, down from 92% in 2019, while 29% came from virtual events and other marketing services[25]. - The company generates revenues primarily from selling trade show exhibit space, sponsorships, and fees for ancillary services, with additional revenue from conferences and digital media[197]. - Other marketing services, including print publications and digital media, generated 21.2% of Emerald's revenues for the year ended December 31, 2021[32]. - The company operates a diversified portfolio of trade shows, which are market leaders in their respective sectors, enhancing brand value and customer engagement[179]. Operational Challenges and Risks - The company faces risks associated with event cancellations and interruptions, which may not be fully covered by insurance, potentially impacting financial results[96]. - A material weakness in internal control over financial reporting has been identified, which could adversely affect the accuracy and timeliness of financial reporting[99]. - The company may face increased competition in certain industry sectors, which could adversely affect its business and financial condition[80]. - The company is exposed to cybersecurity risks that could lead to loss or theft of confidential information, potentially damaging its reputation and financial standing[141]. Employee and Corporate Governance - As of December 31, 2021, the company had 600 full-time employees, with 55% of the senior management team being female[45]. - The company has eliminated the college-degree requirement for various positions to enhance diversity in hiring[46]. - The company is committed to fostering a culture of diversity and inclusion, partnering with OneTen to create job opportunities for Black talent[46]. - The company is classified as a "controlled company" under New York Stock Exchange rules, allowing it to opt out of certain corporate governance requirements[128]. Financial Position and Liabilities - Total assets amounted to $1,062.4 million, a slight increase from $1,054.4 million in 2020[164]. - Total debt as of December 31, 2021, was $519.7 million, down from $525.2 million in 2020[172]. - Total liabilities increased to $747.9 million in 2021 from $659.9 million in 2020[164]. - The company has a negative working capital, excluding cash on hand, indicating that current liabilities exceed current assets[209]. Strategic Initiatives - The company’s strategic initiatives include standardizing marketing and sales planning across its event portfolio and enhancing data analytics capabilities[82]. - The company is currently reviewing and updating its information technology systems to enhance data analytics capabilities, which may consume significant resources[140]. - The company aims to invest in and promote outcomes linked to return on investment, enhancing the value proposition for exhibitors and attendees[184].