Emerald Holding(EEX) - 2022 Q2 - Quarterly Report

Financial Performance - For the three months ended June 30, 2022, revenues increased to $71.4 million, compared to $15.0 million for the same period in 2021, representing a growth of 376.7%[19] - The net loss for the six months ended June 30, 2022, was $3.4 million, a significant improvement from a net loss of $79.1 million for the same period in 2021[19] - Operating income for the three months ended June 30, 2022, was $6.8 million, compared to an operating loss of $31.5 million for the same period in 2021[19] - For the six months ended June 30, 2022, Emerald reported a net income of $15.4 million, a significant improvement compared to a net loss of $61.8 million for the same period in 2021[26]. - The company reported a net loss of $0.7 million for the three months ended June 30, 2022, a significant improvement from a net loss of $46.5 million in the same period of 2021, reflecting a variance of $45.8 million[203] - Adjusted EBITDA for the three months ended June 30, 2022, was $29.2 million, compared to $(2.0) million for the same period in 2021, indicating a significant turnaround[155] Assets and Liabilities - Total current assets increased to $329.1 million as of June 30, 2022, up from $290.1 million as of December 31, 2021, reflecting a growth of 13.5%[15] - Total liabilities rose to $787.0 million as of June 30, 2022, compared to $749.5 million as of December 31, 2021, an increase of 5.0%[15] - Cash and cash equivalents decreased to $181.7 million as of June 30, 2022, down from $231.2 million as of December 31, 2021, a decline of 21.4%[15] - The company had a total stockholders' deficit of $124.8 million as of June 30, 2022, compared to a deficit of $121.0 million as of December 31, 2021[15] - Long-term debt as of June 30, 2022, was $508.7 million, slightly down from $510.9 million as of December 31, 2021[98] Revenue Sources - Trade show revenues represented approximately 83.8% of total revenues for the three months ended June 30, 2022, compared to 26.0% for the same period in 2021[57] - The company recognized revenues of $59.3 million and $144.0 million from deferred revenue for the three and six months ended June 30, 2022, respectively[58] - Revenues for the Commerce segment increased by $15.9 million, or 418.4%, to $19.7 million in Q2 2022 from $3.8 million in Q2 2021, driven by $14.7 million from events staged in Q2 2022[214] Acquisitions and Investments - The Company acquired Advertising Week for a total estimated purchase price of $34.3 million, which included an initial cash payment of $28.4 million and contingent consideration of $5.9 million[72] - The company acquired Bulletin Inc. for approximately $9.0 million on July 11, 2022, funded by cash from operations[158] - The Company has completed 23 strategic acquisitions since June 2013, with purchase prices ranging from approximately $5.0 million to $151.1 million, and annual revenues from approximately $1.3 million to $25.6 million[172] Expenses and Costs - Cost of revenues for Q2 2022 was $26.4 million, an increase of $22.8 million from $3.6 million in Q2 2021, primarily due to a more normal schedule of live events[210] - Selling, general and administrative expenses for the three months ended June 30, 2022, were $32.3 million, compared to $33.1 million in the same period of 2021, showing a slight decrease of 2.4%[200] - Depreciation and amortization expense increased by $1.9 million, or 15.7%, to $14.0 million in Q2 2022 from $12.1 million in Q2 2021[213] Cash Flow and Liquidity - The company experienced a net cash provided by operating activities of $45.2 million for the six months ended June 30, 2022, compared to $26.7 million in the same period of 2021[26]. - Free Cash Flow is presented as a useful indicator of liquidity, providing insight into cash generated from core operations after capital expenditures[195] - The company expects business interruption insurance proceeds to mitigate liabilities related to cancelled events due to COVID-19[192] Market and Industry Insights - The trade show industry is highly fragmented, with the three largest companies, including Emerald, comprising only 10% of the U.S. market, presenting acquisition opportunities[174] - Organic revenue growth is defined as the growth in revenue from one period to the next, adjusted for acquisitions, discontinued events, and other factors[178] - More than 95% of Emerald's sales are made by employees, with less than 5% from third-party sales agents[177] COVID-19 Impact - The ongoing effects of COVID-19 have had a significant negative impact on Emerald's financial results and liquidity, which may continue beyond the pandemic[174] - The ongoing effects of COVID-19 are expected to continue impacting the company's financial results and liquidity beyond the pandemic[38]