Emerald Holding(US:EEX)2022-11-05 04:47Financial Data and Key Metrics Changes - Third quarter revenue was $62.4 million, down from $76.5 million in the prior year quarter, primarily due to the timing of events [38] - Organic revenues for Q3 2022 were $56.6 million, an increase of $14.2 million or 34% compared to $42.4 million in the same period last year [40] - Adjusted EBITDA was $149.7 million in Q3, compared to $8.6 million in the prior year quarter, reflecting the impact of insurance proceeds [42] - Free cash flow, including insurance, was $150.9 million compared to $7.7 million in the prior year quarter [45] - The company expects free cash flow to be in the range of $60 million to $70 million for 2022, down from a prior estimate of $70 million due to rising interest rates [47] Business Line Data and Key Metrics Changes - The company hosted 25 live in-person events with over 79,000 attendees and 3,900 exhibiting companies [11] - The commerce software business continues to contribute mid-20 organic growth, while the content business has reduced overall growth due to technology issues [41] - The company expects almost one quarter of its shows this year to meet or exceed pre-pandemic revenues [12] Market Data and Key Metrics Changes - The market for B2B trade shows is projected to grow at a compound annual growth rate in the high teens from 2021 to 2026 [15] - The company maintains pricing power due to the high return on investment provided by its shows, which are essential for customers' marketing budgets [16][13] Company Strategy and Development Direction - The company focuses on three pillars of value creation: portfolio optimization, customer centricity, and 365-day engagements [17] - New event launches are expected to contribute 1 to 2 percentage points of incremental organic revenue growth per year [20] - The company aims to leverage its scale and operational efficiencies to continue being a leading consolidator of live B2B events in the U.S. [21] Management's Comments on Operating Environment and Future Outlook - Management is pleased with the recovery of in-person events and expects continued increases in exhibitor and attendee counts [12] - The company is positioned to deliver higher attendance and space rates, providing a solid foundation for revenue growth [59] - Management anticipates adjusted EBITDA of over $100 million for 2023, driven by improved margins and strategic investments [57] Other Important Information - The company received final proceeds of $149 million related to insurance litigation, bringing total pandemic-related insurance proceeds to $373 million [7] - The company has a strong balance sheet with $366 million in cash and cash equivalents as of September 30 [50] - The Board approved an extension and expansion of the share repurchase program to allow for the repurchase of $20 million of common stock through December 31, 2023 [53] Q&A Session Summary Question: Could you provide more color on the level of presenters and sponsors compared to pre-pandemic? - Management indicated that revenues overall are tracking 70% to 75% of pre-pandemic levels, with net square footage tracking around 65% [62] Question: What is the annualized financial impact expected from recent acquisitions? - Management has not disclosed the impact at this time but will provide more information in 2023 [63] Question: How are newer events in emerging areas progressing? - The launches of events are largely due to the creation of the Xcelerator business unit, which has been performing well [64] Question: How do margins compare between non-trade show segments and trade shows? - The trade show business historically runs EBITDA margins of 35% to 45%, and the company expects new offerings to achieve similar margins over time [66] Question: What actions are being taken to grow organic growth rates? - Management clarified that they expect to grow organic growth in the mid-single digits or better as they normalize post-pandemic [67] Question: What is the M&A environment like and what areas are being considered for acquisitions? - Management is active in the marketplace looking at opportunities but prefers not to disclose specific areas of focus [68] Question: How does the company integrate acquisitions once completed? - The company leverages its scale in areas like operating live events and marketing technology to add value to acquired businesses [71]