EXHIBIT 99.1
Penton Media, Inc.
Second Quarter/First Half 2005
Performance and Operating Highlights
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SECOND QUARTER AND YTD PERIODS ENDING JUNE 30
($ in thousands) SECOND QUARTER YEAR TO DATE
--------------------------------------------------- ---------------------------------------------------
2005 2004 RESTATED $ CHANGE % CHANGE 2005 2004 RESTATED $ CHANGE % CHANGE
--------- ------------- --------- -------- ---------- ------------- -------- --------
Revenues $ 43,814 $ 46,106 $ (2,292) -5.0% $ 97,145 $ 98,897 $ (1,752) -1.8%
Net Loss $ (5,804) $ (15,226) $ 9,422 n/m $ (3,991) $ (21,128) $ 17,137 n/m
Net Loss Applicable
to Common Stockholders $ (7,695) $ (18,634) $ 10,939 n/m $ (7,705) $ (29,729) $ 22,024 n/m
Adj EBITDA* $ 6,819 $ 4,014 $ 2,805 69.9% $ 22,329 $ 16,344 $ 5,985 36.6%
Adj EBITDA Margin 15.6% 8.7% 23.0% 16.5%
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* Reconciliation of net loss to adjusted EBITDA follows in this document.
Q2 2005 PERFORMANCE HIGHLIGHTS COMPARED WITH YEAR-AGO PERIOD
o 2Q revenues declined $2.3m, or 5%, but increased $0.8m, or 1.9%,
after adjusting for timing shifts (three conferences, two print
products) and the discontinuation of four products.
o Profit performance continued improvement trend. Net loss was
$5.8m compared with $15.2m net loss in 2Q 2004. Total operating
expenses declined $11.6m, or 22.6%; selling, general and
administrative (SG&A) costs declined $4.5m, or 21.2%.
o Adjusted EBITDA grew nearly 70%, but increased 106% after
adjusting for the timing shifts and discontinued products noted.
2Q adjusted EBITDA margin expanded by almost 7 percentage points
to 15.6%.
FIRST-HALF 2005 PERFORMANCE HIGHLIGHTS COMPARED WITH YEAR-AGO PERIOD
o YTD revenues decreased $1.8m, or 1.8%, but increased $1.0m, or
1.1%, after adjusting for event timing shifts and discontinued
products.
o Adjusted EBITDA grew 36.6% to $22.3m; adjusted EBITDA grew 39%
after adjusting for the timing shifts and discontinued products
noted above.
o Adjusted EBITDA margin reached 23% compared with 16.5% in
year-ago period.
PRODUCT LINE OVERVIEW
o PUBLISHING
o Q2 revenues declined $1.5m, or 4%, compared with 2Q 2004.
Revenues declined $1.0m, or 2.7% after adjusting for
discontinuations of two print properties and publishing schedule
changes.
o YTD revenues declined $2.3m, or 3.3%; revenues declined $2.0m, or
2.9% after adjusting for factors noted above.
o EVENTS
o Q2 revenues declined $1.3m, or 26%, primarily due to the
discontinuation of two events and the timing change of three
conferences. Revenues grew $1.3m, or 56.7%, adjusting for these
factors.
o YTD revenues declined $0.6m, or 2.8%, due primarily to the change
in timing of a conference from June in 2004 to September this
year. Revenues increased $1.6m or 8.4%, after adjusting for the
timing change and event discontinuations.
o ONLINE
o Q2 revenues grew $0.4m, or 10%, due primarily to new product
successes across several business units. Adjusting for
discontinued properties, revenues expanded $0.5m, or 12.2%.
o YTD eMedia revenues increased $1.1m, or 14.3%. Adjusting for
discontinued properties, revenues increased $1.4m or 19.2%.
o New Web conferences and product introductions are expected to
accelerate our eMedia growth rate to high teens in Q3 and Q4.
REPORTING SEGMENT OVERVIEW
o INDUSTRY
o Q2 revenues expanded $0.6m, or 2.8%, to $20.0m on the strength of
eMedia increases across the four market units that comprise the
segment. After adjusting for a conference timing shift, revenues
were up $0.8m, or 4.2%.
o YTD revenues grew $0.8m, or 2.1%, to $37.5m. After adjusting for
the event timing change noted, revenues grew $1.0m, or 2.9%.
o TECHNOLOGY
o Q2 revenues declined $1.3m or 7.7%. The decline was due largely
to shift in timing of two IT conferences, roadshow timing and
weakness in electronics OEM print advertising. IT media print
advertising strengthened with a more modest revenue decline
year-to-year. Adjusting for discontinued properties and timing of
events, revenues were flat with the year-ago period.
o YTD revenues down $1.9m, or 6.2%. Adjusting for discontinued
properties, revenues were down $0.8, or 2.7%.
o LIFESTYLE
o Q2 revenues down $1.0m, or 24.9%, due largely to discontinuation
of Natural Products Expo Europe, which took place in Q2 of 2004.
Adjusting for that factor, segment revenues increased modestly.
o YTD revenues down $0.3m, or 1.3%. Adjusting for the discontinued
event, revenues increased $0.8m, or 3.8%.
o RETAIL
o Q2 revenues were down $0.6m, or 9.8%, due primarily to publishing
schedule changes and a discontinued conference. Revenues
decreased $0.1m, or 2%, after adjusting for these factors.
o YTD revenues decreased $0.4m, or 3.6%. Adjusting for timing
differences and cancelled products, revenues were flat to the
year-ago period.
STRATEGIC REVIEW
o Significant progress made with strategies to drive revenue and profits by
accelerating eMedia product development and serving customers' marketing
needs through integrated media solutions that leverage the strength of our
leading magazine brands. The Company also is pursuing selected strategic
investments in add-on properties and strategic partnerships that enhance
our current product offering. Recent strategic highlights include:
o 125 Web conferences produced in the first half of 2005 compared
with 100 in the first half of 2004;
o 25 digital editions developed YTD, including 2 digital-only
editions creating growth opportunities in targeted markets;
o 8 Web sites and 3 new microsites were launched or redeveloped in
first half of 2005;
o Acquisition in June of Kosher World trade show, to collocate with
Natural Products Expo West in March 2006, providing foundation
for expansion of natural products/food sector portfolio into
ethnic/specialty foods markets;
o Acquisition in August of MSD2D (Microsoft Developer to
Developer), a high-tech media company serving the Exchange,
SharePoint, .NET, and Security communities of IT professionals
with a broad product portfolio, creating market synergies with
Penton Windows IT Pro Group and TCI (conference group), and
strengthening the Company's IT media business; and
o Partnership formed in August with Global Sources/CMP Media joint
venture to publish Electronic Design - China, extending Penton
Electronics Group's reach into the booming Asian market.
BALANCE SHEET/LIQUIDITY
o Total debt at June 30, 2005, was $328.2m. As of June 30, Penton had access
to $36.5m of its credit facility. The Company's financial position is
strong and we have ample liquidity under our credit facility.
RECONCILIATION OF NET LOSS TO EBITDA AND CONSOLIDATED ADJUSTED EBITDA
($ IN THOUSANDS)
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THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2005 2004 2005 2004
-------- -------- -------- --------
Net loss $ (5,804) $(15,226) $ (3,991) $(21,128)
Interest expense 9,363 9,362 18,746 18,820
Provision for income taxes 618 767 1,396 1,531
Depreciation and amortization 2,310 2,827 4,577 5,675
-------- -------- -------- --------
EBITDA 6,487 (2,270) 20,728 4,898
Loan and Security Agreement Adjustments:
Restructuring and other charges 186 3,502 252 4,362
Provision for loan impairment -- 1,717 -- 1,717
Executive separation costs -- 347 3 2,701
Non-cash compensation 3 559 14 682
Interest income (32) (50) (62) (136)
Discontinued operations, net of taxes 159 215 2,959 2,124
Gain on extinguishment of debt -- -- (1,589) --
Other, net 16 (6) 24 (4)
-------- -------- -------- --------
Consolidated Adjusted EBITDA $ 6,819 $ 4,014 $ 22,329 $ 16,344
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