EEX - Earnings call transcript Q1 2018

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Operator

Good morning, ladies and gentlemen, and welcome to Emerald Expositions' First Quarter 2018 Earnings Conference Call.

During today's presentation, all parties will be in a listen-only mode.

Following the presentation, the conference will be open for questions with instructions to follow at that time.

As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Officer. Financial Chief Evans, Philip Please go sir. ahead,

Philip Evans

is Thank participation today Operator, With here Capistrano, and CEO. President XXXX good your appreciate me California Juan San We everyone. in Loechner, in call. our and morning earnings you, David our quarter first

As Eastern this will Time XX, on replay on be Web site of of Investor May section our a through a available reminder, call the XX:XX p.m. XXXX.

statements or statements within remind everyone meaning that call the differ such update that filed that begin, constitute Securities which December set we do to variety forth was such certain cause actual materially by forward-looking remarks about Private of let XX, XXXX. duty me risks the other estimates, on indicated future forward-looking Before Act factors not Report year SEC expectations, statements could Such of with for to XXXX. Annual the are We undertake prospects. include the may of those from Form a this factors uncertainties, Reform risks, any implied beliefs, and other contain Litigation to and XX-K statements. ended in subject are on plans Such These February and statements. XXXX results XX, our

can today's these results substitute our useful A comparable non-GAAP GAAP. should we'll not a considered found accordance we in Additionally, be of presentation measure as which during this release. in the be call, for information additional measures discuss isolation with more evaluating can reconciliation earnings The in believe measures non-GAAP GAAP of our performance. prepared in to U.S. be or

to over call the turn David. I'll Now,

David Loechner

of Starting by flat quarter our which key rate high the the solid quarter benefiting growth January almost EBITDA X% first X% with show revenues we by many eight were show pacing the acquired first with XXXX almost continued our in the end few and from well. revenues by Adjusted reached offset in as leading amongst November investments. is we in CPMG, already for the a Marketing to over last of by the with increased XXXX. declines strong of shows, have marketing from digit as of their increased a cycle larger single the view contribution of same event months Sign-ups Organic grew housing are momentum of Thanks, vehicle time for Point discuss. K-Bizz or Connecting a over continue [ph], trade booth And Phil. at XXXX XXXX's shows go. Group will Revenue the driven shows, at for largest XXXX, brands market our I first year. quarter which which our still increase revenue to quarter five the more

for market commensurate Show. the event future last of the lower staged greater acceptance as reflecting Our acquisition year's XX% high down perspective, show. attendance pricing increase the revenue The booth was was + bodes Outdoor year's to percentage larger at the the by shows. last of the with agreed January, Snow Retailer and part approximately than strength that this year Retailer expect of successful was in Denver. SIA well single-digit which was which very year's was time show end the for last Snow of we in show pricing transitional Over and Show, square [indiscernible] than Market, approximately feet net Winter Outdoor From XX% event

two-thirds sold, event Outdoor this the two for sold. summer is while November is pacing line event year is the remaining our approximately forward, Retailer our expectations Looking XX% with in shows as over the

held in expect shows exceed two XX%. to Retailer of those shows Outdoor by the of the the revenues For three we we approximately full-year the XXXX

in show first pacing single-digit staged XX% show. launched City show year. percentage that's this International the regional last spin-off versus larger in grew year's to mid to was is year's this show high And Atlantic Expo. year we was quarter last we event our in grow revenues successful new The Pizza than by The Another show nicely XXXX. acquired the also

while were to sections Turning for and section the February revenues to Now, York New percentage be handmade by home continued flat. probably as were show mid single-digit down the lifestyle soft, the

Though improve the marketing and we ROI innovation pacing to fourth the made several As announced sales steps improve behind quarter performance. implemented show's attract to in and We've and remain management go-to-market of designed new earnings program optimistic broad and company will our improve currently senior is a taken changes New exhibitor call, have is pacing the show. the show's that that expectations, new time. investment show York performance returning noted summer we we summer we've sales more participation Now strategy a for over the sales improve our also to at

in show quarter was significant single-digit other a revenues which Market Our declined ASD Week, in mid by the percentage.

largest show As category the show, February, growth the section solid I and call in value in this March edition. and in noted variety, of core our continued to

categories. growth However style jewelry which and more softness offset gift this beauty remained category's was in than and by and challenging

approach. New have improve our we with and begun marketing to ASD's go-to-market York execute just sales and new performance, see Now, As to opportunity an

any would benefits forecast. our it track too the early meaningful ahead to we reiterate is I While of placing currently are shows that slightly to performance,

in team's we ASD improve ability to forward, of about remain optimistic performance Looking the subsequent editions. our

shows the grew which and quarter in of expectations. mentioned, line with portfolio, first XXXX, X% our by have show balance the Global over trade was Expo, Shop our the I includes revenues Excluding first of quarter Surf which

for million grew this events first four together significantly quarter, with CPMG generating non-tradeshow Our the Events under Other ownership, staging of time revenues. our quarter or category first $X.X

organic over hand of rest CPMG detail, growth future covers still the potential the the first first are our we're more through before quarter on the the the of the call That very positive to we the in year. and this the performance second go quarter of in Phil with the in business. for some process While remain financials pleased team, integrating business me provide about the outlook quarter the review. and thoughts And let to I and

quarter, to largest currently three second of which by Design are a mid tradeshows grow pacing all COUTURE, the percentage Hospitality last IRCE, are the Expo, and For year. single-digit over

a together organic indicated fairly Design business within in in reported decline for Events, we the the revenue Taken second with previously event expect quarter. our Live our as HOW the flat Other whole growth

for more has expect revenue second quarter staging $X second million. the with Emerald revenues Our events to the we CPMG quarter. acquisition for two robust total up growth than Consequently in first-time report

of in Market, last up ramped eight launch to new November the OR's range show $X in rest and launched compares the million in revenues six new to our year, $X not events, the first Retailer Winter events line is a activities show or typical forward year. deliver new with have original we Outdoor million with which to staging, the and Looking launch, nine including expected its our is planning are expectations.

other the launches for Our more traditional year. are pacing the remainder well of

the event, place. total, terms million third and to events Retailer two five the new the planned quarter. or assuming all excluding take the in of In of revenues and the quarter, are launches, event we their $X between In be expected Outdoor in these the have four in $X.X second fourth quarter, one cadence, million

me say strategy. let a our M&A about Lastly, words few

not acquisition quarter discussions did sellers. quarter. the year, with we first number While the an remain we sellers in we potential close evaluated active the a deals in of and in And of

to wait are to determined continue and discerning opportunities. for buyers, be we However, acquisition right the

our and financial our turn the for results. is is quarter strategy I the While intact. like always review of to of timing our robust would transactions over Phil M&A now pipeline remains call first uncertain, to a

Philip Evans

increase again. X.X%. last $XXX.X and of excluding were revenues million, and David, show morning difference. quarter compared We you, CPMG a quarter events, which revenues, first $XXX.X representing of same million $X.X good million or year, scheduling acquired discontinued flat of small in reported Organic the Thank to the revenues an

Week, included which services lower revenues revenues of these million the revenues, Outdoor organic all excluding weighted heavily or New an the events, Other is which Organic first quarter affected from the tradeshows which quarter the As performance the David only three $X.X in million was editions quarter CPMG, staged events of acquisition represented marketing earlier, year. the Market other was quarter’s and Now, growth X% York in the of from otherwise shows, to other growth of $X.X quarter the X.X%. particularly XXXX for portfolio. Retailer tradeshow the our explained X.X%. X% which represented Other XX%. revenue fourth first of growth declined first quarter’s by quarter the Organic across was ASD solid revenues offsets for

for case decline quarter to we steeper the year. than the was first full be expected The

of adjusted modest or reduction the difference. million cost EBITDA a approximately rest from largely was quarter of XXXX our for This strong the million scheduling by reflected $X.X ahead our show $X first adjusted and offset public from of $XX.X quarter a of adjusting company contribution after portfolio. million Our in increase acquisition of the CPMG EBITDA for small incremental X.X%

$X.X reflected strong per XX% reflected XXXX. cash a of XXXX operating items diluted less for net adjusted refinancing year. year. lower million million during was which as flow, $X.XX. quarter and decrease decrease timing income we of capital outstanding $XX.X low tax interest difference million last quarter’s debt to expense to $XX.X compared $X.X of which lower that A the first by was increase expect was expenditures, the earnings and we the at result the Our U.S. mainly low reverse million and key define share beginning working benefits of from $X.X by to million in cash $XX.X due reduced starting change remainder by the quarter partly the of our million XX% the $X.X cash in year. the interest to in from balance Free cash interest were expenses. of XX% the for tax the and cash in flow affecting capital the million $X.XX tax income of offset in interest federal rates provided rates activities of to increased taxes re-pricing The This expense first quarter The transactions

a dividend quarter hand the cash $XXX cash And million of was million. the of our term quarter, $XX the in second our outstanding dividend X.X% we our At And quarter. $XXX.X we months Our share loan balance to March of recently million. share $X.XX will board through And which first we an cash had a $X.X $X.X million. end was of of which the paid of $X.XX In dividend has confident the remain totaled flow March, approximately range. full-year a guidance last the to approximately increase million. increase for approved end free in XX

based million our credit XX the our $XXX.X months of debt last previous the net with on calculations EBITDA ratio X.X times from leverage which Our adjusted quarter’s agreement was in unchanged was ratio.

$XXX when our the million revenue guidance At relative adjusted projecting range and approximately to $XXX the expectations between revenues. X.X% are is million of of line which call. total is typically year pacing Turning summer Week primary in EBITDA the us the remaining to is visibility were this with the thinking, into range XX% our the our Now outcome. $X.XX, and and as of year, earnings the X.X% York items booth point between that our I’ll New we gives our Retailer new original full-year $XXX outlook, finished expect and for and quarter beginning into uncertainties full-year more are namely, to August. the quarter Market is guidance launches. tighter we of fourth key of good his performance color and Adjusted we $XXX million. we per our from outlook now share our XX% the our David The full-year the fourth our all Accordingly, are range likely earnings of for $X.XX hand announce between show Outdoor annual which same X.X% time the X.X%. year. which quarter Consequently, unchanged year's for we built provide shows, organic reasons remarks. at pacing where in and forecast revenue and revenue sold the comprised full-year the This guidance closing our our in ASD in success cash to in earnings And second growth These last million, approximately a growth third items. November, same to revenues to the with back range this fourth of XXXX free flow quarter

David Loechner

Market organic our coming There year that of strengthening growth move two active launch would New focus year. delivering across a and largest for Retailer, our in tradeshow have our far portfolio, Thanks, really more and few Phil. to be a franchises, surprises on been very the program, so the ASD solid show format execution three We Now. this our Outdoor York into the knew Week majority

made Denver was of And industry. initiatives. all have reaction We particularly to executed Retailer the the progress I pleased towards favorable move how of the with these good am Outdoor and

Lastly, continue continue outside M&A good United seek future see cash States high to free will the the to shareholder we to and we in value. And even opportunities will deploy quality acquisitions that United drive States. flow on our

any We now Operator? question. will for up open the call

Operator

Thank America is Bank Corporation. your proceed line Please of question with David first you. from of Instructions] [Operator the Our from with question. Chu

David Chu

Great. Thanks.

we should seeing today, wanted for to what there any see disruptions new XXXX? are if just based onetime expect So are on you

David Loechner

we David. horizon discussed, haven’t don’t that already anything I on see the

David Chu

for Okay, New York ASD great. you expectations the quarter. mentioned and Now And for then, third

Just if share that wanted you can see us? with to

David Loechner

broadly we’re the same should Emerald. real we over improvement. think the portfolio relying strategy the are see summer it, as growth the for that going. we’ll goal the summer about, of we at see the putting new confident it implanting roll seeing initiatives we these talked of shows winter overall lift of stabilize drive are the editions shows is we outcomes and shows place for out kind the here are so outcomes we kind I next the Effort, while several beginning in I on overtime. our But, just forecast the same shows as go-to-market to some saw or mean we on have rest to will in some the

David Chu

we cycle in near economy That’s lastly, that Okay. think are correct. I just general is And the late this point. the at outlook

So, a late typically when performance in kind how cycle and to we maybe environment? of get would characterize recessionary your

David Loechner

recessions setup not that nicely my a that great But, markets we multiple times. future. change Other can many and portfolio I am really the than many the saw, recession happen the times. during really will career recession quite recession are in in fragmented in not important I speak what does on performs It’s through with went shows. and well we sure

David Chu

much. you Thank great. Okay, very

Operator

is proceed question Jeff Our Robert with Please from question. next your Meuler Baird. with W.

Unidentified Analyst

Yes. Hey This guys, on thanks. for Jeff. [indiscernible] is

to was Just your quarter. down that low quarter, expectations? to the in going single back you can I think how it last ASD talk about turning compared digits

just wondering some there kind you if too not further it in a of limited there, So, year? was or that much later is of any change, implement to so but of more if just you are weakness continuation what expecting changes and are time the seeing

David Loechner

Yes.

we in didn’t although I what the first were. new it’s as material implemented where going be But strategies quarter finish our saw. effort changed it. we to an see for we any anything like from have of wasn’t let’s with said show broadly line So There ongoing that expectations

Unidentified Analyst

confident full X% still that to product X% that Okay. still feel growth QX, flat the in you And year of a then is line kind for for bit with target tradeshows achievable? little against roughly do up the

Philip Evans

Yes, this Phil. is

Unidentified Analyst

Hi, Phil.

Philip Evans

We the and Nick New will portfolio. shows. fourth quite that some an quarter indicated will York we launch of fourth ASD be obviously more we Outdoor and have program Retailer challenging also [ph]. in Now contribution little the decent get bit growth we second the from active summer Hey, a big tradeshow because a a in show have new the QX quarter But, quarter. in

So, the you’ll the quarter come this fourth quite think of see I growth of lot year. in

Unidentified Analyst

seeing higher one business from just that you opportunities brand existing then helpful, integrate little CPMG, and and portfolio some any event? that your to leverage talk can potential that’s model had bit now time you’re about across level, one just the you’ve me Okay, last

David Loechner

each they I quarter, grew quite Sure. their quarter. in quite and the one first first first mean had busy of events did few of events in the nicely they a quarter

expand however of we start be So soon the opportunities as identified we portfolio what later of very something year operates the hoping outside. may our and We’ve tried as number first MO currently overburden certainly opportunities. really both company, we’re not were industries identified to to and possible but even in part this they that them their quarter found we’ve in about actionable to a coming inside on

great and that some performing we’re it’s the already So expand opportunities is well acquisition, seen confident it. we’ve to

Unidentified Analyst

taking the thanks questions. for Okay,

Operator

is next Our proceed with question with Manav Barclays. Patnaik Please with questions. your

Ryan Leonard

lot all Hi, would on this some new this about? visibility, need at on it for you out as strategies, your Ryan risk, of a implementing talked is the of rest or obviously to to Leonard do Manav. have guess the it expectations is happen think new you executing about year is I you’ve about the you what for of shows look upside of these or point,

David Loechner

day, Well, to about track. portfolio what really a well in still is built the going our and hedges in new at going some strong and this like number new. of behaving the a feel still bit the I in And in smaller or products in there then but feel launch bit of surprises think there, part and so little of now to minus we’ve we one that. so built as they’re that of the we and the around at little what very but on any as whole a are launches in could to there point uncertainties material guidance, portfolio we’re ASP come other not seeing of we around plus what terms we’re and things be going they’re but end the unknown uncertainties the the towards launched we’ve we’re got We the good there is of a

Philip Evans

the shows before I and that which show type in interest November is ways the the not show and track shows as any we’ve done in of time say and that will different of where we slogs only different obviously Yes, come against getting add lot to a other we’re retailers some have but record would would thing out.

sort So that range David and mid-points strong obviously we now have outperform looking this will that we number strong there would into potentially stronger the to doing hopeful and currently you of us we’re things things our of guidance built really a and facing and outcome and as what we’re ASP it be said on. could that get that’s there a the potentially the so can these launches get yield

Ryan Leonard

And hearing who are are in back New is sales on you coming pipeline? this you clients saying I we’re it you kind things ASP just is about of specifically York of building the new case all stops and kind the communication from or Understood. Now, where guess, why not it’s the stop

Philip Evans

of there between the distractions, oversupply sales growth in a our really So resourcing paint companies we’re a not each oversupply categories I the of one an that sorry that there shows construct into ASP both with within bit is have strategy. fashion of even with couple kind the wouldn’t one shows the the the and the product, within of and of market fashion, we market really and ASP more couple each in show sections the sections each focus the focusing but two some new paintbrush, our a shows, on the headwinds of is shows, do to same and categories of and of same an go we new jewelry categories they’re accessories

companies. the stronger on working more in for growth bringing categories new So and

I’m large group. furniture that ROI important. and better to is a around bit audience the going job our around be with Now, company their the or within there new satisfy increased companies it’s is a bit it’s of think categories and I our emphasis is to of But sorry home of York strong sales New why ASP, show kind For and and on kind participation of bringing there growing that that’s some economics

to of shows. those that footage bring larger more life the need of fill we home Some those to better some square new simply we’ll within in categories are have in so that categories companies buying and

Ryan Leonard

any equity Got in guess are it. to maybe could involved ago? seeing on talk M&A I competition some for space that relative private pricing one and you're seen And increased the the maybe just I could year deals you more we’ve out if about seeing you there front,

David Loechner

multiple the that in really on what’s discovered any our a from haven't we I been conversations the pricing really perspectives than different have seeing past. they not

you they've on On deals client, building particular a with of and ten we might people. and us on talk any had about the in private there fairly imagine puts as on work work well. as aggressive global We specific, so strategy kind Blackstone may are specifically see why other would market the then and don't the reasons not for of obviously well things for that in but anything size

are in and so looking an at think thinking is, there they about same not same but I And more quite we're things M&A the active the necessarily way. strategy

Philip Evans

mean owned looked opportunities. in focused are we with the in on still potential U.S. we're either those and and those up as through against those discussions association individually the those opportunities tuck-ins I or anybody seen we've haven't are

Ryan Leonard

Great, thanks.

Operator

Tait with proceed is Our question Katherine with your with question. Goldman Sachs. next Please

Katherine Tait

that just companies couple the talked are auto for Hi people. you everyone, or came sort of more just been that me a presented from recurrent by new attendance of as and think is sort is XX% sort of tenants higher understand attendees to about bringing existing as coming attendees areas I and questions

discontinued there first discontinued came events like quarters CPMG to new the then should York within Thanks throughout remaining be about talked I more if think insight I little into include get Secondly, those you came innovation talked finally what investments New on of the quarter during a just very in events which Now the within with that? the much. and bit about might understand I more that year just are

David Loechner

do shows the last in to to show the first attends so that up due Compared if we attendee no be of the January last as those our we of overall year kind behind that’s community have will the of probably, and before. a buyers themselves. as also show because question winter that the of people retailers the got to additional the first the other got one saying there gone With comparing one an Matt SIA from obviously previously to two winter held higher so combined retailer may one show show the we we uplift sort the not base and show snow combined all attendance retail really show entire picked just to and time people to definitely but that first at year of SIA outdoor shows some spreading to the were the I’ll the a combined reasons of attention they and were went either so there that market retailer the attracted people we're the XX% and who being

looking some for is everybody lounges we're providing providing the that will show one I New more base things and the but as going shuttle social of question? audience new media greeters we've people I and outcome On beverage or that of some customers of will as more of obviously networking options, release, out of that there the improve the better increased of the through the of We're of discontinued or those and show think attracting we trying we’re as content providing can we're things outcome way go a Now, include edges but to for related to quality be We're then was food attendee of also many around new on just experience a the business of around more of a CPMG. the mass acquisition investment just CPMG, event they and service the investing improve to What the experiential we activities it's third wrote seminar resources have really networking, more of and were also bigger market the kind sessions more well. for that sales that kind the the and some to the part weren't audience coffee some the customer. covered experiential be of putting in and kind buyers. couple there's ensure attacking they or to think a some going related be the or of service, parts we course floor overall the suggested sales and putting carts and York posts the couple matchmaking have towards better also lounges desks

three as QX do a very obviously were XXX,XXX in this scheduling positive small revenue about events, the was the discontinue; quarter. year like with QX that CMPG to environments then relating was would And difference, in we year. in contribution a was and CPMG. had nothing last So, small We event there

qualifying we the that that So adjustment talk we left growth other was of kind the about when for quarter.

Katherine Tait

Thanks very much.

Operator

Ladies this and remarks. I session. question-and-answer closing to David to And back concludes call like for now would our over the Loechner gentlemen, turn

David Loechner

everybody. forward All everybody to again results Thanks, Thank are much. very right. to you we Look, pleased and we look soon. with our and our speaking progress,

Operator

teleconference. today's concludes This

may at time. this for your you your Thank disconnect lines You participation.

Emerald Holding (EEX) 3 May 182018 Q1 Earnings call transcript