Emerald Holding, Inc. (NYSE:EEX) (“Emerald” or the “Company”), a
leading U.S. business-to-business platform producer of trade shows,
events, conferences, marketing and B2B software solutions, today
reported financial results for the second quarter ended June 30,
2021.
Highlights
- Second quarter results continue to be negatively impacted by
event cancellations due to the COVID-19 pandemic
- Impact of revenue declines on operating income partially offset
by claim payments received under Emerald’s event cancellation
insurance policy. Emerald is actively pursuing collection of the
remaining unpaid amounts of filed insurance claims for its
cancelled and impacted 2020 events, in addition to claims for its
cancelled and impacted 2021 events
- To date, Emerald has submitted $167 million in claims, which
represents the net amount of budgeted gross revenues less avoided
costs for impacted or cancelled events previously scheduled to take
place in 2020
- Insurance claim payments received or expected to be received to
date total $124.7 million, of which $89.1 million was received in
2020; $29.6 million was received in the first quarter of 2021; and
$4.7 million was received in the second quarter of 2021
- Additional $1.3 million in insurance payments is expected to be
received in July
- Emerald has also submitted $75 million in incremental event
cancellation insurance claims to date for events that were
originally scheduled to take place in the first half of 2021, but
have been cancelled or otherwise impacted
- Net loss of $46.5 million for the second quarter 2021, compared
to net income of $9.9 million for the second quarter 2020
- Adjusted EBITDA, a non-GAAP measure, of negative $13.6 million
for the second quarter 2021, compared to positive $33.2 million for
the second quarter 2020 (Refer to Schedule 2 for a reconciliation
to net income, the most directly comparable GAAP measure)
- Cash generation increased as bookings for returning events
accelerate with Deferred Revenue increasing to $119.2 million as
compared to $48.6 million at December 31, 2020
- Emerald ended the second quarter with $302.8 million in cash as
compared to the first quarter’s cash balance of $293.6
million.
- The Company also had full availability of its $110 million
revolving credit facility at quarter end
- During the second quarter 2021, Emerald amended and restated
its existing credit agreement to extend the maturity by 18 months
to November 23, 2023; aggregate revolving commitments are $110
million
- During the second quarter 2021, Emerald acquired substantially
all the assets of Sue Bryce Education, a member-based portrait
photography education platform, and its affiliate, The Portrait
Masters, an online photo education destination and conference.
Second Quarter 2021 Financial
Performance
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
Change
% Change
2021
2020
Change
% Change
(unaudited, dollars in
millions, except percentages and per share data)
Revenues
$
15.0
$
7.0
$
8.0
114.3
%
$
27.9
$
106.7
$
(78.8
)
(73.9
%)
Net (loss) income
$
(46.5
)
$
9.9
$
(56.4
)
NM
$
(61.8
)
$
(560.2
)
$
498.4
89.0
%
Net cash provided by (used in) operating
activities
$
25.1
$
(31.4
)
$
56.5
NM
$
26.7
$
(22.6
)
$
49.3
NM
Diluted (loss) earnings per share
$
(0.75
)
$
0.13
$
(0.88
)
NM
$
(1.06
)
$
(7.85
)
$
6.79
86.5
%
Non-GAAP measures:
Adjusted EBITDA
$
(13.6
)
$
33.2
$
(46.8
)
NM
$
(16.3
)
$
56.8
$
(73.1
)
NM
Free Cash Flow
$
23.8
$
(32.6
)
$
56.4
NM
$
24.4
$
(24.9
)
$
49.3
NM
Hervé Sedky, Emerald’s President and Chief Executive Officer,
commented, “There is not a day that goes by that I am not reminded
of the extraordinary times we are living in. The COVID-19 pandemic
has undoubtedly affected our business but it has also brought out
the best in us – our creativity, our ingenuity, our resilience.
While we will always put safety first, the roll out of the vaccine
has allowed us to move forward with in-person events in all states
where we host our shows. As a result, we are set to stage 86 live
events through the second half of the year, representing the most
active show schedule in Emerald’s history. Our clear goal is to
deliver high quality events that meet and exceed our customers’
expectations as we focus on our shows’ brands and the value that
our customers achieve by attending. The early results have been
mixed, with some positive trends. For example, we experienced a
significant increase in our Digital Dealer event’s Net Promoter
Score based upon the quality and value of the event to attendees
following the show’s staging in June. Additionally, while near-term
events are coming back at reduced attendance levels, our bookings
for our 2022 first quarter events are tracking much closer to
pre-COVID-19 levels. We believe this key trend further demonstrates
the vital role that face-to-face events continue to play in driving
connections, commerce and growth for customers and communities
alike and points to a meaningful recovery in our business as we
look to the year ahead. At the same time, our recent acquisition of
PlumRiver continues to deliver on our expectations with more than
double the number of new client wins as compared to this point last
year.”
David Doft, Emerald’s Chief Financial Officer, added, “As we
prepare for a significant acceleration in our return to live
events, we are also cognizant of the risks posed by the Delta
variant, which we are monitoring closely. Safety remains a core
priority and is a focus for all of our events as we work to provide
a safe environment for all attendees. Importantly, we remain well
positioned financially as our event cancellation insurance policy
provides almost $200 million of aggregate coverage for 2021. This
additional 2021 insurance coverage, combined with our strong
liquidity and balance sheet with more than $300 million of cash,
provides us with the flexibility to be opportunistic in the current
environment. We intend to continue to invest in our digital
offerings to accelerate our growth and expand our margins, while
also seeking accretive opportunities to further expand our
portfolio. Recent transactions include our acquisitions of Sue
Bryce Education and The Wedding School, and our announced
partnership with Comexposium to launch SIAL America in March of
next year in Las Vegas. We expect SIAL America to be the first
large-scale, generalist food show focused on supporting the $1.5
trillion Food and Beverage market in the United States.”
COVID-19 Operational and Expected
Insurance Recovery Update
Emerald remains focused on the health and safety of its
employees and customers given this ongoing, unprecedented
environment. We recently implemented a phased return-to-office
practice for our employees, and we are actively returning to
in-person events beginning in July and continuing through the
remainder of 2021.
The rapid spread of COVID-19 and the resulting limitations
placed on travel and gatherings have had a material impact on
Emerald’s ability to deliver large, in-person experiences which has
necessitated substantial show calendar changes. To date, Emerald
has cancelled a total of 118 events. Of the 118 cancelled events,
94 were scheduled to stage in 2020, representing $230.6 million of
2019 revenues, and 24 were scheduled to stage in 2021, representing
$71.4 million of 2020 revenues.
Emerald maintains event cancellation insurance to protect
against losses due to the unavoidable cancellation, postponement,
relocation and enforced reduced attendance at events due to certain
covered causes. Specifically, these causes include event
cancellation caused by the outbreak of communicable diseases,
including COVID-19. Emerald’s policy provides coverage for the
budgeted amount of gross revenues (less avoided costs, plus certain
costs relating to the taking of remedial action) for each of the
Company’s individual events and conferences occurring within a
calendar year. The aggregate limit under this event cancellation
insurance policy is approximately $191.1 million in 2020 and $191.4
million in 2021, if losses arise for reasons within the scope of
this policy.
In addition to this primary policy, Emerald maintains a separate
event cancellation insurance policy for the Surf Expo Summer 2020
and Surf Expo Winter 2021 shows, with respective coverage limits of
$6 million and $7.7 million.
The Company has submitted insurance claims for each of its 2020
cancelled shows. For events previously scheduled to take place in
2020, Emerald has submitted approximately $167 million in claims,
which represents the net amount of expected gross revenues less
avoided costs for cancelled events. Insurance claim payments for
2020 events received to date total $124.7 million, of which $89.1
million was received in 2020, and $35.6 million was or is expected
to be received in 2021. The Company has also submitted additional
claims of approximately $75 million for events cancelled or
otherwise impacted in the first three quarters of 2021.
Emerald is actively pursuing collection of the remaining unpaid
amounts of filed insurance claims for its cancelled 2020 events, in
addition to claims for its cancelled 2021 events. On February 22,
2021, the Company filed a complaint in Federal District Court in
Orange County, California against its event cancellation insurers
under the Company’s 2020 and 2021 event cancellation insurance
policy. The Company believes the insurers have acted in bad faith
and failed to timely pay amounts due and owing on submitted claims.
Under its complaint, the Company is seeking to enforce its rights
under the policies to receive the maximum applicable coverage for
the 2020 and 2021 event cancellations, postponements and
reductions, and to receive court-ordered payment on all outstanding
submissions for 2020 and 2021 events.
While there is no guarantee or assurance as to the outcome of
this litigation or the amount or timing of future recoveries from
the Company’s event cancellation insurance policies, the Company
believes that all events that have been impacted, cancelled or
postponed due to COVID-19 to date should qualify as covered losses
under the event cancellation insurance policies and that, to date,
the insurers have paid less than what is owed under the
policies.
Financial & Operational Results,
Quarter Ended June 30, 2021
For the second quarter of 2021, Emerald reported revenues of
$15.0 million compared to revenues of $7.0 million for the second
quarter of 2020, an increase of $8.0 million, or 114.3%. Organic
revenues for the second quarter of 2021 of $11.6 million, increased
$5.3 million, or 84.1%, as compared to the prior year second
quarter organic revenues of $6.3 million, due to several small live
events staging, higher print and digital advertising revenues as
well as new virtual event launches. The PlumRiver, LLC
(“PlumRiver”) and Sue Bryce Education (“Sue Bryce”) acquisitions,
which closed in the fourth quarter of 2020 and second quarter of
2021, respectively, contributed $3.4 million of revenue in the
second quarter of 2021. Discontinued Other Marketing Services
business representing $0.7 million of second quarter 2020 revenues
also impacted second quarter 2021 results.
The Company recognized a net loss of $46.5 million for the
second quarter of 2021 compared to net income of $9.9 million for
the second quarter of 2020. The increase in net loss was primarily
attributable to a $45.9 million decrease in Other Income related to
lower event cancellation insurance claims being confirmed or
received during the second quarter of 2021. The Company recorded
$2.3 million of Other Income during the second quarter of 2021 as a
result of the receipt or confirmation of event cancellation
insurance claims proceeds related to events cancelled in the second
half of 2020 compared to $48.2 million of Other Income recorded
during the second quarter of 2020 as a result of the receipt or
confirmation of event cancellation insurance claims proceeds
related to events cancelled in the first half of 2020. In addition,
the increase in net loss was due to a $7.7 million increase in the
provision for income taxes from the comparable period in the prior
year.
For the second quarter of 2021, Adjusted EBITDA was negative
$13.6 million, compared to positive $33.2 million for the second
quarter of 2020. The decrease in Adjusted EBITDA of $46.8 million
was mainly due to the lower confirmed or received event
cancellation insurance claim proceeds described above. The
Company’s Adjusted EBITDA throughout 2021 has been and will
continue to be heavily impacted by the timing and receipt of
approved claim payments under the Company’s event cancellation
insurance policy.
For a discussion of the Company’s presentation of Organic
revenues and Adjusted EBITDA, which are non-GAAP measures, see
below under the heading “Non-GAAP Financial Information.” Refer to
Schedule 1 for a reconciliation of Organic revenues to revenues
(discussed in the first paragraph of this section), the most
directly comparable GAAP measure, and refer to Schedule 2 for a
reconciliation of Adjusted EBITDA to net loss (discussed in the
second paragraph of this section), the most directly comparable
GAAP measure.
Cash Flow
Net cash provided by operating activities was $25.1 million in
the second quarter of 2021, compared to cash used in operating
activities of $31.4 million in the comparable period of the prior
year, largely reflecting receipt of prepayments for upcoming live
events scheduled to stage in the second half of 2021 and the first
half of 2022. As a result of refunds paid, the transfer of customer
balances from cancelled events to contracts for future events as
well as additional event cancellations during the quarter, as of
June 30, 2021, cancelled event liabilities were reduced to $8.5
million as compared to $13.7 million at March 31, 2021.
Capital expenditures were $1.3 million for the second quarter of
2021, compared to $1.2 million for the second quarter of 2020.
Free Cash Flow, which the Company defines as net cash provided
by (used in) operating activities less capital expenditures, was an
inflow of $23.8 million in the second quarter of 2021, compared to
outflow of $32.6 million in the second quarter of 2020.
During the second quarter of 2021 Emerald completed the
repurchase of 726,895 shares of its common stock, resulting in cash
outflow of $3.9 million.
Emerald ended the second quarter of 2021 with $302.8 million of
cash as compared to the first quarter of 2021’s cash balance of
$293.6 million.
For a discussion of the Company’s presentation of Free Cash
Flow, which is a non-GAAP measure, see below under the heading
“Non-GAAP Financial Information.” Refer to Schedule 4 for a
reconciliation of Free Cash Flow to net cash (used in) provided by
operating activities (discussed in the first paragraph of this
section), the most directly comparable GAAP measure.
Credit Agreement
Amendment
On June 25, 2021, Emerald amended and restated its existing
credit agreement to: (i) extend the maturity of revolving
commitments by 18 months to November 23, 2023, (ii) reduce
aggregate revolving commitments from $150 million to $110 million,
(iii) only permit the Company to borrow new revolving loans if the
aggregate amount of unrestricted cash is no more than $40 million
(subject to certain exceptions and exclusions), and (iv) limit
certain dividends and distributions to stockholders to the greater
of (a) $40 million and (b) 35% of the cumulative amount of
Consolidated EBITDA (excluding proceeds of event cancellation
insurance), with amounts incurred in reliance on clause (a) above
not to exceed $20 million in any fiscal year.
Conference Call Webcast
Details
As previously announced, the Company will hold a conference call
to discuss its second quarter 2021 results at 8:30am EDT on Friday,
July 30, 2021.
The conference call can be accessed by dialing 1-877-407-9039
(domestic) or 1-201-689-8470 (international). A telephonic replay
will be available approximately two hours after the call by dialing
1-844-512-2921, or for international callers, 1-412-317-6671. The
passcode for the replay is 13720801. The replay will be available
until 11:59 pm (Eastern Time) on August 6, 2021.
Interested investors and other parties can access the webcast of
the live conference call by visiting the Investors section of
Emerald’s website at http://investor.emeraldx.com. An online replay
will be available on the same website immediately following the
call.
About Emerald
Emerald is a leader in building dynamic, market-driven
business-to-business platforms that integrate live events with a
broad array of industry insights, digital tools, and data-focused
solutions to create uniquely rich experiences. As true partners, we
at Emerald strive to build our customers’ businesses by creating
opportunities that inspire, amaze, and deliver breakthrough
results. With over 140 events each year, our teams are creators and
connectors who are thoroughly immersed in the industries we serve
and committed to supporting the communities in which we
operate.
Non-GAAP Financial
Information
This press release presents certain “non-GAAP” financial
measures. The components of these non-GAAP measures are computed by
using amounts that are determined in accordance with accounting
principles generally accepted in the United States of America
(“GAAP”). A reconciliation of non-GAAP financial measures used in
this press release to their nearest comparable GAAP financial
measures is included in the schedules attached hereto.
We define “Organic revenue growth” and “Organic revenue decline”
as the growth or decline, respectively, in our revenue from one
period to the next, adjusted for the revenue impact of: (i)
acquisitions and dispositions, (ii) discontinued events, (iii)
material show scheduling adjustments and (iv) event cancellations
for which the Company has received, or expects to receive, claim
proceeds from its event cancellation insurance policy. We disclose
changes in Organic revenue because we believe it assists investors
and analysts in comparing Emerald’s operating performance across
reporting periods on a consistent basis by excluding items that we
do not believe provide a fair comparison of the trends underlying
our existing event portfolio given changes in timing or strategy.
Management and Emerald’s board of directors evaluate changes in
Organic revenue to evaluate our historical and prospective
financial performance and understand underlying revenue trends of
our events.
We use Adjusted EBITDA because we believe it assists investors
and analysts in comparing Emerald’s operating performance across
reporting periods on a consistent basis by excluding items that we
do not believe are indicative of our core operating performance.
Management and Emerald’s board of directors use Adjusted EBITDA to
assess our financial performance and believe it is helpful in
highlighting trends because it excludes the results of decisions
that are outside the control of management, while other measures
can differ significantly depending on long-term strategic decisions
regarding capital structure, the tax jurisdictions in which we
operate, and capital investments. Adjusted EBITDA should not be
considered as an alternative to net income as a measure of
financial performance or to cash flows from operations as a
liquidity measure.
We define Adjusted EBITDA as net income before (i) interest
expense, (ii) income tax benefit, (iii) depreciation and
amortization, (iv) stock-based compensation, (v) deferred revenue
adjustment, (vi) goodwill and other intangible asset impairment
charge, (vii) material show scheduling adjustments, and (viii)
other items that management believes are not part of our core
operations.
We present Free Cash Flow because we believe it is a useful
indicator of liquidity that provides information to management and
investors about the amount of cash generated from our core
operations that, after capital expenditures, can be used to
maintain and grow our business, for the repayment of indebtedness,
payment of dividends and to fund strategic opportunities. Free Cash
Flow is a supplemental non-GAAP measure of liquidity and is not
based on any standardized methodology prescribed by GAAP. Free Cash
Flow should not be considered in isolation or as an alternative to
cash flows from operating activities or other measures determined
in accordance with GAAP.
Other companies may compute these measures differently. No
non-GAAP metric should be considered as an alternative to any other
measure derived in accordance with GAAP.
Cautionary Statement Concerning
Forward-Looking Statements
This press release contains and our earnings call will contain
certain forward-looking statements, including, but not limited to,
our expectations arising from the severe impact of COVID-19 and
related variants on our business; our ability to recover insurance
proceeds under current policies; the timing of any such recoveries
and our ability to obtain similar event cancellation insurance in
the future; the outcome of the Company’s litigation against the
insurers under the Company’s event cancellation insurance policies;
the timing for rescheduled trade show events; our ability to
successfully integrate the PlumRiver acquisition; and the benefits
of our cost reduction initiatives. These statements involve risks
and uncertainties, including, but not limited to, economic,
competitive, governmental and technological factors outside of the
Company’s control that may cause its business, industry, strategy,
financing activities or actual results to differ materially. See
“Risk Factors” and “Cautionary Note Regarding Forward-Looking
Statements” in the Company’s most recently filed periodic reports
on Form 10-K and Form 10-Q and subsequent filings. The Company
undertakes no obligation to update or revise any of the
forward-looking statements contained herein, whether as a result of
new information, future events or otherwise.
Emerald Holding, Inc.
Condensed Consolidated
Statements of (Loss) Income and Comprehensive (Loss) Income
(unaudited, dollars in
millions, share data in thousands, except earnings per share
data)
Three Months Ended June 30,
2021
Three Months Ended June 30,
2020
Six Months Ended June 30,
2021
Six Months Ended June 30,
2020
Revenues
$
15.0
$
7.0
$
27.9
$
106.7
Other income
2.3
48.2
16.4
48.2
Cost of revenues
3.6
(0.8
)
7.6
42.8
Selling, general and administrative
expense
33.1
25.1
63.9
63.2
Depreciation and amortization expense
12.1
12.2
23.9
25.0
Goodwill impairment charges
-
-
-
564.0
Intangible asset impairment charges
-
-
-
59.4
Operating (loss) income
(31.5
)
18.7
(51.1
)
(599.5
)
Interest expense, net
4.1
5.6
8.1
12.3
(Loss) income before income taxes
(35.6
)
13.1
(59.2
)
(611.8
)
Provision for (benefit from) income
taxes
10.9
3.2
2.6
(51.6
)
Net (loss) income and comprehensive (loss)
income attributable to Emerald Holding, Inc.
$
(46.5
)
$
9.9
$
(61.8
)
$
(560.2
)
Accretion on 7% Series A Convertible
Participating Preferred stock
(7.4
)
(0.3
)
(14.6
)
(0.1
)
Net (loss) income and comprehensive (loss)
income attributable to Emerald Holding, Inc. common
shareholders
$
(53.9
)
$
9.6
$
(76.4
)
$
(560.3
)
Basic (loss) income per share
$
(0.75
)
$
0.13
$
(1.06
)
$
(7.85
)
Diluted (loss) income per share
$
(0.75
)
$
0.13
$
(1.06
)
$
(7.85
)
Basic weighted average common shares
outstanding
71,938
71,444
72,091
71,413
Diluted weighted average common shares
outstanding
71,938
71,470
72,091
71,413
Emerald Holding, Inc.
Condensed Consolidated Balance
Sheets
(dollars in millions, share
data in thousands, except par value)
June 30, 2021
December 31, 2020
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
302.8
$
295.3
Trade and other receivables, net of
allowances of $0.9 million and $1.1 million, as of June 30, 2021
and December 31, 2020, respectively
41.6
30.7
Insurance receivables
-
17.8
Prepaid expenses
14.2
8.5
Total current assets
358.6
352.3
Noncurrent assets
Property and equipment, net
3.8
3.9
Intangible assets, net
258.4
275.0
Goodwill
407.9
404.3
Right-of-use assets
16.0
16.0
Other noncurrent assets
2.3
2.9
Total assets
$
1,047.0
$
1,054.4
Liabilities and Shareholders’
Equity
Current liabilities
Accounts payable and other current
liabilities
$
34.1
$
31.1
Cancelled event liabilities
8.5
25.9
Deferred revenues
119.2
48.6
Right-of-use liabilities, current
portion
4.1
4.3
Term loan, current portion
5.7
5.7
Total current liabilities
171.6
115.6
Noncurrent liabilities
Term loan, net of discount and deferred
financing fees
513.1
515.3
Deferred tax liabilities, net
3.8
1.9
Right-of-use liabilities
14.0
13.4
Other noncurrent liabilities
11.3
13.7
Total liabilities
713.8
659.9
Commitments and contingencies
Shareholders’ equity
7% Series A Convertible Participating
Preferred stock, $0.01 par value; authorized shares June 30, 2021
and December 31, 2020; 80,000; 71,442 and 71,445 shares issued and
outstanding at June 30, 2021 and December 31, 2020,
respectively
0.7
0.7
Common stock, $0.01 par value; authorized
shares: 800,000; issued and outstanding shares: 71,518 and 72,195
at June 30, 2021 and December 31, 2020, respectively
0.7
0.7
Additional paid-in capital
1,088.8
1,088.3
Accumulated deficit
(757.0
)
(695.2
)
Total shareholders’ equity
333.2
394.5
Total liabilities and shareholders’
equity
$
1,047.0
$
1,054.4
Schedule
1
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF
REVENUES TO ORGANIC REVENUES
Three Months Ended June
30,
Change
Six Months Ended June
30,
Change
2021
2020
$
%
2021
2020
$
%
(dollars in millions)
(unaudited)
Revenues
$
15.0
$
7.0
$
8.0
114.3
%
$
27.9
$
106.7
$
(78.8
)
(73.9
%)
Add (deduct):
Acquisition revenues
(3.4
)
-
(5.6
)
-
Discontinued events
-
(0.7
)
-
(2.7
)
COVID-19 cancellations(1)
-
-
-
(71.8
)
COVID-19 postponements(2)
-
-
-
(11.3
)
Organic revenues
$
11.6
$
6.3
$
5.3
84.1
%
$
22.3
$
20.9
$
1.4
6.7
%
Notes:
(1)
Represents reduction in revenues
as a result of the cancellation of certain events in the first and
second quarters of fiscal 2021, compared to all events that staged
in the first six months of 2020, due to COVID-19. The Company
believes the financial impact, net of costs saved, will be
partially offset by event cancellation insurance proceeds from
pending claims.
(2)
Represents deferral of revenues
to the second half of 2021 as a result of the postponement of
certain events that staged in the first quarter of 2020.
Schedule
2
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF
NET (LOSS) INCOME TO ADJUSTED EBITDA
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(dollars in millions)
(unaudited)
Net (loss) income
$
(46.5
)
$
9.9
$
(61.8
)
$
(560.2
)
Add (deduct):
Interest expense
4.1
5.6
8.1
12.3
Provision for (benefit from) income
taxes
10.9
3.2
2.6
(51.6
)
Goodwill impairment charge(1)
-
-
-
564.0
Intangible asset impairment charges(2)
-
-
-
59.4
Depreciation and amortization
12.1
12.2
23.9
25.0
Stock-based compensation
2.8
1.1
5.8
2.7
Deferred revenue adjustment
0.2
-
1.1
-
Other items(3)
2.8
1.2
4.0
5.2
Adjusted EBITDA
$
(13.6
)
$
33.2
$
(16.3
)
$
56.8
Notes:
(1)
For the six months ended June 30,
2021 and 2020, represents non-cash charges of zero and $564.0
million, respectively, for goodwill in connection with the
Company’s interim testing of goodwill for impairment.
(2)
Intangible asset impairment
charges for the six months ended June 30, 2020 represent non-cash
charges of $46.2 million and $13.2 million for certain
indefinite-lived intangible assets and certain definite-lived
intangible assets, respectively, in connection with the Company’s
interim testing of intangibles for impairment.
(3)
Other items for the three months
ended June 30, 2021 included: (i) $1.1 million in expense related
to the remeasurement of contingent consideration, (ii) $1.2 million
in non-recurring legal, audit and consulting fees, (iii) $0.3
million in transition costs in connection with previous
acquisitions and (iv) $0.2 million in transaction costs in
connection with the PlumRiver LLC and Sue Bryce Education
acquisitions. Other items for the three months ended June 30, 2020
included: (i) $1.0 million in transition costs, including one-time
severance expense of $0.9 million, (ii) $0.6 million in
non-recurring legal, audit and consulting fees offset by (iii) a
$0.4 million reduction to expense related to the remeasurement of
contingent consideration. Other items for the six months ended June
30, 2021 included: (i) $1.5 million in expense related to the
remeasurement of contingent consideration, (ii) $1.8 million in
non-recurring legal, audit and consulting fees, (iii) $0.3 million
in transition costs in connection with previous acquisitions and
(iv) $0.4 million in transaction costs in connection with the
PlumRiver LLC, EDspaces and Sue Bryce Education acquisitions. Other
items for the six months ended June 30, 2020 included: (i) $4.4
million in transition costs, including one-time severance expense
of $2.8 million, (ii) $0.8 million in non-recurring legal, audit
and consulting fees and (iii) $0.4 million in transaction costs in
connection with certain acquisition transactions offset by (iv) a
$0.4 million reduction to expense related to the remeasurement of
contingent consideration.
Schedule
3
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH
FLOW
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(dollars in millions)
(unaudited)
Net Cash Provided by (Used in)
Operating Activities
$
25.1
$
(31.4
)
$
26.7
$
(22.6
)
Less:
Capital expenditures
1.3
1.2
2.3
2.3
Free Cash Flow
$
23.8
$
(32.6
)
$
24.4
$
(24.9
)
Schedule
4
Emerald Holding, Inc.
UNAUDITED RECONCILIATION OF
REPORTABLE SEGMENTS RESULTS TO (LOSS) INCOME BEFORE TAXES
Three Months Ended June
30,
Six Months Ended June
30,
2021
2020
2021
2020
(dollars in millions)
(unaudited)
Revenues
Commerce
$
3.9
$
1.5
$
9.6
$
51.0
Design and Technology
4.7
3.9
7.7
40.7
All Other
6.4
1.6
10.6
15.0
Total revenues
$
15.0
$
7.0
$
27.9
$
106.7
Other Income
Commerce
-
34.6
$
7.3
34.6
Design and Technology
2.3
12.9
5.4
12.9
All Other
-
0.7
3.7
0.7
Total other income
$
2.3
$
48.2
$
16.4
$
48.2
Adjusted EBITDA
Commerce
$
(3.1
)
$
31.1
$
2.8
$
49.2
Design and Technology
1.3
12.0
0.9
22.6
All Other
(0.2
)
(0.3
)
2.5
2.9
Subtotal Adjusted EBITDA
$
(2.0
)
$
42.8
$
6.2
$
74.7
General corporate and other expenses
(11.6
)
(9.6
)
(22.5
)
(17.9
)
Interest expense
(4.1
)
(5.6
)
(8.1
)
(12.3
)
Goodwill impairment charges
-
-
-
(564.0
)
Intangible asset impairment charges
-
-
-
(59.4
)
Depreciation and amortization expense
(12.1
)
(12.2
)
(23.9
)
(25.0
)
Stock-based compensation expense
(2.8
)
(1.1
)
(5.8
)
(2.7
)
Deferred revenue adjustment
(0.2
)
-
(1.1
)
-
Other items
(2.8
)
(1.2
)
(4.0
)
(5.2
)
(Loss) income before taxes
$
(35.6
)
$
13.1
$
(59.2
)
$
(611.8
)
Schedule
5
Emerald Holding, Inc.
UNAUDITED EVENT CANCELLATION
INSURANCE CLAIM ACTIVITY
Insurance claims
submitted
Insurance claims approved and
received
Insurance claim proceeds
accrued*
Insurance recognized in Other
Income
(dollars in millions)
(unaudited)
Year Ended December 31, 2020
2020 events
$
166.8
$
89.1
$
17.9
$
107.0
Six Months Ended June 30, 2021
2020 events
-
16.4
-
$
16.4
2021 events
72.7
-
-
-
Total
$
72.7
$
16.4
$
-
16.4
Cumulative Total
$
239.5
$
105.5
$
17.9
$
123.4
* Includes insurance claims accrued and
received in subsequent period
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210730005135/en/
Emerald Holding, Inc. David Doft, 1-866-339-4688
(866EEXINVT)
Emerald (NYSE:EEX)
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