SAN JUAN CAPISTRANO, Calif.--(BUSINESS WIRE)--
Emerald Expositions Events, Inc. (NYSE:EEX) (“Emerald”) today reported
financial results for the second quarter ended June 30, 2017.
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Revenues increased 14.0% to $74.1 million, with organic growth of
4.6%, supplemented by acquisitive growth
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Net loss increased by approximately $5.4 million to a net loss of $5.8
million, partly reflecting costs incurred in the planned relocation of
the Outdoor Retailer show in 2018
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Adjusted EBITDA, a non-GAAP measure, increased 17.3% to $29.1 million
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Adjusted Net Income, a non-GAAP measure, increased 62.0% to $12.8
million
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Completed the acquisition of the SIA Snow Show in May for purchase
consideration of approximately $16 million
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Three Months
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Six Months
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Ended June 30,
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Ended June 30,
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(in millions, except percentages and per share data)
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2017
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2016
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Change
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% Change
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2017
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2016
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Change
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% Change
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Revenues
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$
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74.1
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$
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65.0
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$
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9.1
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14.0
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%
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$
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209.8
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$
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192.8
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$
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17.0
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8.8
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%
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Net (loss) income
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$
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(5.8
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)
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$
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(0.4
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)
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$
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(5.4
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)
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1350.0
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%
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$
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22.5
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$
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27.8
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$
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(5.3
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)
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(19.0
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)%
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Diluted EPS
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$
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(0.08
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)
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$
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(0.01
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)
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$
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(0.07
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)
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700.0
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%
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$
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0.33
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$
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0.44
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$
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(0.11
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)
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(25.0
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)%
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Non-GAAP measures:
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Adjusted EBITDA
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$
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29.1
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$
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24.8
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$
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4.3
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17.3
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%
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$
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102.0
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$
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96.4
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$
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5.6
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5.8
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%
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Adjusted Net Income
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$
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12.8
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$
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7.9
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$
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4.9
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62.0
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%
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$
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51.3
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$
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43.7
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$
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7.6
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17.4
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%
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Adjusted Diluted EPS
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$
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0.18
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$
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0.12
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$
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0.06
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50.0
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%
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$
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0.75
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$
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0.69
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$
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0.06
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8.7
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%
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Free Cash Flow
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$
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20.6
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$
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39.5
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$
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(18.9
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)
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(47.8
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)%
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$
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49.1
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$
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68.9
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$
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(19.8
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)
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(28.7
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)%
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Second Quarter and Year-to-Date 2017 Financial
Performance
“We delivered a very solid financial performance this quarter, with a
14% increase in revenue, including mid-single digit organic revenue
growth, and an Adjusted EBITDA increase of 17%,” said David Loechner,
President and Chief Executive Officer of Emerald. “Additionally, our
acquisition of the SIA Snow Show in the quarter was a significant coup
as it brings together the two leading US trade shows in the winter
lifestyle & outdoor sports sector, Outdoor Retailer and the SIA show.”
Financial & Operational Results
For the second quarter of 2017, Emerald reported revenues of $74.1
million compared to revenues of $65.0 million for the second quarter of
2016, an increase of approximately $9.1 million, or 14.0%. The increase
in revenues reflected organic growth of 4.6%, with the balance driven by
acquisitions.
Cost of revenues of $21.6 million for the second quarter of 2017
increased by 10.2%, or approximately $2.0 million, from $19.6 million
for the second quarter of 2016. This increase was mainly attributable to
$1.4 million of incremental costs associated with acquisitions, with the
remaining $0.6 million attributable to a small show launch and modest
other cost growth.
Selling, General & Administrative expense (SG&A) of $34.5 million for
the second quarter of 2017 increased by 51.3%, or approximately $11.7
million, from $22.8 million for the second quarter of 2016. The 2017
second quarter expense included approximately $8.5 million of one-time
costs to settle various contractual commitments associated with the
relocation of the Outdoor Retailer show from Salt Lake City to Denver in
2018. In addition, transaction costs of $1.1 million were $0.4 million
higher than the second quarter of 2016, and we also incurred $0.4
million of one-time IPO related costs in the quarter. The SG&A of
acquisitions contributed approximately $1.4 million of incremental
costs, and the remaining $1.0 million increase in SG&A mainly reflected
higher compensation and marketing costs.
Net loss for the second quarter of 2017 increased by approximately $5.4
million to a loss of $5.8 million from $0.4 million in the second
quarter of 2016. The variance was largely driven by the increased
settlement costs and transaction costs noted above in SG&A, and also
$6.1 million of charges related to the refinancing of the Company’s
credit facility after our initial public offering, partly offset in the
quarter’s interest expense by lower interest paid on the Company’s debt.
For the second quarter of 2017, Adjusted EBITDA was $29.1 million
compared to $24.8 million for the second quarter of 2016, an increase of
approximately $4.3 million or 17.3%. This performance reflected the
period’s strong revenue growth and modest margin improvement.
For a discussion of our presentation of Adjusted EBITDA, which is a
non-GAAP measure, see below under the heading “Non-GAAP Financial
Information”. For a reconciliation of Adjusted EBITDA to net income see
Appendix I attached hereto.
Cash Flow
Net cash provided by operations decreased by approximately $19.1 million
to $20.9 million in the second quarter of 2017 compared to $40.0 million
in the second quarter of 2016. The Company estimates that the previously
noted one-time contract settlement costs for Outdoor Retailer, higher
transaction costs, and certain IPO related cash flows accounted for
approximately $8.5 million of the decrease, while cash taxes of $1.6
million were $0.4 million higher than in the second quarter of 2016.
Cash interest payments were approximately $8.2 million lower than the
same quarter last year, although this benefit was offset by $6.1 million
of refinancing charges. The balance of the adverse variance in net cash
from operations, approximately $12.3 million, was partly due to lower
cash collections for several of the third quarter shows, where revenues
are projected to be lower this year due to the factors highlighted
during our last quarter’s results call. The balance of the shortfall was
due to timing and other normal operating factors.
Capital expenditures were $0.3 million for the second quarter of 2017,
compared to $0.6 million for the second quarter of 2016.
Free Cash Flow, which we define as net cash provided by operating
activities less capital expenditures, was $20.6 million for the second
quarter of 2017, compared to $39.5 million in the second quarter of 2016.
For a discussion of our presentation of Free Cash Flow, see below under
the heading “Non-GAAP Financial Information”. For a reconciliation of
Free Cash Flow to net cash provided by operating activities, see
Appendix I attached hereto.
Financial Position
On May 3, 2017, the Company applied the net proceeds of $159.1 million
from the April 28, 2017 initial public offering to reduce amounts
outstanding under its term loan facility. On May 22, 2017, we refinanced
our credit facility to reduce the interest rate payable, significantly
extend the maturity profile, achieve more favorable terms and increase
the revolver commitments. The new $565.0 million 7-year term loan B has
an interest rate of LIBOR + 300 basis points, which is 75 basis points
lower than our previous rate, with a step-down to LIBOR + 275 basis
points upon achieving a first lien net leverage ratio of 2.75 times. We
also established a new $150 million 5-year revolving credit facility,
representing an increase of $50 million over the Company’s previous
revolving credit facility.
As of June 30, 2017, Emerald’s cash and cash equivalents were $9.9
million and gross debt was $565.0 million. Net debt (gross debt less
cash and cash equivalents) was $555.1 million and Emerald’s net debt
leverage ratio at the end of the quarter was 3.4 times Acquisition
Adjusted EBITDA for the twelve months ended June 30, 2017 of $164.4
million. The Company has conservatively chosen not to include the pro
forma Adjusted EBITDA of the SIA Snow Show, acquired in May, in the
Acquisition Adjusted EBITDA at June 30, 2017.
For a discussion of our presentation of Acquisition Adjusted EBITDA,
which is a non-GAAP measure, see below under the heading “Non-GAAP
Financial Information”. For a reconciliation of Acquisition Adjusted
EBITDA to net income see Appendix I attached hereto.
Capital Allocation
On May 24, 2017, we announced the acquisition of the SIA Snow Show from
the SnowSports Industries America (SIA) for cash consideration of
approximately $16 million. This acquisition brings together the
industry’s two premier winter sports trade show brands, Outdoor Retailer
and the Snow Show, under the Emerald umbrella at a single January event.
The first combined winter show will be held in Denver in January 2018.
“It was no small feat to bring together these long-established shows,”
noted Mr. Loechner. “This combining of the shows is what the industry
has requested for many years, and the fact that this will happen as soon
as January 2018 has been very well received by the market since our
announcement of the acquisition in May. Importantly, this acquisition
provides a more certain path for our move to a three-shows-per-year
format, solves a venue problem that arose this year that was not of our
making, and advances Outdoor Retailer’s long-term leadership position in
this market space.”
On July 31, 2017, the Board of Directors approved the payment of a cash
dividend of $0.07 per share for the quarter ending September 30, 2017 to
holders of the Company’s common stock. The dividend is expected to be
paid on or about August 31, 2017 to stockholders of record on August 17,
2017.
Outlook (forward-looking statement)
For the year ending December 31, 2017, Emerald management expects
reported and organic revenues to trend towards the lower end of the
previously provided guidance, and Adjusted EBITDA to trend just below
the midpoint of the previously provided guidance, outlined below:
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Total revenue growth of 7.5% to 9.5%, or $348 million to $355 million
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Organic revenue growth of zero percent to 2.0%
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Adjusted EBITDA of $154 million to $160 million, or growth of 1.2% to
5.2%
The above outlook assumes no further acquisitions or unanticipated
events. See discussion of non-GAAP financial measures at the end of this
release.
Conference Call and Webcast Details
The Company will hold a conference call to discuss its second quarter
2017 results at 11:00 am EDT on August 3, 2017. 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 13665556. The
replay will be available until 11:59 pm EDT on August 10, 2017.
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.emeraldexpositions.com.
The online replay will be available on the same website immediately
following the call.
About Emerald Expositions
Emerald is the largest operator of business-to-business trade shows
in the United States by net square footage (“NSF”), with most of our
trade shows dating back several decades. Emerald currently operates more
than 50 trade shows, as well as numerous other events. In 2016,
Emerald’s events connected over 500,000 global attendees and exhibitors
and occupied over 6.5 million NSF of exhibition space.
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 Appendix I attached
hereto.
We use Adjusted EBITDA and Acquisition Adjusted EBITDA because we
believe they assist 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 and Acquisition Adjusted EBITDA to assess our financial
performance and believe they are helpful in highlighting trends because
they exclude 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. Further, our
executive incentive compensation is based in part on Acquisition
Adjusted EBITDA. In addition, we use Acquisition Adjusted EBITDA for
purposes of calculating compliance with our debt covenants in our senior
secured credit facilities. Adjusted EBITDA and Acquisition Adjusted
EBITDA should not be considered as alternatives 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) loss on extinguishment of debt, (iii) income tax expense, (iv)
depreciation and amortization, (v) stock-based compensation, (vi)
deferred revenue adjustment, (vii) intangible asset impairment charge,
(viii) unrealized loss on interest rate swap and floor, net, (ix) the
Onex management fee (which ended prior to the Company’s initial public
offering) and (x) other items that management believes are not part of
our core operations. We define Acquisition Adjusted EBITDA as Adjusted
EBITDA for each period presented as further adjusted for the results of
shows associated with acquisitions made during such period as if they
had been completed as of the first day of the period presented.
In addition to net income presented in accordance with GAAP, we present
Adjusted Net Income because we believe it assists investors and analysts
in comparing our operating performance across reporting periods on a
consistent basis by excluding items that we do not believe are
indicative of our core operating performance. Our presentation of
Adjusted Net Income adjusts net income for (i) loss on extinguishment of
debt, (ii) stock-based compensation, (iii) deferred revenue adjustment,
(iv) intangible asset impairment charge, (v) the Onex management fee,
(vi) other items that management believes are not part of our core
operations, (vii) amortization of deferred financing fees and discount,
(viii) amortization of (acquired) intangible assets and (ix) tax
adjustments related to non-GAAP adjustments.
We use Adjusted Net Income as a supplemental metric to evaluate our
business’s performance in a way that also considers our ability to
generate profit without the impact of certain items.
For example, it is useful to exclude stock-based compensation expenses
because the amount of such expenses in any specific period may not
directly correlate to the underlying performance of our business, and
these expenses can vary significantly across periods due to timing of
new stock-based awards. We also exclude professional fees associated
with debt refinancing, the amortization of intangible assets and certain
discrete costs, including deferred revenue adjustments, impairment
charges and transaction costs (including professional fees and other
expenses associated with acquisition activity) in order to facilitate a
period-over-period comparison of our financial performance. This measure
also reflects an adjustment for the difference between cash amounts paid
in respect of taxes and the amount of tax recorded in accordance with
GAAP. Each of the normal recurring adjustments and other adjustments
described in this paragraph help to provide management with a measure of
our operating performance over time by removing items that are not
related to day-to-day operations or are noncash expenses.
Adjusted Net Income is a supplemental non-GAAP financial measure of
operating performance and is not based on any standardized methodology
prescribed by GAAP. Adjusted Net Income should not be considered in
isolation or as an alternative to net income, cash flows from operating
activities or other measures determined in accordance with GAAP. Also,
Adjusted Net Income is not necessarily comparable to similarly titled
measures presented by other companies.
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 certain forward-looking statements,
including full year guidance with respect to revenue and Adjusted
EBITDA. These statements are based on management’s expectations as well
as estimates and assumptions prepared by management that, although they
believe to be reasonable, are inherently uncertain. 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 prospectus dated April 27, 2017 and filed with the
Securities and Exchange Commission pursuant to Rule 424(b)(4) of the
Securities Act of 1933, as amended, on May 1, 2017. 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.
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Emerald Expositions Events, Inc.
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|
Condensed Consolidated Statements of (Loss) Income and
Comprehensive (Loss) Income
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|
(unaudited, in thousands, except earnings per share)
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|
|
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Three Months
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Three Months
|
|
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Six Months
|
|
|
Six Months
|
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|
|
Ended June 30,
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|
|
Ended June 30,
|
|
|
Ended June 30,
|
|
|
Ended June 30,
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|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Revenues
|
|
$
|
74,139
|
|
|
$
|
64,974
|
|
|
$
|
209,793
|
|
|
$
|
192,770
|
|
Cost of revenues
|
|
|
21,569
|
|
|
|
19,564
|
|
|
|
58,158
|
|
|
|
51,408
|
|
Selling, general and administrative expense
|
|
|
34,545
|
|
|
|
22,782
|
|
|
|
66,510
|
|
|
|
49,174
|
|
Depreciation and amortization expense
|
|
|
10,827
|
|
|
|
9,931
|
|
|
|
21,402
|
|
|
|
19,874
|
|
Operating income
|
|
|
7,198
|
|
|
|
12,697
|
|
|
|
63,723
|
|
|
|
72,314
|
|
Interest expense
|
|
|
16,849
|
|
|
|
13,260
|
|
|
|
26,497
|
|
|
|
26,295
|
|
Loss on extinguishment of debt
|
|
|
216
|
|
|
|
—
|
|
|
|
216
|
|
|
|
—
|
|
(Loss) income before income taxes
|
|
|
(9,867
|
)
|
|
|
(563
|
)
|
|
|
37,010
|
|
|
|
46,019
|
|
(Benefit) from/provision for income taxes
|
|
|
(4,053
|
)
|
|
|
(193
|
)
|
|
|
14,477
|
|
|
|
18,213
|
|
Net (loss) income and comprehensive (loss) income
|
|
$
|
(5,814
|
)
|
|
$
|
(370
|
)
|
|
$
|
22,533
|
|
|
$
|
27,806
|
|
Basic (loss) earnings per share
|
|
$
|
(0.08
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.34
|
|
|
$
|
0.45
|
|
Diluted (loss) earnings per share
|
|
$
|
(0.08
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
0.33
|
|
|
$
|
0.44
|
|
Basic weighted average common shares outstanding
|
|
|
69,102
|
|
|
|
61,860
|
|
|
|
65,484
|
|
|
|
61,854
|
|
Diluted weighted average common shares outstanding
|
|
|
69,102
|
|
|
|
61,860
|
|
|
|
68,393
|
|
|
|
63,072
|
|
|
|
Emerald Expositions Events, Inc.
|
|
Condensed Consolidated Balance Sheets
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|
(in thousands, except par value)
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2017
|
|
|
2016
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
9,945
|
|
|
|
$
|
14,942
|
|
|
Trade and other receivables, net of allowance for doubtful
accounts of
$523 and $693 as of June 30, 2017 and December
31, 2016, respectively
|
|
|
70,031
|
|
|
|
|
57,576
|
|
|
Prepaid expenses
|
|
|
14,011
|
|
|
|
|
23,044
|
|
|
Total current assets
|
|
|
93,987
|
|
|
|
|
95,562
|
|
|
Noncurrent assets
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
3,626
|
|
|
|
|
3,778
|
|
|
Goodwill
|
|
|
971,537
|
|
|
|
|
930,321
|
|
|
Other intangible assets, net
|
|
|
540,298
|
|
|
|
|
541,172
|
|
|
Other noncurrent assets
|
|
|
2,010
|
|
|
|
|
1,686
|
|
|
Total assets
|
|
$
|
1,611,458
|
|
|
|
$
|
1,572,519
|
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Accounts payable and other current liabilities
|
|
$
|
36,446
|
|
|
|
$
|
28,234
|
|
|
Deferred revenues
|
|
|
160,979
|
|
|
|
|
171,644
|
|
|
Term loan, current portion
|
|
|
5,650
|
|
|
|
|
8,744
|
|
|
Total current liabilities
|
|
|
203,075
|
|
|
|
|
208,622
|
|
|
Noncurrent liabilities
|
|
|
|
|
|
|
|
|
Term loan, net of discount and deferred financing fees
|
|
|
550,135
|
|
|
|
|
693,322
|
|
|
Deferred tax liabilities, net
|
|
|
151,046
|
|
|
|
|
140,049
|
|
|
Other noncurrent liabilities
|
|
|
1,616
|
|
|
|
|
2,758
|
|
|
Total liabilities
|
|
|
905,872
|
|
|
|
|
1,044,751
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
Common stock, $0.01 par value; authorized shares: 800,000; issued
and
outstanding shares: 72,202 and 61,860 at June 30, 2017 and
December
31, 2016, respectively
|
|
|
722
|
|
|
|
|
619
|
|
|
Additional paid-in capital
|
|
|
670,570
|
|
|
|
|
510,334
|
|
|
Retained earnings
|
|
|
34,294
|
|
|
|
|
16,815
|
|
|
Total shareholders’ equity
|
|
|
705,586
|
|
|
|
|
527,768
|
|
|
Total liabilities and shareholders’ equity
|
|
$
|
1,611,458
|
|
|
|
$
|
1,572,519
|
|
|
|
|
Appendix I
|
|
Emerald Expositions Events, Inc.
|
|
Reconciliation of Non-GAAP Financial Measures (Unaudited)
|
|
(in thousands)
|
|
|
|
|
|
Three months
|
|
|
Six months
|
|
|
Twelve months
|
|
|
|
ended June 30,
|
|
|
ended June 30,
|
|
|
ended
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|
|
|
(dollars in thousands)
|
|
|
(dollars in thousands)
|
|
|
(dollars in thousands)
|
|
Net (loss) income
|
|
$
|
(5,814
|
)
|
|
$
|
(370
|
)
|
|
$
|
22,533
|
|
$
|
27,806
|
|
|
$
|
16,894
|
|
$
|
22,167
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
16,849
|
|
|
|
13,260
|
|
|
|
26,497
|
|
|
26,295
|
|
|
|
51,602
|
|
|
51,400
|
|
Loss on extinguishment of debt
|
|
|
216
|
|
|
|
—
|
|
|
|
216
|
|
|
—
|
|
|
|
12,996
|
|
|
12,780
|
|
(Benefit) from/provision for income taxes
|
|
|
(4,053
|
)
|
|
|
(193
|
)
|
|
|
14,477
|
|
|
18,213
|
|
|
|
10,360
|
|
|
14,096
|
|
Depreciation and amortization
|
|
|
10,827
|
|
|
|
9,931
|
|
|
|
21,402
|
|
|
19,874
|
|
|
|
41,575
|
|
|
40,047
|
|
Stock-based compensation
|
|
|
564
|
|
|
|
866
|
|
|
|
1,146
|
|
|
1,621
|
|
|
|
2,423
|
|
|
2,898
|
|
Deferred revenue adjustment
|
|
|
24
|
|
|
|
—
|
|
|
|
518
|
|
|
—
|
|
|
|
821
|
|
|
303
|
|
Management fee
|
|
|
—
|
|
|
|
188
|
|
|
|
188
|
|
|
375
|
|
|
|
563
|
|
|
750
|
|
Other items(1)
|
|
|
10,480
|
|
|
|
1,078
|
|
|
|
14,990
|
|
|
2,229
|
|
|
|
20,452
|
|
|
7,690
|
|
Adjusted EBITDA
|
|
$
|
29,093
|
|
|
$
|
24,760
|
|
|
$
|
101,967
|
|
$
|
96,413
|
|
|
$
|
157,686
|
|
$
|
152,131
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,760
|
|
|
6,409
|
|
Acquisition Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
164,446
|
|
$
|
158,540
|
|
(1)
|
|
Other items for the three months ended June 30, 2017 included: (i)
$8.5 million in contract termination costs (ii) $1.1 million in
transaction costs in connection with certain acquisition
transactions that were completed or pending in 2017 and 2016, (ii)
$0.3 million in legal, audit and consulting fees related to the IPO
and other related activities and (iii) $0.6 million in transition
costs. Other items for the three months ended June 30, 2016
included: (i) $0.8 million in transaction costs incurred in
connection with certain acquisition transactions that were pending
as well as acquisitions that were pursued but not completed in the
period and (ii) $0.3 million in transition costs, primarily related
to information technology and facility rental charges for terminated
leases. Other items for the six months ended June 30, 2017 included:
(i) $8.5 million in contract termination costs, (ii) $2.7 million in
transaction costs in connection with certain acquisition
transactions that were completed or pending in 2017, (iii) $3.0
million in legal, audit and consulting fees related to the IPO and
other related activities and (iv) $0.8 million in transition costs.
Other items for the six months ended June 30, 2016 included: (i)
$1.6 million in transaction costs incurred in connection with
certain acquisition transactions that were pending as well as
acquisitions that were pursued but not completed in the period and
(ii) $0.6 million in transition costs, primarily related to
information technology and facility rental charges for terminated
leases. Other items for the twelve months ended June 30, 2017
included: (i) $8.5 in contract termination costs (ii) $5.1 million
in transaction and contingent compensation costs related to
acquisitions that were pending or completed in 2016 and 2017, (iii)
$4.5 million in legal, audit and consulting fees related to the IPO
and other related activities and (iv) $2.4 million in transition
costs. Other items for the twelve months ended December 31, 2016
included (i) $4.0 million in transaction costs incurred in
connection with certain acquisition transactions that were completed
or pending and those that were pursued but not completed during
2016, (ii) $1.3 million in legal and consulting fees related to the
IPO, and (iii) $2.3 million in transition costs, primarily related
to information technology and facility rental charges for terminated
leases.
|
|
|
|
(2)
|
|
Reflects the Adjusted EBITDA of acquisitions completed in 2016 and
to date in 2017, with the exception of SIA Snow Show as discussed
above, where the results of such acquisitions have not been
captured in our consolidated financial statements for the
twelve-month period ended June 30, 2017.
|
|
|
|
|
|
Three months
|
|
|
Six months
|
|
|
|
|
ended June 30,
|
|
|
ended June 30,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
(dollars in thousands)
|
|
|
(dollars in thousands)
|
|
|
Net (loss) income
|
|
$
|
(5,814
|
)
|
|
$
|
(370
|
)
|
|
$
|
22,533
|
|
|
$
|
27,806
|
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Refinancing charges
|
|
|
6,151
|
|
|
|
—
|
|
|
|
6,151
|
|
|
|
—
|
|
|
Loss on extinguishment of debt
|
|
|
216
|
|
|
|
—
|
|
|
|
216
|
|
|
|
—
|
|
|
Stock-based compensation
|
|
|
564
|
|
|
|
866
|
|
|
|
1,146
|
|
|
|
1,621
|
|
|
Deferred revenue adjustment
|
|
|
24
|
|
|
|
—
|
|
|
|
518
|
|
|
|
—
|
|
|
Management fee
|
|
|
-
|
|
|
|
188
|
|
|
|
188
|
|
|
|
375
|
|
|
Other items(1)
|
|
|
10,480
|
|
|
|
1,078
|
|
|
|
14,990
|
|
|
|
2,229
|
|
|
Amortization of deferred financing fees and discount
|
|
|
2,942
|
|
|
|
1,755
|
|
|
|
3,854
|
|
|
|
2,796
|
|
|
Amortization of (acquired) intangible assets
|
|
|
10,302
|
|
|
|
9,500
|
|
|
|
20,421
|
|
|
|
19,000
|
|
|
Tax adjustments related to non-GAAP adjustments(2)
|
|
|
(12,113
|
)
|
|
|
(5,164
|
)
|
|
|
(18,756
|
)
|
|
|
(10,156
|
)
|
|
Adjusted Net Income
|
|
$
|
12,752
|
|
|
$
|
7,853
|
|
|
$
|
51,261
|
|
|
$
|
43,671
|
|
|
Basic earnings per share
|
|
$
|
0.18
|
|
|
$
|
0.13
|
|
|
$
|
0.78
|
|
|
$
|
0.71
|
|
|
Diluted earnings per share
|
|
$
|
0.18
|
|
|
$
|
0.12
|
|
|
$
|
0.75
|
|
|
$
|
0.69
|
|
|
Basic weighted average common shares outstanding
|
|
|
69,102
|
|
|
|
61,860
|
|
|
|
65,484
|
|
|
|
61,854
|
|
|
Diluted weighted average common shares outstanding
|
|
|
72,175
|
|
|
|
63,151
|
|
|
|
68,393
|
|
|
|
63,072
|
|
|
(1)
|
|
Represents other items described in Note 1 above.
|
|
|
|
(2)
|
|
Reflects application of U.S. federal and state enterprise tax rate
of 39.5% for the three and six months ended June 30, 2017 and a rate
of 39.0% for the three and six months ended June 30, 2016.
|
|
|
|
|
|
Three months
|
|
Six months
|
|
|
|
ended June 30,
|
|
ended June 30,
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
(dollars in thousands)
|
|
(dollars in thousands)
|
|
Net Cash Provided by Operating Activities
|
|
$
|
20,910
|
|
$
|
40,044
|
|
$
|
49,719
|
|
$
|
69,971
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
291
|
|
|
593
|
|
576
|
|
1030
|
|
Free Cash Flow
|
|
$
|
20,619
|
|
$
|
39,451
|
|
$
|
49,143
|
|
$
|
68,941
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170803005335/en/
Source: Emerald Expositions Events, Inc.