Emerald Holding, Inc. [EEX] Filings

10-Q 1 eex-20240630.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38076

Emerald Holding, Inc.

(Exact name of registrant as specified in its charter)

    Delaware

    42-1775077

    (State or other jurisdiction of
incorporation or organization)

    (I.R.S. Employer
Identification No.)

100 Broadway

14th Floor

New York, New York 10005

(Address of principal executive offices, zip code)

(Registrant’s telephone number, including area code): (949) 226-5700

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading
Symbol(s)

    Name of each exchange on which registered

    Common Stock, par value $0.01 per share

    EEX

    New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 5, 2024, there were 203,927,001 shares of the Registrant’s common stock, par value $0.01, outstanding.

EMERALD HOLDING, INC.

TABLE OF CONTENTS


		Page

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		1

PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46

Item 4.	Controls and Procedures	46

PART II. OTHER INFORMATION		47

Item 1.	Legal Proceedings	47

Item 1A.	Risk Factors	47

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47

Item 3.	Defaults Upon Senior Securities	47

Item 4.	Mine Safety Disclosures	47

Item 5.	Other Information	47

Item 6.	Exhibits	48

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. You can generally identify forward-looking statements by our use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek” or “should,” or the negative thereof or other variations thereon or comparable terminology. In particular, statements about general economic conditions, or more specifically about the markets in which we operate, including growth of our various markets, and our expectations, beliefs, plans, strategies, objectives, prospects, assumptions or future events or performance contained in this report are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including the trends and other factors discussed in this report under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements, or could affect the trading price of our common stock on the New York Stock Exchange. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include, but are not limited to:

•

risks associated with event cancellations or interruptions, including cancellations or interruptions resulting from natural or manmade disasters, including outbreaks of communicable diseases (e.g., COVID 19); the actions that governments, businesses and individuals take in response to any such outbreaks, including limiting the size of gatherings; the resulting impact on overall demand for face-to-face events; and our ability or inability to obtain insurance coverage relating to event cancellations or interruptions;

•

disruptions in global or local travel conditions and quarantines due to natural or manmade disasters, including outbreaks of communicable diseases or terrorist actions;

•

the potential impairment of intangible assets, including goodwill, on our balance sheet;

•

general economic conditions;

•

our ability to secure desirable dates and locations for our trade shows;

•

our ability to assess and respond to changing market trends, including digital and virtual show offerings;

•

the failure to attract high-quality exhibitors and attendees;

•

the failure to fully realize the expected results and/or operating efficiencies from our strategic initiatives;

•

competition from existing operators or new competitors;

•

our top five trade shows generate a significant portion of our revenues;

•

the effect of shifts in marketing and advertising budgets to online initiatives;

•

our ability to retain our senior management team and our reliance on key full-time employees;

•

risks associated with our acquisition strategy and our ability to execute this strategy to accelerate growth;

•

our ability to use digital media and print publications to stay in close contact with our event audiences;

•

our and our exhibitors’ reliance on a limited number of outside contractors;

•

changes in legislation, regulation and government policy;

•

changes in U.S. tariff and import/export regulations;

•

our relationships with industry associations;

•

risks and costs associated with new trade show launches;

•

that we do not own certain of the trade shows that we operate;

•

the infringement or invalidation of proprietary rights;

•

disruption of our information technology systems;

•

the failure to maintain the integrity or confidentiality of employee or customer data;

•

our potential inability to utilize tax benefits associated with tax deductible amortization expenses; and

•

other factors beyond our control, including those listed under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”) and in other filings we may make from time to time with the SEC.

Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this report are not guarantees of future performance and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained in this report. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements contained in this report, they may not be predictive of results or developments in future periods.

Any forward-looking statement that we make in this Quarterly Report on Form 10-Q speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this report.

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Emerald Holding, Inc.

Condensed Consolidated Balance Sheets

(unaudited)


(dollars in millions, share data in thousands, except par value)	June 30, 2024			December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	193.2		$	204.2
Trade and other receivables, net of allowances of $1.6 million and $1.4 million as of June 30, 2024 and December 31, 2023, respectively		93.9			85.2
Prepaid expenses and other current assets		24.2			21.5
Total current assets		311.3			310.9
Noncurrent assets
Property and equipment, net		1.5			1.5
Intangible assets, net		171.4			175.1
Goodwill, net		567.5			553.9
Right-of-use lease assets		7.7			8.8
Other noncurrent assets		3.2			3.7
Total assets	$	1,062.6		$	1,053.9
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable and other current liabilities	$	48.3		$	46.6
Income tax payable		—			0.2
Cancelled event liabilities		0.6			0.6
Deferred revenues		175.5			174.3
Contingent consideration		0.5			0.2
Right-of-use lease liabilities, current portion		4.0			4.0
Term loan, current portion		4.2			4.2
Total current liabilities		233.1			230.1
Noncurrent liabilities
Term loan, net of discount and deferred financing fees		398.6			398.7
Deferred tax liabilities, net		5.7			3.1
Right-of-use lease liabilities, noncurrent portion		7.2			8.9
Other noncurrent liabilities		10.4			8.5
Total liabilities		655.0			649.3
Commitments and contingencies (Note 13)
Redeemable convertible preferred stock
7% Series A Redeemable Convertible Participating Preferred stock, $0.01 par value; authorized shares at June 30, 2024 and December 31, 2023: 80,000; zero and 71,403 shares issued and outstanding; aggregate liquidation preference of zero and $492.6 million at June 30, 2024 and December 31, 2023, respectively		—			497.1
Stockholders’ equity (deficit)
Common stock, $0.01 par value; authorized shares at June 30, 2024 and December 31, 2023: 800,000; 203,926 and 62,915 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively		2.0			0.6
Additional paid-in capital		1,049.7			559.2
Accumulated deficit		(644.1	)		(652.3	)
Total stockholders’ equity (deficit)		407.6			(92.5	)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)	$	1,062.6		$	1,053.9

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Emerald Holding, Inc.

Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income

(unaudited)


	Three Months Ended						Six Months Ended
(dollars in millions, share data in thousands except earnings per share)	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
Revenues	$	86.0		$	86.5		$	219.4		$	208.8
Other income, net		—			—			1.0			—
Cost of revenues		33.1			32.8			80.6			76.0
Selling, general and administrative expense		39.5			41.8			95.0			90.6
Depreciation and amortization expense		7.0			12.9			14.1			26.4
Operating income (loss)		6.4			(1.0	)		30.7			15.8
Interest expense		12.0			11.4			24.1			19.4
Interest income		2.1			2.3			4.4			3.4
Loss on extinguishment of debt		—			2.3			—			2.3
Other expense		—			0.1			—			0.2
(Loss) income before income taxes		(3.5	)		(12.5	)		11.0			(2.7	)
(Benefit from) provision for income taxes		(0.7	)		(4.4	)		2.8			(1.7	)
Net (loss) income and comprehensive (loss) income attributable to Emerald Holding, Inc.	$	(2.8	)	$	(8.1	)	$	8.2		$	(1.0	)
Accretion to redemption value of redeemable convertible preferred stock		(2.0	)		(10.4	)		(12.7	)		(20.5	)
Net loss and comprehensive loss attributable to Emerald Holding, Inc. common stockholders	$	(4.8	)	$	(18.5	)	$	(4.5	)	$	(21.5	)
Basic loss per share	$	(0.03	)	$	(0.29	)	$	(0.04	)	$	(0.33	)
Diluted loss per share	$	(0.03	)	$	(0.29	)	$	(0.04	)	$	(0.33	)
Basic weighted average common shares outstanding		155,915			62,868			109,477			65,048
Diluted weighted average common shares outstanding		155,915			62,868			109,477			65,048

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Emerald Holding, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(unaudited)


	Three Months Ended June 30, 2024
	(shares in thousands; dollars in millions)
							Total Emerald Holding, Inc. Stockholders’ Equity (Deficit)
	Redeemable Convertible Preferred Stock						Common Stock					Additional Paid-in			Accumulated			Total Stockholders’
	Shares			Amount			Shares			Amount		Capital			Deficit			Equity (Deficit)
Balances at March 31, 2024		71,403		$	499.2			63,053		$	0.6	$	550.0		$	(641.3	)	$	(90.7	)
Stock-based compensation		—			—			—			—		1.5			—			1.5
Issuance of common stock under equity plans		—			—			91			—		0.4			—			0.4
Accretion to redemption value of redeemable convertible preferred stock		—			2.0			—			—		(2.0	)		—			(2.0	)
Redeemable convertible preferred stock conversion		(71,403	)		(501.2	)		140,782			1.4		499.8			—			501.2
Net loss and comprehensive loss		—			—			—			—		—			(2.8	)		(2.8	)
Balances at June 30, 2024		—		$	—			203,926		$	2.0	$	1,049.7		$	(644.1	)	$	407.6

	Six Months Ended June 30, 2024
	(shares in thousands; dollars in millions)
							Total Emerald Holding, Inc. Stockholders’ Equity (Deficit)
	Redeemable Convertible Preferred Stock						Common Stock					Additional Paid-in			Accumulated			Total Stockholders’
	Shares			Amount			Shares			Amount		Capital			Deficit			Equity (Deficit)
Balances at December 31, 2023		71,403		$	497.1			62,915		$	0.6	$	559.2		$	(652.3	)	$	(92.5	)
Stock-based compensation		—			—			—			—		3.9			—			3.9
Issuance of common stock under equity plans		—			—			524			—		1.3			—			1.3
Accretion to redemption value of redeemable convertible preferred stock		—			12.7			—			—		(12.7	)		—			(12.7	)
Redeemable convertible preferred stock conversion		(71,403	)		(501.2	)		140,782			1.4		499.8			—			501.2
Repurchase of common stock		—			—			(295	)		—		(1.8	)		—			(1.8	)
Preferred stock cash dividend		—			(8.6	)		—			—		—			—			—
Net income and comprehensive income		—			—			—			—		—			8.2			8.2
Balances at June 30, 2024		—		$	—			203,926		$	2.0	$	1,049.7		$	(644.1	)	$	407.6

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Emerald Holding, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(unaudited)—Continued


	Three Months Ended June 30, 2023
	(shares in thousands; dollars in millions)
							Total Emerald Holding, Inc. Stockholders’ Deficit
	Redeemable Convertible Preferred Stock						Common Stock						Additional Paid-in			Accumulated			Total Stockholders’
	Shares			Amount			Shares			Amount			Capital			Deficit			Deficit
Balances at March 31, 2023		71,417		$	482.5			62,845		$	0.6		$	585.5		$	(637.0	)	$	(50.9	)
Stock-based compensation		—			—			—			—			1.8			—			1.8
Accretion to redemption value of redeemable convertible preferred stock		—			10.4			—			—			(10.4	)		—			(10.4	)
Redeemable convertible preferred stock conversion		(14	)		(0.1	)		26			—			0.1			—			0.1
Net loss and comprehensive loss		—			—			—			—			—			(8.1	)		(8.1	)
Balances at June 30, 2023		71,403		$	492.8			62,871		$	0.6		$	577.0		$	(645.1	)	$	(67.5	)

	Six Months Ended June 30, 2023
	(shares in thousands; dollars in millions)
							Total Emerald Holding, Inc. Stockholders’ Deficit
	Redeemable Convertible Preferred Stock						Common Stock						Additional Paid-in			Accumulated			Total Stockholders’
	Shares			Amount			Shares			Amount			Capital			Deficit			Deficit
Balances at December 31, 2022		71,417		$	472.4			67,588		$	0.7		$	610.3		$	(644.1	)	$	(33.1	)
Stock-based compensation		—			—			307			—			3.9			—			3.9
Issuance of common stock under equity plans		—			—			14			—			—			—			—
Accretion to redemption value of redeemable convertible preferred stock		—			20.5			—			—			(20.5	)		—			(20.5	)
Redeemable convertible preferred stock conversion		(14	)		(0.1	)		26			—			0.1			—			0.1
Repurchase of common stock		—			—			(5,064	)		(0.1	)		(16.8	)		—			(16.9	)
Net loss and comprehensive loss		—			—			—			—			—			(1.0	)		(1.0	)
Balances at June 30, 2023		71,403		$	492.8			62,871		$	0.6		$	577.0		$	(645.1	)	$	(67.5	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Emerald Holding, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)


(in millions)	Six Months Ended June 30, 2024			Six Months Ended June 30, 2023
Operating activities
Net income (loss)	$	8.2		$	(1.0	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Stock-based compensation		4.0			3.9
Allowance for credit losses		0.3			0.2
Depreciation and amortization		14.1			26.4
Loss on disposal of fixed assets		—			0.2
Non-cash operating lease expense		1.1			1.3
Amortization of deferred financing fees and debt discount		2.2			0.9
Loss on extinguishment of debt		—			2.3
Deferred income taxes		2.5			0.8
Remeasurement of contingent consideration		(0.7	)		(0.6	)
Changes in operating assets and liabilities, net of effect of businesses acquired:
Trade and other receivables		(7.7	)		(15.5	)
Prepaid expenses and other current assets		3.5			4.5
Other noncurrent assets		0.3			0.1
Accounts payable and other current liabilities		0.9			(7.6	)
Cancelled event liabilities		—			(0.6	)
Contingent consideration		(0.2	)		—
Income tax payable		(5.1	)		(4.2	)
Deferred revenues		(4.1	)		7.5
Operating lease liabilities		(1.7	)		(2.1	)
Other noncurrent liabilities		(0.5	)		(0.3	)
Net cash provided by operating activities		17.1			16.2
Investing activities
Acquisition of businesses, net of cash acquired		(12.7	)		(9.5	)
Working capital adjustment receivable from seller		1.0			—
Purchases of property and equipment		(0.5	)		(0.5	)
Purchases of intangible assets		(4.7	)		(5.9	)
Net cash used in investing activities		(16.9	)		(15.9	)
Financing activities
Payment of contingent consideration for acquisition of businesses		—			(3.7	)
Repayment of principal on Amended and Restated Term Loan Facility		—			(239.4	)
Proceeds from Extended Term Loan Facility		—			239.4
Repayment of principal on Extended Term Loan Facility		(2.1	)		—
Original issuance discount		—			(12.5	)
Fees paid for debt issuance		—			(1.6	)
Repurchase of common stock		(1.8	)		(16.9	)
Preferred stock cash dividend		(8.6	)		—
Proceeds from issuance of common stock under equity plans		1.3			—
Net cash used in financing activities		(11.2	)		(34.7	)
Net decrease in cash and cash equivalents		(11.0	)		(34.4	)
Cash and cash equivalents
Beginning of period		204.2			239.1
End of period	$	193.2		$	204.7

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Emerald Holding, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)—Continued


(in millions)	Six Months Ended June 30, 2024		Six Months Ended June 30, 2023
Supplemental disclosure of non-cash investing and financing activities:
Unpaid purchases of intangible assets	$	0.7	$	—
Conversion of redeemable convertible preferred stock to common stock	$	501.2	$	—
Amended and Restated Term Loan Facility	$	—	$	(175.9	)
Extended Term Loan Facility	$	—	$	175.9

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Emerald Holding, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Basis of Presentation

The unaudited condensed consolidated financial statements include the operations of Emerald Holding, Inc. (the “Company” or “Emerald”) and its wholly-owned subsidiaries. These unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC for Interim Reporting. All intercompany transactions, accounts and profits/losses, if any, have been eliminated in the unaudited condensed consolidated financial statements. In the opinion of management, all recurring adjustments considered necessary for a fair statement of results for the interim period have been included.

These unaudited condensed consolidated financial statements do not include all disclosures required by GAAP, and therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the more detailed audited consolidated financial statements for the year ended December 31, 2023. The December 31, 2023 condensed consolidated balance sheet was derived from the Company’s audited consolidated financial statements for the year ended December 31, 2023.

The results for the three and six months ended June 30, 2024 are not necessarily indicative of results to be expected for a full year, any other interim periods or any future year or period.

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within the segment measure of profit or loss. The standard is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact the adoption will have on the disclosures within the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disclosure of disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. The standard should be applied on a prospective basis although retrospective application is permitted. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact the adoption will have on the disclosures within the Company’s consolidated financial statements.

There have been no other new accounting pronouncements that are expected to have a significant impact on the Company’s condensed consolidated financial statements or notes thereto.

Revenues

Revenue Recognition and Deferred Revenue

Revenue is recognized as the customer receives the benefit of the promised services and performance obligations are satisfied. Revenue is recognized at an amount that reflects the consideration the Company expects to receive in exchange for those services. Customers generally receive the benefit of the Company’s services upon the staging of each trade show or conference event and over the subscription period for access to the Company’s subscription software and services. Fees are typically invoiced and collected in-full prior to the trade show or event.

A significant portion of the Company’s annual revenue is generated from the Connections segment, primarily related to the production of trade shows and conference events (collectively, “trade shows”), including booth space sales, registration fees and sponsorship fees. The Company recognizes revenue in the period the trade show occurs. Trade show and other events revenues represented approximately 87.2% and 87.4% of total revenues for the three months ended June 30, 2024 and 2023, respectively. Trade show and other events revenues represented approximately 90.4% and 89.9% of total revenues for the six months ended June 30, 2024 and 2023, respectively.

Content revenues primarily consist of advertising sales for digital products and industry publications that complement the event properties, custom content agency revenues and subscription fees for educational and e-learning services. Advertising sales and custom content revenues are recognized in the period in which the custom content and digital products are provided or publications are issued. Subscription fees for educational and e-learning services are billed and collected at the subscription date. Typically, the fees charged are collected after the custom content and digital products are delivered or publications are issued.

Commerce revenues primarily consist of software-as-a-service subscription revenue, implementation fees and professional services. Fees associated with implementation are deferred and recognized over the expected customer life, which is four years. Subscription revenue is generally recognized over the term of the contract.

Deferred revenues generally consist of booth space sales, registration fees and sponsorship fees that are invoiced prior to a trade show, as well as upfront payments for software subscription fees, professional services and implementation fees for the Company’s subscription software and services. Current deferred revenues were $175.5 million as of June 30, 2024 and are reported as deferred revenues on the condensed consolidated balance sheets. Long-term deferred revenues as of June 30, 2024 were $0.4 million and are reported as other noncurrent liabilities on the condensed consolidated balance sheets. Current and long-term deferred revenues as of December 31, 2023 were $174.3 million and $0.9 million, respectively. During the six months ended June 30, 2024, the Company recognized revenues of $135.3 million from amounts included in deferred revenue at the beginning of the respective period.

The accounts receivable and deferred revenue balances related to cancelled events are classified as cancelled event liabilities in the condensed consolidated balance sheets as the total amount represents balances which are expected to be refunded to customers. As of June 30, 2024, cancelled event liabilities of $0.6 million represents $0.5 million of deferred revenues for cancelled trade shows and $0.1 million of related accounts receivable credits reclassified to cancelled event liabilities in the condensed consolidated balance sheets. As of December 31, 2023, cancelled event liabilities of $0.6 million represented $0.5 million of deferred revenues for cancelled trade shows and $0.1 million of related accounts receivable credits reclassified to cancelled event liabilities in the condensed consolidated balance sheets.

Performance Obligations

For the Company’s trade shows and other events, sales are deferred and recognized when performance obligations under the terms of a contract with the Company’s customers are satisfied, which is typically at the completion of a show or event. Revenue is measured as the amount of consideration the Company earns upon completion of its performance obligations.

For the Company’s commerce offerings, the Company may enter into contracts with customers that include multiple performance obligations, which are generally capable of being distinct. Fees associated with implementation and related professional services are deferred and recognized over the expected customer life, which is four years. Subscription revenue is recognized over the term of the contract. The Company’s contracts associated with subscription software and services are generally three-year terms with one-year renewals following the initial three-year term.

For the Company’s content offerings, revenues are deferred and recognized when performance obligations under the terms of a contract with the Company’s customers are satisfied. This generally occurs in the period in which the publications are issued. Revenue is measured as the amount of consideration the Company earns upon completion of its performance obligations.

The Company applies a practical expedient which allows the exclusion of disclosure information regarding remaining performance obligations if the performance obligation is part of a contract that has an expected duration of one year or less. The Company’s performance obligations greater than one year were $0.4 million as of June 30, 2024.

Disaggregation of Revenue

The following table represents revenues disaggregated by type:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues	(in millions)
Connections	$	75.0	$	75.6	$	198.4	$	187.8
Content		5.9		6.1		10.6		11.6
Commerce		5.1		4.8		10.4		9.4
Total revenues	$	86.0	$	86.5	$	219.4	$	208.8

Contract Balances

The Company’s contract assets are primarily sales commissions incurred in connection with the Company’s subscription software and services, which are expensed over the expected customer relationship period. As of June 30, 2024, the Company does not have material contract assets.

Contract liabilities generally consist of booth space sales, registration fees, sponsorship fees that are collected prior to the trade show or other event and subscription revenue, implementation fees and professional services associated with the Company’s subscription software and services. Contract liabilities less than one year from the date of the performance obligation are reported on the condensed consolidated balance sheets as deferred revenues. Contract liabilities greater than one year from the date of the performance obligation are reported on the condensed consolidated balance sheets in other noncurrent liabilities.

The Company’s sales commission costs incurred in connection with sales of booth space, registration fees and sponsorship fees at the Company’s trade shows and other events and with sales of advertising for publications are short term, as sales typically begin up to one year prior to the date of the trade shows and other events. The Company expects the period benefited by each commission to be less than one year, and as a result, the Company expenses sales commissions associated with trade shows, other events and other marketing services as incurred. Sales commissions are reported on the condensed consolidated statements of (loss) income and comprehensive (loss) income as selling, general and administrative expense.

Accounts Receivable

The Company monitors collections and payments from its customers and maintains an allowance based upon applying an expected credit loss rate to receivables based on the historical loss rate from similar higher risk customers adjusted for current conditions, including any specific customer collection issues identified, and forecasts of economic conditions. Delinquent account balances are written off after management has determined that the likelihood of collection is remote. The activities in this account, including the current-period provision for expected credit losses for the three and six months ended June 30, 2024, were $0.2 million and $0.4 million, respectively, and the activities for the three and six months ended June 30, 2023, were $0.1 million and $0.2 million, respectively. Account balances written off during the three and six months ended June 30, 2024, were $0.1 million and $0.2 million, respectively. Account balances written off during the three and six months ended June 30, 2023, were zero and $0.2 million, respectively.

Business Acquisitions

2024 Acquisitions

The Futurist

On May 7, 2024, the Company executed an asset purchase agreement to acquire the assets and assume certain liabilities of the Blockchain Futurist Conference and its associated experiences (collectively known as the “Futurist”). The total estimated purchase price of $1.9 million included an initial cash payment of $1.1 million and contingent consideration with an estimated fair value of $0.9 million. The acquisition was financed with cash from operations. The Company recorded goodwill of $1.8 million in connection with the Futurist acquisition. Revenue and net income from the acquisition were not material to the three and six months ended June 30, 2024.

Hotel Interactive

In furtherance of the Company’s portfolio optimization strategy to enhance its best-in-class hosted buyer platform, the Company executed an asset purchase agreement on January 19, 2024 to acquire all the assets and assume certain liabilities of the business known as Hotel Interactive. Hotel Interactive produces hosted buyer events in the hotel, hospitality, food service and healthcare and senior living space sectors. The total estimated purchase price of $13.5 million included an initial cash payment of $11.6 million and contingent consideration with an estimated fair value of $2.7 million, as well as a $0.8 million post close working capital adjustment receivable from the seller. The acquisition was financed with cash from operations. During the three and six months ended June 30, 2024, the Company received $1.0 million from the seller for certain working capital adjustments, which is recorded in investing activities in the Company’s condensed consolidated statement of cash flows.

The preparation of the valuation required the use of significant assumptions and estimates. Critical estimates included, but were not limited to, future expected cash flows, including projected revenues and expenses, royalty rate and the applicable discount rates. These estimates were based on assumptions that the Company believes to be reasonable, however, actual results may differ from these estimates.

External acquisition costs of $0.2 million were expensed as incurred and included in selling, general and administrative expenses in the condensed consolidated statements of (loss) income and comprehensive (loss) income. During the three and six months ended June 30, 2024, the acquisition of Hotel Interactive generated revenue of $1.7 million and $4.5 million and net income of zero and $0.6 million, respectively. Goodwill was calculated as the excess of the purchase price over the estimated fair values of acquired assets and intangible assets offset by liabilities acquired, and is primarily attributable to the future economic benefits from synergies expected to arise due to certain cost savings, operating efficiencies and other strategic benefits. Substantially all of the goodwill recorded is expected to be deductible for income tax purposes.

The primary tasks that are required to be completed to finalize the valuation of assets and liabilities acquired include validation of business level forecasts, customer attrition rates and acquired working capital balances.

The contingent consideration liability related to the acquisition of Hotel Interactive consists of two potential payments, the interim payment and the final payment. The interim payment is based on a range of multiples, which are dependent upon the acquisition’s compounded annual EBITDA growth rate from 2023 to 2024, being applied to the 2024 EBITDA growth from a specified EBITDA target. The interim payment will be settled in the second quarter of 2025. The final payment is based on a range of multiples, which are dependent upon the acquisition’s 3-year compounded annual EBITDA growth rate from 2023 to 2026, being applied to the average annual EBITDA growth in calendar years 2025 and 2026, from a specified EBITDA target, less the interim payment. The final payment will be settled in the second quarter of 2027.

Identified intangible assets associated with Hotel Interactive included trade name and customer relationship intangible assets of $1.6 million and $2.5 million, respectively. The weighted-average amortization period of the trade name intangible assets acquired was 10.0 years. The weighted-average amortization period of the customer relationship intangible assets acquired was 4.0 years. There is no assumed residual value for the acquired trade name and customer relationship intangible assets.

The following table summarizes the preliminary fair value of the acquired assets and liabilities on the acquisition date:

Emerald Holding, Inc. [EEX] Filings
10-Q	[2024-08-07]
10-Q	[2024-05-07]
10-K	[2024-03-05]
10-Q	[2023-11-06]
10-Q	[2023-08-03]
10-Q	[2023-05-04]
10-K	[2023-03-15]
10-Q	[2022-11-03]
10-Q	[2022-08-08]
10-Q	[2022-05-10]
10-K	[2022-02-24]
10-Q	[2021-11-08]
10-Q	[2021-07-30]
10-Q	[2021-04-30]
10-K	[2021-02-23]
10-Q	[2020-11-03]
10-Q	[2020-08-05]
10-Q	[2020-05-08]
10-K	[2020-02-14]
10-Q	[2019-11-05]
10-Q	[2019-08-01]
10-Q	[2019-05-02]
10-K	[2019-02-19]
10-Q	[2018-11-08]
10-Q	[2018-08-09]
10-Q	[2018-05-10]
S-1	[2018-03-06]
10-K	[2018-02-22]
10-Q	[2017-11-02]
10-Q	[2017-08-09]
10-Q	[2017-05-25]
S-1	[2017-03-31]