Emerald Holding Inc. recognized a net loss of $58.1 million for the fourth quarter of 2020 compared to a $68.2 million net loss for the fourth quarter of 2019.
Emerald operates over 140 events each year. Emerald Holding’s shows include Outdoor Retailer, Surf Expo, The Sports Licensing & Tailgate Show, Impressions, Swim Collective, and Active Collective in the active lifestyle space.
The company recorded $42.7 million of Other Income during the fourth quarter due to the receipt or confirmation of event cancellation insurance claims proceeds related to events canceled in the second half of 2020. In the fourth quarter of 2020, in connection with the performance of its annual goodwill impairment assessment, the company recorded a $39.4 million non-cash charge and a $17.4 million non-cash charge related to the impairment of specific trade names and customer relationships, respectively. In the fourth quarter of 2019, the company performed its annual goodwill impairment assessment and recorded a $59.8 million non-cash charge related to goodwill impairment.
For the fourth quarter of 2020, Emerald reported $12.2 million in revenue compared to $44.9 million in revenue for the fourth quarter of 2019, a decrease of $32.7 million, or 72.8 percent. The decrease primarily reflected a $32.7 million reduction from the cancellation of substantially all fourth quarter events due to COVID-19, most notably Boutique Design New York, Healthcare Design Expo, Photoplus East, and Medtrade. Discontinued events representing $1.2 million of fourth-quarter 2019 revenues also impacted fourth quarter 2020 results. Organic revenues for the fourth quarter of 2020, which exclude canceled events, increased $1.0 million, or 9.1 percent, compared to the prior-year fourth quarter due to new virtual event launches, partially offset by lower print and digital advertising revenues.
The company incurred a net loss of $633.6 million for fiscal 2020 compared to a net loss of $50.0 million for fiscal 2019. The company recorded $107.0 million of Other Income during fiscal 2020 due to the receipt or confirmation of event cancellation insurance claims proceeds related to events canceled in March through December of 2020. In fiscal 2019, the company recorded Other Income of $6.1 million from cancellation insurance proceeds related to the forced cancellation of Surf Expo and ISS Orlando due to Hurricane Dorian. During fiscal 2020, in connection with a triggering event caused by the anticipated impact of COVID-19 on the travel and events industry, the company’s forecasted results, and the market value of its common stock, performed an interim goodwill impairment assessment and recorded a $564.0 million non-cash charge related to the impairment of goodwill and a $59.4 million non-cash charge related to the impairment of certain trade names and customer-relationship intangible assets. In fiscal 2020, as a result of the performance of its annual goodwill impairment assessment, the company recorded a $39.4 million non-cash charge and a $17.4 million non-cash charge related to the impairment of certain trade names and customer relationships, respectively. During fiscal 2019, the company performed its annual goodwill impairment assessment and recorded a $59.8 million non-cash charge related to goodwill impairment. Also, due to a triggering event caused by reduced performance expectations in fiscal 2019, the company recorded a $26.3 million non-cash charge related to the impairment of certain trade names, customer relationships and goodwill.
For 2020, Emerald reported $127.4 million in revenues compared to $360.9 million for fiscal 2019, a decrease of $233.5 million, or 64.7 percent. The decrease primarily reflected a $230.6 million reduction from the cancellation of substantially all events scheduled to stage since March due to COVID-19. Discontinued events representing $6.7 million of 2019 revenues also impacted fiscal 2020 results. The G3 Communications (“G3”) acquisition, which closed in the fourth quarter of 2019, contributed $7.2 million of incremental revenue in 2020. Organic revenues for 2020, which exclude canceled events, declined $3.4 million, or 2.8 percent, compared to the prior year due to lower print and digital advertising revenues, partially offset by new virtual event launches.
Emerald is actively pursuing collection of the remaining unpaid amounts of filed insurance claims for its canceled 2020 events, in addition to claims for its canceled 2021 events. To date, Emerald has submitted $167.4 million in claims, which represents the net amount of budgeted gross revenues less avoided costs for impacted or canceled events previously scheduled to take place in 2020.
Insurance claim payments received to date total $107.0 million, of which $89.1 million was received in 2020, and $17.9 million was received in the first quarter of 2021. An additional $5.3 million in insurance claim payments recently approved and pending receipt. Emerald expects to submit incremental event cancellation insurance claims for events that were initially scheduled to take place in the first half of 2021 but were canceled or otherwise impacted.
Hervé Sedky, Emerald’s president and chief executive officer, commented, “I am thrilled to have joined Emerald given its portfolio of industry-leading shows combined with the opportunity that I see for the business and the trade show industry in the years to come. Additionally, the strategic initiatives implemented by our management team over the last 18 months are exactly what I believe was necessary to position Emerald for a return to organic growth while expanding the business into new digital offerings to enhance customer engagement. I am excited to build on these initiatives as we focus Emerald on three key pillars to drive value:
- We will continue to keep our customers at the center of everything that we do as we work to deliver solutions that meet their needs.
- We must ensure that we engage with our customers 365 days a year and our acquisition of PlumRiver will enhance the meaningful steps that Emerald has taken to expand its digital presence this past year.
- We will continue to thoughtfully grow our portfolio through both new show launches and acquisitions that expand our scale in those sectors and solutions that are complementary to our existing portfolio.”
David Doft, Emerald’s chief financial officer, added, “Over the last year, we have taken meaningful steps to improve our operations. We reorganized our sales and marketing functions and developed a consolidated customer data hub to understand better and serve our customers’ interests and needs, reduced our expense structure and meaningfully improved our liquidity through our $400 million capital raise. This has positioned Emerald for the next phase of our strategic turnaround plan focused on investment and growth. Our acquisition of PlumRiver is a key step in our plan to bring buyers and sellers together in a digital environment year-round and provide them with a platform where they can transact. PlumRiver is expected to enhance our digital initiatives meaningfully and is just one of the exciting investment opportunities that we have in front of us as we work to expand our business in the year ahead. That said, we will remain disciplined on expenses and manage our liquidity carefully as the trade show industry slowly recovers.”
Photo courtesy Emerald/Outdoor Retailer Show