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Exhibit 99.1

Emerald Expositions Reports Third Quarter 2017 Financial Results

 

SAN JUAN CAPISTRANO, Calif. – November 2, 2017 – Emerald Expositions Events, Inc. (NYSE:EEX) (“Emerald” or the “Company”) today reported financial results for the third quarter and nine months ended September 30, 2017.

 

Third Quarter 2017 Highlights

 

 

Revenues decreased 0.1% to $100.4 million, compared to $100.5 million for the third quarter 2016

 

Net income increased by 4.3% to $19.2 million, compared to $18.4 million for the third quarter 2016

 

Adjusted EBITDA, a non-GAAP measure, decreased 1.8% to $54.9 million, compared to $55.9 million for the third quarter 2016

 

Adjusted Net Income, a non-GAAP measure, increased 3.7% to $28.3 million, compared to $27.3 million for the third quarter 2016

 

Third Quarter and Year-to-Date 2017 Financial Performance

 

 

 

Three Months

Ended September 30,

 

 

Nine Months

Ended September 30,

 

(in millions, except percentages and per share data)

 

2017

 

 

2016

 

 

Change

 

 

% Change

 

 

2017

 

 

2016

 

 

Change

 

 

% Change

 

Revenues

 

$

100.4

 

 

$

100.5

 

 

$

(0.1

)

 

 

(0.1

)%

 

$

310.2

 

 

$

293.3

 

 

$

16.9

 

 

 

5.8

%

Net income

 

$

19.2

 

 

$

18.4

 

 

$

0.8

 

 

 

4.3

%

 

$

41.7

 

 

$

46.2

 

 

$

(4.5

)

 

 

(9.7

)%

Net cash provided by operating activities

 

$

10.8

 

 

$

7.0

 

 

$

3.7

 

 

 

53.0

%

 

$

66.8

 

 

$

77.0

 

 

$

(10.2

)

 

 

(13.2

)%

Diluted EPS

 

$

0.25

 

 

$

0.29

 

 

$

(0.04

)

 

 

(13.8

)%

 

$

0.59

 

 

$

0.73

 

 

$

(0.14

)

 

 

(19.2

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP measures:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

54.9

 

 

$

55.9

 

 

$

(1.0

)

 

 

(1.8

)%

 

$

156.9

 

 

$

152.3

 

 

$

4.6

 

 

 

3.0

%

Adjusted Net Income

 

$

28.3

 

 

$

27.3

 

 

$

1.0

 

 

 

3.7

%

 

$

79.4

 

 

$

70.9

 

 

$

8.5

 

 

 

12.0

%

Adjusted Diluted EPS

 

$

0.37

 

 

$

0.43

 

 

$

(0.06

)

 

 

(14.0

)%

 

$

1.12

 

 

$

1.12

 

 

$

-

 

 

 

0.0

%

Free Cash Flow

 

$

10.6

 

 

$

5.8

 

 

$

4.8

 

 

 

82.8

%

 

$

66.1

 

 

$

74.8

 

 

$

(8.7

)

 

 

(11.6

)%

 

“Revenues in the quarter were flat compared to the third quarter of last year, largely due to the impact of Hurricane Irma on our Surf Expo and ISS Orlando shows. While the financial impact of the hurricane was covered by our event cancellation insurance policy, the vast majority of the booked revenues of these two shows were not reflected in our reported revenue for the quarter. Had we been able to record their full revenues our third quarter revenues would have increased by approximately 6.5% year-over-year,” said David Loechner, President and Chief Executive Officer of Emerald Expositions. “I am pleased with the strong contributions in the period from our recent acquisitions, which were partly offset by declines in our four largest trade shows due to the separate and unusual factors that we have described on previous earnings calls.”

Mr. Loechner added, “M&A remains an important component of our growth strategy and, while we did not close any acquisitions during the third quarter, we have been working diligently on several near and medium-term opportunities and we remain optimistic that we will close one or more transactions before year end as our pipeline remains robust.”

Financial & Operational Results

For the third quarter of 2017, Emerald reported revenues of $100.4 million compared to revenues of $100.5 million for the third quarter of 2016, a decrease of approximately $0.1 million, or 0.1%. Organic revenues declined by approximately $8.4 million (8.3%), largely reflecting the unusual year-over-year revenue declines in Outdoor Retailer, NY NOW, ASD and Interbike that we have described on earlier earnings calls. Revenues were further reduced by $6.6 million (6.5%) due to the impact of Hurricane Irma on our Surf Expo and ISS Orlando shows, which were forced to close two days early. We recorded the $6.5 million insurance settlement under our events cancellation insurance policy, which reflected a small adjustment for cost savings, as Other Income in the quarter.  

These adverse effects were almost offset by $13.7 million of revenues from acquisitions that closed in 2017 and the second half of 2016, and $1.2 million of favorable timing adjustments.  


Cost of Revenues of $27.2 million for the third quarter of 2017 increased by 15.3%, or approximately $3.6 million, from $23.6 million for the third quarter of 2016. This increase was mainly attributable to $4.3 million of incremental costs associated with acquisitions, partially offset by $0.7 million in net savings in the rest of the Company’s portfolio.

Selling, General & Administrative Expense (SG&A) of $29.4 million for the third quarter of 2017 increased by 17.6%, or approximately $4.4 million, from $25.0 million for the third quarter of 2016. The 2017 third quarter expense included approximately $3.9 million of one-time contract termination costs, acquisition transaction costs, public company costs and transition costs, which together were $1.9 million higher than in the same three months of 2016. The additional SG&A related to acquisitions contributed approximately $2.0 million of incremental costs, and the remaining $0.5 million increase in SG&A mainly reflected higher compensation as well as additional costs from operating as a public company.

Net Income of $19.2 million for the third quarter of 2017 increased by approximately 4.4%, or $0.8 million, from $18.4 million for the third quarter of 2016. The increase was largely attributable to a $5.2 million decrease in interest expense for the quarter, which was the result of the complete redemption of the Company’s 9.00% Senior Notes in October 2016; the reduction in outstanding term loan debt in May 2017 through use of the net primary IPO proceeds; and the subsequent refinancing of the remaining term loan debt in May 2017 at a lower interest rate. Partly offsetting this increase was a $2.5 million decline in Operating Income, largely reflecting the quarter’s challenging circumstances for our four largest shows and including $0.9 million in increased Depreciation and Amortization expense, which were in turn partly mitigated by a strong operating contribution from acquisitions in the quarter. These items combined to produce a $2.7 million increase in Income before taxes which was reduced by a $1.9 million increase in the Provision for Income Taxes, part of which reflected a slight increase in the Company’s effective tax rate.

For the third quarter of 2017, Adjusted EBITDA was $54.9 million compared to $55.9 million for the third quarter of 2016, a decrease of approximately $1.0 million or 1.8%. This performance particularly reflected the challenging circumstances experienced in our Outdoor Retailer, ASD, NY NOW and Interbike trade shows, substantially offset by a strong contribution from several recent acquisitions.

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 operating activities increased by approximately $3.8 million to $10.8 million in the third quarter of 2017 compared to $7.0 million in the third quarter of 2016, reflecting a modest improvement in the change in working capital.

Capital expenditures were $0.2 million for the third quarter of 2017, compared to $1.2 million for the third quarter of 2016.

Free Cash Flow, which we define as net cash provided by operating activities less capital expenditures, was $10.6 million for the third quarter of 2017, compared to $5.8 million in the third 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

As of September 30, 2017, Emerald’s cash and cash equivalents were $14.0 million and gross debt was $563.6 million. Acquisition Adjusted EBITDA for the twelve months ended September 30, 2017 was $156.7 million. Net debt (gross debt less cash and cash equivalents) was $549.6 million and Emerald’s net debt leverage ratio at the end of the quarter was 3.5 times Acquisition Adjusted EBITDA for the twelve months ended September 30, 2017. The Company has chosen not to include an adjustment for the pro forma Adjusted EBITDA of the SIA Snow Show, acquired in May, in Acquisition Adjusted EBITDA for the twelve months ended September 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 October 27, 2017, the Board of Directors of the Company approved the payment of a cash dividend of $0.07 per share for the quarter ending December 31, 2017 to holders of the Company’s common stock. The dividend is expected to be paid on or about November 30, 2017 to stockholders of record on November 16, 2017.

Outlook (forward-looking statements) and Key Assumptions

For the year ending December 31, 2017, Emerald management expects reported and organic revenues to fall below the previously provided guidance ranges due to the impact of Hurricane Irma. However, if we had been able to record the full revenues of the two


shows that were affected by the hurricane, we would have trended near the lower end of the previously provided guidance. Since the financial effects of the hurricane were covered by insurance proceeds, management continues to expect Adjusted EBITDA to trend just below the midpoint of the previously provided guidance, outlined below:

 

Total revenue growth of 7.5% to 9.5%, or $348 million to $355 million

 

Organic revenue growth of zero percent to 2.0%

 

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 third quarter 2017 results at 11:00 am EDT on November 2, 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 13671483. The replay will be available until 11:59 pm EDT on November 9, 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 55 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), (x) material show scheduling adjustments, and (xi) 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 (which ended prior to the Company’s initial public offering), (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 growth 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.

Contacts

Emerald Expositions Events, Inc.

Philip Evans, 1-866-339-4688 (866EEXINVT)

Chief Financial Officer

investor.relations@emeraldexpo.com


Emerald Expositions Events, Inc.

Condensed Consolidated Statements of Income and Comprehensive Income

(unaudited, in thousands, except earnings per share)

 

 

 

Three Months

Ended September 30,

2017

 

 

Three Months

Ended September 30,

2016

 

 

Nine Months

Ended September 30,

2017

 

 

Nine Months

Ended September 30,

2016

 

Revenues

 

$

100,404

 

 

$

100,526

 

 

$

310,197

 

 

$

293,296

 

Other income

 

 

6,519

 

 

 

-

 

 

 

6,519

 

 

 

-

 

Cost of revenues

 

 

27,221

 

 

 

23,632

 

 

 

85,379

 

 

 

75,040

 

Selling, general and administrative expense

 

 

29,411

 

 

 

25,004

 

 

 

95,921

 

 

 

74,178

 

Depreciation and amortization expense

 

 

10,848

 

 

 

9,953

 

 

 

32,250

 

 

 

29,827

 

Operating income

 

 

39,443

 

 

 

41,937

 

 

 

103,166

 

 

 

114,251

 

Interest expense

 

 

6,737

 

 

 

11,940

 

 

 

33,234

 

 

 

38,235

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

216

 

 

 

-

 

Income before income taxes

 

 

32,706

 

 

 

29,997

 

 

 

69,716

 

 

 

76,016

 

Provision for income taxes

 

 

13,499

 

 

 

11,570

 

 

 

27,976

 

 

 

29,783

 

Net income and comprehensive income

 

$

19,207

 

 

$

18,427

 

 

$

41,740

 

 

$

46,233

 

Basic earnings per share

 

$

0.27

 

 

$

0.30

 

 

$

0.62

 

 

$

0.75

 

Diluted earnings per share

 

$

0.25

 

 

$

0.29

 

 

$

0.59

 

 

$

0.73

 

Basic weighted average common shares outstanding

 

 

72,202

 

 

 

61,860

 

 

 

67,756

 

 

 

61,859

 

Diluted weighted average common shares outstanding

 

 

75,710

 

 

 

63,369

 

 

 

70,844

 

 

 

63,199

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividend declared per common share

 

$

0.07

 

 

 

-

 

 

$

0.14

 

 

 

-

 

 

 


Emerald Expositions Events, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except par value)

 

 

 

September 30,

2017

 

 

December 31,

2016

 

 

 

(Unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

14,021

 

 

$

14,942

 

Trade and other receivables, net of allowance for doubtful accounts of

   $589 and $693 as of September 30, 2017 and December 31, 2016, respectively

 

 

96,228

 

 

 

57,576

 

Prepaid expenses

 

 

11,364

 

 

 

23,044

 

Total current assets

 

 

121,613

 

 

 

95,562

 

Noncurrent assets

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

3,471

 

 

 

3,778

 

Goodwill

 

 

971,537

 

 

 

930,321

 

Other intangible assets, net

 

 

529,751

 

 

 

541,172

 

Other noncurrent assets

 

 

1,658

 

 

 

1,686

 

Total assets

 

$

1,628,030

 

 

$

1,572,519

 

Liabilities and Shareholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable and other current liabilities

 

$

44,191

 

 

$

28,234

 

Deferred revenues

 

 

143,743

 

 

 

171,644

 

Term loan, current portion

 

 

5,650

 

 

 

8,744

 

Total current liabilities

 

 

193,584

 

 

 

208,622

 

Noncurrent liabilities

 

 

 

 

 

 

 

 

Term loan, net of discount and deferred financing fees

 

 

549,023

 

 

 

693,322

 

Deferred tax liabilities, net

 

 

163,224

 

 

 

140,049

 

Other noncurrent liabilities

 

 

1,714

 

 

 

2,758

 

Total liabilities

 

 

907,545

 

 

 

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 September 30, 2017 and

   December 31, 2016, respectively

 

 

722

 

 

 

619

 

Additional paid-in capital

 

 

671,316

 

 

 

510,334

 

Retained earnings

 

 

48,447

 

 

 

16,815

 

Total shareholders’ equity

 

 

720,485

 

 

 

527,768

 

Total liabilities and shareholders’ equity

 

$

1,628,030

 

 

$

1,572,519

 

 


Appendix I

Emerald Expositions Events, Inc.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(in thousands)

 

 

 

Three months

ended September 30,

 

 

Nine months

ended September 30,

 

 

Twelve months

ended

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

September 30, 2017

 

 

December 31, 2016

 

 

 

(dollars in thousands)

 

 

(dollars in thousands)

 

 

(dollars in thousands)

 

Net income

 

$

19,207

 

 

$

18,427

 

 

$

41,740

 

 

$

46,233

 

 

$

17,674

 

 

$

22,167

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

6,737

 

 

 

11,940

 

 

 

33,234

 

 

 

38,235

 

 

 

46,399

 

 

 

51,400

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

216

 

 

 

-

 

 

 

12,996

 

 

 

12,780

 

Provision for income taxes

 

 

13,499

 

 

 

11,570

 

 

 

27,976

 

 

 

29,783

 

 

 

12,289

 

 

 

14,096

 

Depreciation and amortization

 

 

10,848

 

 

 

9,953

 

 

 

32,250

 

 

 

29,827

 

 

 

42,470

 

 

 

40,047

 

Stock-based compensation

 

 

746

 

 

 

687

 

 

 

1,892

 

 

 

2,308

 

 

 

2,482

 

 

 

2,898

 

Deferred revenue adjustment

 

 

-

 

 

 

-

 

 

 

518

 

 

 

-

 

 

 

821

 

 

 

303

 

Management fee

 

 

-

 

 

 

188

 

 

 

188

 

 

 

563

 

 

 

375

 

 

 

750

 

Other items(1)

 

 

3,896

 

 

 

2,035

 

 

 

18,887

 

 

 

4,264

 

 

 

22,313

 

 

 

7,690

 

Scheduling adjustment

 

 

-

 

 

 

1,083

 

 

 

-

 

 

 

1,083

 

 

 

(1,083

)

 

 

-

 

Adjusted EBITDA

 

$

54,933

 

 

$

55,883

 

 

$

156,901

 

 

$

152,296

 

 

$

156,736

 

 

$

152,131

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

6,409

 

Acquisition Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

156,736

 

 

$

158,540

 

 

 

(1)

Other items for the three months ended September 30, 2017 included: (i) $1.5 million in contract termination costs (ii) $1.0 million in transaction costs in connection with certain acquisition transactions that were completed or pending in 2017 and 2016, (ii) $0.6 million in legal, audit and consulting fees related to the IPO and other related activities and (iii) $0.8 million in transition costs. Other items for the three months ended September 30, 2016 included: (i) $1.4 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) $0.7 million in transition costs, primarily related to information technology and facility rental charges for terminated leases. Other items for the nine months ended September 30, 2017 included: (i) $10.0 million in contract termination costs, (ii) $3.7 million in transaction costs in connection with certain acquisition transactions that were completed or pending in 2017, (iii) $3.2 million in legal, audit and consulting fees related to the IPO and other related activities and (iv) $1.7 million in transition costs. Other items for the nine months ended September 30, 2016 included: (i) $3.0 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) $1.3 million in transition costs, primarily related to information technology and facility rental charges for terminated leases. Other items for the twelve months ended September 30, 2017 included: (i) $10.0 in contract termination costs (ii) $4.7 million in transaction and contingent compensation costs related to acquisitions that were pending or completed in 2016 and 2017, (iii) $4.8 million in legal, audit and consulting fees related to the IPO and other related activities and (iv) $2.8 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, where the results of such acquisitions have not been captured in our consolidated financial statements for the twelve-month period ended September 30, 2017.

 


 

 

Three months

ended September 30,

 

 

Nine months

ended September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

(dollars in thousands)

 

 

(dollars in thousands)

 

Net income

 

$

19,207

 

 

$

18,427

 

 

$

41,740

 

 

$

46,233

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Refinancing charges

 

 

-

 

 

 

-

 

 

 

6,151

 

 

 

-

 

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

216

 

 

 

-

 

Stock-based compensation

 

 

746

 

 

 

687

 

 

 

1,892

 

 

 

2,308

 

Deferred revenue adjustment

 

 

-

 

 

 

-

 

 

 

518

 

 

 

-

 

Management fee

 

 

-

 

 

 

188

 

 

 

188

 

 

 

563

 

Other items(1)

 

 

3,896

 

 

 

2,035

 

 

 

18,887

 

 

 

4,264

 

Amortization of deferred financing fees and discount

 

 

372

 

 

 

1,030

 

 

 

4,226

 

 

 

3,826

 

Amortization of (acquired) intangible assets

 

 

10,387

 

 

 

9,500

 

 

 

30,809

 

 

 

28,549

 

Scheduling adjustment

 

 

-

 

 

 

1,083

 

 

 

-

 

 

 

1,083

 

Tax adjustments related to non-GAAP adjustments(2)

 

 

(6,357

)

 

 

(5,602

)

 

 

(25,236

)

 

 

(15,904

)

Adjusted Net Income

 

$

28,251

 

 

$

27,348

 

 

$

79,391

 

 

$

70,922

 

Basic earnings per share

 

$

0.39

 

 

$

0.44

 

 

$

1.17

 

 

$

1.15

 

Diluted earnings per share

 

$

0.37

 

 

$

0.43

 

 

$

1.12

 

 

$

1.12

 

Basic weighted average common shares outstanding

 

 

72,202

 

 

 

61,860

 

 

 

67,756

 

 

 

61,859

 

Diluted weighted average common shares outstanding

 

 

75,710

 

 

 

63,369

 

 

 

70,844

 

 

 

63,199

 

 

 

(1)

Represents other items described in Note 1 above.

 

 

(2)

Reflects application of U.S. federal and state enterprise tax rate of 42.3% and 40.4% for the three and nine months ended September 30, 2017, respectively, and a rate of 38.6% and 39.2% for the three and nine months ended September 30, 2016, respectively.

 

 

 

Three months

ended September 30,

 

 

Nine months

ended September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

(dollars in thousands)

 

 

(dollars in thousands)

 

Net Cash Provided by Operating Activities

 

$

10,763

 

 

$

7,030

 

 

$

66,840

 

 

$

77,001

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

145

 

 

 

1,196

 

 

721

 

 

 

2,226

 

Free Cash Flow

 

$

10,618

 

 

$

5,834

 

 

$

66,119

 

 

$

74,775