Emerald Says Its Q3 Shows Drew Half Their Pre-COVID-19 Participation

Q3 trade show attendance for Emerald Holding's 32 shows -- 92,000 with 5,200 exhibitors -- was about half of pre-COVID-19 pandemic levels, said CEO Herve Sedky on the company’s quarterly call Monday. Shares closed 16.8% higher Monday at $4.73.

Sedky didn't break out CEDIA Expo attendance figures separately, but Emerald reported post-show that the custom installation channel's 2021 convention Sept. 1-3 in Indianapolis had 82 exhibitors and 1,400 attendees. The prior CEDIA Expo, in Denver Sept. 12-14, 2019, had 20,000 attendees and 500 exhibitors. The 2020 event, scheduled for Denver, was canceled due to COVID-19.

Emerald staged a “meaningful” number of events in Q3, but shows didn’t operate “at their potential,” Sedky said, citing a ban on international travel and the rise of the COVID-19 delta variant. Some events came within 10% of pre-pandemic levels while others “were more impacted,” he said.

Revenue for the quarter ended Sept. 30 was $76.5 million vs. $8.5 million in 2020, said the company. Revenue in Q3 2019, the last quarter CEDIA Expo was held before the pandemic, was $75.6 million. Some $60.7 million of Q3 revenue this year involved live events that had been scheduled but were canceled in 2020 due to COVID-19. “When compared to their last in-person edition, revenue for these events was down $87.3 million,” or 59%, said the company.

Emerald's net loss narrowed to $9 million from $15.3 million in Q3 2020. The decrease in loss was due to higher revenue from the return of live events, offset by a lower number of event cancellation insurance claims being confirmed or received during the quarter, Emerald said. About $1.1 million of other Q3 income resulted from receipt or confirmation of event cancellation insurance claims proceeds from second-half 2020 event cancellations; insurance claims proceeds from the year-ago quarter were $16.1 million.

To date, Emerald has submitted $243 million in claims for “impacted or canceled” events that were scheduled to take place in 2020 and 2021, said Chief Financial Officer David Doft. It’s working to finalize claims submissions for several more canceled, postponed or affected 2020 or 2021 events. The company has received total insurance claim payments of $184.3 million, just over three-fourths of submitted claims; $35.4 million was received in the first nine months of 2021. Emerald is also pursuing collection of remaining unpaid filed insurance claims, Doft said.

Trends for 2022 trade shows indicate a “path to recovery,” Sedky said, expressing hope that Emerald’s events will return to pre-COVID-19 levels in 2023. For Q4, it has a “strong slate” of shows on the board with pacings “moderately better than what we saw in Q3 when compared against their pre-pandemic editions.” Positive indicators include higher vaccine rates that have helped lower the number of new delta cases and the opening of foreign travel to the U.S. for international travelers that have been vaccinated, said Sedky.

Looking at all events in the quarter, compared with previous pre-COVID-19 versions, average event revenue declined about 60%, said Doft. Despite the revenue falloff, the company was able to hold events profitably, “even excluding insurance recoveries,” he said. Responding to an analyst question, Sedky said Emerald hasn't changed pricing or deposit strategy for future events: "It's very important to us that we protect and maintain the integrity of our contracts which allow us to effectively plan these events to have the best experience for our customers."