Shows With Supply Chain Exposure 'Not as Fortunate' as Others: Emerald CFO
About a quarter of trade shows that CEDIA Expo owner Emerald Holding plans to stage in 2022 “will likely exceed pre-pandemic revenue,” said CEO Herve Sedky on a Q1 earnings call Monday. Emerald, hard hit by cancellation of in-person trade shows during the height of the COVID-19 pandemic, reported holding 31 in-person events during the quarter, drawing 5,700 exhibitors and 141,000 attendees.
After being “severely impacted by the pandemic,” said Sedky, “our business is back." Events, along with content and technology that were acquired and internally launched, are generating “additive, fast-growing revenue streams” expected to scale the business beyond pre-pandemic levels, he said.
But shows that have "more exposure to international attendees and exhibitors,” and those affected by supply chain issues, “are not as fortunate in their performance and have a bit of a longer ramp-up period to get back to where we are,” said Chief Financial Officer David Doft. Emerald is encouraged by Net Promoter Scores from surveys in those areas, he said. Attendees are “waiting a little bit longer,” to register for shows vs. exhibitors, which Emerald has been targeting via on-site rebooking efforts, he said.
On inflation, Doft said venue costs have not been much of an issue because convention centers tend to be owned by municipalities that want tourism dollars coming to their cities. “It has always been one of the more reasonable costs within our cost structure,” he said. Now, especially, cities want visitors to come “as part of their own recovery.”
Inflation costs played out instead in labor, Doft said, with the “vast majority” of cost increases Emerald is experiencing coming from general service contractors, security and registration personnel, and its own staff. The company has been able to “successfully price to offset that -- and in some cases, and then some -- as we build back our business.”
The CEDIA Expo owner posted net income of $22.6 million for Q1 vs. a net loss of $15.3 million in the year-ago quarter. Revenue was $98.5 million vs. $12.9 million in Q1 2021. That compares with pre-pandemic 2019 when Emerald reported Q1 revenue of $137.4 million and $26.5 million profit.
Q1 revenue included $28.8 million in insurance claim payments from events canceled due to COVID-19. To date, the company has received $213.1 million insurance claim payments including $89.1 million in 2020 and $95.3 million last year. It has submitted $347.5 million in claims representing the net amount of budgeted gross revenue “less avoided costs for impacted or canceled events” due to take place in 2020 and 2021, it said. Shares closed 18.9% higher Monday at $3.02.