Emerald Expositions Events Inc at Robert W Baird Global Consumer, Technology & Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Perfect. Appreciate the overview. I just first wanted to highlight one of the points you made on I guess the second slide. But you listed revenue, EBITDA, free cash flow. Some of this is calculable. But can you just talk through the margin profile of the business, the CapEx requirements, the free cash flow? Because I think those are some of the financial highlights.

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : And just from a financial standpoint, just so people don't miss it while we hit the financial highlights, you also have some tax assets because of some acquisitions that you've done. So can you just maybe give a quick recap of those? And how does your free cash flow compare to your adjusted net income?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : That's a good overview. So just in terms of like business model, that I guess leads to those attractive financial characteristics. So just first on the operating model, so who is the primary payer? How much of the revenue comes from the exhibitors, how much of it comes from the attendees?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Okay. And then you run a lot of shows. You have 440 employees. You talked about this a bit before in terms of using hotel providers and things like that. But what services does Emerald actually provide? What services do you outsource?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Okay. And what is the competition like for exhibitors at a show level? So how many competing shows could they consider exhibiting at? And are they directly competing? Are they related shows in similar categories? Just what's the competitive landscape for the primary payer, the exhibitors?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : And the trade show model, where does it compete for spend against -- like, what are the alternatives channels for marketing? Is it digital marketing or just what other kinds of marketing are you competing against? And then how mature is the trade show model?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Okay. And you generate a lot of cash. Can you talk about the priorities for the cash? And what's the potential to do the organic show launch, given that the challenge is that you kind of need the critical mass of exhibitors and a critical mass of attendees? So is there a lot of potential for organic growth or just what are the capital uses?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : And what about the potential for organic show launches?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Okay. And so I guess the organic performance of the business is more so driven by how the existing portfolio of shows in any given quarter is performing. Can you just talk through what is the intermediate-term organic revenue growth target? And then I guess since the IPO, you've generally been performing below that at least by a few points. So what's driving the slower growth over the last year, year and a half?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : And to the extent to which there have been some challenges, can you just talk about what the challenges were, what you did to address them, how quickly you can get back to that 3% to 5% targeted growth?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Okay. And I think one other revenue headwind that you faced is the consolidation of the Outdoor Retailer + Snow Show. The show itself is actually performing well since you combined them. But can you just talk through why that was a revenue headwind?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Okay. And then I just want to get one more in on M&A, but if you have audience questions, you can send them to session3@rwbaird.com or raise your hand. Just to shift the conversation a little bit to M&A, given the importance to capital allocation, how big is the landscape? Who are the competing acquirers? And what multiples -- valuation multiples do you typically pay?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Okay. We have a couple email questions. I'll take them in the order I get them. The first one: how much pricing power do have? Why not take more price?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Okay. And then a question on I guess the benefits or the scale benefits of running a big portfolio. But the question is: I can understand the benefits of scale within an individual event, but what are the benefits to scale of running multiple shows across different industries and end markets?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Okay. Another email question. Please speak to the debt level or the targets, how cyclical. And how cyclical is free cash flow in a recession?

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Cyclicality, and specifically the free cash flow in a recession.

Question: Jeff Meuler - Robert W. Baird & Company, Inc. - Analyst : Okay. We are almost out of time, but just one quick one. I think just looking for a little bit more detail about the new marketing and sales efforts. How they are going to lead to increased revenue at some of shows that have been lagging?