Q3 2019 Earnings Call

Good morning, ladies and gentlemen, and welcome to Emerald Expositions third quarter 2019 earnings Conference call.

During today's presentation, all parties will be in hey, listen only mode. Following the presentation. The conference will be open for questions with instructions to follow at that time.

As a reminder, this conference is being recorded.

I like to turn.

Call over to Mr., Philip Evans, Chief Financial Officer. Thank you Sir Please go ahead.

Thank you operator, and good morning, everyone. We appreciate your participation today and third quarter 2019 earnings call.

Very pleased to have Saudi Shankland, Emeralds, President and Chief Executive Officer, Brian Field, our Chief operating Officer with me here today as a reminder, a replay of this call will be available on the Investor section of the company's website through 11 59 PM Eastern time on November 12, 2019, we both.

So posted a supplemental presentation to accompany today's discussion on our website I didn't best adult Emerald expositions Dot com.

Before we begin let me remind everyone that this call may contain certain statements constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.

These include remarks about future expectations beliefs estimates plans and prospects such statements are subject to a variety of risks uncertainties and other factors could cause actual results could differ materially from those indicated or implied by such statements.

Such risks and other factors are set forth in the company's most recent filed periodically.

Form 10-K , and Form 10-Q and subsequent filings.

Do not undertake any duty to update such forward looking statements.

Additionally, during today's call will discuss non-GAAP measures, we believe can be useful in evaluating outperformance presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP.

Reconciliation of these non-GAAP measures to the most comparable GAAP measures can be found in our earnings release.

Now I'll turn the call over to Sally.

Thank you Phil on today's call I'll spend the majority of my time, reviewing our strategic plan, which is designed to improve our execution across all facets of the business.

And return ammo to sustainable organic growth.

Right field, our COO is here with us on the call today.

Why there's always seem to be a she was one of our plan and it's critical to its success.

I seem to provide some additional color on several of the initiatives that we have recently put into action.

Finally, so review our third quarter results in more detail.

Right and update our expectations for the full year.

Well then open up the call for question and answer session.

But before we start let me provide an update on my Oh listen treatment.

As we announced at the beginning of October I was recently diagnosed with cancer or have you done a regimen of regular chemotherapy.

I remain engaged in the strategic management of the business and key decision.

The same time, relying on my leadership team and Brian in particular.

10 year to support execution on a day to day basis.

I sincerely appreciate the support and encouragement I received from my team our employees customers and vendor.

Through this challenging time.

With that said, let's turn to page five the Q3 earnings call presentation.

On the left hand side of the chart I've outlined my view of Emerald Keith right.

I believe passionately its face to face interaction remains a highly valued element of commerce.

Education and market development.

Importantly, I'm old hasn't portfolio strong and respected brands.

With the opportunity to return to some levels of growth and success, we've experienced in the path.

The challenge has been execution and accountability.

Which has led to perform instead of some lag if the industry and more importantly, our expectation.

With more than 25 years of experience in this industry I can tell you that there is nothing that I've encountered enrolled over the last five months.

I haven't seen or addressed before in my career.

This is why I'm highly confident that our challenge is gonna be solved so right team right investments right strategy and the right culture.

Flipping to page six our transition has begun and I'm very pleased with the progress we've made in such a relatively short time.

Our management and our entire employee base.

Yeah, I'm confident we're moving in a better direction.

The next few pages.

Well, we do several of the initiatives that we implemented and the changes that were driving.

To address enrolled to challenges.

Well, it's to drive a cultural change across the company, we needed to strengthen our team to ensure that we have the experience and skills to address the company's issue.

On page seven I've looked at the most senior hires have made since joining ammo Bakken show.

This is a tremendous group of leaders with more than 120 years of relevant industry experience.

Not to be prouder, they've chosen to hit their wagon city.

Yeah.

It's also worth pointing out that we have made and continue to make.

Horton changes.

Well, it's adding new skill set.

Need for any organization as we work to strengthen an upgrade our capabilities at all levels of the company in order to improve our execution across the entire organization.

Turning to page eight and T to our success.

As our redefine vision and mission.

You must be focused on directing our products and services fourth fueling our customer success.

Oh, so that their water industry.

We will do that by listening to them and working with them throughout the year not just for a few days or a few weeks each year.

We will improve the quality and value of what we produce.

And support the broader end markets in communities in which we all right.

Our vision and mission puts our customers at the center of our organization and what we do every day.

As our customers succeed so.

So we'll wait.

Turning to slide nine Yep, four key strategies designed to improve our execution.

And our business and return Ambled to sustainable organic growth.

As we center our organization on our customer.

It's imperative that we work to increase their satisfaction.

I'm old experience.

As their satisfaction grows so our business.

Second we see tremendous opportunities to diversify our revenue.

Mainly by growing our existing non booth revenue.

At an accelerated play.

Third we recognize the importance of operating efficiently and being Uh Huh later in our industry and we see opportunities to improve in these areas.

And finally, we expect to selectively pursue attractive tuck in acquisitions like the G Suite Communications acquisition, we announced yesterday.

Add to our capabilities and drive incremental financial returns.

As we successfully implement our initiatives and improve our execution.

Back to them live our long term organic revenue growth at or above industry level.

And to generate consistent year over year growth in adjusted EBITDA.

Well, let's drop down a level and to some of the detail around for individual strategy.

On page 10, I set out some of the taxes related to our focus on customer satisfaction.

Many initiatives here it ranged from simply delivering better offensive experiences to reestablishing a performance oriented culture that ties our teams compensation to our success in improving client satisfaction.

At this point I'd like to ask Brian outlined some of the specific things that he is a leading and they'll be expects will contribute to improved customer satisfaction.

Brian .

Thank you Sally and good morning.

Turning to page 11 keep process, we're putting in place it's a rigorous planning framework.

This is a standardized diagnostic and forecasting instrument for building up Manning and evaluating the health of an event.

Sally and I have successfully implemented use this kinda process in the past with great success.

Hi, foundational component of this framework is rooted in an outside and approach.

Analyzing the dynamics in the markets in sectors, which each show operates understanding our customers' needs with their industries.

With a holistic understanding of our customers their pain quantum motivations. You then build up the approach and how we target our sales and marketing strategies, the kinds of opportunities and content that will resonate.

Optimal channels to reach.

Using this event plans framework has several benefits first it focuses us on our customers' needs. So that everything we do is designed around what is important to them.

Outcomes they seek.

Second it reinforces data led decision, making by testing the effectiveness of every marketing channel every partnership every investment we make.

Third since this kinda planted requires inputs and participation from a cost minerals organization from brand the management to sales marketing operations and finance it creates a unified understanding of purpose and transparency across our teams.

From an overall management perspective, the a bench clan framework also provides us greater confidence the outcomes.

Due to the rigor of sinking invested during the process and provides a dashboard of flags should any particular metrics fall below established benchmarks as the show cycle progressing.

So for instance, some of the issues that drove the disappointing performance as a bar I CFS and retail ex shows and the second quarter could have surfaced much earlier in the show cycle, which would have allowed us to take urgent remedial actions to get things back on track.

Finally, as we implemented and plans across all the Emerald shows over the course of 2020. This will also become a tool for multiyear planning proving the budgeting process and our forecasting accuracy.

Moving to page 12, we're beginning to implement value based pricing across several shows.

Speaking this is research and analysis of live affect pricing and promotion based on customers proceeds values of available locations.

Use an example, most of us are familiar with.

Real generally I understand the variations of pricing that one fives and airlines heating with different seating types classes amenities and the expectations we have route.

We pay more we expect more for the first class seats and the basic economy.

And there's transparency around that.

The same thinking can be applied to locations on a trade show floor, where high values locations in the front of all you're definitely traffic one desirable locations have greater value and command higher price and then locations and less traffic areas.

That's it for location is only one of many variables, which also include configuration timing of sale and discounting and bundled non booth related promotional products.

We partner with some specialty consulting firms, one of which algorithmically assesses dozens of commercial data points to evaluate the effects of timing and pricing elasticity on the development of our value based pricing.

We've begun this process with six shows outdoor retailer PST, New York now see <unk> Expo surface Expo and retail.

Based on my previous experience the implementation of value based pricing models can deliver an upside of between 4% to 8% on show revenue, which would equate to a potential five to 10 million incremental revenue on these six shows alone based on 2019 revenues.

Due to the timing of show cycles, and the value based pricing implementation, we don't expect to start seeing the financial benefits of this effort until the 2021 show it.

In the meantime reader identifying additional show candidates to undergo this process over the course of 2020.

Moving onto page 13.

Part of our focus on data led decision, making third point of folks I'd like to discuss involves post event research.

We've now begun to implement a standardized process and toolsets to design the floor and measure customer surveys coupled with in depth customer insights.

This past July .

We began to work with explored.

Event specific research and analysis.

To ensure consistency and the design and deployment of our post show surveys and support our cycle researched action.

[noise] exploring currently collects data from over 2700 trade shows, allowing us to measure emerald customer sentiment across not only our own historical benchmarks, but other competitive shows as well.

Exploring has also must stylish then overall show score, which is a robust customer sentiment metric combining net promoter score satisfaction loyalty an important metrics.

The scoring demonstrates how any specific show racks against all other shows an exploration universe and will be a customer led measure of Emirates improvements against our peers.

This will also be a key metric our teams will be accountable to improving from addition tradition.

We currently have 27 events integrated into the exploring platform, which will be fully adopted across enrolled by the end of 2020.

Turning to page 14.

Our next focal point for us as we go into 2020 and one.

Peculiar excited about it's around data enrichment.

Well I've mentioned, our customer information through a fusion the data sources, along with behavioral tracking.

The results of this will provide us deal that insights and enhanced customer led product offerings.

Good day Emerald uses basic demographic and from a graphic information in our marketing practices such as name title company information on size company revenues well. This information that's helpful for broad segmentation its limits what customers explicitly tell us now can create incomplete views.

Mismatched marketing messages.

Emerald has access to information on customer activity that is on linked and under utilized this kind of information includes data such as subscribing test reason online concept behaviors for example.

Bringing these types of data together allows for a refinement and messaging segmentation strategy and customer insights.

This is truly an exciting initiatives.

Based on my experience of implementing these kinds of enhancements in the past its approach can have a transformational impact on how we understand communicate with nurture a customers.

We're currently designing the integration path for these data sets today and plan to start rolling out enriched data to our marketing teams over the course of 2020.

Thanks, Brian .

So let me pick up on page 15, when we set out our second bone strategy, which is to give a more concerted effort towards diversifying our revenue stream.

Just to be clear this doesn't mean that we plan to pay any less attention to our core fee based revenue stream.

But rather that we see on opportunity.

Hi, Jason revenue streams.

With the right attention and resources applied to that would deliver more value to our market and drive growth opportunities for us.

We now have senior executives.

Yeah. So.

Facilities are sponsorship and advertising Robbins conference revenue.

[laughter] buyer revenues across the entire Emerald portfolio.

Working with our individual brands, there hopefully drive adoption of best practices.

The development of new opportunities.

He started several pilot programs the number of brands.

Once rolled out I believe there will be significant opportunity to just to drive substantial incremental revenue over the next several years.

Let me hand over to Brian again to outline our initiatives in the area, it's integrated customer solutions.

Thanks Kelly.

So one of the ways, we're diversifying our revenue is through a focus on integrated customer solutions.

Driving increased value for customers by creating integrated packages that go beyond pure food or conference programs.

These will plan onsite sponsorship programs with digital and print solutions to reach desired customer outcome.

For our customers. This is a more holistic approach at delivering value that extends beyond prevent days two year round opportunities.

Examples of this or bundling that show sponsorship options around show guides contracts speed dating pavilions with your round opportunities such as the sponsorship of curated topical series on our websites extending customers content as part of a webinars series even extends into more traditional need.

The offerings such as relevant section takeovers of display ads digital wallpaper on our web sites and sponsored belly bands on our print magazines and at age.

As we're designing these integrated solutions, our focus will be on standardization scale versus one off the spoke efforts maximize opportunity for new profitable revenue growth.

Thanks, Brian .

On page 17, and sit out our third growth strategy, which is to operate more efficiently and cost effectively.

An important component of the strategy is strengthening the culture and discipline in the organization. So that there was more financial rigor around decision making.

Today.

Forecasting and procurement.

You will also structure the organization and the portfolio to be a sufficient and optimize profitability.

Looking to page 18.

And it continues to pursue M&A opportunities that make sense for us.

Which needs where they meaningfully strengthened the existing business that we already Oh.

Or where we bring considerable value to the acquisition dramatically enhances the acquisitions growth trajectory.

We will apply an even higher level of discipline and rigor to this process and we haven't path.

On page 19, I've said out our most recent acquisition, namely that Oh, Gee, three communications, which we announced yesterday.

This is a perfect example of a tuck in acquisition. It is a great business in its own right.

Purchased at an attractive price.

Also strengthens the animal business considerably.

Teach me has expertise and content and b to B marketing and the ongoing retail transformation.

No. This acquisition, we see opportunities to expand the services and solutions, we provide our exhibitors.

Also to create and monetize education model.

At 10 days across our retail event.

Turning to page 20, as I noted earlier, our financial objectives are quite straightforward.

Aim to be a growth business.

Both topline and Bottomline.

We deployed capital responsibly, and then a balanced way that drives shareholder value.

What that means it we will continue to invest in our core business to improve its trajectory and at the same time look for tuck in acquisitions that fit our very specific criteria.

Its plan and using our remain free cash flow after a regular quarterly dividend payments to pay down debt.

I'll share repurchases are not a core part of our capital allocation strategy.

He may continue to buy back shares as we believed that the company is meaningfully more valuable and is reflected in the share price.

On page 21 has set out in an indicative time.

Showing some of the key milestones on the path to growth.

I believe that much of that success will be driven by new processes.

Discipline and accountability throughout the organization and better use of data and technology.

Frankly, this is simply driving better data informed execution.

While our returned to growth will take time, given the need to drive change across many show cycle, you're considering what key performance indicators, we can provide to the investment community.

Can track our success they will have more to Sanderson February when we release, our fourth quarter and full year 2019 earnings results.

Flipping to page 22 have told our employees in the first day that I joined M. all their four important constituency that need to be addressed we are six to be successful.

Starting with our customer is fairly obvious.

Well, we also need to value our employees and make them all the great place to work.

Moving to expanded training and development opportunities.

Next we put more effort into our communities.

The industrys communities in which we operate.

And the local communities, we have offices and where we live.

And if we do all that's right.

Back to have a highly valuable and sustainable business.

It will benefit all of our stakeholders.

Now I'll turn the call over to sell to discuss our third quarter results.

Thank you Sally and good morning, again, I'll pick up on page 24, and begin with a brief review of all third quarter shows.

Starting with Asti shows revenues were flat. This is the equivalent show last year when excluding the sourcing category that was adversely affected by the ongoing U.S., China trade dispute revenues grew 4%, which is a great result.

No changes to the sales structure of now taken hold and together with other execution improvements in the first the implementation of the initiatives. The Brian discussed earlier, we feel confident that the franchise the stabilized and is poised for growth in 2020 in fact, our revenues for the next show in March already pacing well.

Our second largest show in the quarter was the Summer addition of New York now as expected revenues declined by a low double digit percentage with around 40% of the decline attributable to our Q ration of the gift section in the lifestyle category to both improved the overall quality of the show and to allow for the J Summer show to co located with New York now.

Well the home category continued to be the most challenging there was some clear positive momentum in the show.

Based on our post show research. The overall show school that Brian mentioned earlier increased by approximately 30% over the previous summer show for New York now exhibitors by just less than 10% for New York now attendees.

Looking forward, we continue to see an opportunity to improve New York now not take an extra time to assess the enhanced who show research and analysis before opening the sales process for the next show in February 2020.

While this has impacted shortened booth pacing and revenues, we remain focused and the long term health of the brand. The confident we can return New York now to growth longer term.

Turning to our third largest show in the quarter. So Expo, we announced in early September that Weve canceling. The she is show and also the co located ISS Orlando show due to Hurricane Dorian, which was threatening to imminently strike, Florida.

This is a difficult decision, but we work closely with various stakeholders to ensure that we put the safety of our customers a stefano supplies first.

Well, we were disappointed to cancel the shows a financial loss was covered by event cancellation insurance and Weve recorded the agreed net insurance proceeds as other income in the quota.

As a result of this insurance coverage of profitability and cash flows were not adversely affected by these show cancellations.

On a positive note we're pleased to see that our booth revenues for the for the next if Expo show in January a pacing very nicely.

Finally, let me give a brief updates on a CD Expo show, which took place in September .

Well the community seem to really enjoying moving to the shows latest venue in Denver. The home Tech industry has been particularly affected by the recent U.S. China trade dispute. This can be seen in the shows revenues, which were down by a mid single digit percentage.

Looking forward, we'd expect the trade tensions to remain a modest overhang on the shows performance next year.

Turning to our third quarter results on page 25 in the interests of time I'll just touch on a few of these items will detail is available in our earnings release issued this morning.

[noise] revenues decreased by 27.5 million or 26.7% to 75.6 million compared to the year ago quarter.

The decline reflected a net 13.3 million reduction due to several show scheduling differences in the third quarter 2019, most notably outdoor retailer summer market, which staged in the second quarter this year versus third quarter of 2018.

Our revenues this quarter were also adversely affected by shows discontinued in 2018 that did not repeat in 2019, particularly into bike and.

And also by the 7.1 million of anticipated revenues of Pacific spell, an I assess a lender shows that we weren't able to book due to the cancellation of those shows which I noted a moment ago.

Organic revenues declined by 3.7 million or 4.4% after adjusting for the aforementioned items and excluding the 1.9 million of incremental revenues in the third quarter and the two acquisitions, we completed the second half of last year.

Adjusted EBITDA for the third quarter 2019 of 28.7 million compared with 40.9 million for the equivalent 2018 period adjusted for the impact of show timing differences.

The decrease of 12.2 million or 29.8% was mainly driven by the flow through of our shortfall in organic revenues higher operating costs, mainly due to our planned incremental event and organization investments and the loss contribution on a discontinued events.

Free cash flow, which we defined as net cash provided by operating activities less capital expenditures.

Was 10.7 million in the third quarter 2019, compared to 13.6 million in the third quarter 2018, a decrease of 2.9 million or 21.3%. This reduction largely reflected the operating performance of the business in the quarter.

On page 26, I set out the uses of cash in the quarter.

Most notably we repurchased over 400000 shares of common stock than average price of $9.43 during the quarter.

See ended the quarter, we've acquired approximately 250000 additional shares leaving the company with approximately 24 million up the approved program still available.

At the end of September our outstanding term loan balance was 532 point Threemillion, we had 6 million outstanding on the revolving credit facility.

The cash on hand of 13.6 million. This resulted in a net debt of 524.7 million and the net leverage ratio of approximately 3.9 times, our last 12 months adjusted EBITDA.

Turning to the fourth quarter and our full year guidance, a largest shows in Q4 pacing well.

Oh, BTM, why which were cut acquired last year and health care design take place in the next couple of weeks and are expected to grow nicely against their respective previous year event.

Back in August , we announced that falling considerable consultation with the outdoor community, we decided to combine our planned outdoor retailer went to market trade show set stage. The first week of November without outdoor plus snow show, which stages at the end of January next year.

This decision represented a financial setback for 2019 as and when to market show had revenues over $5 million last year and was solidly profitable.

But it was the right decision for our customers and the industry.

Ultimately, we believe a single winter season show will be most successful for outdoor retailer and its customers. This is staging to winter season shows.

So far we've been successful in converting around 80% of the exhibitors, who had signed up just for the winter 2019 show into the January 2020 show.

On a number of those exhibits as he was signed up for both went to shows have now upsize the January presence.

Overall, the outdoor plus no show 2020 is pacing well ahead of the 2019 addition.

I'm pleased to note that we've been able to absorb the 2019 impact within our guidance not adjusted our guidance ranges for the full year 2019.

Said, the cancellation of Sir Expo and I assess the lando due to hurricane Dorian reduced anticipated third quarter revenues by approximately $7 million and consequently, we currently expect total revenue to full modestly below the low end of that guidance range.

However, as a result about events cancellation coverage for the shows management doesn't expect the show cancellations to impact any of the other measures.

At this point I'll hand back to Sally for final remarks.

Thanks, Phil and thanks to everyone on the call for your time today.

I hope to what you have taken away from this call is it we have reset the table and on a path to improve our execution and deliver better financial results I. Appreciate that it will take time for us to prove that to you and to regain your trust and confidence.

I believe the animal business, it's fundamentally sound.

I understand what we need to do to be successful and while it may take time to see food pharma.

We were doing the right thing we turned the business to grow into achieve our financial objective.

Thank you again operator, please open the call for questions.

At this time will be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad. It confirmation total indicate your line is in the question Q you May press star to if you'd like to remove your question from the Q for participants using speaker equipment. It may be necessary to pick up your handset before pressing this.

Turkeys one moment, please while we pull for questions.

Your first question comes from the line of Jeff Mueller with Baird. Please proceed with your question.

Yes. Thank you Sallie just first best wishes on those the personal challenges here, you're fighting through [laughter] on the the business. So I get that it's kind of early and you're going to wait till February to give us the capitalized to track and measure your progress against just from the changes that you've made thus far.

For any early indicators that you can kind of share or is it just too soon.

I think it's a little soon Jeff I mean, certainly there are some green shoots that we're seeing in terms of improvements and.

Customer experience score is set at a New York now summer, we saw 30% improvement among exhibitor.

So some of those things that we're doing in the measurements were putting in place are starting to show some positives effect, but it's really going to be 2021 before we've got everything implemented I'm really rolling it out into its full impact as.

You have heard as we've gone through the list of various.

Initiative that we're we're undertaking.

Got it and then Phil I guess Im a little confused by just a.

The cancellation, the hurricane cancellation mass and insurance, so I know that your ensure or loss profitability in business disruption I guess I'm just surprised that there would be a 6 million dollar insurance benefit arms 7 million of lost revenue that sounds high so is that right and there was something in the Q.

About.

Yeah, maybe the eating at some point to reimburse exhibitors for out of pocket expenses. So what I'm wondering as is the 6 million dollar benefit all recognize this quarter, but there are some future expense against that that's not accrued just trying to help understand why the 6 million.

Sure as proceeds would be so high and 7 million of lost revenue.

Sure I mean, they the.

The the anticipated revenue, we didn't brokers the 7.1 million, we saved a million dollars in running the show.

We didnt that show didn't take place, but obviously most of this the costs were in could beforehand. So we saved a million dollars versus you know the lost revenue and that's why that's how the event cancellation works. It's the net financial impact to us so you'll see in the commentary around cost of revenues studies says you know one of the.

Hi items affecting the quarter versus the previous quarter was the savings in.

In the show so that's how we got too.

Uh Huh, we got to 6.1 that the.

The reimbursement to exhibitors as we had to thing churns.

Policies, we had long which was for us to reimburse us for having to give refunds to customers and then we purchased a secondary a policy and that's the ones that we will receive cash in Q4, and we will pay out exhibits is for the cost.

They had that were incremental to the beef cost. So the primary pays that these costs back to them and sponsorship cost what they paid US and then we had a secondary one which is what is referenced in the in the Q.

Okay, and then just last from me any kind of rough sizing of you've obviously are in flight whats implementing walks of initiatives like how much of the expense related to them is recognized in year in 2019 versus how much will be incremental Uh huh.

Initiative expense in 2020.

So we have approximately 2 million all the costs of the new team on the initiatives. This started to be kicked off if we annualize that it's probably another.

Threemillion next year. So you know with 5 million as a run rate you know subject to other initiatives our investments the become you could start to be implemented next year. We we've talked about a lot of the things that we are.

Already kicked off you know, but there are other things in the pipeline that maybe we'll have an impact in 2020 as well.

Got it thank you.

Welcome.

Your next question comes from line of Manav Patnaik with Barclays. Please proceed with your question.

Yeah. This is Ryan Leonard on for model and also wishing you a the best Sally.

You know just in terms of a long term targets I was wondering just help us out I mean, we've you know this mid single digit has been thrown out there before so much word you can break that down at all in terms of or is that from volume growth as it from pricing is it expect new show watches you just help us think about how we get there.

Just in terms of some buckets.

I mean.

I'll start and then you can you can add I mean intensive in a way to mid single digit growth come from I think we talked about the opportunities within value based pricing overtime.

The initiatives all are focused on improving the show so we would expect volume growth.

Then shows over the longer term and we have.

A number of.

New show ideas you show launches that are being considered so I think it's a combination of all those things not one no more than.

On the than the others at this point plus the diversification of the revenue stream, which Brian discussed earlier, we believe it's going to also lead to grow.

Got it and just talk about diversification.

Is that really focused on existing shows that exist today or do you think there is a need to diversify the current portfolio of shows.

The current the outlook right. Now is you know we're looking at how we can diversify revenue and all of our existing shows wherever those opportunities arise and then as we contemplate new launches that may happen in the future of course will be looking too.

Contemplate how those those types of bundles are.

Our built into them from the day one.

[laughter].

Got it and then finally from me just on the you know the the cost management side and the the growing at a you know a profitable margin.

Is it safe to say that you know if revenue growth is mid single digit EBITDA growth should be in line with that if not better.

So I think that's a good question because ultimately what matters is Uh huh.

EBITDA growth.

That's our primary focus.

And I think obviously revenue growth is key.

Margin plays a role, but when you're looking at revenue.

EBITDA growth over time.

Getting the growth rates I wouldn't suggest it's probably slightly more important than pushing for the highest possible margin because of growing business at a slightly lower margin is worth more than a contracting business at a very high margin.

Got it thank you.

Your next question comes from the line of David Chu with Bank of America. Please proceed with your question.

Hi, Thank you so based on this value based pricing I mean, how should we think about price increases for like the portal show portfolio in 20, and 21 I know that it's not really being implemented fell 2021, but just thoughts over the next two years would be helpful.

Yes, so the overall effect, you're right are really going to bear out until 2021 based upon the cyclicality of the.

The way the shows from where as I mentioned earlier.

Reducing the value based pricing modeling.

Across a handful of our shows at this for a moment.

Do everything at once.

So we're doing this and batches, we'll be moving forward into additional shows and how value based pricing roles onto them.

Over the course of next year, which will.

I have effect forward.

As those shows stage too.

So we're looking you know those will be 2021, and this is 2022.

And David they that to sell the you know that the current pricing.

Yield growth is it's into 2% to 3%, which is pretty typical and pretty you know what we've seen over the last couple of years. So I think that's sort of our expectation.

Going into 2020, and then you know a little bit of a boosting potentially in 2021.

From the introduction of value based pricing in a bunch of shows.

Okay, Great. That's helpful. And then just given the current assessment of the portfolio just any update on potentially discontinuing any shows.

We're always looking at what makes the most sense for our portfolio at this point, we don't see anything that makes sense to discontinue.

At the same time, it's always an open question as we continue to analyze and go up and continue to look for a proof points about the effectiveness of the tactics, where I'm flying that may change, but at this point no.

Got it okay. Thanks, and just last last one just a quick housekeeping what was organic growth for the three segments.

I don't have the supplemental materials.

Right in front of me right now, but it's on the web site.

The the breakdown between.

Trade shows other events and.

On the marketing services.

Okay. So you can find it is online okay got it thanks, yes.

Your next question comes from a line of Kevin Mcveigh with Credit Suisse. Please. Please proceed with your question.

Great and Sally best wishes on the road to recovery in terms of or the revenue Kinda then on both revenue and accelerated rate a seller Sally any sense of what's been your experience there and then within the context of that.

What is the revenue look like on the non booth versus Fuson does it change this seasonality the business and or the predictability as you start as that becomes a bigger percentage of the contribution.

So we're in the process of running pilot right now and in 2020, those pilots will tell a help us I see opportunity and help us see which of the various things we could pursue.

We'll be most effective it what show just because there will be some variability.

So I.

I think that the opportunity is considerable over time.

Because for enrolled overall, it's a smaller percentage of our revenue then it is for many trade show producer Yeah, our booth revenue pure abuse booth revenues.

About two thirds of all revenues and then some of the non do includes commissions and other things related to to really the trade show so that the third or a little bit less than the third is what we have to.

We have to work with in terms of.

Kind of numbers.

And what would be a more traditional mix.

[noise].

Hard to say because I'm not privy to the exact details, but certainly my model for what it should look like in future years wouldn't be that we continue to grow our booth revenue, but decreased our dependence on it so.

Oh, I could see us in a place where our booth revenue is 50%.

Of our total revenue and the other Huh Congress from conferences from education from sponsorship from content marketing or from a whole list of things that we can be doing given the fact that we'd have a digital presence that were not offering today.

Got it and then would you tell eat theoretically would there be similar.

Revenue growth contribution and would you expect to non boots, obviously would grow faster.

Hi, it's really hard to predict at this point until our pilots are done.

So if you know if we do it right. There's obviously, we're in change your markets, where things like education matter and its hard to predict how much growth, we'll see where.

But we're confident that it's there and that we can gather at overtime.

[noise]. Thank you.

Yeah.

Your next question comes from line of Ashish Sabadra with Deutsche Bank. Please proceed with your question.

[laughter]. Thanks for taking my question is tallied suspicious first media company as well just a question on New York now just.

If you're getting a select some color on expectations for revenues, how much revenue decline and I thought the fact show and when should we just talked to see that going the wrong for the New York now or is something like 20%, even we can start to see done around that thanks.

Hi, Phil I'll try this and then tell you can you can come in I mean, we have we haven't you a leader over the show so and as we said.

And then the prepared remarks, we're really taking some time to look at what we've gotten both what we need to do we believe in in the long term growth opportunities of this franchise, it's really difficult to say you know when that will come through.

Certainly 2020, maybe a little bit soon for it to see that flow through.

But you know there's a lot of initiatives going into the first show in February .

New things happening, we're responding to the research and really detailed research and analysis and so as you know it's we're playing the long game on New York, now and and we'll continue to.

We'll continue to move forward, but you know I think I think 2020 make some a 2020, which was your question maybe a little soon to expect it to stabilize.

In general can feel good about retail as we've seen with a a state which is now returning to growth. So I want to be clear that we think our new York no issues and not related to retail as a category, but more to the fact that.

We havent executed in as customer focused away as we could have.

[noise] definitely helpful. Charlie I mean, again actually providing.

Details from the strategic initiatives.

My question was somewhat Steven fueling value based pricing on integrated customer solution.

And does not require.

Is it because it will make likes it because to spend more money and just yeah. Some talk to them Todd just propensity for makes it goes to spend more money, particularly in a lot of management businesses seem to me slowing down their spend so any thoughts on doctrine.

So I'm going to ask Brian to address that my only remark I said, it's all about ROI.

Yeah, and so you know, it's really about again the values that the exhibitor gets.

In.

The package that that company purchases.

We've seen in the past as Weve rolled these out before in in a variety of different sectors that as long as theres transparency.

The expectation around what the customer will receive.

And the value for that.

You know is something that.

As well welcome because there again theres transparency.

There's a set of packages not just in the space, but other types of things promotional opportunities that come along with that often times.

And that aggregate package and the value that it brings is something that customers.

Tend to find very attractive when they're considering age.

Value based pricing model.

Hi, Thanks, Thanks, Brian Thanks.

As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad as a reminder, if you'd like to ask a question. Please press star one on your telephone keypad.

One moment, please as we pull for questions.

Your next question comes from line of Seth Weber with RBC capital markets. Please proceed with your question.

Hey, Good morning. This is going to answer and then for Seth and again best wishes to you Sally on your recovery.

Brian I guess, just with the value based pricing to follow on that.

Yeah.

Are there certain sectors or categories or even show sizes that are best suited and positioned to benefit from value based pricing is it you know maybe give us some color on you know if the success you've had among different categories.

Or even sides of shows it it's it easier to implement this sort of strategy and <unk> and various types of shows et cetera.

Or should it be fairly fairly you know beneficial across the portfolio.

Should be fairly beneficial across the portfolio that said.

There may be shows that are extremely small mostly ones that are conference led educational led where there isn't a large.

Trade show type of component to it.

Fair value based pricing model wouldn't make a whole lot of sense, what we spend most of our time of the educational element, particularly and.

Conference revenue.

The Expo floor plays a supportive role, but not a major roll the contribution of that kind of an event.

Okay Fair enough and I guess did this is this going to require you guys to kind of retrain kind of your sales staff and some of those.

Ah Commission.

Plan did you guys had in place I mean, how how easily or quickly can some of the existing sales people kind of communicate a different more dynamic message regarding the value based pricing.

Yes. Good question and you know that's part of the reason why it's not a light switch where you don't turn it on overnight right there.

There's the cyclicality of the events piece of it which is one component. The other part is that the actual the design of the floor plan the messaging around how to communicate value to customers.

That also takes time for the sales teams to be able to.

To be able to communicate effectively and so while we're designing this and looking at pricing elasticities models at the same time. The sales teams themselves are very involved in the process.

And so they're seeing the kinds of a packages and value delivery that these customers are going to receive so they're becoming tuned to at even as the the discussions are happening internally.

So that there has been able to deliver that message much more effectively crisply and communicate that value to customers as the packages become available to them.

Some bumps in the future.

Okay. Thanks.

Ladies and gentlemen, we have reached the end of the question and answer session and I'd like to turn the call back to management for closing remarks.

Thank you all for participating today, we know we've historically delivered unacceptable results and we're grateful for your patience.

We believe absolutely. This is a portfolio that can grow and that we've found the right huh forward in order to get there, but we also want to be realistic about timeline.

This is a multi year a turnaround story, so I think you've heard us but excited about the thing we are achieving and where we're going so thank you again for your participation and have a good afternoon everyone.

This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.

[noise].

Uh huh.