Q4 2024 Emerald Holding Inc Earnings Call
Good morning and welcome to the Emerald Holding Inc. fourth quarter in full year 2024 earnings conference call. Before we begin, let me remind everyone that this call will include certain statements that constitute forward-looking statements within the meaning of private security's litigation reform act of 1995. This includes remarks about future expectations, beliefs, estimates, plans, and prospects.
The company does not undertake any duty to update such forward looking statements.
Additionally, during today's call management will discuss non-GAAP measures, which it believes can be useful in evaluating the company's performance.
Presentation of this additional information should not considered in isolation isolation or as a substitute for results prepared in accordance with U S. GAAP.
A reconciliation of these non-GAAP measures that are most comparable GAAP measures can be found in the company's earnings release, which is available on the company's investor Relations website.
Speaker Change: I would now like to turn the call over to Mr. Harvey said, Gee, President and Chief Executive Officer. Please go ahead.
Harvey Said: Thank you, Kevin and good morning, everyone and thank you for joining us today.
Harvey Said: Begin today by discussing our performance and strategic initiatives and then David asked our CFO will provide a more detailed review of our financials.
Harvey Said: 2024.
Speaker Change: Early weeks of 2025 marked a pivotal time for MRV.
Speaker Change: We've laid the groundwork for future successes to deliberate strategic initiatives importantly.
Speaker Change: And as noted in our prior call, we launched an aggressive portfolio optimization effort. In 2024. This involves pruning several unprofitable events and establishing a nimbler portfolio clients for growth.
Speaker Change: At the same time I'm very pleased to announce two exciting acquisitions today, which further our efforts to drive scale and strengthen growth in margin over the long term.
Today, our portfolio is made up of events and increasingly high growth sectors, covering seven industry verticals, including enhanced exposure to design luxury and technology oriented events.
Speaker Change: We feel confident about our portfolio of strength.
Speaker Change: Ordered by an improved business mix from portfolio optimization and earlier strategic realignment in our content and commerce businesses as many of you know historically emerald function as a decentralized federation of brands rather than a unified platform.
Speaker Change: Today, we operate with scalable infrastructure that enables organic growth improves customer efficiency and stronger financial performance as we accelerate organic growth, we expect significant pull through to the bottom line and to improve customer experience, while also delivering real customer value.
Speaker Change: As we move into 2025, we believe Emerald is primed for improved growth and margin enhancements supplemented by a very healthy M&A pipeline.
Speaker Change: As we shared in our press release. This morning, we're thrilled to announce two strategic acquisitions that we believe will immediately enhance the value of the business first we signed a definitive agreement to acquire this is beyond.
Speaker Change: A London based luxury travel events business. This.
Speaker Change: This is beyond provides luxury travel vendors and operators with the opportunity to the embedded decision, making buyers and supplies travel leader the forum to build relationships create new business ideas and generate revenue.
Speaker Change: Exhibitors are typically high end travel hotel brands with a design or lifestyle focus while buyers are travel designers global food operators or in house travel managers.
Speaker Change: This is beyond highly experiential events emphasize thought leadership and networking as a key component of.
Speaker Change: This acquisition aligns seamlessly with our strategy to expand in high growth high margin sectors. In addition to strengthening our event portfolio. It also presents significant organic growth opportunities across this is beyond portfolio, including several flagship events still in their early growth phases.
Speaker Change: Moreover, the company's proven intrapreneur, it'll track record positions Emerald to innovate and launch new concepts.
Speaker Change: <unk> is consistent with our accelerator strategy.
This is beyond also provides us with a leading niche in the global travel business. According to skip the luxury travel demand.
Speaker Change: Surged in 2023 and continue to grow as affluent individuals prioritized travel as their top activity.
Speaker Change: <unk> service, 78% and exclusivity at 67% are the top factors and luxury travel highlighting the importance of personalized attention and intimate settings more importantly, 85% of luxury travelers considered travel advisers crucial for secure.
Speaker Change: <unk> personalized luxury experiences.
Speaker Change: As a forum for the leading luxury travel brands to network and connect on the latest luxury travel trends. This is beyond the offers attendees a better understanding of how to cater to and attract high end luxury travelers.
Speaker Change: This is beyond currently produces seven events globally, including three in the United States. Its two largest events are pure life experiences, which is focused on high end experiential travel sector early Miami, which focuses on the high end contemporary travel sector and caters to a creative and and consumer.
Speaker Change: <unk>. Other notable events include we are Africa, which supports high end travel to Africa further east and event held in Bali for the high end APAC travel region in specialists in entertainment travel, which addresses the entertainment travel sector for touring music and other entertainment among others.
Yeah.
Speaker Change: We're thrilled to add this is beyond the GMO portfolio. This transaction is currently undergoing antitrust review in Morocco, where one events pure takes place and we expect to close the transaction during the second quarter pending regulatory approval.
Speaker Change: On a personal note I've spent much of my career in the travel industry with the American Express company, what I know to be true about this acquisition is that the luxury travel market is the most attractive sub sector of travel with long term in a resilient growth characteristics. We look forward to the potential that this is beyond business provides two.
Speaker Change: Emerald longer term.
Speaker Change: In addition to this is beyond <unk>. We're also pleased to announce that we closed the acquisition of insure Tech insights launched in Europe in 2018 insured Tech insights operates three large scale insurance technology conferences in New York, London, and Hong Kong.
Speaker Change: There are conferences empower insurance professionals with insights inspiration and networking opportunities in discovery for the latest technological innovations transforming the insurance sector attendees at their events include insurance brokers and agents from the top insurers and solution providers.
Speaker Change: Globally.
Speaker Change: And just a few short years ensure tight insights has already grown into one of the preeminent insurance conferences and has an exciting runway ahead of it more importantly, it provides <unk> with a foothold in the fast growing insurance technology industry, where meaningful investments are being made by insurers and improving customer.
Speaker Change: Experience automation of processes artificial intelligence and cloud computing among others. We believe this is a long term trend with a strong growth characteristic of view reinforced by a recent study by alliance.
Speaker Change: The alliance global debt.
Speaker Change: Forecast steady insurance industry growth across all regions with a projected CAGR of 5% to 6% globally through 2030 in their view growth will be supported by innovation and ongoing digital transformation, leaving insured tech insights under <unk> ownership well.
Speaker Change: <unk> to capitalize on emerging industry tailwind is as we would expect the technology providers to Judy.
Speaker Change: Judy industry to exceed that rate.
Speaker Change: Together, both transactions further strengthen and optimize our portfolio mix diversifying our events into a broader portfolio of high growth categories. We expect the combined transactions to be accretive to our growth rate and margins and expect them to contribute approximately $40 million of revenue and approximately <unk> 15.
Speaker Change: Adjusted EBITDA to our financials in 2025.
Speaker Change: Beyond these acquisitions.
Speaker Change: <unk> also recently completed a refinancing of our debt on January 30th enhancing our financial position and providing greater flexibility to execute on our strategic priorities. This transaction is a pivotal pivotal milestone in strengthening our financial flexibility and optimizing our capital structure.
Speaker Change: By enhancing our liquidity and reducing financing costs by 125 basis points, we have greater capacity to accelerate portfolio optimization initiatives bolster free cash flow and advance our strategic growth priorities with confidence.
Speaker Change: Thank our lenders and greatly appreciate their strong support David will walk you through the specific terms in greater detail in a moment.
Speaker Change: As we look ahead, our strategy remains anchored in our three pillars of value creation customer Centricity 365 day engagement and portfolio optimization with a heavy emphasis on the portfolio optimization opportunity.
Speaker Change: We're excited to build upon our diverse portfolio of must attend events encompassing high growth industries. We are confident in the strength of our portfolio and remain open to pursuing strategic opportunities for future acquisitions, and new launches as I noted earlier, our pruning efforts in 2024 optimize.
Speaker Change: The mix of our portfolio more towards high growth industries, and higher margin event that better position us for sustained growth.
We believe that the value proposition for Emerald large and diverse collection of events is strong and our customers understand and appreciate the strong ROI that in person events offer it's proven that in person events are irreplaceable for business outcomes. They have consistently led to faster trust building and more.
Speaker Change: Effective business development compared to virtual interactions.
Speaker Change: This value is evidenced in the broad based year over year pacing growth, we're seeing in the first half of 2025, giving us confidence for the year. This also takes into account the ongoing construction at Las Vegas Convention Center, where which has had continued impact on certain emerald breads, and which we expect to cycle.
Speaker Change: In 2026, given construction is expected to be completed later this year.
Speaker Change: We have several exciting events in the first quarter, including K bids the kitchen and Bath event, which was held in mid February the sports licensing and tailgate show impressions and the international Pizza Expo. Our acquisition pipeline also remains robust we expect continued activity as we move through the year.
Speaker Change: Was the primary driver of our Upsized term loan in January.
Speaker Change: Our efforts to proactively approach.
Speaker Change: What we believe are attractive assets to add to the Emerald portfolio are bearing fruit not just with the acquisitions announced today, but with meaningful incremental near term opportunities that we continue to work on.
Speaker Change: In terms of our outlook for 2025, including the acquisitions announced today, we expect revenue to increase to a range of 450 million to $460 million and adjusted EBITDA to increase to a range of $120 million to $125 million. This implies a 200 basis point improvement in adjusted EBITDA margin.
Speaker Change: 227% as we continue our journey, we do so with confidence in the strength of our portfolio the resilience of our team and the immense opportunities ahead.
Speaker Change: With a clear vision and a commitment to innovation Emerald is poised to drive lasting growth for years to come and now I'll turn the call over to David to review the financials.
David: Thank you Jay and good morning, everyone.
Surveyed said that 2024 was a constructive year for Emerald and we're well positioned for 2025 and beyond.
David: Looking at our results revenue for the fourth quarter was $106 8 million.
David: $101 5 million in the prior year quarter.
David: This was driven primarily by growth of $6 1 million and organic revenue were six 5%, which takes into account the impact of acquisitions scheduling adjustments in discontinued events. The topline was also aided by $4 $8 million in revenue from acquisitions.
David: Growth in the quarter was partially offset by scheduling adjustments of $3 $7 million were events space in the fourth quarter of last year, but in the third quarter of this year and prior year discontinued event revenue of $1 9 million prudent as part of our portfolio optimization efforts.
David: Revenue for the full year totaled $398 8 million and.
David: An increase of four 2% versus the prior year. The increase was driven by organic revenue growth of $21 3 million or five 9% as well as $13 $5 million in revenue from acquisitions. This was offset by prior year discontinued revenue of $18 $2 million.
David: Related to portfolio optimization efforts.
David: Zero point $6 million and forfeited revenue due to the cancellation of one of our hosted buyer events in October as a result of hurricane milk. We successfully recovered proceeds of zero point $5 million from our event cancellation insurance policy, reflecting the bottom line impact of the cancellation. This is reflected in the other income.
David: Line of our P&L consistent with past practice.
David: I would like to highlight the impact of events stays in 2024, but had been discontinued going forward. These events drag organic growth by approximately 1%, meaning that the remaining ongoing portfolio of emerald's businesses actually grew 1% faster last year.
David: Fourth quarter adjusted EBITDA, excluding insurance proceeds was $32 6 million compared.
David: Compared to $35 8 million in the prior year quarter, including the zero point $5 million of insurance proceeds noted above for the event canceled within the period due to the hurricane adjusted EBITDA was $33 1 million.
David: Adjusted EBITDA, excluding event cancellation insurance for the full year 2024 was $100 2 million compared to $95 million in the prior year. The increase was due to continued cost management as well as portfolio optimization efforts that resulted in the discontinuation in 2024 of several small now.
David: Non core and unprofitable, perhaps in addition to the insurance recovery for the fourth quarter Hurricane related cancellations earlier in the year, we recovered $1 million for a cancellation from a previous year, including these proceeds adjusted EBITDA was $101 7 million.
David: Turning to expenses fourth quarter, SG&A was $34 6 million versus $36 1 million in the prior year period, driven by continued management of overhead costs decreased costs related to discontinued events and lower stock based compensation expense. This was partially offset by the impact of acquisitions and integration costs.
David: For the full year, SG&A was $174 million versus $168 $3 million in 2023, driven by similar reasons as the fourth quarter.
David: In the fourth quarter, we generated $17 9 million of free cash flow excluding event cancellation insurance proceeds.
David: Third to $13 $5 million in the prior year period for the full year free cash flow was $35 5 million as compared to $26 million in the prior year, including insurance recoveries free cash flow for 2024 was $37 million.
David: Yes.
David: Following on <unk> comments on the dishes beyond and insure tech and <unk> acquisitions, I'd like to provide a bit more detail.
David: Both companies are based in the UK, even though the operating event in several markets, including the United States combined we're paying 124 million pound Sterling for the businesses. This equates to approximately $160 million at recent exchange rates.
David: We insure tech insights acquisition has already closed however, our survey mentioned the dishes beyond acquisition is pending regulatory approval in Morocco, where beyond stages. It's pure life experiences events, we do not anticipate any issues garnering approval given that Emerald has no preexisting presence in Morocco, nor in the travel sector.
David: Our expectation is that the deal will close in the second quarter and prior to beyond LTE Miami event in May.
David: As already noted we expect the combined businesses to contribute revenue of approximately $40 million and adjusted EBITDA of approximately $15 million. In 2025. We also expect these acquisitions to be accretive to emerald to overall growth and margins as we believe there is substantial incremental growth opportunity long term in both businesses.
David: I also want to highlight the impact it has on the portfolio mix of Emerald events as we've long discussed we run a portfolio of brands exposed to different vertical end markets. It is highly beneficial for an event to operate in a healthy and growing sector. Our goal with our portfolio optimization strategy is to continuously work to improve.
David: The mix of events in our portfolio and increase our mix towards healthy and growing industries with these deals we have taken a big step forward for example, our exposure to the luxury category now across high end jewelry and travel among other subsectors as increased over 13% of revenue on a pro forma basis from less than eight.
David: Sent before.
While our exposure to the technology sector has increased to 15% on a pro forma basis from 13% before at the same time, our exposure to gift and home events has declined meaningfully to only 12% of revenue on a pro forma basis, whereas over the last few years. It was as highest 24% of revenue.
David: Overall, we are pleased with the continued improvement in the long term positioning of our portfolio and remain focused on incrementally strengthening it going forward.
David: Shifting to the balance sheet, we had a healthy cash balance of $194 8 million as of December 31, 2024 versus $188 9 million.
David: As of September 30 as of December 31, we had net debt of $214 3 million, leading to a net leverage ratio as defined in our credit agreement of one nine times, our trailing 12 month consolidated EBITDA based on the definition in our credit agreement of $115 8 million.
David: Pro forma leverage, including the impact of our refinancing assuming the full year benefit of the acquired companies and subtracting the acquisition cost from cash the net leverage ratio increases to just under three times.
David: Yes.
As Herve mentioned on January 30, we successfully executed a strategic refinancing of our first lien term loan and extended our revolving credit facility enhancing our capital structure and improving financial flexibility.
We replaced our existing $409 million first lien term loan with a new upsized seven year $515 million senior secured term loan facility maturing on January 32032. Additionally.
David: Additionally, we extended the maturity of our $110 million senior secured revolving credit facility by five years to January 32030, notably we achieved a significant reduction in pricing with spreads tightening to sofa, plus 375 basis points from the previous so for plus 500 basis point.
David: <unk>, reflecting improved credit market positioning.
David: Pro forma for the refinancing our cash at year end would have been approximately $287 million net.
David: Net of leakage of fees related to the capital raise this is prior to funding the acquisitions, we have discussed today.
David: We believe our balance sheet strength and cash flow generation support our ability to opportunistically invest in and grow the business as well as to optimize the per share value of our stock in 2025, we expect to continue to balanced capital allocation between acquisitions investments in our own business managing debt leverage and opportunistic.
Share buybacks during the fourth quarter, we bought back roughly one 8 million shares for $8 4 million at an average price of $4 68 per share under our existing and prior buyback authorizations. The current authorization had $17 $4 million of capacity remaining at year end since the beginning of the program.
David: In 2021, we have repurchased a total of $13 3 million shares of common stock for $53 $7 million down.
David: Demonstrating our unwavering commitment to delivering value and returning capital to shareholders. Additionally on February 26th Emerald Board of directors declared a regular quarterly dividend of one five cents per share for the quarter ending March 31, 2024, which would imply an annualized cash dividend amount of $12 million and reflect.
David: The dividend yield of one 6% based on yesterday's closing price.
David: Turning to our outlook, we are initiating full year guidance for 2025, and the range of $450 million to $460 million in revenue and $120 million to $125 million and adjusted EBITDA.
Overall this implies at least mid single digit organic growth rate.
David: Within our guidance, we have built in some impact to our outlook from tariffs imposed and threatened by the U S. Government. So note that our international exposure is relatively small today, our international exposure is approximately 10% of our revenue exhibitors coming from China generate roughly 2% of revenue Canada.
David: The same and Mexico less than 1% across companies that sell products or services.
David: Sitting here 10 weeks into the year events that have already taken place represented 36% of our expected annual international revenue. So any potential risk is already meaningfully reduced our overall guidance reflects our current expectations based on what we're seeing in real time and what we.
David: Have already sold this year, we plan to continue to monitor the situation closely as we move through the remainder of 2025.
David: We have also built into our expectations some drag from the ongoing construction at the Las Vegas Convention Center as well as note the impact of our portfolio pruning, which eliminated $5 million of revenue from events from events that states in 2024, but we will not stage in 2025.
David: And now we will open up the call for questions operator.
David: Thank you ladies and gentlemen, we will now begin the question and answer session. At this time I would like to remind everyone to ask a question press. The <unk> button followed by the number one on your telephone keypad. If you would like to withdraw your question. Please press star one again one moment. Please for your first question.
David: Your first question comes from the line of Allen Klee Maxim Group. Please go ahead.
Allen Klee: Good morning.
Speaker Change: You said that.
Speaker Change: The two questions related to the acquisitions, where you said the initial payment is going to be combined $160 million.
Speaker Change: Just starting with that.
Speaker Change: Can you explain how thats being paid in cash or stock or debt.
Speaker Change: And then for the.
Speaker Change: Besides the initial payments the payments thereafter.
Speaker Change: If there is an earn out or something any anything you can touch on that thank you.
Allen Klee: Sure. Thank you Alan and good morning, so the acquisitions.
Speaker Change: Acquisitions are both being funded with cash on hand.
Speaker Change: And there are deferred components based on performance through for both deals through 2027.
Speaker Change: So we would expect incremental payments through 2028 for that.
Speaker Change: Through 'twenty, Okay, great and then.
Speaker Change: You said.
Speaker Change: I should add $40 million to $15 million.
Speaker Change: Revenue and adjusted EBITDA.
Speaker Change: But but theyre not getting put on from day, one can we get a sense two things related to that or how much.
Speaker Change: Annualized revenue.
On January one and EBITDA. They would represent and then is there a way to because they're going to be closing like a quarter apart.
Speaker Change: Think about the.
Speaker Change: The impact on.
Speaker Change: Yeah.
Speaker Change: The following quarter.
Speaker Change: Yes, it's Q2 and Q.
Speaker Change: The quarters related to that Q2, and Q3 or maybe sorry.
Speaker Change: The bigger question is related to that you could answer is just how should we think about seasonality.
Speaker Change: <unk>.
Speaker Change: Through the four quarters.
Speaker Change: Factoring these two things.
Speaker Change: Sure.
Speaker Change: Sure Joe.
Speaker Change: We do expect to own both businesses before they stage any events in the year.
Speaker Change: So the revenue impact is the annualized impact.
Speaker Change: The only caveat there is the timing of the regulatory approval in Morocco, if that goes longer then we expect it's possible that.
Speaker Change: We might not close before one of the events but.
Speaker Change: What we're told in our understanding from counsel is it shouldn't be a problem.
Speaker Change: As you know with events.
Speaker Change: Any costs related to an event or deferred to.
Speaker Change: The event and so the vast majority of the costs. We're capturing this year there is some overhead.
Speaker Change: That.
Speaker Change: Is not being captured this year, but transparently, we built in the full year impact of those costs in our plan as I've kind of a broader overall hedge on our portfolio for the year.
Speaker Change: So the numbers. We gave is what we expect the annualized impact to be.
Speaker Change: From a seasonality standpoint.
Speaker Change: Adam.
Speaker Change: These deals are only moderately shift the overall seasonality of the company.
Speaker Change: I don't have any events in <unk>. So it does take down.
Speaker Change: The mix of the year for the first quarter by by a couple of points.
Speaker Change: Percentage wise of the year. So if you look at last year.
Speaker Change: 33% of our revenue came in the first quarter. This year it should be moderately lower than that in <unk> and so with that Q2, then it goes up a little bit by a point or so.
Speaker Change: Three Q are fairly consistent.
Speaker Change: And in <unk>.
Speaker Change: On a fairly consistent so.
Speaker Change: Theres, just a moderate shift between <unk> and <unk> on the waiting of the year.
Speaker Change: When all is said and done it doesn't meaningfully change the overall dynamics.
Speaker Change: Okay, and then just following up on that and then I'll get back in the queue for questions.
Speaker Change: When you said that the seasonality does that also factor in the events that you had.
Speaker Change: That.
Speaker Change: Because you've shut down.
Speaker Change: They're going to.
Speaker Change: That's going to play out in the quarters.
Speaker Change: Correct.
Speaker Change: The seasonality I spoke of is is the call it the new Emerald in its entirety.
Speaker Change: Got it okay great.
Speaker Change: Okay.
Speaker Change: In Q. Thank you so much.
Speaker Change: Thank you thanks Alan.
Speaker Change: Sure.
Your next question comes from the line of Barton Crockett of Frozen <unk> Securities. Please go ahead.
Barton Crockett: Okay, great. Thanks for taking the question and.
Speaker Change: I guess.
Speaker Change: One was just a little bit more kind of understanding of the acquisition math.
Speaker Change: And I guess one of the things I was wondering is the EBITDA youre talking about is that.
Speaker Change: After synergies are before synergies.
Speaker Change: Our synergies kind of a meaningful part of the story.
Speaker Change: One and then you touched on it before but.
Speaker Change: Performance deferrals, it sounds like that's incremental to the 160.
Speaker Change: Maybe you don't want to be very specific but can you give us some bigger than a breadbox basket.
Speaker Change: A sense of how large that are for us.
Speaker Change: B to factor into the whole acquisition price.
Speaker Change: Sure. Thank you Barb and good morning.
Speaker Change: The numbers, we gave you our pre synergies and.
Speaker Change: Admittedly because these businesses are run overseas, we don't expect synergies in 2025.
Speaker Change: Potential synergies are likely to take a little bit longer to achieve and will likely be in 2026 and going forward. So we definitely have upside there one of the opportunities here is as you know we have.
Speaker Change: Slowly in the last couple of years expanded overseas on a smaller scale, we have the advertising week, our business in the U K with some staff there.
Speaker Change: Have the global risk and compliance JRC business, which was a smaller business. We acquired last year also based in the U K and now with these two deals are much more scaled our presence there and so there is an opportunity for us too.
Speaker Change: Consolidated.
Speaker Change: And operator operations over in the UK and create opportunity as well as both of these businesses have events in the U S and we always have opportunity.
Speaker Change: More easily attainable in the U S, but would expect it not to be in the first iteration of those shows are typically we like to experience running the show.
Speaker Change: First ourselves before we really move to apply more best practices NY something meaningfully standout obviously upfront. So so we're not building in synergies this year we.
Speaker Change: We would expect.
2026, fab those opportunities, yes, afirma deferred payment standpoint.
Speaker Change: Our standard model, which I think everyone should be familiar with at this point.
Speaker Change: As a down payment plus an.
Speaker Change: Earn out based on performance earn outs are only earned if the business grows.
Speaker Change: And so.
Speaker Change: And the way our Formula has worked.
Speaker Change: That.
The more obviously a business grows the more we'll pay but the lower the multiple guests and so any.
Speaker Change: A deferred payment.
Speaker Change: Ultimately, it's because the business has grown and brings down our all in multiple based on the current run rate.
Speaker Change: <unk> of EBITDA at that time.
Speaker Change: It's hard to forecast exactly what it will be because of its contingent on the performance. It's not an earn out where if they just hit X number they get y amount of dollars.
Speaker Change: A more complex grid.
Speaker Change: Our growth rates and multiples on that will determine the ultimate payment.
Speaker Change: So.
Speaker Change: We're still doing the accounting work of what the initial estimate will be on the balance sheet, which will report on the.
Speaker Change: First quarter.
Our earnings.
Speaker Change: But.
Ultimately, we do expect these to be growth businesses, we do expect that we will pay more for them.
Speaker Change: And with that we do believe strongly that.
Speaker Change: The more we pay the better position, we're all going to be in because it will vastly improve overall performance for Emerald.
Speaker Change: Okay. Thank you for that and.
Speaker Change: When we think about.
Speaker Change: Free cash flow conversion.
Speaker Change: I mean, what's your refinancing.
Speaker Change: This deal.
Speaker Change: How should we think about free cash flow conversion this year.
Speaker Change: Relative to what you've done for the last couple of years of EBITDA.
Speaker Change: So.
Speaker Change: <unk>.
Speaker Change: Yes.
Speaker Change: The EBITDA guidance, we've given we're looking at free cash flow of $50 million plus.
Speaker Change: As the flow through off of that so we are looking for a nice step forward.
Speaker Change: And flow through of that.
Speaker Change: That EBITDA to free cash flow and.
Speaker Change: And so we're beginning to get some.
Speaker Change: Some good leverage as we would hope and expect from that going forward, obviously, we did add.
Speaker Change: $106 million to the debt, but at lower rates. So net net we're we're not in two different position on an interest expense standpoint.
Speaker Change: Then we will in 2024, but with meaningful higher EBITDA and as we.
Speaker Change: Hopefully continue to grow which is.
Speaker Change: Our expectation and plan.
Speaker Change: We should continue to have leverage on that.
Speaker Change: Because we have cash on hand.
Speaker Change: Fund incremental deals we have organic growth, we have the free cash flow expected.
Speaker Change: From that our organic growth to hopefully reinvest in the business and drive even more EBITDA and so.
Speaker Change: Sure.
Speaker Change: Stabling out of interest rates hopefully, we're in a more virtuous cycle.
Speaker Change: Our free cash flow generation.
Speaker Change: Okay.
Speaker Change: And then.
Speaker Change: If I can put a question maybe to Herve I think you were saying this measure that would be your first travel exposure what's the steel.
Speaker Change: I just want Im sure I heard that correctly and then.
Speaker Change: Just given your background, what you spoke about.
Speaker Change: I mean, how much more opportunity do you see for not just growth of this particular trade show but.
Speaker Change: Perhaps more watches or acquisitions how.
Speaker Change: How much more meaningful could travel become for you guys.
Speaker Change: I would answer that in two ways. One is yes. It is our first.
Speaker Change: Front row.
Speaker Change: Acquisition.
Speaker Change:
Speaker Change: But I really see this acquisition just as much as being in the luxury sector than it is in the travel sector. So I would really make that distinction is really in luxury and its also in travel.
Speaker Change: The one of the most exciting opportunities in addition to it being.
Speaker Change: Outstanding growing business is really as I mentioned in my prepared remarks.
Speaker Change: <unk> <unk> spirit.
The founder and the team.
Speaker Change: That have really been extraordinarily successful through launches. So they started with one event and then.
Speaker Change: And then expanded from there and in the discussions that we've had with them over the last few months.
Speaker Change: There are some very interesting and unique launched concepts that we will be exploring together and so we will I expect that as I mentioned that this will be a good contributor to our accelerated strategy and that we will be launching alongside.
Speaker Change: This is beyond T in.
Speaker Change: In terms of other travel acquisitions, we as I mentioned, we have a rich pipeline. We don't go through the detail of our pipeline clearly in the sectors that they are in but we do have a rich pipeline and.
Not necessarily focused on the travel sector.
Speaker Change: And as a sector and of itself, but if there are some growing.
Speaker Change: Assets long term growth assets.
Speaker Change: In the travel sector and there are a couple out there then of course those would be interesting to us.
Speaker Change: Okay, that's great.
Speaker Change: That's it for me. Thank you guys very much.
Kumar: Kumar Thanks Martin.
Speaker Change: Yes.
Speaker Change: Your next question comes from the line of Allen Klee of Maxim Group. Please go ahead.
Allen Klee: Thanks, again I just wanted to see if you could expand on two comments you made during the call, which I think.
Tax year outlook, one was your confidence given the first half pacing growth and then second are you.
Allen Klee: Said, you're excited about the Las Vegas construction expansion.
Allen Klee: Further.
Allen Klee: Convention expansion start.
Allen Klee: Thank you.
Allen Klee: Yes.
Allen Klee: <unk>.
Allen Klee: I'll start and maybe David will want to add.
Allen Klee: Our guidance definitely reflects as I think as David mentioned, what we're currently seeing in real time in our business.
Allen Klee: And also what we've already sold and given the nature and the cycles of our business and Thats why.
Allen Klee: We are demonstrating confidence in the numbers the projections that we've.
Allen Klee: Sure on the Las Vegas Convention Center, it's less about excitement.
Allen Klee: The Convention center.
Allen Klee: What I was.
Allen Klee: Mentioning is the fact that the construction is going to end at some point.
At the end of this year in 2025, and therefore, we expect that it will do.
Allen Klee: It will be.
Allen Klee: <unk> are no construction impact to our business in 2026 and beyond that's the comments that I was making around the Las Vegas Convention Center.
Allen Klee: Yes.
Allen Klee: To add to that so far.
Allen Klee: First half of the year and pacing, but consistent with our full year outlook.
Allen Klee: The second half there is some timing of when show stage and when didn't launch that is a bit of a mismatch and so we go in the next.
Allen Klee: Two to three weeks it'll all lineup timewise, but.
Allen Klee: Again, we expect consistent with.
Allen Klee: With our full year outlook kind of adjusted for all of that and so we are we.
Allen Klee: We do have real time data kind of reinforcing where are we see the year than what we guided in terms of the conviction and I just want to add one thing so I will check their two days ago.
Allen Klee: Our ASD event is running as one of the we run twice a year, it's one of the key events.
Allen Klee: Horizon.
Allen Klee: Probably the most significant event in impacted by the construction.
Allen Klee: I know, we talked about last year, a little bit.
Allen Klee: One of the hall is completed.
The North pole at the Convention center it is a meaningful upgrade.
Allen Klee: So to your question in the long term, we do think this will be very good for customer experience.
Allen Klee: People have a good experience that helps our retention rates ultimately is good for us longer term so I do.
Allen Klee: Believe it will be and if you've been to the convention center and looking at what they are and they are working on the Central Hall right now its shutdown. It it is a bit of a mess.
Allen Klee: Blockages and walls and its not continuous insult our show is split between.
Allen Klee: End of the Hall, that's what makes these spring difficult during construction, but they are building a massive new entry way for your all glass I mean, it's going to be really really nice and so I do think there are definitely benefit.
Allen Klee: But we needed to be done.
Allen Klee: <unk>.
Allen Klee: Right now, they're saying there'll be done by the end of this year. So that's a really good thing for 2026.
Allen Klee: Hopefully, it's not delayed so far they've been on schedule the entire time, which is great.
Allen Klee: But surely in the short term.
Allen Klee: Causes a little bit of issue.
Allen Klee: And in the long run physicians won't be there and hopefully a nice improvement.
Allen Klee: Thanks, That's very helpful. And then my last question is.
Allen Klee: When you talked about your key.
Allen Klee: Strategies, one is optimization and you said that last year.
Allen Klee: Eliminating some underperforming.
Allen Klee: It shows when you looked at the fourth quarter of 2004.
Allen Klee: And can you just give some comment on because we just see the.
Allen Klee: Pull numbers, but.
Allen Klee: Do you think that there is also in some other <unk>.
Allen Klee: And it shows that maybe.
Allen Klee: Have been underperforming that you may have to watch a little bit.
25.
The way I'll answer that Alan is absolutely, we always and I commit that we will always look at our portfolio and the performance of every piece of our portfolio.
Allen Klee: And so this is not a one and done effort. This is a continuous effort on our part to make sure that we have the most robust growing portfolio. So we're constantly assessing.
Allen Klee: The various elements of the portfolio, how the brands are performing and I am not going to get into any detail around projecting the future, but if in fact.
Allen Klee: There are underperforming elements of the portfolio.
Allen Klee: There are not contributing.
<unk> to our shareholders and to our company. Then you can expect that we will continue to take the same actions that we took in 2024.
Allen Klee: Okay.
Okay. That's great just personally I actually cover a couple of insurance Tech companies. So I'm excited to see that acquisition.
Allen Klee: Thank you guys.
Thank you.
Allen Klee: Okay.
Allen Klee: Once again, ladies and gentlemen, if you would like to ask a question press star one on your telephone keypad.
Karen: There are no further questions at this time with that I will turn the call back over to Karen <unk> for final closing remarks.
Karen: Well, thank you very much.
Karen: And for joining our call today.
Karen: Days announcements regarding the acquisitions of this is beyond and insure tech insights really further demonstrate our commitment to optimizing the composition of our portfolio as I mentioned.
Karen: These developments coupled with the ongoing efforts over the last couple of years few years to enhance the business performance to refine our go to market strategies and implement best practices across our organization I believe will really position us strongly for sustained growth.
Karen: I want to close by by really thinking all of our incredible employees that Emerald, whom.
Karen: None of this would have been possible without their hard work efforts and commitments and thank you all for joining the call today.
Karen: Okay.
Karen: Ladies and gentlemen that concludes your conference call. We thank you for participating and ask that you. Please disconnect your lines.
Karen: [music].
Karen: Yes.
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Karen: Yeah.
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Karen: Okay.
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Karen: Yes.