Emerald Holding Inc (EEX) 2018 Q3 法說會逐字稿

Greetings, and welcome to the Emerald Expositions Events, Inc.

Third Quarter 2018 Earnings Conference Call.

(Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Phil Evans.

Thank you, operator, and good morning, everyone.

We appreciate your participation today in our third quarter 2018 earnings call.

With me here in San Juan Capistrano, California, is David Loechner.

As a reminder, a replay of this call will be available on the Investors section of our website through 11:59 p.m.

Eastern Time on November 8, 2018.

Before we begin, let me remind everyone that this call may contain certain statements that 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 that could cause actual results to differ materially from those indicated or implied by such statements.

Such risks and other factors are set forth in our annual report on Form 10-K for the year ended December 31, 2017, which was filed with the SEC on February 22, 2018.

We do not undertake any duty to update such forward-looking statements.

Additionally, during today's call, we'll discuss non-GAAP measures, which we believe can be useful in evaluating our performance.

Presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP.

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

Now I'll turn the call over to David.

Thanks, Phil, and good morning, everyone.

As we announced this morning, with the agreement of the Emerald board, I have made the decision to resign as President and Chief Executive Officer of Emerald effective a week from today.

Phil has been appointed by the board to Interim President and Chief Executive Officer until a permanent replacement is identified.

Looking forward, I will continue to work with Phil and the entire Emerald leadership team through year-end to ensure the transition is smooth.

It's been an honor and privilege to lead Emerald over the last 8 years and to have worked with so many talented people.

Together, we've built Emerald into the leading business-to-business trade show operator in the U.S., which culminated in our successful initial public offering last year.

Today, we have a strong foundation, consisting of a portfolio of industry-leading shows, which positions Emerald for continued success.

Additionally, we've executed on our acquisition strategy to enhance the growth profile of the company while continuing to build the portfolio.

That said, we've not achieved all of the successes that I know are possible for this portfolio of brands.

As Phil will touch on in a moment, I believe that the initiatives we've put in place to reinvigorate the performance of several of our larger shows are beginning to have an impact.

There is more to be accomplished, and I believe that a change in leadership will allow the portfolio to achieve its full potential.

Phil, it's been a terrific experience working with you.

I'll leave the rest of the call to you as well as the Q&A.

Phil?

Thank you, David, and thank you for being such a great partner and mentor as we built Emerald into the industry-leading company that it is today.

I look forward to your counsel as we continue to work to reaccelerate the growth of the company.

Now let me turn to the performance of our third quarter shows.

The August edition of ASD experienced a low single-digit percentage revenue decline versus the prior year edition, which was in line with our expectations that we previewed on our last earnings call.

Importantly and as David mentioned, this performance reflected an improved revenue trajectory versus the ASD show held in March, as our initiatives have started to take hold.

Revenue for the largest category of the show, volume/variety increased by a low single-digit percentage over the last year's August show.

However, the apparel and accessories sections in the style and beauty category was soft and drove the show's overall modest decline.

As part of our ongoing show improvement initiatives, we have added new private label and on-trend sections to the show, which were well received by both exhibitors and attendees.

Our team is focused on further improving ASD's revenue trajectory for the 2019 winter show, in part through growing the size and quality of the show's attendees and also by further enhancing our sales and marketing effectiveness.

Turning to New York NOW, which staged in mid-August and as we anticipated when we presented our second quarter earnings, declined in revenue by a low double-digit percentage versus the prior year's edition.

Performance was mainly driven by the home section of the show, which includes home furnishings, tableware and textiles.

The other 2 categories of the show, lifestyle and handmade, decreased only modestly in revenue.

Overall, we're pleased with the progress made on the New York NOW Summer Show by the new brand leadership, which will further strengthen by adding new leaders for both sales and marketing.

We've also started to see some early benefits from our ramp-up investments in the show's attendee experience and improving the exhibitor return on investment.

And our team will continue to refine these initiatives in future show cycles.

In addition, we have a specific focus on improving the quality and reputation of the show, most notably in the home section through the addition of prestigious design-forward exhibitors that we expect will attract additional exhibitors and attendees.

We added several such brands in the New York NOW Summer Show and expect to add more in our upcoming February show.

Overall, while this is likely to be a multi-show effort, we're optimistic that our new team and our new strategies will be successful.

The Outdoor Retailer summer market was our third largest trade show in the quarter and took place for the first time in Denver since moving from Salt Lake City.

We were pleased with the mid-single-digit percentage revenue growth over the prior year edition, and perhaps more importantly, the overwhelmingly positive industry reaction to the new venue.

In early September, we staged the second CEDIA Expo under our ownership in San Diego.

We were able to build on the success of last year's event and began to adopt more of Emerald's approaches and practices into the show.

Revenue increased by a low double-digit percentage over the prior edition, and we're excited about the show has moved to Denver next year, which has historically been a particularly popular venue with the industry.

Next let's talk briefly about Surf Expo summer, which last year had to close after only 1 day due to the approach of Hurricane Irma.

There was no impact from weather this year, but we felt some residual trepidations that adversely affected the show, contributing to a high single-digit revenue decline this year.

That said, we staged a strong show in September, and we expect to see a return to modest growth next year.

Finally, let me say a few words about Interbike, which staged for the first time in Reno, Nevada, after many years in Las Vegas.

This show successfully expanded its demo activities.

The revenues for the main trade show floor declined at a double-digit rate.

We're reviewing the feedback from the recent show to determine whether to adjust our strategy for the show going forward.

Looking next at our show launches.

During the quarter, we staged our new Active Collective events in New York and colocated the new American Handcrafted region event in Orlando alongside our Surf Expo show.

On a combined basis, these events met our prelaunch expectations.

To date in the fourth quarter, we've launched Hospitality Design's Elevate event and also a new CPMG event, RestaurantPoint EAST, both of which have exceeded their prelaunch revenue expectations.

As is sometimes the case, 2 of our planned fourth quarter launches did not make it to market.

In particular, our Brand Authority Summit and National Pavement Expo West events did not gain enough market traction to be successful for these events.

So we deferred their launches to give time to prepare their respective markets for the new events.

That segues us into the fourth quarter, in which we'll stage our first November time to Outdoor Retailer Winter Market.

You'll recall that this winter season, we will present 2 Outdoor Retailer shows.

The first towards the beginning of the buying season and largely focused on soft goods takes place in mid-November.

And the second around the end of the buying season and more focused on hard goods stages in late January.

Industry support for the new November show, the timing of which was driven by industry feedback and request, has been quite positive, although the ultimate size of the event will be somewhat smaller than what we had expected for the first show.

We're encouraged by our conversations with key industry players, who continue to support the 3-show structure, but who can see that the industry will need a full cycle of shows to adapt to the new cadence.

Now let me turn to the 2 acquisitions that we closed since our last earnings call.

Towards the end of August, we acquired a leading hosted-buyer event and a portfolio of prestigious technology intelligence products from EH Media.

Through this acquisition, we gained exclusive content, seasoned industry leaders and a strong supplier and buyer relationships that will strengthen CEDIA Expo as well as our Design brands.

The revenue of this group of assets comprised approximately 25% events, 50% digital revenues and 25% publications and other revenues.

In aggregate, they've grown revenue strongly over the last few years, given their success in driving digital revenues and also robust growth in the hosted buyer environment.

One of the attractions of bringing this team into Emerald is their expertise in generating digital revenues, which we expect to leverage to help improve the growth profile of our other marketing services portfolio.

Just 2 weeks ago, we acquired Boutique Design New York known as BDNY, which was one of the few independently-owned U.S. top 250 trade shows and which is directly aligned with our strategic focus on Hospitality Design.

In addition to its scale, BDNY has demonstrated strong growth over many years and provides attractive market synergies in combination with our existing strong position of brands in the Hospitality Design market, particularly our HD Expo events in Las Vegas.

With BDNY, we also acquired 2 other trade shows, BDwest and HX: The Hotel Experience, several network events and Boutique Design magazine.

Revenues of this acquisition in aggregate comprised approximately 80% trade shows, 10% other events and 10% publications and other revenues.

In total, our cash spent on these 2 acquisitions was approximately $73 million, which is consistent with the range of our annual M&A spend over the last several years.

In aggregate, these 2 acquisitions are projected to produce approximately $30 million of revenue and over $8 million in adjusted EBITDA for the full year 2018 on a pro forma basis.

We expect these acquisitions to be immediately accretive to earnings and free cash flow and also meet or exceed our mid- to high single-digit weighted average cost of capital next year.

Looking forward, our pipeline of potential acquisitions is strong, and we remain committed to driving increased shareholder returns through our selective M&A strategy.

Now I'd like to turn to our financial results.

As a reminder, the third calendar quarter of the year is our second largest quarter by revenue after the first quarter and is expected to contribute approximately 27% of the full year's revenues.

Revenue for the third quarter of $103.1 million represented an increase of $2.7 million or 2.7% over the same quarter last year.

During the third quarter of 2017, we recognized $6.5 million in other income, representing proceeds from insurance intended to replace lost revenue as a result of interruptions to certain of our shows due to Hurricane Irma.

If the amount were to be recognized in revenue and adjusting for a show scheduling difference, our third quarter 2018 revenue would have decreased by $1.1 million or 1.1% versus the as-adjusted period last year.

Organic revenue for the quarter was down $3.1 million or 3% versus the third quarter of 2017, with organic revenue for the trade show portfolio declining 2% over the prior year period.

Our reported revenue for the quarter included $2 million of revenue from acquisitions, which comprised one hosted buyer event staged by our November 2017 acquisition, Connecting Point Marketing Group, and also the digital and publishing revenues related to the technology of brands we recently acquired from EH Media.

Other events and other marketing services, which comprised approximately 9% of the quarter's revenues, increased by approximately 15% and 10%, respectively, each including the benefit of acquisitions.

Cost of revenues of $25.9 million for the third quarter of 2018 decreased by 4.8% or $1.3 million from $27.2 million for the third quarter of 2017.

This decrease was largely driven by cost reductions in several shows and a timing effect of a show staging in the fourth quarter of this year versus the third quarter of last year, partly offset by incremental costs attributable to acquisitions.

Selling, general and administrative expense of $29.7 million for the third quarter of 2018 increased by 1% or $0.3 million from $29.4 million for the third quarter of 2017.

SG&A for the third quarter of 2018 included incremental costs attributable to acquisitions and an increase in stock-based compensation, largely offset by a onetime transaction cost, public company and other related activities cost and transition costs that in aggregate were modestly lower than in the third quarter of 2017.

Adjusted EBITDA for the third quarter of 2018 was $51.6 million compared to $52.9 million for the third quarter of 2017, a decrease of 2.5% or $1.3 million.

The decrease partly reflected a slightly unfavorable show mix and a negative adjusted EBITDA contribution from acquisitions in this quarter, as their SG&A and direct costs exceeded their revenues.

Our adjusted diluted earnings per share for the third quarter increased $0.06 to $0.42, representing 16.7% growth over the same quarter last year.

This quarter's increase was largely due to the benefits of lower interest and tax expense than in the prior year's equivalent quarter.

Free cash flow, which we define as net cash provided by operating activities less capital expenditures, was $13.6 million for the third quarter of 2018 compared to $10.6 million in the third quarter of 2017, an increase of $3 million.

Last week, the Board of Directors approved the payment of the cash dividend of $0.0725 per share for the quarter ended December 31, 2018.

The dividend is expected to be paid at the end of November.

As of September 30, 2018, Emerald's cash and cash equivalents were $13.8 million and gross debt was $537.9 million, resulting in net debt of $524.1 million.

Our resulting net leverage ratio of 3.3x the last 12 months adjusted EBITDA was slightly higher than the previous quarter's ratio.

At this point, I'd like to comment on the 2018 guidance update that we provided earlier today in our earnings release.

I'd also like to note that given the 2 acquisitions we closed over the last few months, we specifically called out the impact on guidance of those acquisitions.

On our last earnings call, we indicated that we were trending towards the lower end of our original guidance for total revenues, organic revenues and adjusted EBITDA and with the reduction in our expectations for the new Outdoor Retail in November show and the deferral of 2 planned launches, we're now expecting to be slightly below the lower end of those guidance ranges with the year largely complete.

However, the acquisitions that we've completed over the last 12 months have added to the growth profile of our portfolio.

If we don't CPMG and the 2 recent acquisitions throughout 2017 and 2018, we estimate they would've added approximately 70 basis points to our full year 2018 organic revenue growth rate.

For adjusted net income and adjusted diluted EPS, our updated guidance range, excluding the effect of acquisitions, is around the midpoint of our original guidance range.

For free cash flow, we've brought on our guidance to a range of $100 million to $110 million.

Our 2 recent acquisitions, despite adding to the 2018 revenue adjusted EBITDA, are expected to reduce 2018 cash flow modestly due to the seasonality of the cash in those businesses.

We also have additional transaction-related and other onetime costs that have contributed to the updated range.

To conclude, we're working to build our view of the 2019 overall financial outlook.

And as we did last year, we'll wait until we release our full year 2018 financial results to provide formal 2019 guidance.

While we still have some challenges to drive an improvement in our overall organic growth rate, I believe we're taking the right actions and pursuing the right initiatives to achieve our objectives, though it may take longer than we would like.

We're excited about our latest acquisitions, and we believe that these new assets will add to the company's overall growth rates.

We continue to see opportunities to use our strong cash flows to invest in our existing businesses and acquire complementary assets that diversify and strengthen our portfolio.

Overall, I'm confident in the quality of our portfolio, our people and our opportunity to grow the company over time, both organically and through acquisition.

Lastly, I'd like to thank David again for his friendship and support over the last 5 years.

It's been a privilege to work with you as we've grown Emerald into the leading B2B trade show company in the U.S.

And with that, I'd like to ask the operator to open up the line, and I'll take any questions.

(Operator Instructions) Our first question comes from David Chu, Bank of America Corporation.

So just in terms of the -- sorry, I know it's early, and you said that you would provide formal guidance next quarter.

But just thinking kind of big picture into next year and the fact that some of these headwinds continue to linger, is it fair to assume that it might be difficult to achieve that 3% to 5% long-term target?

Thanks, David.

Thanks for the question.

We -- it is early in our process.

We're in the midst of budgeting for next year.

And we're in kind of early stages of cycles for the winter shows, ASD and New York NOW.

And we'll learn a lot more as we go through those to be able to help us determine the outlook for those shows, particularly in the summer shows.

We're also a couple of weeks away from the Outdoor Retailer Winter Market, and we'll learn a lot there that will help us determine the performance of the 3 shows of Outdoor Retailer next year.

So we're still in the learning phase on -- for next year.

We said and I think it would be consistent, the -- we're seeing some good signs on New York NOW and ASD, but it will take us several cycles to get there.

And how it all rolls up, it's a little early to tell.

And so that's why we'll come back in February and will explain how it's looking.

Okay, great.

And then just a housekeeping question around the M&A.

So I think the press release mentioned $15 million to $18 million contribution for the year.

It sounded like there was a small contribution for EH Media assets in the third quarter.

So is that -- first of all, is that fair?

And second, just wanted to see how that splits up between BDNY and EH Media?

And then if you can kind of speak to just in terms of revenue recognition on a normal year, how does that look?

So the full year numbers, it's probably 2/3 the BDNY set of assets and 1/3 EH Media from a revenue perspective.

In this current calendar year, the major 2 shows in the BDNY portfolio take place actually in our period of ownership.

And so that has kind of a disproportionate effect.

BDNY takes place in 2 weeks and HX: Hotel Experience colocated at the same time.

So we're actually getting a good chunk of the -- that acquisition's revenue in 2.5 months that we own it.

So that's kind of -- it's disproportionate in 2018 towards BDNY.

But on a full year basis, it's probably -- from a revenue perspective, it's 2/3-1/3, BDNY versus EH Media assets.

Okay.

No, that's helpful.

And just lastly along that -- along those lines.

So it sounds like BDNY is primarily a fourth quarter like revenue generator.

How should we think about EH Media?

Should we kind of think about it split evenly over the course of the year?

How should we think about that?

Yes.

We acquired a really nice hosted-buyer event, Total Tech Summit, which is actually in the fourth quarter.

But otherwise, the revenues for the technology brands are spread pretty evenly across the year.

Our next question comes from Peter Christiansen, Citibank.

And first, I'd like to wish David the best of luck as he looks to the next chapter of his career.

Phil, I just want to go through the change in the outlook a little bit deeper.

So excluding the acquisitions, you're bringing down revenue for the year $7 million or $10-ish million.

Then you have the show cancellations, which I guess, if we look at one of your media presentations, that's $1.5 million to $2 million that comes out.

So it does look like it was a pro forma reduction of $5 million to $8 million roughly.

Is that exclusive to the underperformance of Surf Expo and Interbike?

No, no, I think the difference in our perspective now as we get close to the year is we had indicated we were towards the end of the -- towards the bottom of the range originally.

And so our change from then is really the Outdoor Retailer Winter Market that we highlighted, which is anticipated to be smaller than we built in.

And then again, as you say, the launches were probably close to a couple of million.

The other things in Q3 that were a little off, Interbike was not particularly up versus our expectations.

Surf was -- we were disappointed that Surf didn't pick up closer to the end of the cycle.

We had a little bit of additional softness in publications.

But overall, I think we were -- it was -- the launches and Outdoor Retailer Winter Market that kind of tipped us towards the bottom there.

And the Outdoor Winter Market, there's still the combined show just -- I'm just trying to remember off the top of my head.

The combined show, the Snow Show is in January, correct?

Are you seeing people switch from the Q4 Winter -- Outdoor Winter Market show to the Snow Show and Outdoor Retailer Show next year, is that a trend?

So we're in -- as we've kind of gone through in previous calls, we're in a transition with the -- with Outdoor Retailer moving from 2 shows to 3 shows.

And so we had a perspective on how the winter market would split and adapt to us providing 2 winter market shows, one in November, one in January of 2019.

The earlier show is more geared towards soft goods and the late show to hard goods.

What we're seeing is while people buy into the concept and they are ready to think about kind of changing the way they've operated, they are reluctant to do that until they see the show, till they see the attendance we bring to exceed who else is there.

And so while we were -- we had good momentum and we had a lot of positive talk in the market and it's still going to be a top 150 show in the U.S. that we just kind of created.

It just hasn't kind of played out in this first one exactly as we would've liked it.

And we will see how that goes.

But I think we're going to have 3 good shows in good time periods in 2019.

And so we expect this franchise to grow, and we're really kind of excited about.

Once we get into this preshow cycle properly, that this is going to be a good growth driver for Emerald.

Great.

And then, can you -- it's nice to see that you stabilized some of the declines in ASD and New York NOW at least versus the first half of the winter shows.

Can you talk about what is in that, that low single-digit decline for both of those shows the mix between exhibitor attendance versus pricing?

Because I know that at least in New York NOW, you were going to take some pricing in some areas there.

Just trying to get a sense of what is the mix between those 2?

And then on top of that, what is your sense for attendee -- attendance, I guess, that's the way you would say it, for those shows on a comparable basis?

So in the 2 Q3 shows that you're talking about, ASD and New York NOW, the pricing -- given the trajectory we've seen and what's going on, we're not very aggressive.

I think it's probably very low single digits.

So the overall revenue is largely driven by kind of volume.

From an attendance perspective, what we're seeing is that we need to do more.

And we've invested in attendee initiatives on both shows, probably more heavily on New York NOW in the short term, really expanding the attendee experience and what it's like to come to the show, investing in that, but also in bringing in different groups of attendees, buyers from different categories and from different countries, et cetera, to improve the ROI for exhibitors.

So that's a major focus is on many of our shows, but particularly on New York NOW and ASD is to really drive more value to exhibitors so that those shows get healthier and we can continue to see some improvements in the trajectories.

Last one from me.

I just want to clarify on that point.

Were there any dramatic changes at least in attendee attendance on a comparable basis for either of those shows?

No, not really.

Our next question comes from Manav Patnaik from Barclays.

This is Ryan on for Manav.

Just a question on the new show launches.

I mean, are those typically assumed in guidance?

Or when you're thinking about -- when you put up the official guidance, how should we think about what's baked in, in terms of new show losses with all the puts and takes?

In general, we have things that we include and things that we don't include.

We have a track record of launches and we feel -- generally feel pretty confident.

But there are other things that we're working on that we don't include in guidance.

And it just so happens we had a high level of confidence in both of these and for a number of reasons, which include, as often is the case, people -- when you get close to asking people, even though they said they're committed and they're in, it becomes kind of a budget issue in the same budget year.

And so that's what we've kind of stepped back and said, let's look at these and get people time to budget to include them in their 2019 or 2020 as we kind of go through to increase the confidence.

But generally, we only include those ones that we have a high confidence level in.

And sometimes, you just don't get it right.

And then, I guess, on that -- I mean, I'd imagine your business, you're going to feel some of the impacts if people are a little uncertain about the economy.

And you talked about some of these shows with double-digit declines.

Is there any sense that people are pulling back on show spending, given either uncertainty or just business trends aren't picking up like they had hoped?

Not that we're seeing.

I think the issues we see are very show specific, category specific, industry specific and not anything kind of general that we're seeing more widely so.

I think we understand and have our arms around what it is that we need to do.

I think we have identified those things, we have strategies in place, and we just need to execute against them.

I don't think that there's anything that's kind of broader that's worth noting.

I mean, once we get some of these issues behind us, we've a large portfolio, a lot of growing shows, growing products.

And we're adding in these acquisitions in stronger industries, and I think it's specific to particular industries, and we'll address it.

Fair enough.

And maybe, I guess, along the same note, could you remind us how the business typically performs in downturns and just kind of revenue profitability, those kind of things?

I mean, this is typically in the last recession, which I don't think anyone would call typical.

And the portfolio has changed so much, it's really kind of not easy for us to predict what will happen depending on any particular depth of recession.

I'd say we have a broad portfolio.

We have a lot of different industries that we participate in.

And we don't anticipate that all industries would be affected in the same way.

And we have the leading shows and products.

So we should do better than most.

And we have diversified and continue to do diversify so that any impact doesn't affect large parts of the portfolio.

Our next question comes from Jeff Meuler, Robert W. Baird & Company.

You've got Nick Nikitas on for Jeff.

Just going back to the ASD and New York NOW shows, so they're roughly selling in line with your expectations going into the quarter.

But you guys also noted that some of the initiatives you put in place are starting to have an effect.

So is it mostly just that performance relative to earlier in the year has improved?

Or are there any likely indicator that you're seeing that should lead to further improvement in '19?

These are big shows, and it takes multiple events to affect people's perceptions, to affect people's behaviors.

And so what we're seeing is the work that we put in, the investments we put in are starting to change people's perceptions, a little bit starting to change people's behaviors.

But it's not a quick fix.

You say there's a problem and you fix it and the next show is fine.

So I think we're working through it.

We're doing the right things.

We've new people and new eyes on the New York NOW show, and I think that's really helping.

And we're optimistic that we keep doing the right things that the shows will improve and the performance will improve.

And it's not a question of one quarter.

Certainly, things change.

It's the quarter that shows were pretty much what we expected and what we outlined in the -- on the Q2 call.

And as you say and as we said, we're starting to see the market really -- the markets really respond to the messaging and the investments we're making.

So we're optimistic.

Okay, that's fair.

And then just 2 cycles for things to take hold.

Would it be fair -- I know you don't want to comment on '19 guidance.

But just thinking about those events, specifically probably.

Still headwind to organic growth, but hopefully to a lesser degree than in 2018?

So ASD, as I said I think before, we're 1/3 of the way through the sales cycle.

So we've got a lot of way to go on both of these big shows.

What we're currently seeing on ASD is a similar level of revenue pacing to the summer event, although kind of more recently, we've seen some good signs.

So we're optimistic that New York NOW, we're seeing -- we're not seeing an improvement in the pacing versus the summer show yet.

But we're seeing a -- really a lot of positive feedback, and we're doing a lot of work there.

So no, I'm optimistic, but as I said, it's going to take several cycles really to get to where we need to get to.

And so we're still early to say what the Q1 shows will do, but we think we're moving in the right direction.

Okay.

And then just other marketing services at higher level.

Longer term, how you're thinking about that piece of the business?

I mean, it's been a headwind to growth and hasn't really improved in the existing portfolio, but then looks like with some of the newer acquisitions, might be a little bit more heavily weighted to outside core trade shows.

So is it something that you feel like you can change with your existing events and hopefully stabilize?

Or is it something more structural to the industry?

Within -- roughly 5% of our revenues are currently print advertising.

So it's a relatively small piece.

And even within that, there are several titles that are kind of more challenged than others.

Some of our print is actually growing.

So it's a small piece.

We do really like the assets we acquired, the technology assets from EH Media, really good skills, particularly in conversion to digital revenues from print revenues.

And we're working with that team, as we speak, to try and replicate some of the techniques and some of the approaches that they're using.

So I think we're not ever going to say that this is really likely to be a growth driver in the business in the near term, but we think we can do better and we think that this acquisition in particular is going to help us kind of move the needle on those.

Great.

And just last one from me on the 2 acquisitions, thanks for the numbers on the revenue and margin, looks like about a 33% margin profile.

Is that kind of the right ballpark to think about going forward or any synergies you guys can get from bringing those in-house?

And then just from a growth profile, you kind of expect high single low double-digit revenue growth to continue into the future?

Those -- they definitely have grown nicely, those businesses, and we expect that to continue, because in addition to inherently having good growth characteristics, we do bring some additional things to the table as Emerald, particularly on the shows we think there's some market synergies there, particularly with the BDNY and HX brands.

From a margin perspective, I think it's -- 30%-plus or minus margins is still a great margin.

The nature of these 2 acquisitions is: one, it's kind of content heavy.

It's more naturally a relatively lower margin.

And the BDNY show and the shows that we acquired and the publications we acquired, those are very attractive, good-looking shows that stage in New York primarily.

So those are, again, naturally slightly lower margin to the Emerald margin.

But we do see opportunities for some cost synergies from scale, but we're not dramatically going to move the margin.

And that was not an assumption when we made the acquisitions.

(Operator Instructions) Our next question comes from Katherine Tait, Goldman Sachs.

Just a couple of questions from me.

Firstly, we've been seeing a lot of data talking about the pickup in inflation generally, particularly in terms of wages, et cetera.

Just wondering if you could talk to the impact that, that could have on your cost base and if you're seeing any signs of that coming through in terms of your negotiations with venues and the contractors, et cetera?

Secondly, I think you spoke before about not expecting much impact at all from any trade tariff, I need to confirm that's still the case and that you're not seeing that impact coming through into any of your forward bookings at the moment?

And then finally, just taking a step back and looking at performance over the last quarters.

Is there something you can point to that you perhaps would have done differently?

I mean, when you think about the sort of disappointments that we've seen in some of the major shows, do you think it's driven mostly by lack of investment historically?

I think you've talked about talent being an issue historically as well?

Or is it mostly related to market trends?

I mean, I appreciate that it's quite a complicated thing to talk to.

But just curious to see if there's anything obvious that you would have done differently looking back?

Okay.

So first question was around inflation wages, cost pressures.

We're -- we have a long-term agreement with our decorator.

We generally are contracting ahead with venues.

And wages are the same in our industry as anywhere else.

So we do have cost pressures, but it's not any different from anyone else's.

And generally, the situation with venues, it's really such a small part of our cost that it's not meaningful.

But at the same time, there's a lot of competition for our business in the U.S. And so we're generally in a pretty good spot there.

From a tariff perspective, I mean, a place where we see it most is probably in our Interbike show.

We're hearing that and seeing the effects there at least in conversations.

The Fastener show we hear a little bit there.

And on ASD, which has a sourcing component and has an element of kind of offshore manufacturers, we hear it there.

It's not -- it's a small part of the business.

But in some of the shows, it certainly a conversation.

And we'll see -- we don't anticipate a material effect in any of our revenue, but it certainly is -- it is something that people are talking about.

The last thing I think was around, is there anything that we would do differently on the large shows?

And I think if we're honest, we would say yes, we would have -- anticipate some of the moves and some of the issues in the home section, particularly of both New York NOW earlier.

It's a long complex story we don't time for, but there were things that happened before we acquired the business and decisions that were made that really affected kind of the trajectory of that, and we probably should have stepped in earlier and made some changes.

And so we're a little bit in catch-up mode there.

I think from an ASD perspective, there's a lot of category-driven drivers there.

And I think we just -- we need to keep developing new categories, keep being kind of efficient and bringing in attendees.

But I think we've identified what we need to do.

And we're executing the team, being strong in both those shows, and we're kind of moving ahead.

Ladies and gentlemen, we have reached the end of the question-and-answer session.

Now I'd like to turn the call back to Phil Evans for closing remarks.

Thanks so much.

Well, thank you, everyone, for participating in our call today.

As I think about where we are in Emerald today, what I see is a portfolio of market-leading brands with a very promising future.

Having said that, the growth in the portfolio is being hindered by a few large shows.

And as we talked about today, we're working diligently to try and improve those shows.

Our efforts appear to be gaining some traction, and we just need to maintain that momentum.

Because I think once we stabilize New York NOW and ASD in particular, that will allow the rest of the portfolio to drive good organic growth performance.

And we'll continue to execute on our M&A strategy that will further add to that.

So overall, I'm excited about the opportunities we have, and I'm confident that we'll be successful.

So thanks again for your time today.

This concludes today's conference.

You may disconnect your lines at this time.

Thank you for your participation.