Status of CEDIA Expo Remains in Doubt
Emerald Holding Inc. (NYSE: EEX), formerly known as Emerald Expositions Events Inc. – a national exposition company that is home to both the CEDIA Expo and CE Pro magazine – has announced that they are postponing all events for the first two quarters of 2020 due to the rapid spread of the global pandemic Coronavirus (COVID-19). Given their position as one of the largest producers of B-to-B trade shows in the U.S., this is a major development with huge impact on the various industries their shows serve.
Learn more on this major Emerald move…
It is hard to overstate the impact of this announcement from Emerald Holding Inc. (Emerald). The company says that this decision means that they have already shuttered 30 events during the first and second quarter of 2020, from now until June.
Fully 20 of their events scheduled between March and June represented a collective $45 million in revenues for the company in their 2019 fiscal year. Added to this are another 10 events, including ASD Market Week and JA New York shows, that represented another $50 million in revenues for the company in 2019.
Government Prohibition of Large Events a Factor
“Emerald’s primary focus is on the health and safety of our employees, exhibitors, attendees and the communities that our events are built to serve. Due to the declaration of a federal national emergency by the President of the United States and by various individual states; recommendations and mandates provided by various local, state and federal government agencies and public health authorities regarding social distancing, containment areas, and against large public gatherings; travel restrictions imposed by the U.S. and foreign governments and by companies as applied to their employees; various event venue closures; as well as a variety of other factors, Emerald has updated its calendar of events originally set to stage over the coming weeks and months. As always, the safety and well-being of our employees, customers and communities is our top priority. We look forward to returning to our normal event schedule and continuing to serve the communities of which we are a part.”
Brian Feld, COO and Interim President and CEO of Emerald Holding, Inc
Company Filing Claims with Insurance Providers
Emerald notes that they hold special insurance policies on all of their events and shows in the case of event cancellation “to protect against losses due to the unavoidable cancellation, postponement, relocation and enforced reduced attendance at events due to certain circumstances, including communicable diseases.” While typically these policies pay off less than the anticipated revenues from their events, by cancelling the events the company also saves the costs associated with fielding them, protecting – for the most part – their profits.
The company is now in the process of pursuing claims with their insurance underwriters for the affected events.
What About the CEDIA Expo & Other Remaining Events?
Understandably, given the fluidity of the evolving events surrounding the COVID-19 pandemic, the company has made no commitment or decision about the shows and events remaining in 2020. They say, with a touch of understatement, “The potential impact on Emerald events that are scheduled to stage later this year is uncertain.”
Clearly, it would seem the ability to produce any more events this year will be dependent upon how quickly the pandemic passes. This of course depends on many variables outside of Emerald’s control.
Taking Steps to Preserve Cash; Dividend Suspended
In a separate announcement, Emerald has told investors that they were engaging in a series of tactics to “preserve liquidity” in these uncertain times. Those tactics include the suspension of the payment of their usual quarterly dividend to investors, as well as their stock buy-back program. The company says these suspensions are temporary measures.
“Given the changes to our event schedule announced earlier this week and due to the ongoing uncertainty surrounding near-term business conditions, the Board and Emerald management firmly believe preserving liquidity is in the best interest of all stakeholders and is the prudent course of action to maintain flexibility and navigate these unprecedented times,” Feld said. “In addition to suspending our dividend, we are also implementing a broad range of initiatives designed to further preserve capital and liquidity, including, but not limited to, cutting costs, putting a temporary freeze on company travel and hiring, and suspending purchases under the Company’s share buyback plan. Taken together, we believe these are the right actions to position Emerald to successfully weather this challenging environment.”
Emerald says it will continue to monitor the COVID-19 situation as it relates to their upcoming show schedule and will “manage its upcoming portfolio of events.”
See more on Emerald Holding at: www.emeraldx.com.
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