Good morning, ladies and gentlemen, and welcome to the Emerald Expositions First Quarter 2017 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Philip Evans, Chief Financial Officer. Please go ahead, sir.

Thank you, operator, and good morning, everyone. We appreciate your participation today in our first quarter 2017 earnings call. With me here in San Juan Capistrano, California, is David Loechner, Chief Executive Officer. As a reminder, a replay of this call will be available on the Investors section of our website through noon Eastern Time on June 1, 2017. 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 the -- in our financial prospectus dated April 27, 2017, and we do not undertake any duty to update such forward-looking statements. Additionally, during today's call, we'll discuss certain non-GAAP measures, which we believe can be useful in evaluating our performance. The 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 comparable GAAP measure can be found in our earnings release. At this point, I'll turn the call over to David.

Thank you, Phil, and good morning, everybody. Before I get started, I'd like to take a moment to thank all those people who helped us through our initial public offering, which culminated on the first day of trading on the New York Stock Exchange on April 28. That was result of many months of effort. The hard work of our employees and advisers and the loyal support of our customers and partners contributed to the success of our offering. And as a consequence, we were able to raise $159 million in net proceeds for the company. This capital injection allowed us to further reduce our leverage and gives us an even more flexibility to continue to pursue our M&A strategy. Turning to today's call, I'd like to start by briefly reviewing the highlights of our first quarter performance. As we've already released initial first quarter results ahead of our debt refinancing earlier this month, I'll spend the majority of my time revealing the overall Emerald Expositions story, reiterating our growth strategy and providing some additional color on the full year guidance that we communicated in our press release earlier today. After that, Phil will review our Q1 financial results in more detail, and then we'll open up the call for questions. So let me start by saying that I'm pleased with our first quarter results, where we delivered total revenue growth of 6% compared to Q1 2016, approximately half organic and half from acquisitions. Our adjusted EBITDA growth of just under 2% reflected this revenue growth, partially offset by higher sponsorship costs, new show launches, which are typically low or no margin in the first year, and slightly higher SG&A expenses, partly incurred in preparation for our IPO and ongoing future obligations as a public company. Our best-performing shows in…

Thank you, David, and good morning, everyone. For the first quarter of 2017 and consistent with our expectations, we reported revenues of $135.7 million compared to revenues of $127.8 million for the first quarter of 2016, which is an increase of approximately $7.9 million or 6.1%. The increase in revenues reflected organic growth of 2.9% and growth from acquisitions of 3.3%. As you'll appreciate, our business is quite seasonal depending as it does on which events take place in which quarters. The first and third calendar quarters are disproportionately higher than the second and fourth, which is typical of the trade show industry as a whole. Cost of revenues of $36.6 million for the first quarter of 2017 increased by 14.9% or approximately $4.8 million from $31.8 million for the first quarter of 2016. This increase is mainly attributable to $1.4 million of incremental costs associated with acquisitions, $1.6 million in higher sponsorship costs, largely related to the growth in the Kitchen & Bath Industry Show, with the remaining $1.8 million attributable to our 2 show launches and modest other cost growth. Selling, general and administrative expense of $32.0 million for the first quarter of 2017 increased by 21.1% or approximately $5.6 million from $26.4 million for the first quarter in -- of 2016. Acquisitions contributed $1.2 million of incremental costs, while transaction and transition costs of $1.9 million was $0.7 million higher than the first quarter of 2016. During the first calendar quarter, we also incurred $2.6 million of costs related to the IPO and sale-related activities. The remaining approximately $1.1 million increase in SG&A cost mainly reflected higher compensation costs. Net income increased by approximately $0.1 million to $28.3 million from $28.2 million in the first quarter of 2016. This largely reflected lower interest expense due to the…

Thanks, Phil. So thank you, again, for your time today everyone. Overall, I'm pleased with the positioning of our business and the industries we serve. While our 2017 organic growth rate will be constrained somewhat by some very specific issues that relate to few of our shows, we have a strong, capable management team. And I believe sincerely and passionately that we can deliver sustained revenue and adjusted EBITDA growth in the future. I'd like to reaffirm today our longer-term revenue growth target of 3% to 5% organic growth, supplemented by the contribution of acquisitions. I am particularly excited to have announced the acquisition yesterday of the SIA Snow Show, the leading national ski and snowboard B2B trade show, expanding and strengthening our position within the outdoor sports and recreation sector. Our thesis for acquiring shows from associations as well as from independent owners continues to be realized, and we expect to add more great brands to the Emerald portfolio over time. With that, I'd like to ask the operator to open up the line for questions.

[Operator Instructions] Our first question is from the line of Anj Singh with Crédit Suisse.

I appreciate all the color on what's moderating your outlook for the year. I guess, I'll focus on what's been happening in 2Q. I realize it's one of your lighter revenue quarters, but I think you guys have had 6 or 7 shows occur Q2 to date, so wondering if you can give us a sense of how much moderation there may have been for your 2Q shows versus your initial expectations, any high-level color on exhibitor and attendee attendance, and how those shows tracked versus your expectations.

Hi, Anj, it's Phil. I think relative to our expectations, the major factor would be the HOW Design Live conference, which as we just noted was earlier in the quarter, and the registration revenues were not what we expected to be. Aside from that, the shows that take place in the quarter, which as you say, it’s kind of our third-largest quarter, it's relative to the first and third quarters it’s smaller, have done just as we expected, pretty well. We have ICFF and HD Expo and really kind of -- they've achieved what we expected them to achieve. So we feel good about the portfolio absent the HOW situation.

Okay. Got it. And then on M&A, could you speak to your recent acquisition of Snow Show and the deals earlier this year, perhaps, the opportunity you see within these under your ownership and going forward? And any thoughts on what typically happens as you combine shows like you're doing here with Outdoor Retailer? Is there any revenue or exhibitor attrition? Just trying to get a sense of one-offs that we should anticipate in the first combined year of the show early next year.

This is David. Thanks for the question. The first -- let me start with the first CEDIA and InterDrone, we expect good performance on -- they're running slightly ahead of where they had been and in line with our expectations. Good solid shows. I think InterDrone still has some real solid upside future as it's an emerging show in its space and dominates in the commercial drone space. As far as the OR, SIA situation, we haven't acquired a show and integrated it with another business in the past. So let me just make a couple of points there. This really consolidates the market. It significantly strengthens our longer-term growth aspirations for outdoor. It's a fantastic outcome for exhibitors, for attendees. And we're really working on developing our plans on how that will look financially. Our original thesis was develop this 3-show format individually with just the Outdoor Retailer brand. And so we're going to have to work through some integration issues, bringing SIA into the business and it's probably going to take the first year, maybe the first 2 years to completely begin to see the benefits of bringing those 2 businesses together.

Okay, got it. And one final one from me. On your smaller show that you launched this year, any takeaways you'd share as to why that wasn't successful? I realize there is a much of a margin impact from these new show launches, but just wondering if you can share any lessons learned and what goes into your decision to discontinue the show going forward.

Sure. I mean this was a bit of an experiment for us. It was sort of a cross-platform closeout show that we invited the public into for 2 days at the piers that ran alongside our New York Now Show. It just wasn't received enough in the market to repeat on a second edition. It may have legs in the future, but we thought if we can look across our portfolio and find individual markets that had closed-out products, so it was more introduced as a pop-up show post holiday that we thought might have some legs and it just didn't. And as we've noted in the past, we don't expect a 100% hit rate on all new launches of shows. We'll have a fairly good hit rate, but not 100%.

Our next question comes from the line of Manav Patnaik with Barclays.

This is Ryan Leonard filling in for Manav here. So I guess, just on the changes in the organic growth. I guess, what kind of happened in the last month or so that kind of caused the new way you're looking at the business? Is that just softness in the market? Is that sales efforts weren't connecting? And just you talked about, I think, in the past kind of this year without all the moving pieces would be kind of close to more of a normalized 4.5% organic growth. Does that 2% to 4% you mentioned ex some of these issues, does that imply any overall softness? Or is that just because those -- you're looking at those events as if they were flat?

Let me start with the first. ASD -- let's start with Outdoor Retailer. Outdoor Retailer is not a show- or industry-related issue, so it's a political situation, that's a bit more of an unprecedented, harder to see coming the reactions of companies individually and their impact on affecting the political situation in Utah. So it's not a show or market-related. We're just seeing some additional companies kind of grab onto that and not supporting the outdoor show this summer. But as we said, as we see that show relocating to another state, we feel those companies are not show-related and it's -- and it will return. Let me address ASD. ASD, as you know, is held twice a year. So the sales cycle is a bit shorter. It's a 6-month sales cycle. This August show or actually it's held in late July, the sales cycle is a bit shorter than typically is. The March show is a bit later in the March -- month of March. And the summer show is a bit earlier in the cycle. So we underestimated the shorter selling cycle between shows affecting us. I think we took longer than usual for our retention and, in fact, our retention is running slightly ahead year-over-year, but we're just finding or seeing that we're going to drive less new companies with the time we have committed into this business. So again underestimating the sales cycle and seeing fewer new companies coming into the business. There is also a couple of categories that we expected to grow faster. So in reality, we didn't really start the sales cycle on this show until kind of mid to late March. And as we got into it, we saw some of the categories that have been growing well are still growing well,…

Great. Thanks. And I guess, just more broadly then, what about a sales cycle can be impacted? I mean, are these things that you can't start marketing until the previous show has occurred? And I guess, just quickly on Interbike, I mean, what if anything would cause you to kind of say the end market here isn't under good enough footing for us to continue the show?

I don't think we're contemplating, anticipating or even thinking about it not being on good enough footing. I think this is a strong dominant show in the space. I worked in the space a long time. I've seen the bicycle market kind of cycle up and down over time, I guess, pun intended here, but I have seen it cycle up and down over time. Right now, I think we're just experience a period where there is just too much product in the channel. And as that product moves through the channel -- we are not seeing fewer participants in the bicycling space. So we don't think it's a end-market driver that's a long-term driver, but we do have to see the market kind of cycle through the oversupply of product in the space. And we believe we're going to begin to see the benefits of that in the future.

The next question is from the line of Peter Christiansen with Citi.

Firstly, congrats on the IPO, but some questions here. I just want to dig a little bit more into Outdoor Retailer. I just -- is there any way you can kind of or do you feel like you've accounted for the risk that you could have additional boycotts with the show? And I guess, as it relates to the Winter show, I guess, the contracts with Salt Lake is up -- Salt Lake City is up in 2018, does that include the winter show or when does that start?

Let me start with the last question. The Outdoor Retailer show and the SIA show will be combining and relocating in Denver in 2018 winter. So we expect a very, very strong show, having no political impact on the legacy issue that we're finding on the August show. But returning to the August show for a second, it takes companies quite some time to plan, prepare for these shows. So it's unlikely that we will see any more material changes between now and the show, and the show stages in a couple of months. So we feel like we have a strong connection with the market, we're close to the market, and we've identified what we think is the right kind of finish line for the show coming up in a couple of months.

That's helpful. And then, as it relates to the Javits renovation, it seems like you've gotten incrementally a bit more conservative on that, should we take -- have that take through from what you were speaking about before?

So we haven't really taken any more conservative view. The Javits Convention Center is going under renovation, and there is a section of the show that's going to be unusable space. And so we're going to sell out the entire Javits Center that has the available space, but we've reassessed the salability of some of the usable ancillary spaces we haven't used in the past, some hallways and some meeting rooms and some foyers and lobby space that we haven't used. And we're just assessing what is ultimately the ability for us to sell some of those ancillary spaces to the customers that we’ll have in the queue once the show sells out.

Our next question is from the line of Gary Bisbee with RBC.

And congratulations on completing the IPO. I guess, let me just ask about these challenges in this way. Can you help us frame them from historical perspective? Are there typically 1 or 2 things like this that crop up in most years? Or is this really truly fairly unique that you have this 3 or 4 things that you called out as real drags this year?

Thanks, Gary. As you know, I've been here almost 30 years. I've never seen 3 kind of unmarket-related issues all happen at the same time in my experience. I think it's not uncommon for a show to experience something that's unique, but it's uncommon in my experience to see 3. And really probably short of Interbike really unmarket-related and even unshow-related experiences. So, look, we're working through them. We feel confident in the businesses and the brands that serve these markets are highly important to the markets. And once we cycle through these issues, we feel we're going to be on continued great footing as we were before these cycles.

And just when you’ve had them happen to single shows in the past in your history, what is the history of bouncing back in the next year? Is it sometimes take a couple of years? Or some of these things, Javits being totally understandable and it is what it is, but in the other ones, what's your confidence that everybody comes back to Outdoor Retailer in Denver or wherever you end up putting it, that Interbike getting a new location bounces back? Or is there some risk or potential that this is a couple of year rebuild to where you are?

So for Outdoor Retailer, let's start with that. We've never had a situation like this, where the political environment was causing the show to have a -- to see a negative impact. We've not only forecast, estimate these -- all these companies coming back, they told us they're coming back. This is a nonshow and nonmarket-related. And I can see their point of view, and we respect their point of view, and we'll certainly service their business as it comes back into winter in Denver, and as summer relocates to a new venue, they're returning as well. So I don't see that as any kind of a lingering effect. Javits is just simply a construction issue. When we get the -- recall that when the facility finishes renovation, we'll have a larger exhibit space, and as the only show in our portfolio that uses the entire exhibit space, we're going to benefit of that on the comeback. And in fact, we'll expect to sell this show out. We'll probably have a waiting list for the show, and we will sell more of this ancillary space over time, and we continue to have pricing opportunities in this sold-out show. So once we cycle through the construction, I don't see that being any kind of a lingering effect on the space. And Interbike, look, it's just going to take some time for the market to just cycle through the oversupply. And we feel as consumer participation in cycling and consumer confidence remains as strong as it is, we don't see a long-term lingering effect on this business.

Great. Thanks. And then just on one more -- sorry to keep beating on this, but you've talked in the past about occasionally moving shows. Is the history of that when you move a show sort of for some of these reasons we've discussed, that the uptake is good the next year? And should we think about as sort of a high confidence factor in terms of improving performance in some of the ones where you cited them just being sale in the market or an opportunity to upgrade the location?

So some show -- thanks, Gary. Some shows that moved, it's a freshened experience and some shows cycle in and out of certain cities over time, which means they have a history of being in that same city. And it's just a way that market has operated over time. The mere moving of a show is not necessarily a risk to organic growth. In fact, sometimes it's an opportunity. I think there is certain cases where shows do become stale in a certain city, and it's incumbent upon us to see that in advance and bring that show to a new city to freshen that experience. I think that was also partially a case with the Interbike show being in Vegas for a long period of time, and it feels like they're ready for a freshened experience. So I don't see the mere move of a show. There is a couple of shows -- CEDIA Expo has been historically a show that has moved around in terms of its location and it'll again be in San Diego this year. I think it was in Houston last year. So it's not uncommon for shows to move, but we don't really see that as a kind of positive or negative contributor unless, of course, specific to that show looking for a new home.

Okay, great. I appreciate all the color. Personally, I can't imagine demoing a bicycle in 100-degree heat in Vegas. So it strikes me to putting that in another market may well be a good positive for everybody.

Our next question is from the line of David Chu with Bank of America.

Just a few housekeeping questions. So what was trade show revenue for the quarter?

Good question. Ask your other question, and I’ll find -- see if we can look it up.

Yes, I mean, adjusted net income up as well? And then I guess, lastly, I know you guys gave us the acquisition price for this new show, but as a stand-alone, what level of revenue and adjusted EBITDA does this show generate?

Revenue, it's less than $5 million, and the EBITDA, I mean, the multiples that we paid are kind of in the same range, so you can look back to the adjusted EBITDA based on the purchase price. The 10-Q is going to come out later today, and the adjusted net income is $38.5 million for the 3 months. And I am just looking on the trade show revenue.

While you look for that, just lastly, which quarter will the third OR show be in?

It should be in the fourth quarter of 2018.

Got you. And it sounds like Snow Show will be part of all 3 shows, correct?

No, it probably won't be part of the summer show. And ultimately, the market will see a consolidated combined winter sports industry, and we'll find some customers that will be in the November show and some customers that will be in the January show. I don't think the market in the future will see them as separate independent shows. They're going to see one consolidated, strengthened industry operating based on the sales cycle of the products in that market.

And David, the trade show revenues in the quarter were $124 million. So the -- obviously the bulk of the revenue for the quarter.

Next question is from the line of Kevin McVeigh with Deutsche Bank.

Not to belabor the organic growth in '17, but is there any way to think about how much of the adjustment is trade show-related versus ancillary services? I obviously appreciating majority of the revenues that trade show, but was it outpaced on the other services that contributed more in the decline? Or was it consistent with historical trends?

Let me just start with that and you can fill in, Phil. Part of our -- part of this effect is, probably 1/3 of it being based on conferences. And conferences are very, very difficult to read in advance. They are the shows and that specifically the HOW show that Phil is referring to where attendees are paying to hear speakers and probably another 20% was the ancillary parts of our business. The remainder being the effects we talked about with Summer Market, New York Now and ASD expecting to increase and being largely flat or slightly up.

Okay. And then in terms of the guidance going out, do you have 2 or 3 additional shows already factored into that in addition to the 2 that you already opened this year or that be on the come based on when they open?

I'm not sure. I understand the question.

The new show launches that we planned for the rest of this year, are they included in the guidance that we have.

Yes, 2 of 3 of the shows are included in the guidance. We do have one or maybe -- probably one more that's not included in the guidance.

And in terms of just any visibility on additional acquisitions this year? Is there any way to handicap how many more we should expect to close?

I don't think we would handicap how many we close. We have a good track record of closing acquisitions throughout the year. We have a very strong pipeline. We're in various stages of discussions with acquisitions. So it's an important part of our strategy here. With this consolidated market, we feel like it's going to be kind of a regular part of our business.

Our next question is from the line of Jeff Meuler with Baird.

It’s Nick Nikitas on for Jeff. I’ll move off of the '17 organic growth, and I’ll preface this with that I realize it's probably very early for this, but given the visibility you guys have, and, Dave, as you mentioned, no change in kind of that 3% to 5% longer-term organic growth target, is there anything you could say about the near-term headwinds and how that might impact '18 or potentially being within that range or above it given the M&A you guys have this year?

I mean, we haven't gone through the process of rolling up 2018 forecast yet. Clearly, that something we tend to do later in the year. In terms of growth rates, I think that each of these shows is independent, meaning that the kind of issues we've highlighted here tend to be very show-specific and so kind of the rest of the portfolio we expect to continue to grow as we anticipated, and the majority of the portfolio is doing well. So I think once these issues cycle through, we feel very good about the 3% to 5% kind of growth -- organic growth guidance that we've put out there.

Okay. That's fair. And then just from an M&A pipeline perspective, are you guys -- are you seeing any change with the percentage of, I mean, you obviously had 2 recently, but the industry-owned events versus these other privately owned events in your pipeline? And just from a multiple perspective, is there any historic difference between those 2?

Well we now have a track record of 2 for association, so I'm not sure, I can call 2 a trend. But no, I mean, ultimately, I think, this is the market. It's an extremely fragmented market. And I think this is the range at which entrepreneurs and associations are willing to trade. Given that it's a large market, we're fairly particular about the businesses being important to the markets, being number one in their space, serving the many-to-many environment, being B2B. Once these shows have the qualities that would be additive to our high-quality portfolio at Emerald, we're going to be in this kind of mid- to upper single-digit trading multiple of EBITDA.

Thank you. At this time, I will turn the floor back to management for closing remarks.

Thank you. I'm not sure we have any closing remarks. We just want to thank everybody for their time today and look forward to talking to folks over the course of the next few weeks and then delivering on our promises as we go through the rest of the year. Thank you.

Thank you, everybody.

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