eex-10q_20190930.htm

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 31, 2019, there were 71,417,658 shares of the Registrant’s common stock, par value $0.01, outstanding.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. You can generally identify forward-looking statements by our use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect”, “intend,” “may,” “might,” “plan,” “potential,” “predict,” “seek” or “should,” or the negative thereof or other variations thereon or comparable terminology. In particular, statements about the markets in which we operate, including growth of our various markets, and our expectations, beliefs, plans, strategies, objectives, prospects, assumptions or future events or performance contained in this report are forward-looking statements.

We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond our control. These and other important factors, including those discussed in this report under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements, or could affect the trading price of our common stock on the New York Stock Exchange. Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include:

Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements contained in this report are not guarantees of future performance and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained in this report. In addition, even if our results of operations, financial condition and liquidity, and events in the industry in which we operate, are consistent with the forward-looking statements contained in this report, they may not be predictive of results or developments in future periods.

Any forward-looking statement that we make in this Quarterly Report on Form 10-Q speaks only as of the date of such statement. Except as required by law, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this report.

(dollars in millions, share data in thousands, except par value)	September 30, 2019		December 31, 2018
Assets
Current assets
Cash and cash equivalents	$	13.6	$	20.5
Trade and other receivables, net of allowance for doubtful accounts of $1.3 million and $0.9 million as of September 30, 2019 and December 31, 2018, respectively		76.3		62.7
Prepaid expenses		12.7		19.8
Total current assets		102.6		103.0
Noncurrent assets
Property and equipment, net		3.8		3.7
Goodwill		1,027.2		1,036.5
Intangible assets, net		380.7		435.3
Right-of-use lease assets		18.7		—
Other noncurrent assets		1.3		1.5
Total assets	$	1,534.3	$	1,580.0
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and other current liabilities	$	40.2	$	30.5
Deferred revenues		149.0		192.4
Revolving credit facility		6.0		40.0
Right-of-use lease liabilities, current portion		3.9		—
Term loan, current portion		5.7		5.7
Total current liabilities		204.8		268.6
Noncurrent liabilities
Term loan, net of discount and deferred financing fees		520.8		524.2
Deferred tax liabilities, net		75.3		75.4
Right-of-use lease liabilities		16.2		—
Other noncurrent liabilities		2.3		3.5
Total liabilities		819.4		871.7
Commitments and contingencies (Note 13)
Shareholders’ equity
Preferred stock, $0.01 par value; authorized shares: 80,000 at September 30, 2019 and December 31, 2018: no shares issued and outstanding at September 30, 2019 and December 31, 2018		—		—
Common stock, $0.01 par value; authorized shares: 800,000 at September 30, 2019 and December 31, 2018; issued and outstanding shares: 71,585 and 71,591 at September 30, 2019 and December 31, 2018, respectively		0.7		0.7
Additional paid-in capital		698.4		689.7
Retained earnings		15.8		17.9
Total shareholders’ equity		714.9		708.3
Total liabilities and shareholders’ equity	$	1,534.3	$	1,580.0

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Condensed Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income

(dollars in millions, share data in thousands except earnings per share)	Three Months Ended September 30, 2019			Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
Revenues	$	75.6		$	103.1	$	316.0	$	323.7
Other income		6.1			—		6.1		—
Cost of revenues		24.6			25.9		102.8		91.7
Selling, general and administrative expense		33.7			29.7		101.9		90.0
Depreciation and amortization expense		12.9			11.4		39.3		34.2
Goodwill and intangible asset impairment charges		26.3			—		26.3		—
Operating (loss) income		(15.8	)		36.1		51.8		107.8
Interest expense		7.5			7.3		23.3		21.1
(Loss) income before income taxes		(23.3	)		28.8		28.5		86.7
(Benefit from) provision for income taxes		(3.6	)		7.9		10.3		21.8
Net (loss) income and comprehensive (loss) income	$	(19.7	)	$	20.9	$	18.2	$	64.9
Basic (loss) earnings per share	$	(0.27	)	$	0.29	$	0.25	$	0.89
Diluted (loss) earnings per share	$	(0.27	)	$	0.28	$	0.25	$	0.86
Basic weighted average common shares outstanding		71,796			73,063		71,843		72,893
Diluted weighted average common shares outstanding		71,796			75,398		72,752		75,688

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

	Three Months Ended September 30, 2019
	(shares in thousands; dollars in millions)
	Preferred Stock				Common Stock					Additional Paid-in			Retained			Total Shareholders’
	Shares		Amount		Shares			Amount		Capital			Earnings			Equity
Balances at June 30, 2019		—	$	—		71,944		$	0.7	$	696.7		$	44.6		$	742.0
Stock-based compensation		—		—		38			—		1.7			—			1.7
Dividends on common stock		—		—		—			—		—			(5.4	)		(5.4	)
Issuance of common stock under equity plans		—		—		8			—		0.1			—			0.1
Repurchase of common stock		—		—		(405	)		—		(0.1	)		(3.7	)		(3.8	)
Net loss and comprehensive loss		—		—		—			—		—			(19.7	)		(19.7	)
Balances at September 30, 2019		—	$	—		71,585		$	0.7	$	698.4		$	15.8		$	714.9

	Nine Months Ended September 30, 2019
	(shares in thousands; dollars in millions)
	Preferred Stock				Common Stock					Additional Paid-in			Retained			Total Shareholders’
	Shares		Amount		Shares			Amount		Capital			Earnings			Equity
Balances at December 31, 2018		—	$	—		71,591		$	0.7	$	689.7		$	17.9		$	708.3
Stock-based compensation		—		—		76			—		5.9			—			5.9
Dividends on common stock		—		—		—			—		—			(16.0	)		(16.0	)
Issuance of common stock under equity plans		—		—		366			—		2.9			—			2.9
Repurchase of common stock		—		—		(448	)		—		(0.1	)		(4.3	)		(4.4	)
Net income and comprehensive income		—		—		—			—		—			18.2			18.2
Balances at September 30, 2019		—	$	—		71,585		$	0.7	$	698.4		$	15.8		$	714.9

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

	Three Months Ended September 30, 2018
	(shares in thousands; dollars in millions)
	Preferred Stock				Common Stock				Additional Paid-in		Retained			Total Shareholders’
	Shares		Amount		Shares		Amount		Capital		Earnings			Equity
Balances at June 30, 2018		—	$	—		73,044	$	0.7	$	684.8	$	117.0		$	802.5
Stock-based compensation		—		—		—		—		1.9		—			1.9
Dividends on common stock		—		—		—		—		—		(5.3	)		(5.3	)
Issuance of common stock for stock option exercises		—		—		45		—		0.2		—			0.2
Net income and comprehensive income		—		—		—		—		—		20.9			20.9
Balances at September 30, 2018		—	$	—		73,089	$	0.7	$	686.9	$	132.6		$	820.2

	Nine Months Ended September 30, 2018
	(shares in thousands; dollars in millions)
	Preferred Stock				Common Stock				Additional Paid-in		Retained			Total Shareholders’
	Shares		Amount		Shares		Amount		Capital		Earnings			Equity
Balances at December 31, 2017		—	$	—		72,604	$	0.7	$	677.1	$	83.4		$	761.2
Stock-based compensation		—		—		13		—		4.5		—			4.5
Dividends on common stock		—		—		—		—		—		(15.7	)		(15.7	)
Issuance of common stock for stock option exercises		—		—		472		—		5.3		—			5.3
Net income and comprehensive income		—		—		—		—		—		64.9			64.9
Balances at September 30, 2018		—	$	—		73,089	$	0.7	$	686.9	$	132.6		$	820.2

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

(in millions)	Nine Months Ended September 30, 2019			Nine Months Ended September 30, 2018
Operating activities
Net income	$	18.2		$	64.9
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense		6.1			4.5
Provision for doubtful accounts		0.5			0.3
Depreciation and amortization		39.3			34.2
Goodwill and intangible asset impairment charges		26.3			—
Amortization of deferred financing fees and debt discount		1.0			1.3
Unrealized gain on interest rate swap and floor		—			(0.7	)
Deferred income taxes		(0.1	)		5.2
Remeasurement of contingent consideration		—			0.5
Changes in operating assets and liabilities, net of effect of businesses acquired:
Trade and other receivables		(14.1	)		(23.6	)
Prepaid expenses		7.1			8.1
Other noncurrent assets		0.1			—
Accounts payable and other current liabilities		10.4			7.2
Income tax payable		0.5			2.9
Deferred revenues		(43.4	)		(34.3	)
Other noncurrent liabilities		(0.3	)		(2.0	)
Net cash provided by operating activities		51.6			68.5
Investing activities
Acquisition of businesses		—			(27.8	)
Purchases of property and equipment		(0.9	)		(0.6	)
Purchases of intangible assets		(0.9	)		(2.6	)
Net cash used in investing activities		(1.8	)		(31.0	)
Financing activities
Payment of deferred consideration for acquisition of businesses		(1.0	)		—
Proceeds from borrowings on revolving credit facility		6.0			—
Repayment of revolving credit facility		(40.0	)		—
Repayment of principal on term loan		(4.2	)		(24.2	)
Cash dividends paid		(16.0	)		(15.7	)
Repurchase of common stock		(4.4	)		—
Proceeds from issuance of common stock under equity plans		2.9			5.3
Net cash used in financing activities		(56.7	)		(34.6	)
Net (decrease) increase in cash and cash equivalents		(6.9	)		2.9
Cash and cash equivalents
Beginning of period		20.5			10.9
End of period	$	13.6		$	13.8

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The unaudited condensed consolidated financial statements include the operations of Emerald Expositions Events, Inc. (the “Company”) and its wholly-owned subsidiaries. These unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC for Interim Reporting. All intercompany transactions, accounts and profits, if any, have been eliminated in the unaudited condensed consolidated financial statements. In the opinion of management, all recurring adjustments considered necessary for a fair presentation have been included.

These unaudited condensed consolidated financial statements do not include all disclosures required by GAAP, therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the more detailed audited consolidated financial statements for the year ended December 31, 2018. The December 31, 2018 condensed consolidated balance sheet was derived from the Company’s audited consolidated financial statements for the year ended December 31, 2018.

The results for the three and nine months ended September 30, 2019 are not necessarily indicative of results to be expected for a full year, any other interim periods or any future year or period.

In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (“ASU 2018-02”). This update permitted entities to reclassify tax effects stranded in accumulated other comprehensive income as a result of tax reform from the Tax Cuts and Jobs Act. The Company adopted ASU 2018-02 on January 1, 2019 and the adoption did not have an impact on the Company’s condensed consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), to simplify the accounting for share-based payments made to nonemployees. Under ASU 2018-07, accounting for share-based payments made to nonemployees is substantially the same as the accounting for share-based payments made to employees. Share based awards to nonemployees are measured at fair value on the grant date of the awards, with the need to assess the probability of satisfying performance conditions, if any are present. The Company adopted ASU 2018-07 on January 1, 2019 and the adoption did not have an impact on the Company’s condensed consolidated financial statements.

In July 2018, the FASB issued ASU 2018-09, Codification Improvements (“ASU 2018-09”). This standard did not prescribe any new accounting guidance, but instead made changes to a variety of topics to clarify, correct errors in, or make minor improvements to the Accounting Standards Codification (“ASC”). The Company adopted ASU 2018-07 on January 1, 2019 and the adoption did not have an impact on the Company’s condensed consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASC 842”), which requires lessees to recognize most leases on their balance sheets as a right-of-use asset with a corresponding lease liability. The Company adopted ASC 842 on January 1, 2019 and elected to use the modified retrospective transition method prescribed under ASC 842 to not restate comparative periods in transition and use the effective date of ASC 842 as the date of initial adoption. Additionally, the Company applied the available practical expedient of keeping leases with an initial term of twelve months or less off of the balance sheet. As a result of the adoption of ASC 842, the Company recorded right-of-use lease assets of $19.7 million and right-of-use lease liabilities of $21.1 million including the reclassification of approximately $1.4 million of unamortized lease incentives and deferred rent liabilities into the right-of-use lease asset balance. The adoption of ASC 842 did not have a material impact on the Company’s condensed consolidated statements of (loss) income and comprehensive (loss) income and condensed consolidated statements of cash flows. Additional information and disclosures required by this new standard are contained in Note 8, Leases.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 modifies how an entity accounts for credit losses for most financial assets and certain other instruments and requires entities to estimate expected credit losses for trade receivables. ASU 2016-13 is effective for annual and interim fiscal reporting periods beginning after December 15, 2019, with early adoption permitted for annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of this standard on its consolidated financial statements and disclosures.

There have been no other new accounting pronouncements that are expected to have a significant impact on the Company’s condensed consolidated financial statements or notes thereto.

The Company’s primary source of revenue is generated from the production of trade shows and conference events (collectively, “trade shows”), including booth space sales, registration fees and sponsorship fees. The Company recognizes revenue upon completion of each trade show. Trade show and conference events revenues represented approximately 84% and 83% of total revenues for the three and nine months ended September 30, 2019, respectively. Trade show and conference events revenues represented approximately 91% and 86% of total revenues for the three and nine months ended September 30, 2018, respectively.

Deferred revenues generally consist of booth space sales, registration fees and sponsorship fees that are invoiced prior to the trade show or other event. Current deferred revenues were $149.0 million and $158.2 million as of September 30, 2019 and 2018, respectively, and are reported as deferred revenues on the condensed consolidated balance sheets. Long-term deferred revenues as of September 30, 2019 and 2018 were $0.2 million and $0.7 million, respectively, and are reported as other noncurrent liabilities on the condensed consolidated balance sheets. Total deferred revenues, including the current and noncurrent portions, were $149.2 million and $158.9 million, as of September 30, 2019 and 2018, respectively. During the three and nine months ended September 30, 2019, the Company recognized revenues of $71.4 million and $276.6 million, respectively, from amounts included in deferred revenue during the respective period. During the three and nine months ended September 30, 2018, the Company recognized revenues of $90.2 million and $280.2 million, respectively, from amounts included in deferred revenue during the respective period.

For the Company’s trade shows and other events, sales are deferred and recognized when performance obligations under the terms of a contract with the Company’s customer are satisfied, which is typically at the completion of a show or event. For the Company’s other marketing services, sales are deferred and recognized when performance obligations under the terms of a contract with the Company’s customer are satisfied. This generally occurs in the period in which the publications are issued. Revenue is measured as the amount of consideration the Company expects to receive upon completion of performance obligations.

The Company applies a practical expedient which allows the exclusion of disclosure information regarding remaining performance obligations if the performance obligation is part of a contract that has an expected duration of one year or less. The Company’s performance obligations greater than one year are immaterial.

The Company’s primary sources of revenue are from trade shows, other events and other marketing services derived from the Company’s trade shows and other events.

Due to the nature of the Company’s revenue from contracts with customers, the Company does not have material contract assets that fall under the scope of ASC Topic 606, Revenue from Contracts with Customers. Contract liabilities generally consist of booth space sales, registration fees and sponsorship fees that are collected prior to the trade show or other event. The related revenue is recognized upon the completion of the applicable trade show or other event. Contract liabilities less than one year from the date of the performance obligation are reported on the condensed consolidated balance sheets as deferred revenues. Contract liabilities greater than one year from the date of the performance obligation are reported on the condensed consolidated balance sheets in other noncurrent liabilities.

The Company incurs sales commission costs in connection with sales of booth space, registration fees and sponsorship fees at the Company’s trade shows and events and with sales of advertising for industry publications. The Company’s contracts with customers are generally short term, as sales generally begin up to one year prior to the date of the trade shows and other events. The Company expects the period benefited by each commission to be less than one year, and as a result, the Company expenses sales commissions as incurred. Sales commissions are reported on the condensed consolidated statements of (loss) income and comprehensive (loss) income as selling, general and administrative expenses.

During the third quarter of 2019, as a result of Hurricane Dorian, the Company’s Surf Expo and Imprinted Sportswear Show - Orlando (“ISS Orlando”) were cancelled. The Company carries cancellation insurance to mitigate losses caused by natural disasters and received confirmation from its insurance carrier that a settlement of approximately $6.1 million will be paid to offset the lost revenues of the affected trade shows. Management concluded that the receipt of insurance proceeds was realizable as of September 30, 2019. As a result, during the three and nine months ended September 30, 2019, the Company recorded Other Income of $6.1 million to recognize the amount to be recovered from the insurance company in the condensed consolidated statements of (loss) income and comprehensive (loss) income.

The Company acquired the assets and assumed the liabilities of two companies during 2018 (collectively, the “2018 Acquisitions”). Each transaction qualified as an acquisition of a business and was accounted for as a business combination.

On October 15, 2018, the Company acquired certain assets and assumed certain liabilities associated with BDNY and associated trade shows and related assets from ST Media Group International, Inc. and Hospitality Media Group, LLC, for a total purchase price of $45.1 million, which included a negative working capital adjustment of approximately $8.7 million and non-cash deferred payments of $1.8 million. As of September 30, 2019, $0.6 million of the deferred payment was included in accounts payable and other current liabilities in the condensed consolidated balance sheet and $0.2 million of the deferred payment was included in other noncurrent liabilities in the condensed consolidated balance sheet. As of December 31, 2018, $1.0 million of the deferred payment was included in accounts payable and other current liabilities and $0.8 million was included in other noncurrent liabilities in the condensed consolidated balance sheet. The acquisition was financed with cash from operations and a draw on the Company’s revolving credit facility.

All of the external acquisition costs of $0.7 million were expensed as incurred and included in selling, general and administrative expenses in the condensed consolidated statements of (loss) income and comprehensive (loss) income. The measurement period was closed in the fourth quarter of 2018.

On August 20, 2018, the Company acquired certain assets and assumed certain liabilities associated with a technology event and a group of complementary technology intelligence brands serving the residential, commercial and security integrator markets from EH Publishing, Inc., for a total purchase price of $27.8 million, which included a negative working capital adjustment of approximately $0.5 million. The acquisition of the technology event, Total Tech Summit, and related brands CEPro, Commercial Integrator, Security Sales & Integration, and Campus Safety (collectively, the “Technology Brands”) was paid for with cash from operations.

All of the external acquisition costs of $0.6 million were expensed as incurred and included in selling, general and administrative expenses in the condensed consolidated statements of (loss) income and comprehensive (loss) income. The measurement period was closed in the fourth quarter of 2018.

The following table summarizes the fair value of the assets and liabilities at the date of acquisition:

Supplemental information on an unaudited pro-forma basis is reflected as if each of the 2018 Acquisitions had occurred at the beginning of the year prior to the year in which each acquisition closed, after giving effect to certain pro-forma adjustments primarily related to the amortization of acquired intangible assets and interest expense. The unaudited pro-forma supplemental information is based on estimates and assumptions that the Company believes are reasonable. The supplemental unaudited pro-forma financial information is presented for comparative purposes only and is not necessarily indicative of what the Company’s financial position or results of operations actually would have been had the Company completed the acquisitions at the dates indicated, nor is it intended to project the future financial position or operating results of the Company as a result of the 2018 Acquisitions. Further, the supplemental unaudited pro-forma information has not been adjusted for show timing differences or discontinued events.

The Company tests goodwill for impairment annually on October 31, and between annual tests if the Company becomes aware of an event or a change in circumstances that would indicate the carrying value may be impaired. During the third quarter of 2019, the Company revised its forecast for future performance and issued revised guidance to the investment community causing a prolonged decline in the Company’s stock price resulting in the market capitalization of the Company falling below the carrying value of its single reporting unit. Accordingly, the Company performed a quantitative assessment of the Company’s fair value of goodwill using income and market approaches with assumptions that are considered level 3 inputs and concluded that the Company’s carrying value of goodwill exceeded the Company’s fair value, resulting in a goodwill impairment charge of $9.3 million during the three and nine months ended September 30, 2019. The goodwill impairment charge is reported in goodwill and intangible asset impairment charges on the condensed consolidated statements of (loss) income and comprehensive (loss) income. There were no goodwill impairment charges recognized during the three and nine months ended September 30, 2018.

Determining the fair value of a reporting unit requires the application of judgment and may involve the use of significant estimates and assumptions including, projections of future cash flows, revenue growth rates, weighted average cost of capital, forecasting future sales and expenses, selecting appropriate discount rates and other factors which can be affected by changes in business climate, economic conditions, the competitive environment and other factors. The Company bases these fair value estimates on assumptions management believes to be reasonable but which are unpredictable and inherently uncertain. A change in underlying assumptions would cause a change in the results of the tests and, as such, could cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future. Additionally, if actual results are not consistent with the estimates and assumptions or if there are significant changes to the Company’s planned strategy, it may cause fair value to be less than the carrying amounts and result in additional impairments of goodwill in the future. The Company corroborates the reasonableness of the total fair value of the reporting unit with the Company’s market capitalization. The Company’s market capitalization is calculated using the relevant shares outstanding and stock price of the Company’s publicly traded shares.

(in millions)	December 31, 2018			Additions			Impairments			Transfers			September 30, 2019
Indefinite-lived intangible assets
Trade names	$	117.6		$	—		$	(4.9	)	$	—		$	112.7
Amortizable intangibles
Customer-related intangibles		399.2			0.1			(11.3	)		—			388.0
Trade names		106.6			—			(3.5	)		—			103.1
Computer software		9.9			0.2			—			0.5			10.6
		633.3			0.3			(19.7	)		0.5			614.4
Accumulated amortization
Customer-related intangibles		(190.9	)		(33.0	)		2.6			—			(221.3	)
Trade names		(1.0	)		(4.5	)		0.1			—			(5.4	)
Computer software		(6.6	)		(1.0	)		—			—			(7.6	)
		(198.5	)		(38.5	)		2.7			—			(234.3	)
Capitalized software in progress		0.5			0.6			—			(0.5	)		0.6
Total intangible assets, net	$	435.3		$	(37.6	)	$	(17.0	)	$	—		$	380.7

Amortization expense for the three and nine months ended September 30, 2019 was $12.7 million and $38.5 million, respectively. Amortization expense for the three and nine months ended September 30, 2018 was $11.2 million and $33.5 million, respectively.

The Company tests indefinite-lived intangible assets for impairment annually on October 31, and between annual tests if the Company becomes aware of an event or a change in circumstances that would indicate the carrying value may be impaired. During the third quarter of 2019, the Company revised its forecast for the future performance of several trade show brands as the Company’s revenue expectations and pacing reflected a decline compared to the 2019 forecast due to the underperformance of these brands and an expected decrease in EBITDA driven by planned investments in technology and the execution of events. Management determined this to be a triggering event and an indicator it was more likely than not that the carrying amount of certain of its indefinite-lived intangible assets exceeded their fair value. The Company performed a quantitative analysis using “a relief from royalty payments” method with assumptions that are considered level 3 inputs and concluded that certain of its indefinite-lived trade names had a fair value below the carrying value. As a result, the Company recognized an impairment charge of $4.9 million during the three and nine months ended September 30, 2019. The decline in fair value in certain indefinite-lived intangible assets compared to the carrying value is the result in changes in forecasted revenues and expenses. The impairment charge is reported in goodwill and intangible asset impairment charges on the condensed consolidated statements of (loss) income and comprehensive (loss) income. There were no indefinite-lived intangible asset impairment charges recognized during the three and nine months ended September 30, 2018.

The fair values of the Company’s indefinite-lived trade names are calculated using a form of the income approach referred to as the “relief from royalty payments” method. The royalty rate is estimated using market evidence of identifiable transactions in the marketplace involving the licensing of trade names similar to those owned by the Company. This fair value of the trade name is then compared to the carrying value of each trade name. If the carrying amount of the trade name exceeds its fair value, an impairment loss would be reported. Determining the fair value of an indefinite-lived intangible asset group requires the application of judgment and involves the use of significant estimates and assumptions. These estimates and assumptions include revenue growth rates, planned use of assets to support revenue growth, weighted average cost of capital, tax rate and royalty rates. The Company bases its fair value estimates on assumptions it believes to be reasonable, but which are unpredictable and inherently uncertain. Actual future results may differ from the estimates. The Company performs its indefinite-lived intangible assets impairment test at the asset group level and has determined it has multiple asset groups that are typically at the trade show brand level.

During the third quarter of 2019, the Company became aware of changes in circumstances, including the revised forecast for future performance of several trade show brands including its revised forecast for the future performance of several trade show brands as the Company’s revenue expectations and pacing reflected a decline compared to the 2019 forecast due to the underperformance of these brands and an expected decrease in EBITDA driven by planned investments in technology and the execution of events, which indicated the carrying value of certain trade names and customer relationships that may not be recoverable. The Company evaluated the recoverability of the related intangible assets using level 3 inputs to be held and used by comparing the carrying amount of an asset to the future net undiscounted cash flows expected to be generated by the asset to determine if the carrying value is not recoverable. The recoverability test indicated that certain of the customer-related intangible assets and definite-lived trade names were impaired which resulted in an impairment charge. As a result, the Company recognized an impairment charge based on a measurement of fair value of those assets using an income approach of $12.1 million during the three and nine months ended September 30, 2019. The long-lived assets impaired during the three and nine months ended had a remaining fair value of $2.2 million as of September 30, 2019. The long-lived asset impairment charge is reported in goodwill and intangible asset impairment charges on the condensed consolidated statements of (loss) income and comprehensive (loss) income. There were no long-lived intangible asset impairment charges recognized during the three and nine months ended September 30, 2018.

Depreciation expense related to property and equipment for the three and nine months ended September 30, 2019 was $0.2 million and $0.8 million, respectively. Depreciation expense related to property and equipment for the three and nine months ended September 30, 2018 was $0.2 million and $0.7 million, respectively. Losses on disposals were not material for the three and nine months ended September 30, 2019 and 2018.

Emerald Expositions Holding, Inc. (“EEH”) had $6.0 million and $40.0 million in borrowings outstanding under its Amended and Restated Revolving Credit Facility as of September 30, 2019 and December 31, 2018, respectively. During the nine months ended September 30, 2019, EEH repaid $40.0 million under the Amended and Restated Revolving Credit Facility. There were $6.0 million in borrowings by EEH under the Amended and Restated Revolving Credit Facility during the nine months ended September 30, 2019. EEH had $1.0 million and $0.9 million in stand-by letters of credit under the Amended and Restated Revolving Credit Facility as of September 30, 2019 and December 31, 2018, respectively.

Interest expense reported in the condensed consolidated statements of (loss) income and comprehensive (loss) income consists of the following:

	Three months ended September 30,				Nine months ended September 30,
(in millions)	2019		2018		2019		2018
Senior secured term loan	$	6.8	$	6.8	$	21.0	$	19.6
Non-cash interest for amortization of debt discount and debt issuance costs		0.4		0.4		1.0		1.3
Realized and unrealized loss on interest rate swap and floor, net		—		—		—		(0.3	)
Revolving credit facility commitment fees		0.3		0.1		1.3		0.5
Total interest expense	$	7.5	$	7.3	$	23.3	$	21.1

The Amended and Restated Revolving Credit Facility contains a financial covenant requiring EEH to comply with a 5.50 to 1.00 Total First Lien Net Leverage Ratio, which is defined as the ratio of Consolidated Total Debt (as defined in the Amended and Restated Senior Secured Credit Facilities) secured on a first lien basis, net of unrestricted cash and cash equivalents to trailing four-quarter Consolidated EBITDA (as defined in the Amended and Restated Senior Secured Credit Facilities). This financial covenant is tested quarterly only if the aggregate amount of revolving loans, swingline loans and letters of credit outstanding under the Amended and Restated Revolving Credit Facility (net of up to $10.0 million of outstanding letters of credit) exceeds 35% of the total commitments thereunder. As of September 30, 2019, the Company was not required to test this financial covenant and EEH was in compliance with all covenants under the Amended and Restated Senior Secured Credit Facilities.

The Company determines if an arrangement is or contains a lease at contract inception. The Company's leases consist of operating leases for office space and certain equipment through operating leases. The Company does not have any financing leases. For arrangements where the Company is the lessee, a right-of-use lease asset, representing the underlying asset during the lease term, and a right-of-use lease liability, representing the payment obligation arising from the lease, are recognized on the balance sheet at lease commencement based on the present value of the payment obligation. Right-of-use lease assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. The Company's leases have a remaining contractual term of 9 months to 8 years, some of which include options to extend the lease term for up to five years and options to terminate. The options to extend certain lease terms or terminate certain leases are at the sole discretion of the Company. As the Company is not reasonably certain that it will exercise these options, none of the options to modify the lease terms are included in the Company’s right-of-use lease assets and right-of-use lease liabilities as of September 30, 2019. The Company’s weighted-average remaining lease term was 6.4 years as of September 30, 2019.

Short-term operating leases with a contractual term of 12 months or less are not recorded on the balance sheet, but instead are expensed as incurred and included as selling, general and administrative expense on the condensed consolidated statements of (loss) income and comprehensive (loss) income and are considered rent expense. Short-term operating lease costs were not material for the three and nine months ended September 30, 2019. Leases with a duration of less than one month are not included in rent expense. Rent expense is recognized on a straight-line basis over the lease term. Rent expense was $1.1 million and $3.3 million for the three and nine months ended September 30, 2019, respectively. Rent expense was $0.9 million and $2.9 million for the three and nine months ended September 30, 2018, respectively. The Company reported $0.3 million and $0.9 million in rent expense on the condensed consolidated statements of (loss) income and comprehensive (loss) income as cost of revenues and $0.8 million and $2.4 million in rent expense on the condensed consolidated statements of (loss) income and comprehensive (loss) income as selling, general and administrative expense for the three and nine months ended September 30, 2019, respectively.

Certain of the Company's lease agreements include variable lease payments. Variable lease costs were $0.1 million and $0.2 million for the three and nine months ended September 30, 2019, respectively.

Maturities of right-of-use lease liabilities for the remaining five years and thereafter as of September 30, 2019 were as follows:

As of December 31, 2018, minimum lease payments under operating leases by period were as follows:

The discount rate implicit within the Company’s leases is generally not determinable; therefore, the Company determined the discount rate based on its incremental borrowing rate using the portfolio approach. The Company’s weighted-average discount rate used to measure right-of-use lease liabilities was 5.17%.

As of September 30, 2019, the Company’s assets measured at fair value on a recurring basis are categorized in the table below:

As of December 31, 2018, the Company’s assets measured at fair value on a recurring basis are categorized in the table below:

Dividend activity for the first, second and third quarters of 2019 was as follows:

Dividend activity for the first, second and third quarters of 2018 was as follows:

In November 2018, the Company’s Board of Directors (the “Board”) authorized a $20.0 million share repurchase program. Under the terms of the November 2018 Share Repurchase Program, the Company has the ability to repurchase shares through open market purchases (either with or without a 10b5-1 plan), block transactions, privately negotiated purchases or otherwise, through December 31, 2019. The November 2018 Share Repurchase Program did not require the Company to acquire any specific number of shares. Pursuant to the November 2018 Share Repurchase Program, the Company did not settle the repurchase of any shares during the three months ended September 30, 2019 and 43,437 shares for $0.6 million during the nine months ended September 30, 2019, bringing the aggregate total of common stock repurchased in connection with the November 2018 Share Repurchase Program to 1,670,685 shares for aggregate consideration of $20.0 million. During the three and nine months ended September 30, 2018 there were no shares repurchased. There were no remaining amounts available for share repurchases as of September 30, 2019 in connection with the November 2018 Share Repurchase Program.

In July 2019, the Company’s Board authorized and approved a $30.0 million share repurchase program. Under the terms of the July 2019 Share Repurchase Program, the Company has the ability to repurchase shares through open market purchases (either with or without a 10b5-1 plan), block transactions, privately negotiated purchases or otherwise, through July 31, 2020, subject to early termination or extension by the Board. The July 2019 Share Repurchase Program does not obligate the Company to purchase any specific number of shares. The Company settled the repurchase of 405,154 shares for $3.8 million during the three and nine months ended September 30, 2019 related to the July 2019 Share Repurchase Program. There was $26.2 million remaining available for share repurchases under the program as of September 30, 2019.

The Company recognizes cumulative stock-based compensation expense for the portion of the awards for which the service period and performance or market conditions, as applicable, have been satisfied. Stock-based compensation expense is included in selling, general and administrative expense in the condensed consolidated statements of (loss) income and comprehensive (loss) income. The related deferred tax benefit for stock-based compensation recognized was $0.5 million and $1.7 million for the three and nine months ended September 30, 2019, respectively. The related deferred tax benefit for stock-based compensation recognized was $0.5 million and $1.1 million for the three and nine months ended September 30, 2018, respectively.

Emerald Expositions Events, Inc. 2019 Employee Stock Purchase Plan (the “ESPP”)

In January 2019, the Company’s Board approved the ESPP, which was approved by the Company’s stockholders in May 2019. The ESPP requires that participating employees must be customarily employed for at least 20 hours per week, have completed at least 6 months of service, and have compensation (as defined in the ESPP) not greater than $150,000 in the 12-month period before the enrollment date to be eligible to participate in the ESPP. Under the ESPP, eligible employees will receive a 10% discount from the lesser of the closing price on the first day of the offering period and the closing price on the purchase date. The Company reserved 500,000 shares of its common stock for issuance under the ESPP.

The ESPP expense recognized by the Company was not material for the three and nine months ended September 30, 2019 and was zero for the three and nine months ended September 30, 2018. The Company’s initial ESPP offering period began in February 2019 and ended in August 2019. The Company issued 8,426 shares to employees in August 2019 at the end of the initial ESPP offering period. The Company’s second ESPP offering period began in August 2019 and will end in February 2020.

The Company recognized stock-based compensation expense relating to stock option activity of $0.8 million and $2.7 million for the three and nine months ended September 30, 2019, respectively. The Company recognized stock-based compensation expense relating to stock option activity of $0.8 million and $2.3 million for the three and nine months ended September 30, 2018, respectively.

Stock option activity for the nine months ended September 30, 2019, was as follows:

				Weighted-Average
	Number of Options			Exercise Price per Option		Remaining Contractual Term		Aggregate Intrinsic Value
(option data in thousands, except per option data)						(years)		(millions)
Outstanding at December 31, 2018		7,085		$	12.62
Granted		988			12.29
Exercised		(358	)		8.00
Forfeited		(257	)		15.53
Outstanding at September 30, 2019		7,458		$	12.70		4.6	$	3.8
Exercisable at September 30, 2019		5,306		$	11.42		2.9	$	3.8

The aggregate intrinsic value is the amount by which the fair value of the Company’s common stock exceeded the exercise price of the options as of the close of trading hours on the New York Stock Exchange on September 30, 2019, for those options for which the market price was in excess of the exercise price.

There was a total of $4.5 million unrecognized stock-based compensation expense at September 30, 2019 related to unvested stock options expected to be recognized over a weighted-average period of 1.0 years.

The Company periodically grants RSUs that contain service and, in certain instances, performance and market conditions to certain directors, executives and employees. Stock-based compensation expense relating to RSU activity recognized in the three and nine months ended September 30, 2019 was $1.1 million and $3.4 million, respectively. Stock-based compensation expense relating to RSU activity recognized in the three and nine months ended September 30, 2018 was $1.1 million and $2.2 million, respectively. There was a total of $6.3 million of unrecognized stock-based compensation expense at September 30, 2019 related to unvested RSUs expected to be recognized over a weighted-average period of 2.9 years.

In June 2019, the Company granted performance-based market condition share awards to two senior executives under the Emerald Expositions Events, Inc. 2017 Omnibus Equity Plan, which entitle these employees the right to receive shares of common stock equal to a maximum value cash value of $16.9 million, in the aggregate, upon achievement of specified targeted share prices measured over sixty days within a ninety-day trading period. As of September 30, 2019, $16.9 million of the performance-based market condition share awards remain unvested with an estimated weighted average conversion threshold of $21.06 per share, which would result in an estimated 190,000 shares of common stock to be issued upon vesting. Each of the estimated 190,000 shares of common stock has a weighted-average grant date fair value of $25.13 per share. The performance-based market condition share awards consist of four tranches with four separate specified award values that become payable upon achievement of the specified closing share price targets, which range from $18.00 per share to $24.00 per share. If the applicable targeted closing share price is attained over sixty days during a ninety-day trading period, that tranche of the award vests and the employees holding the awards receive shares of common stock equal to the specified award values (calculated based on the closing price per share on the trading day on which the relevant vesting condition was satisfied). In connection with the vesting, if any, of each award tranche, the Company expects to issue new shares of common stock to settle the vested awards. The total number of shares that will be awarded upon vesting will depend on the closing price per share on the trading day on which the relevant vesting condition is satisfied. These performance-based market condition share awards have a contractual term of ten years.

The performance-based market condition awards are classified as liability awards, which are measured at fair value, and are re-measured to an updated fair value at each reporting period. As of September 30, 2019, the liability for these awards was $0.3 million and is reported on the condensed consolidated balance sheets in other noncurrent liabilities. The fair value of performance-based market condition share awards is estimated on the grant date using a risk-neutral Monte Carlo simulation model. The grant date fair value of the awards was $4.8 million. The fair value of the awards as of September 30, 2019 was $2.9 million. The Company recognizes expense for performance-based market condition share awards over the derived service period for each tranche. The Company recognizes stock-based compensation expense for awards subject to market-based vesting conditions regardless of whether it becomes probable that these conditions will be achieved or not, and stock-based compensation expense for any such awards may be reversed if vesting does not occur and the employee terminates employment before the ten year term expires, except that upon a termination of employment other than for cause, or upon a termination for good reason within three months prior to the earlier of the execution of an agreement resulting in a change in control or the date of a change in control, any unvested shares subject to the performance-based market condition share award shall remain eligible to vest in accordance with the performance-based market condition share award agreement’s vesting conditions, including in the event of a change in control. The Company recognized stock-based compensation expense relating to performance-based market condition share awards of $0.2 million and $0.3 million for the three and nine months ended September 30, 2019, respectively.

The assumptions used in determining the fair value for the performance-based market condition share awards granted during the nine months ended September 30, 2019 were as follows:

The weighted-average expected term of the Company’s performance-based market condition share awards is the weighted-average of the derived service periods for the share awards.

Basic earnings per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding options, using the treasury stock method and the average market price of the Company's common stock during the applicable period. Certain shares related to some of the Company's outstanding stock options were excluded from the computation of diluted earnings per share because they were antidilutive in the periods presented, but could be dilutive in the future. Performance-based market condition share awards are considered contingently issuable shares, which would be included in the denominator for earnings per share if the applicable market conditions have been achieved, and the inclusion of any performance-based market condition share awards is dilutive for the respective reporting periods. For both the three and nine months ended September 30, 2019, unvested performance-based market condition share awards were excluded from the calculation of diluted earnings per share because the market conditions had not been met.

The details of the computation of basic and diluted earnings per common share are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
(dollars in millions, share data in thousands except earnings per share)	2019			2018		2019		2018
Net (loss) income	$	(19.7	)	$	20.9	$	18.2	$	64.9
Weighted average common shares outstanding		71,796			73,063		71,843		72,893
Basic (loss) earnings per share	$	(0.27	)	$	0.29	$	0.25	$	0.89
Net (loss) income	$	(19.7	)	$	20.9	$	18.2	$	64.9
Diluted effect of stock options		—			2,335		909		2,795
Diluted weighted average common shares outstanding		71,796			75,398		72,752		75,688
Diluted (loss) earnings per share	$	(0.27	)	$	0.28	$	0.25	$	0.86
Anti-dilutive shares excluded from diluted earnings per share calculation		5,332			952		5,131		952

The Company determines its interim income tax provision by applying the estimated effective income tax rate expected to be applicable for the full fiscal year to the income before income taxes for the period. In determining the full year estimate, the Company does not include the estimated impact of unusual and/or infrequent items, which may cause significant variations in the customary relationship between income tax expense and income before income taxes. Significant judgment is exercised in determining the income tax provision due to transactions, credits and calculations where the ultimate tax determination is uncertain.

The Company’s U.S. corporate income federal tax rate was 21% as of September 30, 2019. For the three and nine months ended September 30, 2019, the Company recorded a benefit from income taxes of $3.6 million and provision for income taxes $10.3 million, respectively, which resulted in effective tax rates adjusted for discrete items of 25.9% and 27.2%, respectively. Discrete items for the three and nine months ended September 30, 2019 primarily consisted of goodwill impairment charges. For the three and nine months ended September 30, 2018, the Company recorded provisions for income taxes of $7.9 million and $21.8 million, respectively, which resulted in effective tax rates of 27.4% and 25.1%, respectively. The differences between the statutory and effective tax rates are primarily attributable to the net effects of state income taxes, permanent book-to-tax differences (e.g., nondeductible officer compensation), tax benefits attributable to goodwill impairments, and tax deficiencies realized upon the vesting of certain share-based payment awards.

Liabilities for unrecognized tax benefits and associated interest and penalties were $1.2 million and $1.1 million as of September 30, 2019 and December 31, 2018, respectively.

For the September 2019 edition of Surf Expo, in addition to the event cancellation insurance carried by the Company, the Company purchased a supplemental insurance policy to cover the out-of-pocket expenses that Surf Expo exhibitors might incur due to an event cancellation. The Company is in the process of finalizing a claim under this policy as a result of the Surf Expo cancellation due to Hurricane Dorian. The Company intends to pay all amounts received under this claim directly to Surf Expo exhibitors as a reimbursement for out-of-pocket by the exhibitors, however, the Company has no liability for exhibitor expenses until the insurance company confirms the amount to be paid to the Company. Due to the ongoing claim negotiation, management concluded that the asset from receipt of insurance proceeds and corresponding liability for payment to Surf Expo exhibitors, were not realizable or incurred, respectively, as of September 30, 2019.

The Company has entered into operating leases and other contractual obligations to secure real estate facilities, equipment and trade show venues. These agreements are not unilaterally cancelable by the Company, are legally enforceable and specify fixed or minimum amounts or quantities of goods or services at fixed or minimum prices. See Note 8, Leases, for additional information regarding the Company’s leases.

The Company is subject to litigation and other claims in the ordinary course of business. In the opinion of management, the Company’s liability, if any, arising from regulatory matters and legal proceedings related to these matters is not expected to have a material adverse impact on the Company’s condensed consolidated balance sheets, results of operations or cash flows.

In the opinion of management, there are no claims, commitments or guarantees pending to which the Company is party that would have a material adverse effect on the condensed consolidated financial statements.

Investment funds affiliated with Onex Corporation (“Onex”) owned approximately 65% of the Company’s outstanding common stock as of September 30, 2019. Onex owned a majority equity position in SMG Holdings, Inc. (“SMG”), including SMG Food & Beverage, LLC, a wholly-owned subsidiary of SMG, which the Company has contracted with for catering services at certain of the Company’s trade shows and events. The Company made payments of $0.1 million and $0.6 million to SMG during the three and nine months ended September 30, 2019, respectively. The Company made no material payments to SMG during the three and nine months ended September 30, 2018. These expenses are included in cost of revenues in the condensed consolidated statements of (loss) income and comprehensive (loss) income. The Company had no amounts due to SMG as of September 30, 2019 and December 31, 2018.

On October 31, 2019, the Company’s Board approved, and the Company subsequently declared, the payment of a cash dividend of $0.075 per share for the quarter ending December 31, 2019 to holders of record of the Company’s common stock as of November 14, 2019.

On November 1, 2019, the Company acquired the associated assets and liabilities of G3 Communications for purchase price consideration of approximately $12.8 million plus future contingent payments based on business performance. The Company funded this transaction with cash from operations and a revolver draw of $5.0 million under the Amended and Restated Revolving Credit Facility. The initial accounting and fair value measurements of assets acquired and liabilities assumed necessary to develop the purchase price allocation has not been completed. The Company expects to finalize the valuation and complete the purchase price allocation in the fourth quarter of 2019.

This discussion and analysis of the financial condition and results of our operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes of Emerald Expositions Events, Inc. included in Item 1 of this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and the related notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2018 (the “Annual Report”), as filed with the SEC. You should review the disclosures under the headings “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in the Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. All references to the “Company”, “us,” “we,” “our,” and all similar expressions are references to Emerald Expositions Events, Inc., together with its consolidated subsidiaries, unless otherwise expressly stated or the context otherwise requires.

We are a leading operator of business-to-business trade shows in the United States. We currently operate more than 55 trade shows, as well as numerous other face-to-face events. In 2018, Emerald’s events connected over 500,000 global attendees and exhibitors and occupied more than 7.0 million net square feet of exhibition space. We have been recognized with many awards and accolades that reflect our industry leadership as well as the importance of our shows to the exhibitors and attendees we serve.

Our mission is to be a year-round partner to our customers – both buyers and sellers – nurturing them with valuable events and critical information and insights that make us a platform for their success; to inform, educate and connect our customers, creating meaningful and memorable experiences in vibrant, real-world environments, facilitating sourcing, discovery and community; to consistently deliver more value than we take in, from all of our exchanges; to advocate for the markets we serve to increase their success as well as the success of the businesses and people within them; and to support the communities in which we live and work and to be a preferred employer wherever we operate. We currently operate trade shows within several diverse industry sectors including Gift, Home & General Merchandise; Sports; Design & Construction; Technology; Jewelry; and others including Photography, Food, Healthcare, Industrials and Military.

We are focused on generating organic growth by understanding and leveraging the drivers for increased exhibitor and attendee participation at trade shows. Creating new opportunities for exhibitors to influence their market, engage with significant buyers, generate incremental sales and expand their brand’s awareness in their industry builds further demand for exhibit space and strengthens the value proposition of a trade show, generally allowing us to modestly increase booth space pricing annually across our portfolio. At the same time, our trade shows provide attendees with the opportunity to enhance their industry connectivity, develop relationships with targeted suppliers and distributors, discover new products, learn about new industry developments, celebrate their industry’s achievements and, in certain cases, obtain continuing professional education credits, which we believe increases their propensity to return and, consequently, drives high recurring participation among our exhibitors. By investing in and promoting these tangible and return-on-investment linked outcomes, we believe we will be able to continue to enhance the value proposition for our exhibitors and attendees alike, thereby driving strong demand and premium pricing for exhibit space, sponsorship opportunities and attendee registration.

We are also focused on growing our national footprint through the acquisition of high-quality events that are leaders in their specific industry verticals. Since the Onex Acquisition in June 2013, we have completed 17 strategic acquisitions, with purchase prices, excluding the $335.0 million acquisition of GLM, ranging from approximately $5.0 million to approximately $54.0 million, and annual revenues ranging from approximately $1.3 million to approximately $15.1 million. Historically, we have completed acquisitions at EBITDA purchase multiples that are typically in the mid-to-high single digits. Our acquisitions have historically been structured as asset deals that have resulted in the generation of long-lived tax assets, which in turn have reduced our purchase multiples when incorporating the value of the created tax assets. In the future, we intend to look for acquisitions with similarly attractive valuation multiples.

There are a number of existing and developing factors and trends which impact the performance of our business, and the comparability of our results from year to year and from quarter to quarter, including:

In assessing the performance of our business, we consider a variety of performance and financial measures. The key indicators of the financial condition and operating performance of our business are revenues, cost of revenues, selling, general and administrative expenses, interest expense, depreciation and amortization, income taxes, Adjusted EBITDA, Adjusted Net Income and Free Cash Flow.

We generate revenues primarily from selling trade show exhibit space to exhibitors on a per square foot basis. Other trade show revenue streams include sponsorship, fees for ancillary exhibition services and attendee registration fees. Additionally, we generate revenue through conferences, digital media and print publications that complement our trade shows. We also engage third-party sales agents to support our marketing efforts. More than 95% of our sales are made by our employees, with less than 5% made by third-party sales agents. These agents, who are mainly based in Asia and Europe, are paid a commission based on a percentage of sales.

For the periods presented in this report, interest expense principally represents interest payments and certain other fees paid to lenders under the Amended and Restated Senior Secured Credit Facilities.

We have historically grown our business through acquisitions and, in doing so, have acquired significant intangible assets, the value of some of which is amortized over time. These acquired intangible assets, unless determined to be indefinite-lived, are amortized over periods of seven to thirty years from the date of each acquisition or date of change in estimated useful life under accounting principles generally accepted in the United States of America (“GAAP”), or fifteen years for tax purposes. This amortization expense reduces our taxable income.

Income tax expense consists of federal, state and local taxes based on income in the jurisdictions in which we operate.

We also record deferred tax charges or benefits primarily associated with our utilization or generation of net operating loss carryforwards and book-to-tax differences related to amortization of goodwill, amortization of intangible assets, depreciation, stock-based compensation charges and deferred financing costs.

Our effective tax rate for the nine months ended September 30, 2019 was higher than the U.S. federal statutory rate of 21% primarily due to the net effects of state income taxes, permanent book-to-tax differences (e.g., nondeductible officer compensation), tax benefits attributable to goodwill impairments, and tax deficiencies realized upon the vesting of certain share-based payment awards.

Adjusted EBITDA is a key measure of our performance. Adjusted EBITDA is defined as net income before interest expense (including unrealized loss on interest rate swap and floor, net, for periods prior to the expiration of the interest rate swap and floor, which expired on December 31, 2018), income tax expense, goodwill and intangible asset impairment charges, depreciation and amortization, stock-based compensation, deferred revenue adjustment, and other items that management believes are not part of our core operations. We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

Management and our Board of Directors (“Board”) use Adjusted EBITDA to assess our financial performance and believe it is helpful in highlighting trends because it excludes the results of decisions that are outside the control of management, while other performance metrics can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. We reference Adjusted EBITDA frequently in our decision-making because it provides supplemental information that facilitates internal comparisons to the historical operating performance of prior periods.

Adjusted EBITDA is not defined under GAAP, and has limitations as an analytical tool, and you should not consider such measure either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations include that Adjusted EBITDA excludes certain normal recurring expenses and one-time cash adjustments that we consider not to be indicative of our ongoing operating performance. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.

The most directly comparable GAAP measure to Adjusted EBITDA is net (loss) income. For a reconciliation of Adjusted EBITDA to net (loss) income, see footnote 3 to the table under the heading “—Results of Operations—Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018.”

Adjusted Net Income is defined as net (loss) income before goodwill and intangible asset impairment charges, stock-based compensation, deferred revenue adjustment, other items that management believes are not part of our core operations, amortization of deferred financing fees and discount, amortization of acquired intangible assets and tax adjustments related to non-GAAP adjustments.

We use Adjusted Net Income as a supplemental metric to evaluate our business performance in a way that also considers our ability to generate profit without the impact of certain items. For example, it is useful to exclude stock-based compensation expenses because the amount of such expenses in any specific period may not directly correlate to the underlying performance of our business, and these expenses can vary significantly across periods due to timing of new stock-based awards. We also exclude professional fees associated with debt refinancing, the amortization of intangible assets and certain discrete costs, including deferred revenue adjustments, impairment charges and transaction costs (including professional fees and other expenses associated with acquisition activity) in order to facilitate a period-over-period comparison of the Company’s financial performance. Each of the normal recurring adjustments and other adjustments described in this paragraph help management with a measure of our operating performance over time by removing items that are not related to day-to-day operations.

Adjusted Net Income is not defined under GAAP and has limitations as an analytical tool, and you should not consider such measure either in isolation or as an alternative to net (loss) income, cash flows from operating activities or other measures determined in accordance with GAAP. Because not all companies use identical calculations, our presentation of Adjusted Net Income may not be comparable to other similarly titled measures used by other companies. The most directly comparable GAAP measure to Adjusted Net Income is net (loss) income. For a reconciliation of Adjusted Net Income to net (loss) income, see footnote 4 to the table under the heading “—Results of Operations—Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018.”

We have favorable cash flow characteristics, as described below (see “—Cash Flows”), as a result of our high profit margins, low capital expenditures and consistently negative working capital. Our working capital is negative as our current assets are consistently lower than our current liabilities. Current assets primarily include accounts receivable and prepaid expenses, while current liabilities primarily include accounts payable and deferred revenues. Cash received prior to an event is recorded as deferred revenue on our balance sheet and recognized as revenue upon completion of each trade show. The implication of having negative working capital is that changes in working capital represent a source of cash as our business grows.

The primary driver for our negative working capital is the sales cycle for a trade show, which typically begins during the prior show. In the interim period between the current show and the following show, we continue to sell to new and past exhibitors and collect payments on contracted exhibit space. We require exhibitors to pay in full in advance of each trade show, whereas the bulk of expenses are paid close to or after the show. Cash deposits start to be received as early as twelve months prior to a show taking place and virtually 100% of booth space revenues are typically received in cash one month prior to a show taking place. This highly efficient cash flow model, where cash is received in advance of expenses to be paid, creates a working capital benefit.

In addition to net cash provided by operating activities presented in accordance with GAAP, we present Free Cash Flow because we believe it is a useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our core operations that, after capital expenditures, can be used for the repayment of indebtedness and strategic initiatives, including investing in our business, payment of dividends, making strategic acquisitions and strengthening our balance sheet.

Free Cash Flow is a supplemental non-GAAP financial measure of liquidity and is not based on any standardized methodology prescribed by GAAP. Free Cash Flow should not be considered in isolation or as an alternative to net cash provided by operating activities or other measures determined in accordance with GAAP. Also, Free Cash Flow is not necessarily comparable to similarly titled measures used by other companies.

The most directly comparable GAAP measure to Free Cash Flow is net cash provided by operating activities. For a reconciliation of Free Cash Flow to net cash provided by operating activities, see footnote 6 to the table under the heading “—Results of Operations—Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018.”

Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018

The tables in this section summarize key components of our results of operations for the periods indicated.

	Three Months Ended September 30,
	2019			2018		Variance $			Variance %
	(unaudited) (dollars in millions)
Statement of (loss) income and comprehensive (loss) income data:
Revenues	$	75.6		$	103.1	$	(27.5	)		(26.7	)%
Other income		6.1			—		6.1			100.0	%
Cost of revenues		24.6			25.9		(1.3	)		(5.0	)%
Selling, general and administrative expenses⁽¹⁾		33.7			29.7		4.0			13.5	%
Depreciation and amortization expense		12.9			11.4		1.5			13.2	%
Goodwill and intangible asset impairment charges⁽²⁾		26.3			—		26.3			100.0	%
Operating (loss) income		(15.8	)		36.1		(51.9	)		(143.8	)%
Interest expense		7.5			7.3		0.2			2.7	%
(Loss) income before income taxes		(23.3	)		28.8		(52.1	)		(180.9	)%
(Benefit from) provision for income taxes		(3.6	)		7.9		(11.5	)		(145.6	%)
Net (loss) income and comprehensive (loss) income	$	(19.7	)	$	20.9	$	(40.6	)		(194.3	)%

Other financial data (unaudited):
Adjusted EBITDA⁽³⁾	$	28.7		$	40.9	$	(12.2	)		(29.8	)%
Adjusted Net Income⁽⁴⁾	$	12.6		$	24.2	$	(11.6	)		(47.9	)%

We define Adjusted EBITDA as net (loss) income before (i) interest expense (including unrealized loss on interest rate swap and floor, net for periods prior to the expiration of our interest rate swap), (ii) income tax expense, (iii) goodwill and intangible asset impairment charges, (iv) depreciation and amortization, (v) stock-based compensation, (vi) deferred revenue adjustment and (vii) other items that management believes are not part of our core operations. We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management and our Board use Adjusted EBITDA to assess our financial performance and believe they are helpful in highlighting trends because it excludes the results of decisions that are outside the control of management, while other performance metrics can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. We reference Adjusted EBITDA frequently in our decision-making because it provides supplemental information that facilitates internal comparisons to the historical operating performance of prior periods. Adjusted EBITDA is not defined under GAAP and has limitations as an analytical tool, and you should not consider such measure either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations include that Adjusted EBITDA excludes certain normal recurring expenses and one-time cash adjustments that we consider not to be indicative of our ongoing operative performance. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.

	Three Months Ended September 30,
	2019			2018
	(unaudited)
	(dollars in millions)
Net (loss) income	$	(19.7	)	$	20.9
Add (deduct):
Interest expense		7.5			7.3
(Benefit from) provision for income taxes		(3.6	)		7.9
Goodwill and intangible asset impairment charges^(a)		26.3			—
Depreciation and amortization expense		12.9			11.4
Stock-based compensation expense^(b)		1.9			1.9
Other items^(c)		3.4			2.2
Scheduling adjustment^(d)		—			(10.7	)
Adjusted EBITDA	$	28.7		$	40.9

We use Adjusted Net Income as a supplemental metric to evaluate our business’s performance in a way that also considers our ability to generate profit without the impact of certain items.

For example, we exclude the amortization of intangible assets and certain discrete costs, including deferred revenue adjustments, and transaction costs (including professional fees and other expenses associated with acquisition activity) in order to facilitate a period-over-period comparison of our financial performance. This measure also reflects an adjustment for the difference between cash amounts paid in respect of taxes and the amount of tax recorded in accordance with GAAP. Each of the normal recurring adjustments and other adjustments described in this paragraph help to provide management with a measure of our operating performance over time by removing items that are not related to day-to-day operations or are non-cash expenses.

Adjusted Net Income is not defined under GAAP and has limitations as an analytical tool, and you should not consider such measure either in isolation or as an alternative to net (loss) income, cash flows from operating activities or other measures determined in accordance with GAAP. The most directly comparable GAAP measure to Adjusted Net Income is net (loss) income. Because not all companies use identical calculations, our presentation of Adjusted Net Income may not be comparable to other similarly titled measures used by other companies.

	Three Months Ended September 30,
	2019			2018
	(unaudited)
	(dollars in millions)
Net (loss) income	$	(19.7	)	$	20.9
Add (deduct):
Stock-based compensation expense^(a)		1.9			1.9
Goodwill and intangible asset impairment charges^(b)		26.3			—
Other items^(c)		3.4			2.2
Amortization of deferred financing fees and discount		0.4			0.3
Amortization of intangible assets^(d)		12.4			10.9
Scheduling adjustments^(e)		—			(10.7	)
Tax adjustments related to non-GAAP adjustments^(f)		(12.1	)		(1.3	)
Adjusted Net Income	$	12.6		$	24.2

Revenues of $75.6 million for the three months ended September 30, 2019 decreased $27.5 million, or 26.7%, from $103.1 million for the comparable period in 2018. The decrease partly reflected a net $13.3 million reduction from several show scheduling differences in the third quarter of 2019, most notably Outdoor Retailer Summer Market, which staged in the second quarter of 2019 versus the third quarter of 2018. In addition, revenues for the quarter were further reduced by $7.1 million as our Surf Expo and ISS Orlando shows were forced to cancel due to the impact of Hurricane Dorian. We recorded the associated $6.1 million insurance settlement, under our event cancellation insurance policy, as other income in the quarter. Further, acquisitions made in 2018 contributed $1.9 million of incremental revenue in the third quarter of 2019, while 2018 third quarter revenues included $5.3 million from discontinued events, primarily our Interbike show, which did not stage in 2019. After adjusting organic revenues for the various show timing differences discussed above, for the anticipated revenue of the Surf Expo and ISS Orlando shows and the discontinuance of tour Interbike show, organic revenues for the third quarter of 2019 were down $3.7 million, or 4.4%, as compared to the prior year quarter.

Our July ASD Market Week show was flat in revenues despite the adverse impact on its sourcing category of the ongoing trade dispute between the U.S. and China. Excluding the sourcing category, ASD grew revenues approximately 4%. The trade dispute also affected the CEDIA Expo show, whose revenues were down by a mid-single digit percentage as compared to the prior year. As expected, the NY NOW Summer show declined in revenues by a low double-digit percentage, partly reflecting the decision to downsize the lifestyle category to create space to co-locate our JA Summer jewelry show. Revenues from other events doubled versus the comparative period last year, reflecting growth in our Connect Point Marketing Group (“CPMG”) hosted buyer events, partly timing related, and the contribution of two Campus Security events acquired as part of our 2018 Technology Brands acquisition. Other Marketing Services revenues were flat as compared to the comparable period in the prior year, excluding the incremental contribution of the 2018 Acquisitions.

During the third quarter of 2019, as a result of Hurricane Dorian, our Surf Expo and Impressions Expo Orlando (“ISS Orlando”) shows were forced to be cancelled. We carry cancellation insurance to mitigate losses caused by natural disasters and received confirmation from its insurance carrier during the quarter that a settlement of approximately $6.1 million would be paid to offset the lost revenues from the affected trade shows. Management concluded that the receipt of insurance proceeds was realizable in the quarter ended September 30, 2019. As a result, during the three months ended September 30, 2019, we recorded other income of $6.1 million in the condensed consolidated statements of (loss) income and comprehensive (loss) income included elsewhere in this Form 10-Q in order to recognize the amount to be recovered from the insurance company.

Cost of revenues of $24.6 million for the three months ended September 30, 2019 decreased $1.3 million, or 5.0%, from $25.9 million for the comparable period in 2018. This decrease reflected $2.0 million of net lower costs due to show scheduling differences, most notably Digital Dealer Fall and Fastener both staging in the third quarter of 2019, versus the fourth quarter of 2018, Outdoor Retailer Summer, which staged in the second quarter of 2019, versus the third quarter of 2018, and Impressions Expo Fort Worth, which will stage in the fourth quarter of 2019, and $1.6 million and $1.0 million, respectively, of cost savings on discontinued events and the cancellation of Surf Expo and ISS Orlando shows, respectively, offset by an incremental $0.6 million related to the 2018 Acquisitions. The remaining $2.7 million increase in cost of revenues partly reflected the additional costs of our 2019 show improvement initiatives.

Selling, general and administrative expenses of $33.7 million for the three months ended September 30, 2019 increased $4.0 million, or 13.5%, from $29.7 million for the comparable period in 2018. The increase in selling, general and administrative expenses for the third quarter of 2019 reflected approximately $1.6 million in incremental costs from the 2018 Acquisitions and $1.2 million in higher non-recurring other items, offset by $0.6 million of lower costs attributable to show scheduling differences and $0.9 million in reduced costs related to discontinued events. The remaining $2.7 million increase in 2019 partly reflected additional senior management costs and incremental investment initiatives.

Depreciation and amortization expense of $12.9 million for the three months ended September 30, 2019 increased $1.5 million, or 13.2%, from $11.4 million for the comparable period in 2018. The increase was related to additional intangible assets acquired in the 2018 Acquisitions and additional intangible asset amortization on the trade name intangible assets for which we adjusted the estimated useful life in the fourth quarter of 2018.

As a result of the August 31, 2019 impairment assessments for goodwill, long-lived assets and indefinite-lived intangible assets, we recorded $26.3 million in non-cash impairment charges, which included a goodwill impairment charge of $9.3 million, an impairment charge for certain of our customer-related intangible assets of $8.7 million and an impairment charge for certain of our trade names of $8.3 million for the three months ended September 30, 2019. No goodwill or intangible asset impairment charges were recorded during the comparable period in 2018. The impairment charges were due to a decline in fair value compared to the carrying value of goodwill, certain trade names and certain customer-related intangible assets, which were primarily driven by changes to future forecasted performance and decline in our stock price, which management deemed a triggering event and requiring quantitative analysis.

Interest expense of $7.5 million for the three months ended September 30, 2019 increased $0.2 million, or 2.7%, from $7.3 million for the comparable period in 2018. The increase was primarily attributable to an increase in the interest expense related to borrowings under the Amended and Restated Revolving Credit Facility and letters of credit outstanding related to higher outstanding indebtedness balance under the Amended and Restated Revolving Credit Facility during the three months ended September 30, 2019.

For the three months ended September 30, 2019 and 2018, we recorded a benefit from income taxes of $3.6 million and a provision for income taxes of $7.9 million, respectively, which resulted in an effective tax rate adjusted for discrete items of 25.9% for the three months ended September 30, 2019, and an effective tax rate of 27.4% for the three months ended September 30, 2018. The decrease in benefit from income taxes of $11.5 million was primarily due to a $52.1 million decrease in loss before taxes. The decline in the effective tax rate was also primarily due to the $52.1 million decrease in loss before income taxes, partly offset by fluctuations in state income taxes, permanent book-to-tax differences (e.g., nondeductible officer compensation), and excess tax benefits (deficiencies) realized upon the vesting of certain share-based payment awards, in addition to the effects of certain discrete items. Discrete items for the three months ended September 30, 2019 primarily consisted of goodwill impairment charges.

Net loss of $19.7 million for the three months ended September 30, 2019 represented a $40.6 million, or 194.3%, decrease from net income of $20.9 million for the comparable period in 2018. In the third quarter, in connection with a triggering event caused by reduced performance expectations in the current year, we recorded a $26.3 million non-cash charge related to the impairment of goodwill, certain customer-related intangible assets and certain trade names. Other key drivers of the quarter-over-quarter decrease were lower revenues due to show scheduling differences and increased expenses, as described above.

Adjusted EBITDA of $28.7 million for the three months ended September 30, 2019 decreased by $12.2 million, or 29.8%, from $40.9 million for the comparable period in 2018, after adjusting for the show scheduling differences described above. The decrease in Adjusted EBITDA of $12.2 million, or 29.8%, was mainly driven by the combined effect of lower organic revenues, incremental investments in the events that took place in the quarter and in marketing costs incurred for future events.

Adjusted Net Income for the three months ended September 30, 2019 of $12.6 million decreased by $11.6 million, or 47.9%, from $24.2 million for the comparable period in 2018. The decrease was primarily attributable to the decrease in net income to a net loss position as described above and the increase for income tax adjustments, partially offset by the add-back of increases of $26.3 million for goodwill and intangible impairment charges, $1.5 million for higher amortization for acquired intangible assets, $1.2 million for increases in other items and the impact of $10.7 million for the deduction for several show scheduling adjustments, as described above.

Adjusted EBITDA and Adjusted Net Income are financial measures that are not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA, see footnote 3 to the table under the heading “—Results of Operations—Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018.” For a discussion of our presentation of Adjusted Net Income, see footnote 4 to the table under the heading “—Results of Operations—Three Months Ended September 30, 2019 Compared to Three Months Ended September 30, 2018.”

Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018

	Nine Months Ended September 30,
	2019		2018		Variance $			Variance %
	(unaudited) (dollars in millions)
Statement of income and comprehensive income data:
Revenues	$	316.0	$	323.7	$	(7.7	)		(2.4	)%
Other income		6.1		—		6.1			100.0	%
Cost of revenues⁽¹⁾		102.8		91.7		11.1			12.1	%
Selling, general and administrative expenses⁽²⁾		101.9		90.0		11.9			13.2	%
Depreciation and amortization expense		39.3		34.2		5.1			14.9	%
Goodwill and intangible asset impairment charges⁽³⁾		26.3		—		26.3			100.0	%
Operating income		51.8		107.8		(56.0	)		(51.9	)%
Interest expense		23.3		21.1		2.2			10.4	%
Income before income taxes		28.5		86.7		(58.2	)		(67.1	)%
Provision for income taxes		10.3		21.8		(11.5	)		(52.8	)%
Net income and comprehensive income	$	18.2	$	64.9	$	(46.7	)		(72.0	)%

Other financial data (unaudited):
Adjusted EBITDA⁽⁴⁾	$	129.3	$	158.2	$	(28.9	)		(18.3	)%
Adjusted Net Income⁽⁵⁾	$	74.2	$	102.4	$	(28.2	)		(27.5	)%
Free Cash Flow⁽⁶⁾	$	49.8	$	65.3	$	(15.5	)		(23.7	)%

	Nine Months Ended September 30,
	2019		2018
	(unaudited)
	(dollars in millions)
Net income	$	18.2	$	64.9
Add:
Interest expense		23.3		21.1
Provision for income taxes		10.3		21.8
Goodwill and intangible asset impairment charges^(a)		26.3		—
Depreciation and amortization expense		39.3		34.2
Stock-based compensation expense^(b)		6.1		4.5
Deferred revenue adjustment^(c)		0.2		0.2
Other items^(d)		5.6		7.7
Scheduling adjustments^(e)		—		3.8
Adjusted EBITDA	$	129.3	$	158.2

	Nine Months ended September 30,
	2019			2018
	(unaudited)
	(dollars in millions)
Net income	$	18.2		$	64.9
Add (deduct):
Stock-based compensation expense^(a)		6.1			4.5
Deferred revenue adjustment^(b)		0.2			0.2
Goodwill and intangible asset impairment charges^(c)		26.3			—
Other items^(d)		5.6			7.7
Amortization of deferred financing fees and discount		1.1			1.3
Amortization of acquired intangible assets^(e)		37.5			32.6
Scheduling adjustments^(f)		—			3.8
Tax adjustments related to non-GAAP adjustments^(g)		(20.8	)		(12.6	)
Adjusted Net Income	$	74.2		$	102.4

Free Cash Flow is a supplemental non-GAAP financial measure of liquidity and is not based on any standardized methodology prescribed by GAAP. Free Cash Flow should not be considered in isolation or as an alternative to cash flows from operating activities or other measures determined in accordance with GAAP. Also, Free Cash Flow is not necessarily comparable to similarly titled measures used by other companies.

Revenues of $316.0 million for the nine months ended September 30, 2019 decreased $7.7 million, or 2.4%, from $323.7 million for the comparable period in the prior year. Revenues were reduced for the nine months ended September 30, 2019 by $7.1 million as our Surf Expo and ISS Orlando shows were forced to cancel due to the impact of Hurricane Dorian. We recorded the associated $6.1 million insurance settlement, under our event cancellation insurance policy, as other income in the nine months ended September 30, 2019. Further, acquisitions made in 2018 contributed $9.3 million of incremental revenue in the nine months ended September 30, 2019, while the nine months ended September 30, 2018 revenues included $5.4 million from discontinued events, primarily our Interbike show, which did not stage in 2019. Scheduling differences contributed a net of $6.0 million of revenue during the nine months ended September 30, 2019, most notably Digital Dealer Fall and Fastener, which staged in the third quarter of 2019, versus the fourth quarter of 2018, and Impressions Expo Fort Worth, which will stage in the fourth quarter of 2019, versus the third quarter of 2018. After adjusting organic revenues for the various show timing differences, for the anticipated revenue of the Surf Expo and ISS Orlando shows, and the discontinuance of our Interbike show, organic revenues for the nine months ended September 30, 2019 were down $10.4 million, or 3.3%, as compared to the prior year quarter. The decrease in revenues is partially reflected declines for our NY NOW shows, National Stationery Show, Outdoor Retailer Snow Show, Wedding & Portrait Photography International, Internet Retailer Conference and Exhibition, GlobalShop, JA New York Summer and ICFF. The underlying performance reflected growth in several of the year’s shows, including the Kitchen & Bath Industry Show (“KBIS”), Sports Licensing & Tailgate Show, National Pavement Expo, the Original Miami Beach Antique Show, the International Pizza Expo and HD Expo.

On September 1, 2019, as a result of Hurricane Dorian, our Surf Expo and ISS Orlando were forced to be cancelled. We carry cancellation insurance to mitigate losses caused by natural disasters and received confirmation from its insurance carrier during the quarter that a settlement of approximately $6.1 million would be paid to offset the lost revenues from the affected trade shows. Management concluded that the receipt of insurance proceeds was realizable in the quarter ended September 30, 2019. As a result, during the nine months ended September 30, 2019, we recorded other income of $6.1 million in the condensed consolidated statements of (loss) income and comprehensive (loss) income included elsewhere in this Form 10-Q to recognize the amount to be recovered from the insurance company.

Cost of revenues of $102.8 million for the nine months ended September 30, 2019 increased $11.1 million, or 12.1%, from $91.7 million for the comparable period in the prior year. This increase reflected $1.9 million of net higher costs due to show scheduling differences, most notably Digital Dealer Fall and Fastener, which staged in the third quarter of 2019, versus the fourth quarter of 2018, and Impressions Expo Fort Worth, which will stage in the fourth quarter of 2019 and an incremental $3.8 million of costs related to the 2018 Acquisitions, offset by $1.7 million and $1.0 million, respectively, of cost savings on discontinued events and the cancellation of Surf Expo and ISS Orlando shows, respectively. After adjusting for the various show timing differences, the costs savings for the Surf Expo and ISS Orlando shows and the discontinuance of our Interbike show, organic cost of revenues increased by $8.1 million, or 8.1%, as compared to the comparable period in the prior year. The organic increase was attributable to additional investments in our shows, most notably our NY NOW shows, additional costs from growth in certain shows, most notably KBIS, and new show launches in 2019, most notably C-StorePoint.

Selling, general and administrative expenses of $101.9 million for the nine months ended September 30, 2019 increased $11.9 million, or 13.2%, from $90.0 million for the comparable period in the prior year. Selling, general and administrative expenses for the nine months ended September 30, 2019 included incremental costs of $6.7 million related to costs associated with the 2018 Acquisitions, $1.6 million in increases for stock-based compensation and $0.2 million net higher costs attributable to show scheduling differences, most notably Digital Dealer Fall and Fastener, which staged in the third quarter of 2019, versus the fourth quarter of 2018, and Impressions Expo Fort Worth, which will stage in the fourth quarter of 2019, partly offset by a reduction of $2.1 million in non-recurring costs associated with transaction and transition activities and $1.4 million in cost savings on discontinued events. The remaining $6.9 million increase partly reflected additional senior management costs and incremental investment initiatives.

Depreciation and amortization expense of $39.3 million for the nine months ended September 30, 2019 increased $5.1 million, or 14.9%, from $34.2 million for the comparable period in the prior year. The increase was primarily associated with additional intangible assets acquired in the 2018 Acquisitions and additional intangible asset amortization on the trade name intangible assets for which we adjusted the estimated useful life in the fourth quarter of 2018.

As a result of the August 31, 2019 impairment assessments for goodwill, long-lived assets and indefinite-lived intangible assets, we recognized $26.3 million in non-cash impairment charges, including a goodwill charge of $9.3 million, a charge for certain of our customer-related intangible assets for $8.7 million and a charge for certain of our trade names of $8.3 million for the nine months ended September 30, 2019. No goodwill or intangible asset impairment charges were recorded during the comparable period in 2018. The impairment charges were due to a decline in fair value compared to the carrying value of goodwill, certain trade names and certain customer-related intangible assets, which were primarily driven by changes to future forecasted performance and decline in our stock price, which management deemed a triggering event and performed a quantitative analysis.

Interest expense of $23.3 million for the nine months ended September 30, 2019 increased $2.2 million, or 10.4%, from $15.8 million for the comparable period in the prior year. The increase was primarily attributable to (i) a $1.4 million increase in interest expense on the Amended and Restated Term Loan Facility primarily resulting from the increase in the average interest rate of 5.16% for the nine months ended September 30, 2019 compared to an average interest rate of 4.65% during the nine months ended September 30, 2018 and (ii) a $0.8 million increase in interest expense related to borrowings under the Amended and Restated Revolving Credit Facility and letters of credit outstanding related to higher outstanding indebtedness balance under the Amended and Restated Revolving Credit Facility during the nine months ended September 30, 2019.

For the nine months ended September 30, 2019 and 2018, we recorded a provision for income taxes of $10.3 million and $21.8 million, respectively, which resulted in an effective tax rate adjusted for discrete items of 27.2% for the nine months ended September 30, 2019 and an effective tax rate of 25.1% for the nine months ended September 30, 2018. The increase in the effective tax rate is primarily attributable to the net effects of state income taxes, permanent book-to-tax differences (e.g., nondeductible officer compensation), tax benefits attributable to goodwill impairments, and tax deficiencies realized upon the year-to-date vesting of certain share-based payment awards. Discrete items for the nine months ended September 30, 2019, primarily consisted of goodwill impairment charges.

Net income of $18.2 million for the nine months ended September 30, 2019 decreased $46.7 million, or 72%, from $64.9 million for the comparable period in the prior year. The key drivers of the decrease were the $26.3 million goodwill and intangible asset impairment charges, the decline in organic revenues and higher operating expenses described above, partly offset by lower provision for income taxes for the nine months ended September 30, 2019.

Adjusted EBITDA of $129.3 million for the nine months ended September 30, 2019 decreased by $28.9 million, or 18.3%, from $154.4 million for the comparable period in the prior year. The decrease in Adjusted EBITDA for the nine months ended September 30, 2019 is primarily attributable to the $46.7 million decline in net income described above and increases in the deductions for provision for income taxes of $11.5 million, scheduling adjustments of $3.8 million, most notably Digital Dealer Fall and Fastener, which staged in the third quarter of 2019, versus the fourth quarter of 2018, and Impressions Expo Fort Worth, which will stage in the fourth quarter of 2019, and other items of $2.1 million. These decreases were partially offset by increases in the add-backs for goodwill and intangible asset impairment charges of $26.3 million, depreciation and amortization of $5.1 million, interest expense of $2.2 million and stock-based compensation of $1.6 million during the nine months ended September 30, 2019.

Adjusted Net Income for the nine months ended September 30, 2019 of $74.2 million decreased $28.2 million, or 27.5%, from $102.4 million for the comparable period in the prior year. The decrease was primarily attributable to the $46.7 million decrease in net income as described above and increases in the deductions in the tax adjustment of $8.2 million and scheduling adjustments of $3.8 million, most notably Digital Dealer Fall and Fastener, which staged in the third quarter of 2019, versus the fourth quarter of 2018, and Impressions Expo Fort Worth, which will stage in the fourth quarter of 2019, partly offset by increases in the add-back for the goodwill and intangible asset impairment charges of $26.3 million and amortization of acquired intangible assets of $4.9 million.

Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, other commitments and contractual obligations. We consider liquidity in terms of cash flows from operations and their sufficiency to fund our operating and investing activities.

We expect to continue to finance our liquidity requirements through internally generated funds and borrowings under the Amended and Restated Revolving Credit Facility. We believe that our projected cash flows generated from operations, together with borrowings under the Amended and Restated Revolving Credit Facility are sufficient to fund our principal debt payments, interest expense, working capital needs and expected capital expenditures for the next twelve months. We currently anticipate incurring approximately $2.0 million of capital expenditures for property and equipment during 2019. We may draw on the Amended and Restated Revolving Credit Facility from time to time to fund or partially fund acquisitions.

As of September 30, 2019, we had $532.3 million of borrowings outstanding under the Amended and Restated Term Loan Facility and $6.0 million of borrowings outstanding under the Amended and Restated Revolving Credit Facility, with an additional $143.0 million available to borrow (after giving effect to $6.0 million in outstanding borrowings and $1.0 million in letters of credit outstanding) under the Amended and Restated Revolving Credit Facility.

The Amended and Restated Senior Secured Credit Facilities contain a number of covenants imposing certain restrictions on our business. These restrictions may affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities as they arise. The restrictions these covenants place on our business operations, include limitations on our or our subsidiaries’ ability to:

As of September 30, 2019, we were in compliance with the covenants contained in the Amended and Restated Senior Secured Credit Facilities.

Our Board approved a $20.0 million share repurchase program in the fourth quarter of 2018 and a new $30.0 million share repurchase program in the third quarter of 2019. We settled the repurchase of 405,154 and 448,591 shares of our common stock for $3.1 million and $3.7 million during the three and nine months ended September 30, 2019, respectively, and 1,627,248 shares of our common stock for $19.4 million during the year ended December 31, 2018. As of September 30, 2019, there was $26.2 million remaining available to repurchase shares pursuant to the share repurchase program publicly announced in the third quarter of 2019.

We intend to pay quarterly cash dividends on our common stock, which we commenced in the second quarter of 2017. On October 31, 2019 our Board approved the payment of a cash dividend of $0.0750 per share for the quarter ending December 31, 2019 to holders of our common stock. The dividend amount is expected to be paid on or about November 24, 2019 to stockholders of record on November 14, 2019. The payment of dividends in future quarters is subject to the discretion of our Board and depending upon our results of operations, cash requirements, financial condition, contractual restrictions, restrictions imposed by applicable laws and other factors that our Board may deem relevant. Based on the 71,417,658 shares of common stock outstanding as of October 31, 2019, this dividend policy implies a quarterly cash requirement of approximately $5.4 million (or an annual cash requirement of approximately $21.6 million), which amount may be changed or terminated in the future at any time and for any reason without advance notice.

Our business is conducted through our subsidiaries. Dividends, distributions and other payments from, and cash generated by, our subsidiaries will be our principal sources of cash to repay indebtedness, fund operations and pay dividends. Accordingly, our ability to pay dividends to our stockholders is dependent on the earnings and distributions of funds from our subsidiaries. In addition, the covenants in the agreements governing our existing indebtedness, including the Amended and Restated Senior Secured Credit Facilities, significantly restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us (See “—Liquidity and Capital Resources”). We cannot assure you that we will continue to pay dividends on our common stock, and our indebtedness could limit our ability to pay dividends on our common stock.

The following table summarizes the changes to our cash flows for the periods presented:

Operating activities consist primarily of net income adjusted for non-cash items that include depreciation and amortization, deferred income taxes, amortization of deferred financing fees and debt discount, stock-based compensation, provision for doubtful accounts and goodwill and intangible asset impairment charges, plus the effect of changes during the period in our working capital.

Net cash provided by operating activities for the nine months ended September 30, 2019 decreased by $16.9 million, or 24.7%, to $51.6 million from $68.5 million during the comparable period in the prior year. Cash provided by operating activities reflects the $46.7 million decrease in our net income and non-cash adjustment for deferred taxes decrease of $5.3 million, partly offset by increases in non-cash adjustments primarily attributable to the goodwill and intangible asset charges of $26.3 million, an increase in depreciation and amortization of $5.1 million and an increase in stock-based compensation expense of $1.6 million, as well as a decrease in the use of working capital of $2.0 million. Net income plus non-cash items provided operating cash flows of $91.3 million and $110.2 million for the nine months ended September 30, 2019 and 2018, respectively. Cash used for operating activities reflects the use of $39.7 million and $41.7 million for working capital in the nine months ended September 30, 2019 and 2018, respectively

Investing activities generally consist of business acquisitions and purchases of other productive assets, investments in information technology and capital expenditures to furnish or upgrade our offices.

Net cash used in investing activities for the nine months ended September 30, 2019 decreased $29.2 million or 94.2%, to $1.8 million from $31.0 million in the comparable period in the prior year. The decrease was due to lower payments for acquisitions, as we did not complete any acquisitions during the nine months ended September 30, 2019, and lower investments in information technology and capital expenditures as compared to the prior year period.

Financing activities primarily consist of cash dividend payments, proceeds from the issuance of common stock associated with stock option exercises and borrowing and repayments on our debt to fund business acquisitions and our operations.

Net cash used in financing activities for the nine months ended September 30, 2019 was $56.7 million, primarily comprised of a $40.0 million voluntary repayment of outstanding borrowings under the Amended and Restated Term Revolving Credit Facility, $16.0 million in quarterly dividend payments, $4.2 million in scheduled quarterly principal payments on the Amended and Restated Term Loan Facility, $4.4 million in share repurchases associated with our publicly announced share repurchase programs and a $1.0 million deferred payment for the acquisition of a business.

These uses of cash were partly offset by $6.0 million in proceeds from borrowings under the Amended and Restated Term Revolving Credit Facility and $2.9 million in proceeds from the issuance of common stock associated with stock option exercises.

Free Cash Flow of $49.8 million for the nine months ended September 30, 2019 decreased $15.5 million, or 23.7%, from $65.3 million for the comparable period in the prior year.

Free Cash Flow is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Free Cash Flow, see footnote 6 to the table under the heading “—Results of Operations—Nine Months Ended September 30, 2019 Compared to Nine Months Ended September 30, 2018.”

We are not party to, and do not typically enter into, any off-balance sheet arrangements.

There have been no material changes to the contractual obligations as disclosed in the Company’s Annual Report on Form 10-K, filed with the SEC on February 19, 2019, which is accessible on the SEC’s website at www.sec.gov, other than those made in the ordinary course of business.

Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the assets acquired and liabilities assumed resulting from acquisitions. Goodwill and indefinite-lived intangible assets are not amortized but instead tested for impairment at least annually or more frequently should an event or circumstances indicate that a reduction in fair value may have occurred. We test for impairment of goodwill and indefinite-lived intangible assets on October 31 of each year, or more frequently if events and circumstances warrant. As a result of the prolonged decline in our stock price and changes to our future forecasted performance, we deemed it necessary to conduct a goodwill and indefinite-lived intangible asset impairment test as of August 31, 2019. In connection with the August 31, 2019 goodwill and indefinite-lived intangible asset impairment test, we recognized a non-cash goodwill impairment charge of $9.3 million and a non-cash indefinite-lived intangible asset impairment charge of $4.9 million.

Long-lived assets other than goodwill and indefinite-lived intangible assets, held and used by the Company, including property and equipment and long-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. During the third quarter of 2019, the Company became of aware of changes in circumstances indicating that the carrying value of certain trade names and customer relationships may not be recoverable. The Company evaluates recoverability of long-lived assets to be held and used by comparing the carrying amount of an asset to the future expected net undiscounted cash flows expected to be generated by the asset to determine if the carrying value is not recoverable. The recoverability test indicated that certain of the Company’s long-lived assets were impaired and were required to be fair valued and compared to the carrying value. As a result, the Company recognized a non-cash long-lived asset impairment charge of $12.1 million during the three and nine months ended September 30, 2019. Refer to Note 5, Goodwill and Intangible Assets in the notes to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

While we conducted an impairment test and recognized non-cash impairment charges during the third quarter of 2019, there can be no assurance that we will not be required to recognize additional impairment charges in future periods, including in connection with the annual impairment test on October 31, or as a result of future impairment tests that may be required based on specific events and circumstances. Such events and circumstances may be a significant change in our business climate, economic and industry trends, legal factors, negative operating performance indicators, significant competition or changes in strategy. If the trading price of our common stock decreases further we may be required to recognize a non-cash charge relating to impairment of our goodwill and intangible assets, and any such charge may be material in the period in which it is recognized. A prolonged or significant decline in our stock price or market capitalization could be an indicator of goodwill and intangible asset impairment and constitute a triggering event that would require an interim assessment for potential goodwill and intangible asset impairment.

The preparation of financial statements in conformity with GAAP requires the appropriate application of certain accounting policies, some of which require us to make estimates and assumptions about future events and their impact on amounts reported in our consolidated financial statements. Since future events and their impact cannot be determined with absolute certainty, the actual results will inevitably differ from our estimates.

We believe the application of our accounting policies, and the estimates inherently required therein, are reasonable. Our accounting policies and estimates are reevaluated on an ongoing basis and adjustments are made when facts and circumstances dictate a change. We base our estimates and judgments on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions.

The policies and estimates discussed below involve the selection or application of alternative accounting policies that are material to our consolidated financial statements. With respect to critical accounting policies, even a relatively minor variance between actual and expected experience can potentially have a materially favorable or unfavorable impact on subsequent results of operations.

Our accounting policies are more fully described in Note 1, Description of Business, Basis of Presentation and Significant Accounting Policies in the notes to our audited consolidated financial statements included in the Annual Report. Management has discussed the selection of these critical accounting policies and estimates with members of our Board. There have been no significant changes in the critical accounting policies and estimates described in the Annual Report, except with respect to our leases as described in Note 2, Recently Adopted Accounting Pronouncements, and Note 8, Leases, in the notes to our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q.

See Item 1 of Part I, “Financial Statements—Note 2 – Recent Accounting Pronouncements.”

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act. We would cease to be an emerging growth company upon the earliest of: (i) the last day of the first fiscal year in which our annual gross revenues are $1.07 billion or more; (ii) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year; (iii) the date on which we have, during the previous three-year period, issued more than $1.07 billion in non-convertible debt securities or (iv) the last day of the fiscal year ending December 31, 2022. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. We have elected to take advantage of these reduced disclosure obligations, and may elect to take advantage of other reduced reporting obligations in the future.

The JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have chosen to irrevocably “opt out” of this provision and, as a result, we will comply with new or revised accounting standards when they are required to be adopted by public companies.

Market risk is the potential loss arising from adverse changes in market rates and prices. Our primary exposure to market risk is interest rate risk associated with the unhedged portion of our Amended and Restated Senior Secured Credit Facilities. See Note 7, Long-term Debt, in the notes to the condensed consolidated financial statements for further description of our Amended and Restated Senior Secured Credit Facilities. As of September 30, 2019, we had $538.3 million of variable rate borrowings outstanding under our Amended and Restated Senior Secured Credit Facilities with respect to which we are exposed to interest rate risk. Holding other variables constant and assuming no interest rate hedging, a 0.25% increase in the average interest rate on our variable rate indebtedness would have resulted in a $1.4 million increase in annual interest expense based on the amount of borrowings outstanding as of September 30, 2019.

Inflation rates may impact the financial statements and operating results in several areas. Inflation influences interest rates, which in turn impact the fair value of our investments and yields on new investments. Operating expenses, including payroll, are impacted to a certain degree by the inflation rate. We do not believe that inflation has had a material effect on our results of operations for the periods presented.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 (the “Exchange Act”) Rules 13a-15(e) and 15(d)-15(e)), as of the end of the period covered by this report. Based upon the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2019, the disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports we file and submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

We also carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the fiscal quarter ended September 30, 2019.

There have been no changes to our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the fiscal quarter ended September 30, 2019 which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we may be involved in general legal disputes arising in the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, financial condition or results of operations.

Our Annual Report on Form 10-K, filed with the SEC on February 19, 2019, which is accessible on the SEC’s website at www.sec.gov, includes a detailed discussion of our risk factors. At the time of this filing, there have been no material changes to the risk factors that were included in our Annual Report on Form 10-K.

In July 2019, our Board authorized and approved a $30.0 million share repurchase program. Share repurchases may be made from time to time through and including July 31, 2020, subject to early termination or extension by the Board, through open market purchases (either with or without a 10b5-1 plan), block transactions, privately negotiated purchases or otherwise. There is no minimum number of shares that we are required to repurchase and the timing and amount of any shares repurchased under the program will depend on a variety of factors, including available liquidity, general market and economic conditions, regulatory requirements, capital structure optimization, valuation metrics and other factors.

The following table presents our purchases of common stock during the third quarter ended September 30, 2019, as part of the publicly announced share repurchase program:

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Page

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		1

PART I. FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43

Item 4.	Controls and Procedures	43

PART II. OTHER INFORMATION		44

Item 1.	Legal Proceedings	44

Item 1A.	Risk Factors	44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

Item 3.	Defaults Upon Senior Securities	44

Item 4.	Mine Safety Disclosures	44

Item 5.	Other Information	44

Item 6.	Exhibits	45

(in millions)
Balance at December 31, 2018	$	1,036.5
Impairment charges		(9.3	)
Balance at September 30, 2019	$	1,027.2

(dollars in millions, except per share values)	Three Months Ended March 31, 2019		Three Months Ended June 30, 2019		Three Months Ended September 30, 2019
Dividend declared on	February 5, 2019		April 30, 2019		July 30,2019
Shareholders of record on	February 19, 2019		May 14, 2019		August 13, 2019
Dividend paid on	March 05, 2019		May 28, 2019		August 27, 2019
Dividend per share	$	0.0725	$	0.0750	$	0.0750
Cash dividend paid	$	5.2	$	5.4	$	5.4

(dollars in millions, except per share values)	Three Months Ended March 31, 2018		Three Months Ended June 30, 2018		Three Months Ended September 30, 2018
Dividend declared on	January 26, 2018		May 1, 2018		July 31, 2018
Shareholders of record on	February 9, 2018		May 15, 2018		August 4, 2018
Dividend paid on	February 23, 2018		May 29, 2018		August 28, 2018
Dividend per share	$	0.0700	$	0.0725	$	0.0725
Cash dividend paid	$	5.1	$	5.3	$	5.3

(share data in thousands, except per share data)	Number of RSUs			Weighted Average Grant Date Fair Value per Share
Unvested balance, December 31, 2018		403		$	20.91
Granted		507			12.30
Forfeited		(99	)		18.48
Vested		(114	)		21.12
Unvested balance, September 30, 2019		697		$	14.94

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☒

(in millions)	October 15, 2018
Trade and other receivables	$	1.5
Prepaid expenses		1.9
Goodwill		29.2
Other intangible assets		24.6
Deferred revenues		(12.1	)
Purchase price, including working capital adjustment	$	45.1

(in millions)	August 20, 2018
Prepaid expenses and other assets	$	1.5
Goodwill		14.2
Intangible assets		14.2
Deferred revenues		(1.7	)
Other current liabilities		(0.4	)
Purchase price, including working capital adjustment	$	27.8

(in millions)	September 30, 2019
Remaining three months of 2019	$	1.0
2020		4.3
2021		3.8
2022		3.3
2023		3.2
Thereafter		8.2
Minimum lease payments	$	23.8
Less: Imputed interest		(3.7	)
Present value of minimum lease payments	$	20.1

	Three Months Ended September 30,		Nine Months Ended September 30,
(in millions)	2019		2019
Cash paid for amounts included in the measurement of right-of-use lease liabilities:
Cash paid reported as operating activities on the condensed consolidated statements of cash flows	$	1.0	$	3.3
Right-of-use lease assets obtained in exchange for new right-of-use lease liabilities	$	0.8	$	1.5

(in millions)	Total		Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	13.6	$	13.6	$	—	$	—
Total assets at fair value	$	13.6	$	13.6	$	—	$	—

	September 30, 2019
Expected volatility		32.40	%
Dividend yield		3.08	%
Risk-free interest rate		1.67	%
Weighted-average expected term (in years)	3.7

	Nine Months Ended September 30
	2019			2018
	(unaudited) (dollars in millions)
Statement of Cash Flows Data
Net cash provided by operating activities	$	51.6		$	68.5
Net cash used in investing activities	$	(1.8	)	$	(31.0	)
Net cash used in financing activities	$	(56.7	)	$	(34.6	)

(Dollars in millions, except per share data)	Total Number of Shares Purchased as Part of Publicly Announced Program		Average Price Paid Per Share		Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program
July 1, 2019 - July 31, 2019		—	$	—	$	—
August 1, 2019 - August 31, 2019		395,873		9.41		26.3
September 1, 2019 - September 30, 2019		9,281		9.49		26.2
Total		405,154

*31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

*31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) promulgated under the Securities Exchange Act of 1934, as amended.

*32.1		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*101.INS		XBRL Instance Document

*101.SCH		XBRL Taxonomy Extension Schema Document

*101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

*101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

*101.LAB		XBRL Taxonomy Extension Label Linkbase Document

*101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

		EMERALD EXPOSITIONS EVENTS, INC.

Date: November 5, 2019	By:	/s/ Philip T. Evans
		Philip T. Evans
		Chief Financial Officer and Treasurer
		(Principal Financial Officer and Principal Accounting Officer)