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Emerald Expositions Events, Inc.  (NYSE:EEX)
Q4 2018 Earnings Conference Call
Feb. 14, 2019, 11:00 a.m. ET

Contents:

Prepared Remarks:

Operator

Good morning, ladies and gentlemen and welcome to the Emerald Expositions' Fourth Quarter 2018 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the call over to Mr. David Gosling, SVP-General Counsel and Secretary. Please go ahead, sir.

David Gosling -- Senior Vice President-General Counsel & Secretary

Thank you, operator; and good morning, everyone. We appreciate your participation today in our fourth quarter 2018 earnings call. With me here today is Phil Evans, Emerald's Interim President and CEO and the Company's Chief Financial Officer; and also Kevin O'Keefe, Executive Vice President. As a reminder, a replay of this call will be available on the Investors section of the Company's website through 11:59 PM Eastern Time on February 21st, 2019.

Before we begin, let me remind everyone that this call may contain certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include remarks about future expectations, beliefs, estimates plans and prospects. Such statements are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from those indicated or implied by such statements. Such risks and other factors are set forth in our Company's most recently filed periodic reports on Form 10-K, Form 10-Q and subsequent filings. We do not undertake any duty to update such forward-looking statements.

Additionally, during today's call we will discuss non-GAAP measures, which, we believe, can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with US GAAP. A reconciliation of these non-GAAP measures to the most comparable GAAP measure can be found in our earnings release filed this morning on Form 8-K.

Now, I'll turn the call over to Phil.

Philip Evans -- Interim President & Chief Executive Officer

Thanks, David. I'll start by reviewing our fourth quarter and full year 2018 results, I will then turn to our strategy for 2019 and the outlook for the year. At that point, we'll open up the line for your questions.

As David just noted, with me here today is Kevin O'Keefe, who took over the leadership of our New York NOW, National Stationery Show and SURTEX shows in 2018, and has been the leader of our ICFF event for many years. Kevin will join me in answering any questions you may have relating to New York NOW.

Beginning with our fourth quarter financial performance. Revenues increased by $25.5 million or 81% over the fourth quarter of 2017, benefiting from strong organic growth and the contributions of several recent acquisitions. Organic revenue growth for the quarter, adjusting for the timing difference related to our Digital Dealer Fall event was approximately 19%, which strongly benefited from the new Outdoor Retailer Winter Market show and two other fourth quarter event launches. Our adjusted EBITDA for the fourth quarter increased by $5.5 million to $8.5 million as compared to $3.0 million in the year-ago quarter, reflecting the contributions of acquisitions and our fourth quarter launches. Acquisitions contributed $17.1 million of revenue in the fourth quarter.

In mid-November we staged the Boutique Design New York or BDNY show, which is the flagship asset in the portfolio we acquired from ST Media in October and it increased revenue over the prior year's show by a low-double digit percentage. Overall, we were satisfied with the performance of our newly acquired events, which was in line with our preacquisition expectations.

To conclude my comments on the fourth quarter, we booked a non-cash impairment charge of $104.3 million on our trade name and customer-related intangible assets in connection with annual impairment review of our indefinite-lived intangible assets that we do each October 31st.

During 2018, we enhanced our reporting capabilities and changed the basis of the impairment assessment for trade names from a total Company aggregate calculation to asset groups that more closely align with the individual brands. As a consequence of our more detailed analysis and certain changes in the business impacting the inputs and the valuation calculation, we booked an impairment charge in the fourth quarter for certain intangible assets with a book value exceeded fair value at October 31st, 2018.

Turning next to our financial performance for the full year 2018. We grew revenues by 11.4% to $380.7 million; or by 9.3%, if you factor in the insurance proceeds we received in 2017 to replace lost revenue as a result of the disruption caused by Hurricane Irma. Acquisitions contributed revenues of approximately $32.1 million in 2018 and organic revenue growth was approximately 1.1% or 0.8% including the revenues of the discontinued Interbike show in both years.

Adjusted EBITDA for the full year 2018 increased by 3.2% over the full year 2017 to $162.9 million, driven mainly by the contributions of our November 2017 acquisition of CPMG and our 2018 acquisitions of technology brands and BDNY both of which staged events late in the year under our ownership. Our adjusted EBITDA margin for the full year 2018 was 42.8% compared with 45.3% in 2017 after adjusting for the insurance proceeds received in 2017 in place of lost of revenue due to Hurricane Irma. This 250 basis point reduction reflected several factors: First, there was some advice margin mix effect within our portfolio driven largely by our recent and growing acquisitions, which came with somewhat lower margins of approximately 30%; second, we decided to make some additional investments in our events; and last, we incurred incremental public company cost relative to 2017, partially reflecting an annualization of those costs incurred in the prior year.

Adjusted net income for the year of $100.2 million was up 24.8% versus 2017, benefiting from a lower interest expense and a reduced effective tax rate, while 2018's adjusted diluted earnings per share of $1.33 represented an increase of 19.8% over 2017.

Free cash flow for 2018 was $100.4 million, which decreased by $7.4 million or 6.9% over 2017. This reduction partly reflected lower cash receipts for 2019 events received in 2018 than was received for 2018 events in 2017, including lower receipts for New York NOW, National Stationery Show, ASD and the absence of receipts for the Interbike event that staged in 2018, but won't stage this year.

In 2018 we used our free cash flow plus $40 million from borrowings under our revolving credit facility to close two acquisitions for a total consideration of $71.2 million to pay four quarterly dividends totaling $21.0 million, to pay down outstanding principal on our term loan by $25.7 million and to repurchase $19.4 million in shares of our common stock. Of note, we repurchased approximately 1.6 million shares at an average cost of $11.94 per share as we believe that our shares were trading below their intrinsic value.

Turning to debt and leverage. We finished 2018 with net debt of $556.0 million, representing a net leverage ratio of 3.4 times our 2018 adjusted EBITDA calculated in accordance with our credit agreement.

All-in-all, 2018 was a mixed year for Emerald. Amongst our best-performing trade shows in 2018 were the Kitchen and Bath industry show, CEDIA Expo, Hospitality Design Expo, International Pizza Expo, ICFF, Couture and our military shows. And we also saw good growth from our Outdoor Retailer franchise as it moved from a two-show cycle to a three-show cycle. In total, we launched six new events last year.

Additionally, we were pleased with the results of our M&A program, adding events in the hospitality industry and various digital and event assets in the install technology and security sectors; in both cases, complementary to existing assets in our portfolio. We also saw the early benefits of our 2017 fourth quarter acquisition of CPMG, a series of innovation-focused hosted-buyer events for executives in the retail, restaurant, healthcare and hotel industries.

At the same time, we faced challenges in several of our largest brands, which proved to be a headwind to organic revenue growth. As noted on previous earnings calls, we experienced revenue declines in 2018 in our New York NOW and ASD shows, plus difficult circumstances specific to the bicycle industry which impacted our Interbike show in September.

Outside of our trade show portfolio, our Other Events category increased significantly due to the first contributions from our CPMG acquisition. We saw slight organic growth for this category due to a CPMG new launch in the fourth quarter that offset the previously discussed disappointing performance from our HOW Design Live conference in the second quarter.

Our Other Marketing Services products, which comprised approximately 7% of our revenues in 2018 and an even lower percentage of our profit, declined in revenue by a low-double digit percentage, excluding assets that were included in our 2018 acquisitions.

Looking forward to 2019. The B2B events industry remains a highly relevant and attractive one with strong financial characteristics and good growth opportunities. In fact, the Globex 2018 Report released by AMR International in November 2018 projects average annual revenue growth in the US exhibitions market of 3% to 3.5% through 2022. Against this backdrop, we've strengthened our portfolio through growth-enhancing acquisitions in 2017 and 2018.

That said, as you are aware, several of the assets in our portfolio have recently underperformed against our own growth targets and against the overall growth of the industry due to a combination of both external and internal show-specific factors that we've previously discussed on these calls. To help restore of the long-term positive growth trajectory of the business, we've made changes to our management team, resources and execution strategy within several brands.

First, during 2018, we made a number of management and structural changes aimed at strengthening the brand leadership team and improving local decision-making and performance accountability. We've also added and plan to add more new resources and capabilities particularly in marketing and sales, which, we expect, will have a meaningful impact on our organic revenue growth over time. One of our key hires in the fourth quarter of 2018 was Johanna Morse, who has more than 20 years of experience in conference management and joined us as Senior Vice President-Conference Development. Johanna is already improving the content and attendee experience at our conference events and enhancing the education component of a number of our trade shows.

Second, we've set aside additional funding to enhance the event experience and value for our exhibitors and attendees. We've ramped up our attendee marketing efforts to find and deliver more and better attendees for our exhibitors, and are selectively adjusting our attendance criteria for our shows to ensure participants are of the highest quality and meet the commercial objectives of our exhibiting companies. For the attendees, our investments include enhanced educational and networking opportunities, as well as additional show floor amenities such as music, refreshments, lounges and charging stations, more transport, improved signage and declarations, and additional greeters. Our targeted initiatives will likely take at least one-show cycle to start to see a noticeable return on our investments.

Third and specific to our two New York NOW shows, we've made the tough but necessary decision to fundamentally reposition the brand for success in the future. To provide some perspective on New York NOW's relevance to our overall portfolio, we expect then winter and summer shows in aggregate to generate approximately 9% of our overall revenues and a modestly lower proportion of our profit this year after absorbing the 2019 repositioning impact.

As a reminder, New York NOW is the leading US trade show for independent home goods and gift-oriented retailers and designers featuring innovative and design-forward products in the home, lifestyle, gift and handmade categories. At New York NOW, we're reinvigorating our Home category, which has been the main source of performance softness in recent editions, creating a globally inspired design-driven home section that's already beginning to attract unique exhibitors and the highest quality of attendees to improve this key section of the show.

In the Lifestyle category, we're more actively curating our exhibitors and in the Winter show we replaced a section of the category with our co-located National Stationery Show, which has moved up from its previous May timing. In the upcoming August 2019 New York NOW show, we will replace some of the lifestyle exhibitors with our small JA Summer jewelry show, which will add a high-quality attractive event alongside New York NOW and support our upscaling strategy for the brand.

We have significant confidence in the changes being implemented at New York NOW under Kevin. He was -- almost tripled the size of our ICFF High-End and Contemporary Furniture Fair in New York City since taking over responsibility for that show six years ago.

Turning to the New York NOW event that staged last week. We're pleased to report that attendance was up approximately 20%, thanks to our investment in attendee marketing and the benefits of the co-located National Stationery Show, and feedback coming out of the event was markedly stronger than recent additions. While it takes time to build momentum given our twice-a-year show cycle, these are important leading indicators that are very encouraging. Although we were happy with the market reaction to the show, we did experience a revenue percentage decline in the high-teens. It's important to note that approximately a-third of this decline reflected our decision to more actively curate parts of the Lifestyle category in order to make room for our National Stationery Show.

As part of the overall strategy to reestablish New York NOW as the preeminent home, lifestyle and gift show in the US, we've added several prestigious new brands in the Home category such as Tom Dixon and Italia Swarovski, and we continued and extended the show floor enhancements and features that we introduced in last summer show. Importantly, the look and feel of the show was dramatically better than last year and there was a palpable buzz of excitement on the show floor.

While the show's revenue decline excluding the effect of our aggressive curation was in line with the summer 2018 show as we anticipated, our feeling coming out of the show was that we've successfully turned around the perception of New York NOW for many in the marketplace. As a result, we're optimistic that we will see an improvement in the revenue trajectory for 2019 summer show. Kevin who's here with me today is the architect of this transformational New York NOW strategy and can answer questions and offer more detail on the initiatives which are being implemented in a few minutes.

Turning to our busy first quarter calendar of shows. Surf Expo Winter improved its performance trend over last year, settling a flattened revenue versus 2018. We saw good growth in Sports Licensing and ISS Long Beach shows, as well as our Original Miami Beach Antique Show, which is back at the Miami Beach Convention Center after two years of the temporary venue.

A couple of weeks ago we staged the Outdoor Retailer Snow Show in Denver. This was the second of our two shows for the 2018-2019 winter buying season following on from our new November show. Although our revenue at this latest January edition of OR is expected to be down by a mid-single digit percentage versus last year's January show, our total revenue for this winter season's two shows, the recent November and just completed January events, versus last winter season's single January show is projected to be up by more than 40%, which demonstrates that our industry customers are adopting the three-show format to meet that product development and introduction decision needs. The mood and the energy of the show floor was excellent and we received strong positive feedback from many exhibitors and attendees.

Looking ahead, the next major show on the calendar is the Kitchen & Bath Industry Show, which takes place next week. KBIS continues to be one of our strongest performers and is expected to increase revenue this year by a high-single digit percentage. The show rotates every few years between Orlando and Las Vegas and will be in Las Vegas for 2019 and 2020, after staging in Orlando for the last two years. We continue to enjoy the benefits of robust market conditions and our mutually beneficial co-location with the National Association of Home Builders' International Builders' Show.

Lastly, let me provide an update on our ASD Market Week show which takes place in Las Vegas in a month's time. Our current pacing suggests that excluding our small Source Direct category, the show will flat in revenues, a notable improvement over 2018 with continued growth in the show's largest category of value and variety partly offset by modest softness in the second largest category style and beauty. Our Source Direct section, which houses many exhibitors who fulfill the international sourcing needs of certain ASD attendees, has been disproportionately hit by the current trade tensions between China and the US. Overall, at ASD, we're pleased that our sales and marketing initiatives and our investments appear to be improving the brand's revenue trajectory.

So let me now shift to our full year 2019 guidance that was outlined in our earnings release issued earlier today. Total revenue for 2019 is projected to be between $378 million and $390 million, representing a decline of 0.7% to growth of 2.5%. This range includes between $11 million and $13 million of incremental revenue in 2019 from our second-half 2018 acquisitions. While we may complete additional acquisitions in the year, consistent with our past approach, we have not incorporated any impact from these into our full year guidance. We're projecting organic revenue growth to be between a decline of 1.7% and growth of 1.1%, which reflects our good visibility into our first-half performance and a broad range of assumed potential outcomes for the second half of the year, particularly relating to the revenue trends in our New York NOW and ASD shows in the summer, the outcome of the second edition of our Outdoor Retailer November show, the performance of our Other Marketing Services products and the relative success of our launch program.

We anticipate good revenue growth in many of our brands, offset by an expected revenue decline for the two New York NOW shows of between $5 million and $8 million in aggregate, partly reflecting our conscious decision to more tightly curate and reposition the New York NOW event. Without the New York NOW decline, our organic revenue growth rate guidance would range from growth of 0.6% to growth of 2.8%.

As it relates to our other major brands, the midpoint of our guidance assumes a low-single digit decline at ASD mainly driven by the US-China trade situation, although we're obviously working to exceed that. And we expect the three Outdoor Retailer shows to be slightly positive in revenue in aggregate versus 2018 as the prior year included the large single winter event in January 2018 and also benefited from the new November event. It's encouraging that we've received early orders for the November 2019 show from several influential brands, including Patagonia and The North Face, neither of whom participated in the inaugural 2018 event.

With regard to launches, we currently have four new events scheduled for 2019 and we're exploring several other potential opportunities for later in the year. Additionally, there are a few events that took place in 2018 that will not repeat in 2019. The largest of these by far was our Interbike show as we previously disclosed. In aggregate, these events contributed approximately $6.2 million in revenue in 2018 and an estimated $2.5 million in adjusted EBITDA.

Turning to adjusted EBITDA. Our 2019 guidance is between $140 million and $150 million, representing a decline from 2018's adjusted EBITDA of $162.9 million. The key factors driving this decline in addition to the impact of discontinued events are the repositioning of New York NOW for future growth where the previously noted estimated revenue decline is expected to largely flow through the profit decline versus 2018 and the deliberate decision to ramp up investment in our show experiences and in marketing and sales resources in several of our brands. In aggregate, this program of incremental initiatives totals more than $9 million. We believe this is the right time to make these investments to position Emerald for improved revenue growth in 2020 and beyond. Based on the timing of our acquisitions in 2018 which in the case of BDNY was just before its two largest events took place, we've recognized a significant portion of the full year profits for the acquisitions in 2018 and the incremental profit in 2019 is relatively modest.

Turning to adjusted net income. We expect to report between $76 million and $88 million, reflecting a projected increase in interest expense due to higher average rates and a slightly increased effective tax rate. Based on our assumptions for the change in the number of shares outstanding, we expect to report adjusted diluted EPS between $1.02 and $1.20 for the year, which would represent a decrease of between 9.8% and 23.3% versus 2018.

Lastly, free cash flow guidance reflects our adjusted EBITDA expectations and our modestly higher cash interest and cash taxes projections, offset by the higher cash flow contributions of our 2018 acquisitions, lower non-recurring other items and lower CapEx. We expect free cash flow to be the range of $80 million to $90 million, a reduction of between $10.4 million and $20.4 million versus 2018. Our business is very cash generative even during a year when we're making conscious investments to improve our longer term prospects and we would expect our free cash flow to resume growth in the coming years.

Turning to M&A. We were again pleased with our activity in 2018. The nature of acquisitions is by definition episodic, but we've reliably bought high-quality businesses for between $60 million and $100 million annually at accretive multiples; and 2018 was no different. We continue to see and review many opportunities in the market and are selective with respect to which we pursue. Having said that, it should come as no surprise that in the very short-term you might expect to see a slowdown in our activities, although I would caveat that we will always be opportunistic with our acquisition activity. There are several reasons for this near-term slowdown: first is the desire to have the entire Emerald organization focused on maximizing the benefits of the incremental investments we're making strengthen our business; and second is the recognition that we're in the process of hiring a new CEO and it would make most sense to wait to have that person's inputs in the process. As noted however we'll continue to evaluate high-quality businesses that meet our financial and strategic criteria. And if they make sense for our portfolio and the valuation is appropriate, we will pursue them.

Let me conclude by saying that our management team is optimistic about the future of our portfolio and our Company. Emerald has the benefit of being comprised of a large and diversified portfolio of events, each of which is driven by different end market and specific factors. There is strength in the large part of our portfolio though certainly there are several discrete pockets which happened to be at our larger events that are currently experiencing weakness. We're making bold moves to improve a number of our largest brands and enhance their future growth prospects and we're confident that we're making progress toward stabilizing our New York NOW and ASD brands. We're making the necessary investments to provide for the continued health and growth of the total portfolio and we'll continue to be disciplined in our capital allocation strategy and remain focused on creating shareholder value. What this means is a consistent return of capital to shareholders in the form of regular quarterly dividend payments, pursuing attractive acquisitions that meet our strategic and financial criteria, potentially using surplus cash to return cash to shareholders via special dividends or to pay down debt, and potentially buying back our shares when they're trading materially below their intrinsic value.

Lastly, we're excited with the CEO candidates that have been interviewed thus far who come from both inside and outside the events industry. While conversations are ongoing, we're hopeful we'll be in a position to announce the appointment of our new CEO in the coming months.

With that, let me ask the operator to please open the call for questions.

Questions and Answers:

Operator

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Our first question comes from the line of Seth Weber with RBC Capital Markets. Please proceed with your question.

Emily McLaughlin -- RBC Capital Markets -- Analyst

Good morning. This is Emily McLaughlin on for Seth today. Just a question on the comment about lower cash receipts for future shows received in the fourth quarter. Is there anything to read into there? Are renewal rates meaningfully lower than the were a year ago?

Philip Evans -- Interim President & Chief Executive Officer

Hi, Emily. This is Phil. As we talked about, the Q1 shows, we have a decline in the New York NOW and NSS Show and it really is entirely related to that. If we actually look at renewal rates for 2018, they were slightly improved over 2017. So I think, it's specifically related to one or two shows.

Emily McLaughlin -- RBC Capital Markets -- Analyst

Okay. And then on marketing side, are you starting to see any stabilization there? And is any of the digital knowledge that EH Media brought to the table having any impact on the legacy business yet?

Philip Evans -- Interim President & Chief Executive Officer

The Other Marketing Services piece is obviously it's a challenge, because it's largely print advertising. And we -- as you point out, we're in the process of using the skills and products and techniques that the EH Media brands brought with them. And I've seen several, recently, of the initiatives being adopted in some of our other brands. I saw Healthcare Design the other day doing some of that. So we're optimistic that we can benefit from that. It really is going to take some time to do that, but we're definitely optimistic.

Emily McLaughlin -- RBC Capital Markets -- Analyst

Okay. And one last one, if I may. Just any update on the pricing environment? I think, you guys have talked about 3% to 4% a year in the past. Does that still hold?

Philip Evans -- Interim President & Chief Executive Officer

Broadly that still holds. I mean, we're -- as I have explained in the past, we make those decisions at a show level based on all the other factors relating to a show and it's kind of -- it blends out to be in the range that you just said and that's pretty much the same thing. We're very mindful of the individual conditions the individual markets of each of the shows and that's what we take into account when we're doing the pricing.

Emily McLaughlin -- RBC Capital Markets -- Analyst

Understood. That's all from me. Thanks for the time.

Philip Evans -- Interim President & Chief Executive Officer

Thanks, Emily.

Operator

Thank you. Our next question comes from the line of Jeff Meuler with Robert W. Baird & Company. Please proceed with your question.

Nick Nikitas -- Robert W. Baird & Co. -- Analyst

Yeah, Good morning. Nick Nikitas on for Jeff. So just looking at the adjusted EBITDA decline and the incremental investments in sales and marketing, Phil, that you kind of called out, are these things, you guys would view more as one-time investments for 2019 or potentially more of a structural change to your events or maybe you need to require a higher level investment or an enhanced offering for attendees going forward?

Philip Evans -- Interim President & Chief Executive Officer

Thanks, Nick. They really aren't one-time in nature, I would say. Of the $9 million we call out, about half of that is experiential and attendee related. So that would be things like design spaces and lounges, and education and refreshments, and those are things that -- what we've really learned a lot through the New York NOW exercise of investment and changing the view of that show in the market is that these things actually make a difference, the people appreciate them. We got an email from -- unsolicited from one of the exhibitors -- tabletop exhibitors at New York NOW, who mentioned a bunch of these things and noticed that we've introduced them at the shows and said, what a refreshing difference it was and what a revert of the show it was. And so about half of what we're doing is experiential and obviously we could change those things over time, but we think those things are important.

And then the other piece is around about a-third of the total relates to marketing and sales heads largely, because we see the opportunity to grow faster and to kind of fuel the growth over time. And so those things will continue and that will drive growth going forward. And then the other piece, math-wise is a six, that's around attendee initiatives to attract better or more attendees. So there's nothing specific that isn't going to be kind of something we do and continue to do as we go forward.

Nick Nikitas -- Robert W. Baird & Co. -- Analyst

Okay. That's helpful. Just on the other side or the flip side of things, do you think you can drive any incremental revenues from the investments in 2019 or are these really multi-year revenue enhancements that you're feeling kind of the build-out of the cost in 2019 specifically?

Philip Evans -- Interim President & Chief Executive Officer

We're really not anticipating that we will get much of a pick-up in 2019. As you can imagine, particularly on ASD and New York NOW, which is probably a-third of the investment, we're already selling the summer shows, and by the time we've continued our program of investments, we'll really be selling the 2020 events. And so, I think, that's when we expect to start to see the pick-up and we're being pretty cautious about the impact on 2019.

Nick Nikitas -- Robert W. Baird & Co. -- Analyst

Okay. Just shifting to New York NOW, nice to see the attendance uplift, and that's a pretty big number. Is that something that is in the early stages of benefiting the exhibitor trends, but it's been more than offset by the show changes you're implementing? Or is the exhibitor improvement is something that will likely take until 2020 given how early bookings are?

Kevin O'Keefe -- Executive Vice President

This is Kevin. Well, the -- I guess, the best way to describe what happened at New York NOW is that Super Bowl Sunday we had 10,000 people show up in the first two hours. So the shock, positive experience to exhibitors was quiet strong. And so the reaction by exhibitors who expected a different result, not quite as -- so positive result, was exuberance, and also on the part of attendees. So I think that we will see -- that attendance again will help us to bring the summer show in flash to previous year and then it really gives us the momentum to as we move into 2020 create an entirely new and much more vibrant event.

Nick Nikitas -- Robert W. Baird & Co. -- Analyst

Okay. And just given the second year kind of somewhat substantial declines and some more near-term improvement in ASD, is it just a product mix difference between the two shows or you saw a quicker rebound in ASD or is there something from the sales changes you've implemented with ASD that could potentially be leveraged at New York NOW going forward?

Philip Evans -- Interim President & Chief Executive Officer

So this is Phil in case you can't tell difference between Kevin and Phil. The issues at ASD and New York NOW are very different. They're in different markets and the declines -- modest declines that we saw at ASD were kind of much less in 2018 than what we saw in the summer at New York NOW. I do think there are similarities with sales and marketing approaches and some of the initiatives we've taken and some of the experiential things that are going on. So those are somewhat parallels, but the end markets are quite different and the issues are quite different.

Nick Nikitas -- Robert W. Baird & Co. -- Analyst

Okay. And then just last one from me. The trade tensions comment impacting ASD was something that necessarily wouldn't have jumped out. I mean initially so, is that being felt in any other events throughout the portfolio; and I guess, similar question for government-related shows and the recent shutdown?

Philip Evans -- Interim President & Chief Executive Officer

So I mean, the nature of kind of the world we live in and we have a lot of shows with products is a lot of products are made in China. And so, there is more broadly an impact on cost potentially for some of our exhibitors. The place where in ASD we have a particular sourcing category which is a single-digit percentage of the revenue of that show and so that's more directly affected. But there's modest effects and at least concerns at some of the other shows, but it really isn't translating into anything from a revenue perspective at this time. It's really more kind of a conversation and slight concerns that if it continues and if it ramps up and if it gets ugly, then it'll affect the input costs for exhibitors. But we're not really seeing other than in the ASD event kind of translating into revenue at this point. And on the shutdown, pretty much we have some military shows, but those kind of excluded pretty much from the impacts of the shutdown and we haven't really seen any impact anywhere else in -- of any real note.

Nick Nikitas -- Robert W. Baird & Co. -- Analyst

Okay. Thank you.

Philip Evans -- Interim President & Chief Executive Officer

Okay. You're welcome.

Operator

Thank you. Our next question comes from the line of Ashish Sabadra with Deutsche Bank. Please proceed with your question.

Ashish Sabadra -- Deutsche Bank Research -- Analyst

Thanks. I'll just follow up on the New York NOW show itself. So the turnaround expected in 2020, are you expecting -- is it going to be -- maybe you expect a revenue growth improvement, your expectation is you'll see more exhibitors come in or your existing exhibitors start spending more money, how do you think about the turnaround or is it both of those?

Philip Evans -- Interim President & Chief Executive Officer

So I'll let Kevin do kind of the second bit. The first bit is really -- we -- from a guidance perspective, you might think that our guidance is fairly wide and that's really because there are a number of second-half shows where we feel like we've seen the inflection point on New York NOW and ASD. But we're cautious on where that will be. And so, we definitely think that we're on the right trajectory and things will get better, but we're not pointing to growth specifically in 2020 at this point. Hopefully, we'll get to that point and be able to talk about that later in the year. But, Kevin what else you want to add?

Kevin O'Keefe -- Executive Vice President

So, I think relative to New York NOW, the section that was most impacted over time in terms of exhibitor content was Home. And what we had done with the introduction of wrapping New York NOW around Retail Renaissance's new sweet big trend in the marketplace and bringing in Transcend and experiential spaces on the floor designed by the top interior designers in New York and Transcend talks -- I mean, the reworking of the show was so dramatic that those maybe hundreds of returning exhibitors who came to look at it was very positive. And so not only that, but we engaged all of the top showrooms here in New York and so people like Grotioba (ph), B&B Italia, Rene Lalique and Kristofo (ph), people who have never been involved with New York NOW before are very interested in it. So the nature of that Home event is changing dramatically. And so I think that it was a big change this time. And I think 20% lift in attendance was significant. As we look forward to summer, it's going to be much stronger in terms of stronger attendance. And so, I think that it's a big show and the momentum is going to push us into 2020 as we evolve into a different, much better event that's all based on it being -- New York NOW being the indispensable resource for the independent retail in the United States. So I'm very positive about the view toward 2020.

Ashish Sabadra -- Deutsche Bank Research -- Analyst

Okay, no, that's helpful. And maybe just a follow-up question. So one of the concerns investors have is the fact that even if the attendees go up, the challenge is more around on exhibitors side, where a lot of the exhibitors might be struggling or maybe -- may have changed the way their marketing budgets are located. Have you seen any of those trends in the marketplace or any color on that front? Thanks.

Kevin O'Keefe -- Executive Vice President

No, not at all. I mean, the trade show model is one which is extremely effective when done well. So the -- as a sales person and been in sales for such a long time, really the face-to-face is the most effective way to sell. The email no longer works. I mean, you really can't call people, because they won't take the calls. So if you don't meet them face-to-face, you really can't get it done. So when you can put the right content together on the exhibition side, all of those attendees will come and it works extremely well for both parties. And so, if anything, exhibitors and companies will invest more in trade shows, because it is a model that works. But you must always be cognizant of best content to deliver best attendance. While you do that, you'll have a very successful model that can do nothing but grow.

Ashish Sabadra -- Deutsche Bank Research -- Analyst

That's helpful. Thanks again.

Operator

Thank you. (Operator Instructions) Our next question comes from the line of David Chu with Bank of America Corporation. Please proceed with your question.

David Chu -- Bank of America Merrill Lynch -- Analyst

Hi. Thanks for taking my question. So just overall like what growth assumptions are embedded to guidance for each of the segments?

Philip Evans -- Interim President & Chief Executive Officer

That's a difficult question. I'm not sure I'm actually capable of answering that easily. And when you say segments, do you mean trade shows and Other Marketing Services and Other Events, what do you mean, David, in that?

David Chu -- Bank of America Merrill Lynch -- Analyst

Yeah, yeah, exactly. Just what you just mentioned, Phil.

Philip Evans -- Interim President & Chief Executive Officer

Okay. It's tough to say other than let me kind of characterize where we are. The trade show kind of piece of the business, which obviously is the bulk of the business, that really is dependent on how the show is going in the middle of the year. As I said in the prepared remarks, we have ASD, we have New York NOW, we have the Outdoor Retailer shows and launches. Those would really kind of determine the level of growth in the trade show part. We know, first quarter, New York NOW is down, we know KBIS is up, we know Outdoor Retailer is down slightly. So we've given you kind of a lot of the pieces in the first quarter. And our full year is fairly broad in terms of the guidance from probably a small decline to fairly reasonable low-single digit growth.

On the Other Marketing Services, we're fairly, I wouldn't say pessimistic, but we're fairly realistic about the likely trajectory of that. So we certainly have that as an expectation of decline -- modest decline. We do have, as I was telling, I think, it was Emily earlier on, we're working through some things that hopefully will give us some better opportunities there.

And then the Other Events piece, the CPMG acquisition that we did, it's a great business, they're growing nicely, they are launching one event certainly in 2019 that they've already pretty much sold out. So we're optimistic that there'll be some decent growth in the Other Events part of the portfolio, which is also a part that's Johanna, who I mentioned in the prepared remarks, is helping us kind of grow that part of the portfolio as well. So I think, the trade show portfolio, we're optimistic, we're cautiously optimistic, but in the guidance we've looked, as you'd expect, kind of the range of the potential outcomes.

David Chu -- Bank of America Merrill Lynch -- Analyst

Okay. Great. That's helpful. And then, you highlighted the recent ASD Winter was flat and then expected it to be down in 2019. Was that just purely on the China trade tension? So maybe you can speak to kind of underlying, would you have expected it to be up?

Philip Evans -- Interim President & Chief Executive Officer

So I said it was flat, if you exclude the Source Direct section. So the expectation is it will be slightly down overall. We would have expected it to be flat and actually the Source Direct category has been a growth category in the past. So if that had grown at the rate at which it had been doing over several years, then we could have seen -- we could have eeked out a little bit of growth. We think that the things that we had implemented there in the sales and marketing areas and the stability of the team and the quality of the team that we have now is getting us to a point where we can have more confidence in the results of those shows.

David Chu -- Bank of America Merrill Lynch -- Analyst

Okay. Great. That's very helpful. Thank you.

Operator

Thank you. We have reached the end of our question-and-answer session. I would like to turn the call over back to Mr. Evans for any closing remarks.

Philip Evans -- Interim President & Chief Executive Officer

Thank you, Michelle; and thanks to everyone for joining the call today; and thanks, Kevin, for joining me here. Clearly 2018 was a challenging year and we still have work to do in 2019. But as you probably heard, we're cautiously optimistic that we've reached the inflection point for New York NOW and ASD, and we feel really good about the investments we're making to drive improved growth going forward. So personally, I feel more optimistic about our situation than I probably have been for a while. And I'm really excited about the state of the business that the new CEO will inherit and I'm really looking forward to the next stage of the Company's growth and the Company's success. So, thanks again for joining us and I'll hand back to the operator.

Operator

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.

Duration: 47 minutes

Call participants:

David Gosling -- Senior Vice President-General Counsel & Secretary

Philip Evans -- Interim President & Chief Executive Officer

Emily McLaughlin -- RBC Capital Markets -- Analyst

Nick Nikitas -- Robert W. Baird & Co. -- Analyst

Kevin O'Keefe -- Executive Vice President

Ashish Sabadra -- Deutsche Bank Research -- Analyst

David Chu -- Bank of America Merrill Lynch -- Analyst

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