Welcome to the Emerald Expositions first quarter 2019 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference is being recorded. Now I'd like to turn the call over to Mr. David Gosselin, Senior Vice President, General Counsel and Secretary. Please go ahead.
Thank you operator, and good morning, everyone. We appreciate your participation today in our first quarter 2019 earnings call. With me here today is Philip Evans, Emerald's Interim President and CEO, and the company's Chief Financial Officer. As a reminder, a replay of this call will be available on the Investors section of the company's website through 11:59 P.M. Eastern Time on May 9th. Before we begin, let me remind everyone that this call may contain certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include remarks about future expectations, beliefs, estimates, plans, and prospects. Such statements are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from those indicated or implied by such statements.
Such risks and other factors are set forth in our annual report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 19th, 2019. 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 U.S. GAAP. A reconciliation of these non-GAAP measures to the most comparable GAAP measure can be found in our earnings release. Now I'll turn the call over to Phil.
Thank you, David, and good morning, everyone. I'll begin with a review of our first quarter results and then move to the outlook for the second quarter and the rest of the year, including the latest indicators for the summer editions of ASD and NY NOW. I'll then provide a short financial review of the first quarter, briefly touch on capital allocation, and finish with an update on the CEO hiring process. At that point, I'll open up the call for any questions. Before jumping into the numbers, I want to reinforce that the business and our loyal leaders and employees continue to execute on a wide range of initiatives to strengthen our business. We're starting to see some positive indicators at a few of our larger events, and we're optimistic about the long-term future and opportunity that's available for Emerald. Now to our first quarter performance.
Revenues of $137.4 million were 3.4% lower than the first quarter of 2018, as they were affected by a few show scheduling differences compared with the prior year's same quarter. After adjusting for these timing differences, adjusted EBITDA of $59.4 million decreased by $9 million or 13.2% compared to the first quarter of 2018. Importantly, this financial performance was in line with our expectations for the quarter. We experienced solid revenue growth in several of our first quarter trade shows, including the Kitchen & Bath Industry Show, Sports Licensing and Tailgate Show, National Pavement Expo, our Imprinted Sportswear events, and the International Pizza Expo. The Kitchen & Bath Industry Show, or KBIS, continues to be one of our strongest trade shows. The show successfully rotated into Las Vegas this year and will be there again next year.
The remodeling and custom build sectors of the residential construction market remain robust, and our co-location with the National Association of Home Builders' International Builders' Show continues to benefit both events. Another large event in the quarter, ASD March, was virtually flat in revenues and would have grown modestly as compared to the year-ago show if we hadn't experienced a decline in our sourcing section due to the ongoing trade dispute between the United States and China, as we discussed on our prior earnings call. We're pleased with our progress improving the show's execution, which led to the March show's better overall performance. Looking forward, we have approximately three months of the sales cycle left before the next ASD show, which stages in the third quarter.
Our sourcing section has traditionally been modestly larger in the summer show than in the March show, and we're seeing a similar adverse impact from the Chinese trade tensions in the coming summer edition. Excluding this section, the rest of ASD is pacing to be broadly flat in revenues versus last year's equivalent edition, which points to a stabilization in this important Emerald franchise. You will recall that we implemented a number of sales and marketing initiatives over the past two years, and it's good to see those working through to improve performance a few editions out, as we expected. Turning to NY now, and as I discussed in detail on our fourth quarter call, we staged a much-improved show at the beginning of February, which was confirmed by increased exhibitor and attendee satisfaction scores collected in our post-show surveys.
To accomplish this, we implemented a wide range of initiatives, which included the co-location of the National Stationery Show and SURTEX shows previously staged in May in order to add high-quality products and attendees alongside the NY NOW show. While necessitating a deliberate reduction in the size of these two shows, these moves helped to drive an approximate 20% increase in attendance for NY NOW, with many exhibitors remarking on the improved quality and quantity of attendees. We also increased our investments in various show features, which we believe have enhanced the show experience for both attendees and exhibitors.
Consistent with what we discussed on the prior call, while revenues declined by a high-teens percentage in the winter edition, as we more tightly curated space to make room for the National Stationery Show and SURTEX, I remain confident that we're on a path to improve performance over the next several editions. Looking forward to the next N Y NOW show in August, we're introducing a number of new features that we believe will continue our positive momentum. These initiatives include adding a new Epicurean kitchen area that will attract high-end kitchenware exhibitors, additional health and wellness and upscale fashion jewelry areas, and the launch of a second edition of the co-located National Stationery Show.
We've also actively curated areas of the lifestyle section to allow space for our JA New York Summer Show to be co-located with NY NOW, again, with the goal of elevating the show and increasing the size and quality of the attendees. With 3 and a half months of the sales cycle to go, we're currently pacing towards a low double-digit revenue decline, which is a modestly slower recovery than we were hoping for, but would still represent a marked improvement in the show's revenue trajectory. Our objective for NY NOW is to not only stabilize it but have it eventually contribute to Emerald's growth over time. It serves an enormous and highly fragmented market, stages in the design center of North America, and has all the characteristics of an event that when run creatively and aggressively, can deliver substantial value to its audience.
Returning to our Q1 performance, at the end of January, we staged the Outdoor Retailer Snow Show in Denver, which was the second of our two Outdoor Retailer shows for the 2018-2019 winter buying season. As I noted on the fourth quarter earnings call in February, our aggregate revenue for this winter season's two shows versus last winter season's one show was up by more than 40%. Turning next to the second quarter of the year, we expect significant growth in all reported financial measures compared to the 2018 second quarter, as our Outdoor Retailer Summer Market Show is moving up from July to June, and our GlobalShop Show moved from March of last year to late June this year.
give you an indication of the financial impact of these and other smaller scheduling differences, our second quarter revenues and adjusted EBITDA last year would've been approximately $25 million and $20 million higher respectively, had last year's show timing mirrored this year's timing. Our three largest shows in the second quarter, Outdoor Retailer Summer Market, Hospitality Design Expo, and The COUTURE Show, are expected to show low to mid-single-digit revenue growth over their respective prior year events. Our mid-size ICFF, which has demonstrated strong growth over several years, is expected to decline in revenue this year, partly reflecting modest downsizing from certain European exhibitors, including some U.K. exhibitors affected by Brexit, and also the unusual proximity of dates with our own Hospitality Design Expo Show.
We also suffered from resource issues, which we have a plan to address in order to continue the robust growth in this brand, which we believe continues to have considerable upside potential. As I've noted previously, we have co-located our GlobalShop and IRCE events and added an RFID retail component under the umbrella brand of RetailX. The concept for this combined event, which takes place in Chicago at the end of June, is that these three separate shows together help retailers address the ongoing transformation in their industry, whereby in-store design and experience, innovation, and e-commerce are converging. Both GlobalShop and IRCE are currently pacing behind their previous editions. However, we're optimistic that June's event, which will be the first under the RetailX umbrella, will demonstrate the value and the logic of this combination and lead to opportunities to grow this concept in the future.
In addition to the RFID retail launch in the second quarter, we also have a jewelry launch called Premiere in Las Vegas during Jewelry Week. We just staged a new CPMG event for the convenience store market called C-StorePoint. We're optimistic about the future of all three of these new events. Since I've already provided some thoughts on the ASD and NY NOW shows in the third quarter, and it's too early to provide much additional color on the other shows staging later in the year. At this point, let me put on my CFO hat and provide a brief financial review of the first quarter performance.
Revenues of $137.4 million for the first quarter declined $4.8 million or 3.4% versus the first quarter of 2018, largely the result of $7.4 million of show scheduling differences, the largest of these being GlobalShop's timing change from Q1 2018 to Q2 2019. 2018 acquisitions contributed $3.6 million of incremental revenues in the quarter, while organic revenues on a like-for-like basis, adjusting for timing differences, declined by $3 million or 2.2% for the reasons outlined earlier on this call. Excluding NY NOW, which is being repositioned, organic revenues would've been slightly positive versus the first quarter of 2018. Adjusted EBITDA for the first quarter of 2019 of $59.4 million compared with $68.4 million for the equivalent 2018 period, adjusted for the impact of show timing differences.
This 13.2% decline in adjusted EBITDA was particularly affected by the financial impact of the NY NOW repositioning and related incremental investments, which contributed approximately 60% of the year-over-year decrease. The other notable factors driving the decline were our increase in show investments and higher expenses and revenue in the brands we acquired in 2018, as their larger revenue-generating activities are in subsequent quarters. As noted earlier, our first quarter performance was in line with our expectations at the start of the year. Net income of $26.5 million decreased by $11.6 million, or 30.4% versus the first quarter of 2018. While Adjusted Net Income, which reflects the impact of show scheduling changes amongst other items, declined by $8 million, or 17.2% versus the prior year period.
Adjusted diluted earnings per share was $0.53 for the quarter, compared with $0.61 for the equivalent quarter in 2018, representing a decline of 13.1%. As expected, our free cash flow for the quarter was affected by the quarter's financial performance. We generated free cash flow of $11.3 million during the quarter, which was $8.8 million less than the first quarter of 2018. At March 31st, 2019, we had net debt of $549.2 million, which represented a net debt leverage ratio of 3.5 times our last 12 months adjusted EBITDA, which was slightly higher than at the end of 2018. Turning to our guidance for the full year. We're maintaining the guidance provided on our 2018 fourth quarter earnings call at the beginning of February, although we expect to be in the lower half of that range.
While our first quarter results were solidly in line with our expectations, we're tracking modestly behind our original projections in our other marketing services products and in a few of our upcoming shows, including ICFF and RetailX, which I previously reviewed. It's also worth noting that we estimate that the ongoing trade dispute between the U.S. and China is costing us between $3 million and $4 million in revenue this year, largely related to Chinese exhibitor participation across a few of our events. However, I continue to believe we're taking the right steps to return the portfolio to sustainable organic growth. While it takes several show cycles to deliver improved performance, I remain confident we will deliver on our full year 2019 financial commitment as we work to restore the growth profiles of our largest brands. Turning to our capital allocation.
The Emerald board has approved a 3.4% increase in our regular quarterly dividend from $0.0725 a share to $0.075 a share, effective for the second quarter dividend that we expect to pay at the end of this month. On the M&A front, our internal activities have continued over the last few months, and we have several smaller potential deals at various stages of the acquisition process. As I noted on the last earnings call, while we remain opportunistic in our acquisition activities, we have, to some extent, slowed down our outreach in order to ensure that our team is appropriately focused on addressing the challenges and opportunities in certain of our existing brands. We currently have $25 million outstanding on our revolving credit facility, and I anticipate that we'll seek to pay this down opportunistically this year.
Plus make our normal quarterly principal payments of $1.4 million per quarter on our outstanding term loan facility. Aside from these debt payments, we currently have no plans to pay down any more of our outstanding long-term debt. We're comfortable with our capital structure and expect further deleveraging over the coming years. You will recall that we put in place a 20 million share repurchase program back in November, and we have approximately $500,000 of remaining approved capacity on that program. Overall, we'll continue to be disciplined in our capital allocation strategy and remain focused on enhancing shareholder value. Finally, let me provide a brief update on the ongoing CEO search.
The Board is highly engaged with broad participation in the process and is being very deliberate in its approach to the search to ensure that the individual that is ultimately hired is well suited for the role and the great opportunity it presents them. Pipeline of candidates has been and continues to be very strong, which we feel good about, and we look forward to updating everyone when the process wraps up. Let me also note that we recently added a new director to the Emerald Board, namely Sali Shankland. Amongst Sali's many career accomplishments, was leading the UBM Americas business as its CEO, and she brings considerable expertise and experience in the events industry to the Board. To conclude, we're confident we're on the right path with our strategy for NY NOW, and we're very encouraged that our ASD show has effectively stabilized.
Additionally, we've taken steps to return ICFF to growth and are optimistic that the market will react favorably to our new RetailX concept. Importantly, we're aggressively addressing those challenges which exist in our portfolio, and we're confident that we're setting the stage for improved execution and organic growth looking to the year ahead. With that, operator, please open up the call for questions.
Great. Thank you. At this time, we will be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to move your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull for questions. Our first question is from Seth Weber from RBC Capital Markets. Please go ahead.
Hey, this is Gunnar Hansen on for Seth. I appreciate all that commentary about the broader portfolio of events. I guess just to dig in, it seems like you guys have made some progress, with ASD, which is great to see. I guess, the recent softness you cited with ICFF and RetailX, can we just dig into that a little bit more? It seems like RetailX might be a co-location near-term impact, but long-term has good growth potential. ICFF has some external issues. Can we just dig back into that? We just want to make sure that we understand what's going on there.
Sure. I think you captured it well, Sistel. RetailX, it's a really kind of bold concept that we've been working on for a while. Two shows. The GlobalShop Show has suffered over a few years because its primary market there was fixtures and bricks and mortar fitting out of stores, et cetera. IRCE, I think we haven't leveraged that show as much as we should have done in terms of content and the ability to talk to the transformation. We have put these things together, which is a little disruptive, certainly, because from a location perspective, when you're talking about exhibitors, when they're used to a certain place, you have to kind of reconfigure how you put things together. We've added a bunch of new content. I think it is a transition issue that we believe in the concept.
We've been getting some traction, just not at the pace that we would have liked or that, frankly, we expected. I think the proof will be when we put this together, put it on at the end of June. The team's very excited. We're hopeful that it'll just be a transitional issue. We'll move to a kind of a platform for growth once we get into 2020 and beyond. ICFF, it's very different. It's a show that's coming up in a few weeks. It's about 60% international exhibitors. There's a lot of issues at play in terms of the international geopolitical situation and trade. Frankly, we've had some resource issues on the team and in terms of priorities. Kevin, for instance, has obviously spent a lot of time on NY NOW and has had less time to spend on ICFF.
Those are things that we think are totally within our control. We're still going to have a good show, a really good show. We expect to bounce back well next year. Continue what's been quite remarkable growth in that show over the last three or four years. There's still lots more to do in that show. We're optimistic.
Okay. Thanks for that. I guess with ASD, obviously, it's faced some challenges with some of the trade impact with U.S. and China. Assuming we do get a resolution at some point in the near future, are you going to see a benefit, I guess, from that? Have you guys fundamentally kind of moved away strategically from some of the source direct exposure, to limit yourself from that?
No, it's a good question. I think that once things settle down, we will be back on a good path. It's been, again, a growth section over several shows, and it's a kind of important need in the marketplace. We're still committed to it. For 2019, even if tomorrow there was a resolution and everybody was happy, commitments need to be made longer out than that for goods to be delivered and people to come to the show. It won't help us for 2019. Certainly, if there's a resolution that kind of makes sense and that is good for international trade, then we expect to see some benefits from that in 2020.
Okay. I guess just lastly, on the guidance, obviously targeting the lower half of the prior ranges. If you were to kind of handicap how the growth would be impacted, I mean, obviously, the big shows have their own issues that are well understood. Where within that range, like, what is the surprise out of the upside or the downside? Is it some of these larger shows still? Do you see maybe some of these mid-tier events in the second half of the year having a disproportionate impact? Thanks.
Yeah, no, the things that we talked about are pretty much what's moved our view. We talked about ICFF, RetailX. Other marketing services, it's a relatively smaller part of the business. We were optimistic that we'd do a little better than we've been tracking, and we're anticipating that it's going to kind of continue on a similar path for the rest of the year, which has reduced our expectations. In NY NOW, we were probably a little optimistic on NY NOW for the summer edition. We have some tremendous things going on, and Kevin is doing a great job. We've seen the turn in terms of the market kind of starting to buy into what it is we're doing, and I think the trajectory will be improved over the last couple of editions. It's going to take a little bit longer than we thought.
We have a little bit of kind of leakage there. Fundamentally, ASD is doing a little better than we thought. We're very kind of increasingly optimistic that the initiatives we put in place, the team, the execution, is coming through now in terms of performance. We're starting to be more optimistic about 2020 from that perspective. I think the guidance, our range is not that big. To move slightly within the range is nothing fundamental. It's just a few things here and there where maybe we were a little bit optimistic, and it's not looking that will play out.
Okay, thanks.
Our next question is from Kevin McVeigh from Credit Suisse. Please go ahead.
Great. Thanks. Hey, Phil.
Hey, Kevin.
Any thoughts, obviously without getting too specific on the CEO search, are you looking for someone within the industry, external? Just any thoughts at a high level, what type of attributes you folks are really focusing in on as you narrow that search down?
Sure. I think we've met a lot of really good candidates, both from inside and outside the industry. I think it's helped us focus on what kind of attributes we're looking for, even more finely than when we started off. The list is leadership qualities, a growth orientation, someone who's innovative, uses technology, used to capturing the power of technology to strengthen the business, uses data. We've seen that in people who are inside the industry and outside the industry. We don't have a particular preference there. It's really a strong leader who brings all those different pieces to the table, and we think Emerald will benefit from all of those. We'll continue. It's been a process. People tell me it always takes a long time to get the right person. We're sticking with it, and it'll take as long as it takes.
No, I get that. It seems like there's been a lot of more refreshes and moves within cities of some of the shows than what's occurred in the past. Is that fair? If it is, what's driving that? Historically, it seemed like there was a lot more stability show to show. It seems like you're refreshing a lot more. Just any thoughts around that?
I'm trying to think where we've moved, other than Outdoor Retailer. The Kitchen & Bath Industry Show has always rotated between Orlando and Las Vegas. When we picked up CDH has rotated city to city over its history. The smaller events tend to, especially if you're connected with an association, the association liked to move it around so that it's close to different members of the association. We've tended to do that with some of our design shows. I don't think it's anything that's new, particularly. Maybe we talk about it a little bit more than we used to talk about it.
Yeah. Thank you.
Okay.
Our next question is from David Hsu from Bank of America. Please go ahead.
Hi. Thank you. The sentiment around the economy was quite bearish in December into early this year. Did that have an impact on any of the trade shows or commitments made early enough so there's just no real impact?
To the general question of the economy, we haven't seen any softening or any real change in sentiment. Trade shows, obviously, there tends to be a lag because people are booking ahead of time, and we haven't seen people change their behavior in terms of bookings or pacings. Subject to the scheduling changes that we have on shows are very much in line with where they have been before. Really the only topic of conversation, and it's not in every show, but in some of the shows, is the uncertainties around China and Europe, which, obviously, for a lot of stuff that's made, it's made in China. It really is more about the uncertainty than whatever decision comes out. As soon as we get decisions, people will plan accordingly, and we'll be fine. It's really more about that uncertainty.
Got it. Okay. Then it sounds like the first half, there's a lot of timing-oriented kind of changes, or just the timing of shows seems to be having an impact on the first half of the year. Can you help us think about the second half as well?
The third quarter becomes a slightly less sizable quarter just because in the way that we have timed the three OR events, the Summer show is moving earlier into Q2. Aside from that, I don't think there's anything really timing related. It'll be the large shows, ASD in NY NOW. In the fourth quarter, we have the Outdoor Retailer Winter Show, which is a big show. We're feeling good about Outdoor Retailer. It takes some time to get the industry really working to the cadence of the shows and really changing their behavior. We're making good progress there. Second half of the year, I think looks pretty decent.
Okay. Then just lastly, I know it's early, but in thinking about 2020, should we expect an additional step up in spend for ASD in NY NOW to get it back to its historical growth trajectory?
I think we're on a pretty good trajectory for ASD. If you think about last year, we probably declined in the low to mid-single digits in terms of revenue. We're probably doing better than that. Still declining slightly overall in the two shows, I would anticipate. I think we're on a good trajectory, and we've invested somewhat in the ASD shows. I think we're on a good trajectory with the kind of level of investment that we have. NY NOW, in the first quarter, we had a step-up of investment there that was more than $1 million in terms of incremental investment. We put that amount of investment in the Summer show last year and started to see some turn, and the kind of similar level of effort and investment took place in the show earlier this year.
Once you get to the summer show, we already have a good amount of investment that we put in place last year, so it's not necessarily incremental. We'll see. I think the ROI on some of these investments is medium-term. It's not incredibly easy to put a number on what did you get for it. It's a longer-term increased satisfaction, increased renewal rates, grow the businesses, grow the shows. We think that we've put a good amount of investment to get that going. We'll have to judge over time whether there's an opportunity to accelerate the growth rates by investing more, but that'll be a judgment we'll make with the new CEO.
Great. Okay. Thank you very much.
Our next question is from Manav Patniak from Barclays. Please go ahead.
Hey, this is Ryan Leonard on for Manav. Just a question on, you've talked a lot about the co-location. It seems like more and more shows are co-locating different events under one kind of umbrella. Obviously, there's a near-term impact there, and it's been negative. Can you just discuss the strategy that goes into that? Is it the fact that you see some demand slackening in some of the shows, so combining them under one roof will increase the demand? Or is this something you're hearing from the attendees and exhibitors? Just why take the near-term hit, the strategy behind your decision-making there?
It's a good question. I would say that just because you co-locate doesn't mean that there is always going to be a negative impact. We co-located Kitchen & Bath Industry Show with the International Builders' Show, and both shows got an uplift. I think it's really case by case. In the case of NY NOW, as part of the repositioning of the show to improve the quality of the content, as Kevin would call it, the exhibitors and the attendees, National Stationery Show was a better show than some of the lifestyle exhibitors that we had, and we've made the conscious decision to do that. In doing so, we moved the show 3 months earlier, and not everybody in the stationery world was able to accommodate that based on their timing.
The plus side of this is we're going to launch a second stationery show with our summer NY NOW. It was a little bit of having to kind of reposition things for the long-term benefit of NY NOW. In the case of RetailX, GlobalShop was already on a less than favorable path, and IRCE has varied. It would be a stretch to say that putting them together has affected the performance. What we try to do in these situations is find the complementary events that make sense together, and so there's crossover attendance, because quality of attendance is important. We try and do it case by case. In some cases, you're right, we take an initial hit because we have to downsize certain sections just to make it work.
It isn't a conscious strategy to bring things together to make them smaller. It really is a strengthening strategy.
Got it. Just on the international kind of exposure across the broader portfolio. I was under the impression that roughly 10% of attendees and exhibitors were from international markets, but your commentary on the China impact obviously implies that it's much bigger. Can you help flesh out the sizing of that?
The Chinese exhibitors is probably 3% or 4% of Emerald's revenue. Some of this is not necessarily Chinese exhibitors, though, because you can have brands that do their manufacturing in China, and because of the uncertainty, they have to determine whether they're going to set up manufacturing in adjacent countries or take a different approach to manufacturing. That leads them, even though they're not directly Chinese exhibitors, to step back and say, "Okay, we need to rethink what our strategy is going to be here. In the short term, we're not going to advertise in one of the publications, or we're going to downsize our booth till we know exactly what we're going to do." China itself is relatively small, but the impact has been meaningful there. It has a knock-on effect on other parts of the business.
Got it. Just lastly, on the guidance range, I think when you initially laid out the range, especially in other marketing services, you talked about being, I think you said pessimistic or realistic about the performance, and that's obviously gotten a little bit worse in the last couple weeks. Then, you mentioned being somewhat optimistic on NY NOW. Just trying to get a sense of what embedded in the guidance is in hand and what is things that you either need to be optimistic about or need to go after between now and the end of the year?
We have pretty much 70%-80% of the summer shows sold. If we continue the same trajectory, I think we feel good about that. The things that are still we have to see happen around attendees at conferences, some advertising in publications. Those are decisions that are made closer to the event. From a pacing of booth sales, we feel pretty good about the visibility there. It's really the other pieces of the business which can move the numbers $1 million or so this way or that. These are relatively small margins that we're talking about in terms of the differences.
Got it. Thank you.
Welcome.
Our next question is from Ashish Sabharwal from Deutsche Bank. Please go ahead.
Hi. A quick question on the other marketing services. Is the weakness also related to China, or the trade issue?
I would previously have said no, but certainly in some of the new publications that we acquired last year that are in the connected home and security industries. So much of that equipment is manufactured in China itself that we are seeing some impact on advertising decisions as I was just explaining to Ryan. As brands are trying to figure out whether they need to save money to be able to set up manufacturing in different locations or kind of just have a level of uncertainty around the availability of their products. It is affecting the OMS piece of the business somewhat. Generally, I think OMS is We have large presence in design, which is less affected by it. There, it's really a continuation of some secular issues. We're working on trying to create more digital opportunities.
It just is a slower process than we would like.
No, that's helpful. Maybe just a follow-up question on co-locations. Looks like that's driving higher attendees. My question was, is there opportunity for you to do more of these co-locations of shows, or are you done with that whole strategic review process? As you go forward, are there other opportunities where you could continue to co-locate shows? That's one. On the co-location, even if the number of attendees go up, is there a risk that the attendees also then get split, the time gets split between the shows? Even if the number of attendees go up, the time that they spend at each show could potentially get affected. Any color on that front?
Yeah. It's a good question. I would say we are looking a little bit more actively at co-locations. Shows tend to be in time windows that work for their industries and that have developed over time, and it isn't possible to just pick things up and change the timing very often. You even see GlobalShop move back 3 months and National Stationery Show moved up a couple of months. Those things are a little disruptive the first time you do them. You have to have a good strategic reason to do it, and it has to be a long-term play. I would say we're probably more actively looking at those from an efficiency perspective. It is true that you potentially, at least in theory, you dilute the attendees' time.
Most of the attendees come for one of the events, and then you get a spillover benefit when they go to the second one, rather than they would actively shop in both events equally. When we did the National Stationery Show, clearly stationery stores are interested in gifts and high-level gifts and jewelry and some of the other things that were in NY NOW. There's a little bit of good overlap there, but primarily they went to the National Stationery Show for all the products that traditionally were at the National Stationery Show. It really has to be done carefully, but we're looking at it with kind of new interest.
That's helpful. Maybe a final question. As you mentioned, your first quarter results came in line with your expectations, but they obviously came below our estimates. Just so that our sell side estimates are set up more appropriately, would it make sense to give more clarity on a quarterly guidance? I know that's not your strategy to give quarterly guidance, but maybe give us a better color so that our models are set appropriately.
Well, based on the Q1 outcome, I could see how you would get there because we were even modestly favorable to where we expected to be for Q1, obviously out of line with consensus. I think that was really because there was a lot of change on four shows, kind of scheduling differences that would be difficult for the outside world to really understand how that played through in the numbers. It's a good question. It's a topic of discussion. I think it'll be one that we will raise with the CEO, when he or she comes in. It certainly is not impossible that it would make sense for us to do that. I'm not going to make a commitment today to it.
Sure. Thanks again for all your help.
You're welcome.
Once again, as a reminder, if you'd like to ask a question, it is star one. Our next question here is from Jeff Meuler from Robert W. Baird. Please go ahead.
Yeah, thank you. Good morning. I've asked, I guess, variations of this question in the past, but I think it remains relevant just given the revenue trends, I guess the new batch of issues, and then just the shading guidance lower again. I guess, maybe if you could just speak to the point that this is largely temporal and execution driven, because it seems like you're addressing issues, but then there's always something new that pops up. It starts to feel as it drags out more structural, either to the U.S. trade show industry or to the Emerald portfolio, maybe because it's overweight the consumer and retail sector. Maybe if you could just try to give us some detail that could give investors confidence that things are temporal and can be fixed through improved execution instead of something more structural.
Yeah. Thanks, Jeff. I've been to a dozen shows so far this year, and I come away from all of them bar none saying we do a really good job. We create good events. There's a demand. People are doing business. From our numbers, you can see or from our comments, you can see that there's a bunch of shows that are growing nicely, that are meeting the needs of their communities and we're able to grow those. Where we've seen issues, I do think that you're right. Sometimes there's some kind of industry component to it, but more often than not, it's an execution issue. That's something that we're seeking to address. We're not happy with some of the issues that we've had, and I think we're making some progress. On ASD, we've made some progress. On NY NOW, we've made some progress.
There's some self-inflicted issues here, including on ICFF. Fundamentally, when I go to trade shows, trade shows are strong. The model is still strong, and we're not a long way away from doing better and meeting kind of the growth targets that we set out a couple of years ago. I think we're on a much better path, and it's unfortunate when we have to talk about ICFF and RetailX, but those are addressable issues. I don't think that they are really related to anything underlying, and certainly not the trade show industry, which is doing fine.
Okay. Then maybe this is a better conversation once the new CEO is in place. Recognize it is a large portfolio and some things are going to be doing better than others at different points in time, and some are just structurally stronger shows or better positioned. Is the company, as the board, considering anything more drastic around the show portfolio, more aggressive wind downs, potential divestitures of shows? Just anything more dramatic beyond the focus on executional improvement?
The short answer is no. We haven't had discussions other than clearly we review the performance of individual shows and industries, and we have a view on those. Partway through a more detailed strategy exercise in anticipation of the CEO coming in to really explain the positions we have, the opportunities we see. Once we get through that process, the CEO joins. I couldn't say that we wouldn't choose to make some bets in certain areas and double down and not in other areas. We certainly have no plan at the moment, and as we look across the portfolio, there are very few assets that we have that we don't think we could grow. You're right, relative growth. Maybe it would make sense to do some things, but there's nothing that stands out as being something that we want to divest.
At this point, we're moving forward to improve all the assets we have.
Okay. Thank you. The last one from me, just maybe if you could talk to capital allocation and the current leverage in greater detail, obviously increasing the dividend. There was a comment about slowing outreach for acquisitions. Just what is the leverage target for the company now? How does debt paydown factor into your capital allocation decisions, et cetera?
Right now, we're comfortable with where we are, around 3.5 times. I guess longer term, we would expect to bring that down below the three times is our soft target. Where we are today, we're trying to maintain flexibility in order to give the new CEO some opportunities to use cash in ways that we all agree makes sense. M&A continue to be active on M&A. There's a few small deals that we're excited about that we're pursuing. We're not reaching out for big deals at this point. We're in a little bit of a continue with small focused acquisitions, and we'll decide once we have a new CEO where we go from here. We're still generating a lot of cash. The model is good. We have lots of options. I think we're in a pretty good spot.
Yeah. Thank you, Phil. Appreciate you taking the questions head on.
This concludes the question and answer session. I'd like to turn the floor back to Mr. Evans for any closing comments.
Thank you, Matt. Yes, thank you everyone for joining us today. I hope you can take from this that we feel good about where we are. ASD has stabilized. NY NOW is progressing, and we feel good about where that's going. We're investing in the business and overall, we think we're on the right track and we look forward to having the opportunity to talk to everyone again on the next quarter and hopefully continue to show progress. Thanks everyone for your time.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.