Good morning, and welcome to the Emerald Holding Incorporated First Quarter 2021 Earnings Conference Call. During today's call, all parties will be in a listen only mode. Following the prepared remarks, the conference will be open for questions with instructions Call is to follow at that time. 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, Call plans and prospects.
Such statements are subject to uncertainties and other factors that could cause actual results to differ materially from those indicated are implied by such statements. Such risks and other factors are set forth in the company's most recently filed periodic reports on Form 10 ks Call and Form 10 Q and subsequent filings. The company does not undertake any duty to update such forward looking statements. Additionally, during today's call, Call, management will discuss non GAAP measures, which we believe can be useful in evaluating the company's performance. The presentation of this additional information should not be considered in isolation as a substitute for results prepared in accordance with U.
S. GAAP. A reconciliation of these non GAAP measures fit to the most comparable Call. As a reminder, this conference is being recorded and 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 7, 2021. I would now like to turn the call over to Mr. Herve Fedki, President and Chief Executive Officer. Please go ahead, sir.
Thank you, and good morning, everyone. Call. On today's call, I'll provide an update on our event schedule for the balance of the year as well as our progress executing on our strategic initiatives Call designed to add value to our customers while accelerating Emerald's growth. David Doft, Emerald's CFO, will review our first quarter results in more Call. And we will then open the call for your questions.
To start, our Q1 results continued to be impacted by the COVID-nineteen pandemic Call. As we canceled or postponed all our live events except for Surf Expo in Orlando in January, Call that while in person was impacted by understandable travel and safety concerns. You may recall January was a time when we were in the midst call. Frightening surge of COVID-nineteen. It was in fact the deadliest month yet.
So it's no surprise that even though we still hosted several 1,000 people, We experienced a more than 50% decline in attendance. Yet our exhibitors were very pleased with the quality call and the number of buyers that attended as the buyer to exhibitor ratio exceeded COVID levels. Call. Importantly, the events staged safely with the industry's all secure protocols fully observed call and there were no reported COVID cases coming out of the events. The positive customer sentiments coming out of Surf Expo call clearly demonstrates the vital role that face to face events continue to play in driving connections, commerce and growth Call for customers and communities.
Looking ahead, our business is at an important inflection point call as COVID-nineteen vaccines are now widely available in the U. S. And tens of millions of Americans have been vaccinated. Call. Many states have scheduled their reopening dates for large in person events over the next 2 months, call, which is providing real optimism across our industry.
Importantly, the Governor of Nevada announced that the state is expected to fully open on June 1. Call. California announced that events are expected to be allowed beginning on June 15. And just yesterday, the Mayor of New York City said he plans to fully reopen the city call on July 1, so we're hopeful that New York State will allow large live events beginning this summer. Additionally, Florida and Texas call are already fully open for business.
The rapid rollout of COVID-nineteen vaccines, combined with their call. Our success in providing protection is beginning to provide confidence to our customers while giving our team the conviction to move forward with an aggressive call. As a result, we expect a full resumption of our events calendar beginning this summer. Call. We are planning for the busiest second half in Emerald's history in terms of the number of events we're producing given Call.
While the outlook for attendance at our shows remains uncertain and could well be challenged in the near term call. Even for events we do stage with the lingering impacts of COVID, we are encouraged with the early success call that we're seeing from other operators in Asia where recovery seems further along and we've seen several recent events which have matched call or exceeded pre COVID levels. That said, our focus is to ensure that we stage call. We remain confident call in the value that our events provide to our customers and believe that our shows and our industry return to pre COVID levels over time. Call.
Safety is of course still very much top of mind. This past March, Governor Steve Sisolak of Nevada said the following in an interview with the Associated call. Mark my words, Nevada will be the safest place to have a convention or to come and visit. It will be call. It will be safe for the hotel operators and for the employees and their families.
I quote the Governor of Nevada Call. As I feel his words are a helpful reminder that as we begin to roll out ambitious in person trade shows, we cannot forget call that our clients and employees need us to commit to the highest safety standards possible. They have my word. While we have only staged transforming our business as we strive to innovate and expand. On last quarter's call, I discussed our growth focused framework call that is centered on 3 strategic imperatives, which are customer centricity, delivering 365 day customer engagements and call.
I'm very proud to report that we have made significant progress across all three initiatives through the Q1, which puts us in a position to thrive as we return to live events. On customer centricity, we have completed the first stage Call of our customer data hub, which has taken more than a year to complete. This was a significant undertaking as we have integrated call. We expect to have the remainder of our data integrated by the summer, Call, which should allow our team to deliver greater service and value to our customers due simply to the fact that we will have improved visibility Call into all areas that our customers are doing business with us. Ultimately, we will better understand what our customers really care about across Call.
Emerald's portfolio of events, webinars, digital content, which will in turn allow us to be more targeted in how we develop, call market and sell solutions to them and more effectively engage with them year round. We also created a dedicated pricing function call by hiring our 1st pricing director whose mandate is to drive the optimization of our value based pricing initiative. Call. The second strategic imperative is our goal of engaging with our customers 265 days a year through utilizing digital mediums. Call.
Our acquisition of Plum River and its Elastic Suite technology platform is central to accomplishing this goal and a key component of our strategy of bringing buyers and sellers together in a digital environment year round while providing them with a platform where they can transact. Call. As part of this, I'm very pleased with the development of ElasticSuite's digital market technology platform. This powerful B2B e commerce platform call will provide our exhibitors with the technology to take their relationships with their customers beyond the show floor by supporting the wholesale purchasing process year round. Call.
Digital market creates a standardized single platform approach to B2B e commerce by offering 3 65 day access to call. Digital market also provides the opportunity call for more streamlined and collaborative buyer seller experience at our in person events. Call. The launch of digital market is set to coincide with our outdoor retailer and Surf Expo summer additions with expectations for the platform to be rolled out across more of our events over the balance of this year and next. Our third strategic imperative is portfolio optimization Call, where we're cultivating a culture of innovation with additional growth driven by accretive M and A and new event call.
Through our newly created Emerald Accelerator business unit. We recruited and onboarded call. A few weeks ago, a former senior executive from American Express, Issa Juana to lead Emerald Accelerator. This team will evaluate and call. We expect to execute on new event launch opportunities, which we expect to be an incremental driver of organic growth over time.
Call. Given our strong balance sheets and liquidity, we're also in an enviable position to acquire attractive assets that come up for sale. 1 One that we believe has real potential is Sue Bryce Education, which we acquired in April. Sue Bryce is a member based portrait photography platform that provides valuable content to its members with a subscription based business model. Call.
The company offers photographers both online and in person learning and a community that helps them grow While focused on photography, we believe this e learning concept can be expanded across our portfolio of shows, adding a valuable subscription based revenue call that will enhance our year round digital offerings. This was a relatively small acquisition, but one that we believe provides a platform for expansion across our portfolio of industry leading shows, which is critical to how we think about expanding the value that we provide to our customers while growing call. Historically, Emerald was a collection of industry leading live events that are number 1 in their industries and must call. And we'll continue to attend events for both exhibitors and attendees. These shows were managed and run almost as separate companies with their own sales forces, marketing and customers.
Call. The show teams did not interact with one another nor were customers engaged holistically. Each show was staged once Call twice a year with limited customer engagement beyond the live show except to sell the next edition. Call. We're changing this paradigm with a new way of doing business, which can clearly be seen with our key initiatives this quarter.
Call. Our customer data hub will allow our sales team to better add value to our customers by offering solutions that draw upon all call of Emerald's products, which will better meet their needs. With the launch of digital market, brands and retailers across the Emerald portfolio call will be able to transact year round. Importantly, digital market provides a valuable lead generation function for our customers call and further enhances the value that we can provide. We're now positioned to engage with our customers 265 days a year call, while adding an important new revenue stream to Emerald.
Lastly, our acquisition of Sue Bryce will allow us to develop new ways of engaging with our customers Call around our live events and unlock the potential of subscription based e learning offerings. As you can see, Call. We think there are numerous subscription based products that we believe we can extend into, which should not only enhance our growth profile, but also provide incremental value to our existing customer base across all categories. Our portfolio of industry leading events call is crucial to our success and remains our core focus. That said, the disruption call.
To live events caused by the pandemic has provided us with an opportunity to build businesses that complement our shows, expand our reach call and create new fast growing revenue streams for Emeralds. I'm often asked, when will your shows get back to full capacity and what will margins look like at that Call. While I understand this line of thinking, it's not how I think about our business. Our vision has much higher aspirations call with reimagining Emerald. Doing so will result in accelerating growth and expanding profitability.
We took a significant step forward call through the
Q1 to achieving our goal, and I'm very excited for what the future holds for Emerald. Now let me turn the call over to David. Call. Thank you, Herve, and good morning. For the Q1, we reported revenues of $12,900,000 call, which compares to $99,700,000 in the year ago quarter.
The decrease was primarily due to the cancellation of almost all first quarter events call due to COVID-nineteen, including KBIS, New York NOW Winter, Outdoor Retailer Snow Show, ISS Long call and the sports licensing and tailgate show, which resulted in a reduction of $70,800,000 of Q1 2020 revenue. Call. We have also rescheduled several shows later in the year, comprising $12,200,000 of Q1 2020 revenue. During the Q1, we were able to successfully stage Surf Expo Winter in Orlando, Florida, where we experienced a more than 50% decline in revenue. Call.
As Herve mentioned, the number of buyers per exhibitor increased as compared to pre COVID levels, which drove a strong rise in exhibitor call. Our customers' satisfaction with Surf Expo demonstrates the value of in person face to face events, which is so important to our customers' businesses. Call. Our adjusted EBITDA for the Q1 was negative $2,700,000 as compared to positive $23,600,000 in the same period last year. Decrease in adjusted EBITDA of $26,300,000 was mainly due to the COVID related cancellation of call.
13 Q1 events representing prior year Q1 adjusted EBITDA of $39,700,000 call and the postponement of 10 Q1 2020 events, representing prior year Q1 adjusted EBITDA of $5,500,000 call. This was offset by the recognition of $14,100,000 in other income related to event cancellation insurance claim proceeds call. 1st quarter 2021 adjusted EBITDA also reflected the benefit of cost savings measures that we have implemented over the last 12 months. Looking at our event cancellation insurance in more detail, we have submitted call $220,000,000 in claims to date. We also continue to work on finalizing claim submission for several more canceled 2021 events.
These claims represent the net amount of budgeted gross revenues, call. Less avoided costs for impacted or canceled events previously scheduled to take place in 2020 2021. Call. Through April of 2021, we have received insurance claim payments totaling $121,100,000 call, of which $89,100,000 was received in 2020 $29,600,000 has been received in the Q1 of 2021 call and $2,400,000 was received this month. We are actively pursuing collection of the remaining unpaid amount Call of filed insurance claims for our canceled 2020 event in addition to claims for our canceled 2021 event.
Call. As part of these collection efforts, this past February, we commenced litigation against the insurers. We believe the insurers have improperly call. We intend to vigorously pursue full collection on our claims. Call.
Looking to the balance of the year, we have canceled or postponed all our Q1 2021 events call except SURF EXPO, which as I discussed successfully staged in January. Additionally, we have postponed many of our second quarter events call. We are pleased to announce that we are in the expectation that states will continue to reopen as the COVID vaccines continue to be call. As Herve discussed, we are very optimistic that we can begin staging events through the summer call and execute an aggressive calendar in the second half of this year. That said, we maintain almost $200,000,000 of event cancellation insurance for the full year 2021, which we expect to continue to insulate our business from certain adverse effects of the pandemic.
Call. We will also be vigilant as we work to mitigate expenses related to canceled events in order to preserve our event cancellation insurance coverage call given the uncertain environment, which you can see in the sharp decline in our cost of revenues. Turning to free cash flow in the Q1. Call. We experienced an inflow of $600,000 which compares to an inflow of $7,700,000 in the year ago Q1.
Call. It is important to point out that as our shows begin to stage, we expect to experience positive net cash inflows as we receive customer deposits. Call. In fact, we are already seeing this in the strong increase in our deferred revenue since year end, up over 50 call. This should have a long tail as we ramp our events back to pre COVID levels over time.
Additionally, Call. Our business model is a capital light model as our CapEx runs at very low levels as can be seen by our CapEx in the Q1 of 2021, which was $1,000,000 as compared to $1,100,000 in the year ago Q1. Call. Turning to our balance sheet. We ended the Q1 of 2021 with $293,600,000 of cash call as compared to the Q4 2020's cash balance of $295,300,000 Additionally, we have full availability of our $150,000,000 revolving credit facility, which brings our total liquidity to more than $440,000,000 call.
As we have discussed, our $400,000,000 capital raise in 2020 combined with our event cancellation insurance policy call has allowed our team to opportunistically invest in the business and position Emerald for growth as the pandemic is brought under Call and the exhibition industry begins to normalize. Herve outlined the benefits of our acquisitions of Plum River and Sue Bryce Education, which are key steps towards engaging with our customers 365 days a year. Call. We plan to invest in these businesses to expand them across our brands as well as make other strategic growth investments in our business as we work to position Emerald call for a return to organic growth. We also plan to remain disciplined and keep a tight rein on our expenses as we strive to balance call.
We finished the Q1 with net debt of $230,200,000 call flat to year end and representing a net leverage ratio of 1.6 times our consolidated EBITDA call of $140,800,000 per the terms of our credit agreement. As a reminder, our credit agreement has a call. Bringing total net leverage covenant of no more than 5.5x, which kicks in if borrowings under our credit facility exceed 35% of our revolver capacity of $150,000,000 At March 31, we had no borrowings under our call and do not expect to draw on our revolver in the near term given our strong liquidity position. With that, I will now turn the call back to Erbe. Call.
Thank you, David. To conclude, this is a very exciting time at Emeralds as we prepare to return to live events. We have built a strong foundation call over the past year, which will allow us to expand the value we offer our customers, engage with them year round and ultimately better monetize the value that we're providing. Call. Additionally, we're building new digital businesses that are expected to provide high margin subscription revenue streams to complement call are live events.
Ultimately, we are greatly expanding our addressable market, which will position Emerald to deliver Call. Thank you again for your time today. Call. Operator, please open the meeting for questions.
Thank you. At this time, we will be conducting a question
Call.
Ladies and gentlemen, there are no further questions at this time. I would like to turn the call back over to management for closing remarks.
Great. Thank you very much, Alex. Building on this strong foundation over the Call. Last year is provides us with this exciting opportunity here at Emerald call to return to live events. We feel very good about the position that we're in, excited about Call.
The near and the long term, and I want to thank you for your time today.
This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation and have a great day.