Thursday, March 09, 2006
Advanstar: The Big Momentum
I listened in on Advanstar's conference call today, and came away, frankly, impressed.
Among the highlights:
The company's plans for 2006 include the launch of 12 magazines and special issues, 24 conferences and shows and 45 new webinars.
They'll be creating a centralized electronic media group to manage and grow their Internet business, which grew to $3.6 million in 2005, up 300% over the previous year.
In the fourth quarter of 2005, magazine revenues were up 9%, ad pages were up 14%. They seem to have fixed the problem with their healthcare special projects, which weighed heavily on magazine revenues over the past year. There was a 12% year-over- year increase in that business in the fourth quarter.
On the show side, they're also carrying a lot of momentum into this year. In the first quarter, the MAGIC show delivered a 16% increase in revenues, a 9% increase in square footage, and about a 10% increase in attendance (And yes, this compares apples to apples, factoring in the 2005 performance of the Pool and Project acquisitions). The Dealer Expo, which I recently referred to, was up 7% in revenues and 27% in attendance. And the International Motorcycle Show Tour was up 15% in revenues, 8% in square footage and 16% in attendance.
CEO Joe Loggia was quizzed on the true organic growth rate of the business by an analyst, who said that without launches, it seemed to be about 3-4%. Loggia argued with this reasoning, saying that launches were organic growth (I agree). "What sets us apart in the business to business world is that these launches do drive growth. We don't talk about growing ad pages or square footage. We talk about growing our market presence in each segment." He thinks Advanstar's true organic growth rate in 2005 was 6-7%.
The debt situation looks under control, cashflow is good, they're in compliance with covenants.
Interestingly, I hear the situation is not quite as good at Questex, the company founded out of the sale of "non-core" Advanstar assets last year. Caveat emptor.
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Among the highlights:
The company's plans for 2006 include the launch of 12 magazines and special issues, 24 conferences and shows and 45 new webinars.
They'll be creating a centralized electronic media group to manage and grow their Internet business, which grew to $3.6 million in 2005, up 300% over the previous year.
In the fourth quarter of 2005, magazine revenues were up 9%, ad pages were up 14%. They seem to have fixed the problem with their healthcare special projects, which weighed heavily on magazine revenues over the past year. There was a 12% year-over- year increase in that business in the fourth quarter.
On the show side, they're also carrying a lot of momentum into this year. In the first quarter, the MAGIC show delivered a 16% increase in revenues, a 9% increase in square footage, and about a 10% increase in attendance (And yes, this compares apples to apples, factoring in the 2005 performance of the Pool and Project acquisitions). The Dealer Expo, which I recently referred to, was up 7% in revenues and 27% in attendance. And the International Motorcycle Show Tour was up 15% in revenues, 8% in square footage and 16% in attendance.
CEO Joe Loggia was quizzed on the true organic growth rate of the business by an analyst, who said that without launches, it seemed to be about 3-4%. Loggia argued with this reasoning, saying that launches were organic growth (I agree). "What sets us apart in the business to business world is that these launches do drive growth. We don't talk about growing ad pages or square footage. We talk about growing our market presence in each segment." He thinks Advanstar's true organic growth rate in 2005 was 6-7%.
The debt situation looks under control, cashflow is good, they're in compliance with covenants.
Interestingly, I hear the situation is not quite as good at Questex, the company founded out of the sale of "non-core" Advanstar assets last year. Caveat emptor.
