##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549-1004
 
 FORM 10-Q/A
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2004
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 COMMISSION FILE NUMBER 1-14337
 PENTON MEDIA, INC.
  DELAWARE(State of Incorporation)
    
    36-2875386(I.R.S. Employer Identification No.)
 1300 East Ninth Street, Cleveland, OH(Address of Principal Executive Offices)
    
    44114(Zip Code)
 216-696-7000
 (Registrants Telephone Number, Including Area Code)
 þ o
 o þ




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PENTON MEDIA, INC.
 Form 10-Q/A
 INDEX
 PagePart I  FINANCIAL INFORMATIONItem 1. Financial StatementsRestated Consolidated Balance Sheets at June 30, 2004 and December 31, 2003
    
    
    4Restated Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2004 and 2003
    
    
    6Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2004 and 2003
    
    
    7Notes to Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    36Item 4. Controls and Procedures
    
    
    49Part II  OTHER INFORMATIONItem 6. Exhibits and Reports on Form 8-K
    
    
    51Signature
    
    
    52Exhibit Index
    
    
    53EX-31.1 CERTEX-31.2 CERTEX-32 CERT
  2




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EXPLANATORY NOTE
       3




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##### Table of Contents



Part I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 PENTON MEDIA, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (Unaudited, Dollars in thousands)
 RestatedJune 30,
    
    December 31,2004
    
    2003AssetsCurrent assets:Cash and cash equivalents
    
    $
    15,919
    
    
    $
    29,626Restricted cash
    
    
    193
    
    
    
    Accounts receivable, less allowance for doubtful
accounts of $3,329 and $3,703 in 2004 and 2003, respectively
    
    
    31,671
    
    
    
    27,170Notes receivable
    
    
    760
    
    
    
    571Inventories
    
    
    905
    
    
    
    875Deferred tax asset
    
    
    253
    
    
    
    253Prepayments, deposits and other
    
    
    11,282
    
    
    
    9,625Total current assets
    
    
    60,983
    
    
    
    68,120Property, plant and equipment:Land, buildings and improvements
    
    
    8,674
    
    
    
    8,810Machinery and equipment
    
    
    47,706
    
    
    
    46,45056,380
    
    
    
    55,260Less: accumulated depreciation
    
    
    39,691
    
    
    
    36,33216,689
    
    
    
    18,928Other assets:Goodwill
    
    
    214,411
    
    
    
    214,411Other intangibles, less accumulated amortization of
$14,279 and $13,189 in 2004 and 2003, respectively
    
    
    9,677
    
    
    
    10,883Other non-current assets
    
    
    7,442
    
    
    
    9,102231,530
    
    
    
    234,396$
    309,202
    
    
    $
    321,444
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PENTON MEDIA, INC.
 CONSOLIDATED BALANCE SHEETS
(Unaudited, Dollars in thousands, except share and per share data)
 RestatedJune 30,
    
    December 31,2004
    
    2003Liabilities and stockholders deficitCurrent liabilities:Accounts payable
    
    $
    6,925
    
    
    $
    6,402Accrued compensation and benefits
    
    
    10,092
    
    
    
    8,458Other accrued expenses
    
    
    27,239
    
    
    
    22,747Unearned income, principally trade
show and conference deposits
    
    
    21,870
    
    
    
    22,535Total current liabilities
    
    
    66,126
    
    
    
    60,142Long-term liabilities and deferred credits:Senior secured notes, net of discount
    
    
    156,979
    
    
    
    156,915Senior subordinated notes, net of discount
    
    
    171,847
    
    
    
    171,698Net deferred pension credits
    
    
    10,764
    
    
    
    11,040Deferred tax liability
    
    
    18,635
    
    
    
    17,245Other non-current liabilities
    
    
    8,320
    
    
    
    9,270366,545
    
    
    
    366,168Commitments and contingenciesMinority interest
    
    
    424
    
    
    
    450Mandatorily redeemable convertible preferred stock, par value $0.01
per share; 50,000 shares authorized, issued and outstanding;
redeemable at $1,000 per share
    
    
    63,572
    
    
    
    54,971Redeemable common stock, par value $0.01 per share; 4,191
shares issued and outstanding at December 31, 2003
    
    
    
    
    
    
    2Stockholders deficit:Preferred stock, par value $0.01 per share; 1,950,000 shares
authorized; none issued or outstanding
    
    
    
    
    
    
    Common stock, par value $0.01 per share; 155,000,000 shares
authorized; 33,353,610 and 33,220,877 shares issued and outstanding
at June 30, 2004 and December 31, 2003, respectively
    
    
    332
    
    
    
    332Capital in excess of par value
    
    
    218,369
    
    
    
    226,355Retained deficit
    
    
    (404,003
    )
    
    
    (382,875
    )Notes receivable from officers, less reserve of $5,848 and $7,600 at
June 30, 2004 and December 31, 2003, respectively
    
    
    
    
    
    
    (1,897
    )Accumulated other comprehensive loss
    
    
    (2,163
    )
    
    
    (2,204
    )(187,465
    )
    
    
    (160,289
    )$
    309,202
    
    
    $
    321,444
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PENTON MEDIA, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited; dollars and shares in thousands, except per share data)
 Restated
    
    RestatedThree Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    2004
    
    2003Revenues
    
    $
    50,936
    
    
    $
    50,183
    
    
    $
    105,403
    
    
    $
    104,575Operating expenses:Editorial, production and circulation
    
    
    23,765
    
    
    
    23,467
    
    
    
    45,146
    
    
    
    45,820Selling, general and administrative (including $0.3
million and $2.7 million of executive separation
costs for the three and six months ended
June 30, 2004, respectively)
    
    
    24,110
    
    
    
    22,588
    
    
    
    48,604
    
    
    
    46,225Provision for loan impairment
    
    
    1,717
    
    
    
    7,600
    
    
    
    1,717
    
    
    
    7,600Restructuring and other charges
    
    
    3,524
    
    
    
    1,901
    
    
    
    4,392
    
    
    
    1,817Depreciation and amortization
    
    
    2,969
    
    
    
    3,785
    
    
    
    5,990
    
    
    
    7,51156,085
    
    
    
    59,341
    
    
    
    105,849
    
    
    
    108,973Operating loss
    
    
    (5,149
    )
    
    
    (9,158
    )
    
    
    (446
    )
    
    
    (4,398
    )Other income (expense):Interest expense
    
    
    (9,362
    )
    
    
    (9,412
    )
    
    
    (18,820
    )
    
    
    (19,750
    )Interest income
    
    
    64
    
    
    
    128
    
    
    
    166
    
    
    
    237Other, net
    
    
    (10
    )
    
    
    66
    
    
    
    (16
    )
    
    
    (308
    )(9,308
    )
    
    
    (9,218
    )
    
    
    (18,670
    )
    
    
    (19,821
    )Loss from continuing operations before income taxes
    
    
    (14,457
    )
    
    
    (18,376
    )
    
    
    (19,116
    )
    
    
    (24,219
    )Provision for income taxes
    
    
    (769
    )
    
    
    (760
    )
    
    
    (2,012
    )
    
    
    (5,649
    )Loss from continuing operations
    
    
    (15,226
    )
    
    
    (19,136
    )
    
    
    (21,128
    )
    
    
    (29,868
    )Discontinued operations:Income (loss) from discontinued operations (including
gain on disposal of $1.4 million for the six months
ended June 30, 2003), net of taxes
    
    
    
    
    
    
    (188
    )
    
    
    
    
    
    
    678Net loss
    
    
    (15,226
    )
    
    
    (19,324
    )
    
    
    (21,128
    )
    
    
    (29,190
    )Amortization of deemed dividend and accretion
of preferred stock
    
    
    (3,408
    )
    
    
    (1,966
    )
    
    
    (8,601
    )
    
    
    (2,733
    )Net loss applicable to common stockholders
    

    $
    (18,634
    )
    
    $
    (21,290
    )
    
    $
    (29,729
    )
    
    $
    (31,923
    )Net loss per common share  basic and diluted:Loss from continuing operations applicable
to common stockholders
    
    $
    (0.55
    )
    
    $
    (0.63
    )
    
    $
    (0.89
    )
    
    $
    (0.98
    )Discontinued operations, net of taxes
    
    
    
    
    
    
    (0.01
    )
    
    
    
    
    
    
    0.02Net loss applicable to common stockholders
    
    $
    (0.55
    )
    
    $
    (0.64
    )
    
    $
    (0.89
    )
    
    $
    (0.96
    )Weighted-average number of shares outstanding:Basic and diluted
    
    
    33,583
    
    
    
    33,508
    
    
    
    33,559
    
    
    
    33,272
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PENTON MEDIA, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited; dollars in thousands)
 Six Months EndedJune 30,2004
    
    2003Net cash provided by (used for) operating activities
    
    $
    (11,757
    )
    
    $
    34,722Cash flows from investing activities:Capital expenditures
    
    
    (1,519
    )
    
    
    (1,343
    )Earnouts paid
    
    
    
    
    
    
    (7
    )Decrease (increase) in notes receivable
    
    
    (188
    )
    
    
    1,549Proceeds from sale of Professional Trade Shows group
    
    
    
    
    
    
    3,250Net cash provided by (used for) investing activities
    
    
    (1,707
    )
    
    
    3,449Cash flows from financing activities:Repayment of senior secured credit facility
    
    
    
    
    
    
    (4,500
    )Payment of notes payable
    
    
    
    
    
    
    (417
    )Employee stock purchase plan payments
    
    
    
    
    
    
    (113
    )Proceeds from repayment of officers loans
    
    
    
    
    
    
    250(Increase) decrease in restricted cash
    
    
    (193
    )
    
    
    267Payment of financing costs
    
    
    (6
    )
    
    
    (200
    )Increase (decrease) in book overdrafts
    
    
    (63
    )
    
    
    193Net cash used for financing activities
    
    
    (262
    )
    
    
    (4,520
    )Effect of exchange rate changes on cash
    
    
    19
    
    
    
    (52
    )Net increase (decrease) in cash and cash equivalents
    
    
    (13,707
    )
    
    
    33,599Cash and cash equivalents at beginning of period
    
    
    29,626
    
    
    
    6,771Cash and cash equivalents at end of period
    
    $
    15,919
    
    
    $
    40,370
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PENTON MEDIA, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 1  BASIS OF PRESENTATION
   Reclassifications
  Use of Estimates
  Accounting for Stock-Based Compensation
   2004
    
    2003Risk-free interest rate
    
    
    3.65
    %
    
    
    3.62
    %Dividend yield
    
    
    0.00
    %
    
    
    0.00
    %Expected volatility
    
    
    136.29
    %
    
    
    104.79
    %Expected life
    
    7 years
    
    7 years
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PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  Restated
    
    RestatedThree Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    2004
    
    2003Net loss applicable to common stockholders:As reported
    
    $
    (18,634
    )
    
    $
    (21,290
    )
    
    $
    (29,729
    )
    
    $
    (31,923
    )Add: Compensation expense included in net loss applicable to common
stockholders, net of related tax effects
    
    
    576
    
    
    
    339
    
    
    
    702
    
    
    
    1,240Less: Total stock-based compensation expense determined under fair
value based methods for all awards, net of related tax effects
    
    
    (2,544
    )
    
    
    (939
    )
    
    
    (2,901
    )
    
    
    (2,577
    )Pro forma
    
    $
    (20,602
    )
    
    $
    (21,890
    )
    
    $
    (31,928
    )
    
    $
    (33,260
    )Basic and diluted earnings per share:As reported
    
    $
    (0.55
    )
    
    $
    (0.64
    )
    
    $
    (0.89
    )
    
    $
    (0.96
    )Pro forma
    
    $
    (0.61
    )
    
    $
    (0.65
    )
    
    $
    (0.95
    )
    
    $
    (1.00
    )
 New Accounting Pronouncements
    9




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PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 2  RESTATEMENT
   Restatements Included in 2004 Form 10-K
   Deferred Tax Adjustments
   Other Accounting Adjustments
   10




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PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
   
    
    In September 2003, our minority interest in consolidated subsidiaries balance should
have been reduced by $2.0 million, when certain assets contributed in 2002 by our minority
interest partner were impaired.
    
    Other less significant balance sheet adjustments were also recorded for items related to
tenant improvements, subscription revenues and restructuring charges.
 Other
   Three Months Ended June 30,As Previously
    
    
    
    
    
    As PreviouslyReported
    
    Restated
    
    Reported
    
    Restated2004
    
    2004
    
    2003
    
    2003(Dollars and shares in thousands,except per share data)Revenues
    
    $
    50,936
    
    
    $
    50,936
    
    
    $
    50,466
    
    
    $
    50,183Editorial, production and circulation
    
    
    23,765
    
    
    
    23,765
    
    
    
    23,467
    
    
    
    23,467Selling, general and administrative
    
    
    24,114
    
    
    
    24,110
    
    
    
    22,592
    
    
    
    22,588Provision for loan impairment
    
    
    1,717
    
    
    
    1,717
    
    
    
    7,600
    
    
    
    7,600Restructuring and other charges (credits)
    
    
    3,524
    
    
    
    3,524
    
    
    
    1,901
    
    
    
    1,901Depreciation and amortization
    
    
    2,965
    
    
    
    2,969
    
    
    
    3,781
    
    
    
    3,785Interest expense
    
    
    9,362
    
    
    
    9,362
    
    
    
    9,412
    
    
    
    9,412Interest income
    
    
    (64
    )
    
    
    (64
    )
    
    
    (128
    )
    
    
    (128
    )Other, net
    
    
    10
    
    
    
    10
    
    
    
    (66
    )
    
    
    (66
    )Loss from continuing operations before income taxes
    
    
    (14,457
    )
    
    
    (14,457
    )
    
    
    (18,093
    )
    
    
    (18,376
    )Provision (benefit) for income taxes
    
    
    74
    
    
    
    769
    
    
    
    65
    
    
    
    760Gain (loss) from discontinued operations
    
    
    
    
    
    
    
    
    
    
    (188
    )
    
    
    (188
    )Net loss
    
    
    (14,531
    )
    
    
    (15,226
    )
    
    
    (18,346
    )
    
    
    (19,324
    )Amortization of deemed dividend and accretion of
preferred stock
    
    
    (3,408
    )
    
    
    (3,408
    )
    
    
    (1,860
    )
    
    
    (1,966
    )Net loss applicable to common stockholders
    
    $
    (17,939
    )
    
    $
    (18,634
    )
    
    $
    (20,206
    )
    
    $
    (21,290
    )Earnings per common share  basic and diluted:Loss from continuing operations applicable to common
    
    $
    (0.53
    )
    
    $
    (0.55
    )
    
    $
    (0.59
    )
    
    $
    (0.63
    )Discontinued operations, net of taxes
    
    
    
    
    
    
    
    
    
    
    (0.01
    )
    
    
    (0.01
    )Net loss applicable to common stockholders
    
    $
    (0.53
    )
    
    $
    (0.55
    )
    
    $
    (0.60
    )
    
    $
    (0.64
    )Weighted-average number of shares outstanding:Basic and diluted
    
    
    33,583
    
    
    
    33,583
    
    
    
    33,508
    
    
    
    33,508
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PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 Six Months Ended June 30,As Previously
    
    
    
    
    
    As PreviouslyReported
    
    Restated
    
    Reported
    
    Restated2004
    
    2004
    
    2003
    
    2003(Dollars and shares in thousands,except per share data)Revenues
    
    $
    105,403
    
    
    $
    105,403
    
    
    $
    104,858
    
    
    $
    104,575Editorial, production and circulation
    
    
    45,146
    
    
    
    45,146
    
    
    
    45,820
    
    
    
    45,820Selling, general and administrative
    
    
    48,613
    
    
    
    48,604
    
    
    
    46,233
    
    
    
    46,225Provision for loan impairment
    
    
    1,717
    
    
    
    1,717
    
    
    
    7,600
    
    
    
    7,600Restructuring and other charges (credits)
    
    
    4,392
    
    
    
    4,392
    
    
    
    1,817
    
    
    
    1,817Depreciation and amortization
    
    
    5,981
    
    
    
    5,990
    
    
    
    7,503
    
    
    
    7,511Interest expense
    
    
    18,820
    
    
    
    18,820
    
    
    
    19,750
    
    
    
    19,750Interest income
    
    
    (166
    )
    
    
    (166
    )
    
    
    (237
    )
    
    
    (237
    )Other, net
    
    
    16
    
    
    
    16
    
    
    
    308
    
    
    
    308Loss from continuing operations before income taxes
    
    
    (19,116
    )
    
    
    (19,116
    )
    
    
    (23,936
    )
    
    
    (24,219
    )Provision (benefit) for income taxes
    
    
    622
    
    
    
    2,012
    
    
    
    191
    
    
    
    5,649Gain (loss) from discontinued operations
    
    
    
    
    
    
    
    
    
    
    678
    
    
    
    678Net loss
    
    
    (19,738
    )
    
    
    (21,128
    )
    
    
    (23,449
    )
    
    
    (29,190
    )Amortization of deemed dividend and accretion of
preferred stock
    
    
    (8,601
    )
    
    
    (8,601
    )
    
    
    (2,515
    )
    
    
    (2,733
    )Net loss applicable to common stockholders
    
    $
    (28,339
    )
    
    $
    (29,729
    )
    
    $
    (25,964
    )
    
    $
    (31,923
    )Earnings per common share  basic and diluted:Loss from continuing operations applicable to common
    
    $
    (0.84
    )
    
    $
    (0.89
    )
    
    $
    (0.80
    )
    
    $
    (0.98
    )Discontinued operations, net of taxes
    
    
    
    
    
    
    
    
    
    
    0.02
    
    
    
    0.02Net loss applicable to common stockholders
    
    $
    (0.84
    )
    
    $
    (0.89
    )
    
    $
    (0.78
    )
    
    $
    (0.96
    )Weighted-average number of shares outstanding:Basic and diluted
    
    
    33,559
    
    
    
    33,559
    
    
    
    33,272
    
    
    
    33,272
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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  June 30, 2004As PreviouslyReported
    
    Restated(Dollars in thousands)AssetsCurrent assets:Cash and cash equivalents
    
    $
    15,919
    
    
    $
    15,919Restricted cash
    
    
    193
    
    
    
    193Accounts receivable, net
    
    
    31,671
    
    
    
    31,671Notes receivable
    
    
    760
    
    
    
    760Inventories
    
    
    905
    
    
    
    905Deferred tax assets
    
    
    
    
    
    
    253Prepayments, deposits and other
    
    
    11,282
    
    
    
    11,282Total current assets
    
    
    60,730
    
    
    
    60,983Property and equipment, net
    
    
    16,573
    
    
    
    16,689Goodwill
    
    
    214,411
    
    
    
    214,411Other intangible assets, net
    
    
    9,677
    
    
    
    9,677Other non-current assets
    
    
    7,442
    
    
    
    7,442Total Assets
    
    $
    308,833
    
    
    $
    309,202Liabilities and stockholders deficitCurrent liabilities:Accounts payable
    
    $
    6,925
    
    
    $
    6,925Accrued compensation and benefits
    
    
    9,279
    
    
    
    10,092Other accrued expenses
    
    
    27,846
    
    
    
    27,239Unearned income, principally trade show and conference deposits
    
    
    21,559
    
    
    
    21,870Total current liabilities
    
    
    65,609
    
    
    
    66,126Senior secured notes, net of discount
    
    
    156,979
    
    
    
    156,979Senior subordinated notes, net of discount
    
    
    171,847
    
    
    
    171,847Net deferred pension credits
    
    
    10,764
    
    
    
    10,764Deferred tax liability
    
    
    
    
    
    
    18,635Other non-current liabilities
    
    
    8,222
    
    
    
    8,320Total Liabilities
    
    
    347,812
    
    
    
    366,545Commitments and contingenciesMinority interest
    
    
    2,461
    
    
    
    424Mandatorily redeemable convertible preferred stock
    
    
    63,661
    
    
    
    63,572Stockholders deficit:Preferred stock, par value $0.01 per share; 1,800,000
shares authorized; none issued
or outstanding
    
    
    
    
    
    
    Common stock, par value $0.01 per share; 155,000,000 shares authorized;
33,220,877 shares issued and outstanding at 2003, respectively
    
    
    332
    
    
    
    332Capital in excess of par value
    
    
    218,280
    
    
    
    218,369Retained deficit
    
    
    (387,187
    )
    
    
    (404,003
    )Notes receivable from officers
    
    
    
    
    
    
    Accumulated other comprehensive loss
    
    
    (2,135
    )
    
    
    (2,163
    )Total Stockholders Deficit
    
    
    (170,710
    )
    
    
    (187,465
    )Total Liabilities and Stockholders Deficit
    
    $
    308,833
    
    
    $
    309,202
 13




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 3  GOODWILL AND OTHER INTANGIBLES
  GoodwillDecember 31,
    
    
    
    
    
    June 30,2003
    
    Activity
    
    2004Industry
    
    $
    36,278
    
    
    $
    
    
    
    $
    36,278Technology
    
    
    67,385
    
    
    
    
    
    
    
    67,385Lifestyle
    
    
    84,924
    
    
    
    
    
    
    
    84,924Retail
    
    
    25,824
    
    
    
    
    
    
    
    25,824Total
    
    $
    214,411
    
    
    $
    
    
    
    $
    214,411
  Gross
    
    
    
    
    
    NetCarrying
    
    Accumulated
    
    BookValue
    
    Amortization
    
    ValueTrade names
    
    $
    5,282
    
    
    $
    (3,983
    )
    
    $
    1,299Mailing/exhibitor lists
    
    
    9,350
    
    
    
    (5,239
    )
    
    
    4,111Advertiser relationships
    
    
    7,200
    
    
    
    (3,859
    )
    
    
    3,341Subscriber relationships
    
    
    2,100
    
    
    
    (1,178
    )
    
    
    922Noncompete agreements
    
    
    24
    
    
    
    (20
    )
    
    
    4Balance at June 30, 2004
    
    $
    23,956
    
    
    $
    (14,279
    )
    
    $
    9,677
  Year EndedDecember 31,
    
    Amount2004
    
    $
    2,4742005
    
    $
    2,4412006
    
    $
    2,2142007
    
    $
    1,3002008
    
    $
    404
 NOTE 4  DISPOSALS
  14




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2003
    
    2003Revenues
    
    $
    
    
    
    $
    Loss from operations, net of taxes
    
    $
    (188
    )
    
    $
    (709
    )Gain on sale of properties, net of taxes
    
    
    
    
    
    
    1,387Income (loss) from discontinued operations
    
    $
    (188
    )
    
    $
    678
 NOTE 5  DEBT
 Loan and Security Agreement
   Senior Secured Credit Facility
  15




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  Senior Secured Notes
  Senior Subordinated Notes
  Interest Payments
  NOTE 6  MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK
 Preferred Stock Leverage Ratio Event of Non-Compliance
   16




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
   NOTE 7  EXECUTIVE BONUS AND TERMINATION BENEFITS
      NOTE 8  COMMON STOCK AND COMMON STOCK AWARD PROGRAMS
 Executive Loan Program
   17




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
    Redeemable Common Stock
  Management Stock Purchase Plan
  Equity and Performance Incentive Plan
 Stock Options
  Deferred Shares
  18




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 Performance Shares
  Performance Units
  Treasury Stock
  NOTE 9  EMPLOYEE BENEFIT PLANS
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    2004
    
    2003Service cost
    
    $
    
    
    
    $
    468
    
    
    $
    
    
    
    $
    936Interest cost
    
    
    700
    
    
    
    660
    
    
    
    1,286
    
    
    
    1,320Expected return on plan assets
    
    
    (841
    )
    
    
    (751
    )
    
    
    (1,562
    )
    
    
    (1,502
    )Amortization of prior service costs
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    34Amortization of actuarial gain
    
    
    
    
    
    
    (138
    )
    
    
    
    
    
    
    (276
    )Net periodic benefit cost (benefit)
    
    $
    (141
    )
    
    $
    256
    
    
    $
    (276
    )
    
    $
    512
   19




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    2004
    
    2003Service cost
    
    $
    
    
    
    $
    18
    
    
    $
    
    
    
    $
    36Interest cost
    
    
    13
    
    
    
    13
    
    
    
    26
    
    
    
    26Amortization of prior service costs
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    14Net periodic benefit cost
    
    $
    13
    
    
    $
    38
    
    
    $
    26
    
    
    $
    76
 NOTE 10  EARNINGS PER SHARE
  Restated
    
    RestatedThree Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    2004
    
    2003Net loss applicable to common stockholders
    
    $
    (18,634
    )
    
    $
    (21,290
    )
    
    $
    (29,729
    )
    
    $
    (31,923
    )Number of shares:Weighted
average shares outstanding 
basic and diluted
    
    
    33,583
    
    
    
    33,508
    
    
    
    33,559
    
    
    
    33,272Per share amount:Loss applicable to common stockholders 
basic and diluted
    
    $
    (0.55
    )
    
    $
    (0.64
    )
    
    $
    (0.89
    )
    
    $
    (0.96
    )
   20




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 11  COMPREHENSIVE LOSS
  Restated
    
    RestatedThree Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    2004
    
    2003Net loss
    
    $
    (15,226
    )
    
    $
    (19,324
    )
    
    $
    (21,128
    )
    
    $
    (29,190
    )Other comprehensive loss:Change in accumulated translation adjustment
    
    
    (114
    )
    
    
    (108
    )
    
    
    41
    
    
    
    228Total comprehensive loss
    
    $
    (15,340
    )
    
    $
    (19,432
    )
    
    $
    (21,087
    )
    
    $
    (28,962
    )
 NOTE 12  RELATED PARTY TRANSACTIONS
    NOTE 13  INCOME TAXES
   NOTE 14  CONTINGENCIES
  21




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
   NOTE 15    BUSINESS RESTRUCTURING CHARGES
    2004 Restructuring Plan
   Severanceand Other
    
    OtherPersonnel Costs
    
    Exit Costs
    
    TotalCharged to costs and expenses
    
    $
    695
    
    
    $
    37
    
    
    $
    732Cash payments
    
    
    (85
    )
    
    
    (25
    )
    
    
    (110
    )Restructuring balance, March 31, 2004
    
    
    610
    
    
    
    12
    
    
    
    622Charged to costs and expenses
    
    
    2,868
    
    
    
    79
    
    
    
    2,947Adjustments
    
    
    (5
    )
    
    
    (7
    )
    
    
    (12
    )Cash payments
    
    
    (254
    )
    
    
    (20
    )
    
    
    (274
    )Restructuring balance, June 30, 2004
    
    $
    3,219
    
    
    $
    64
    
    
    $
    3,283
  2003 Restructuring Plan
  22




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  Severanceand Other
    
    Facility
    
    OtherPersonnel Costs
    
    Closing Costs
    
    Exit Costs
    
    TotalCharged to costs and expenses
    
    $
    2,736
    
    
    $
    1,505
    
    
    $
    661
    
    
    $
    4,902Adjustments
    
    
    35
    
    
    
    (11
    )
    
    
    
    
    
    
    24Cash payments
    
    
    (1,105
    )
    
    
    (500
    )
    
    
    (233
    )
    
    
    (1,838
    )Restructuring balance, December 31, 2003 (restated)
    
    
    1,666
    
    
    
    994
    
    
    
    428
    
    
    
    3,088Adjustments
    
    
    76
    
    
    
    
    
    
    
    
    
    
    
    76Cash payments
    
    
    (1,121
    )
    
    
    (205
    )
    
    
    (182
    )
    
    
    (1,508
    )Restructuring balance, June 30, 2004 (restated)
    
    $
    621
    
    
    $
    789
    
    
    $
    246
    
    
    $
    1,656
  2002 Restructuring Plan
   Severanceand Other
    
    Facility
    
    OtherPersonnel Costs
    
    Closing Costs
    
    Exit Costs
    
    TotalCharged to costs and expenses
    
    $
    10,344
    
    
    $
    3,421
    
    
    $
    1,648
    
    
    $
    15,413Adjustments
    
    
    200
    
    
    
    1,705
    
    
    
    59
    
    
    
    1,964Cash payments
    
    
    (5,440
    )
    
    
    (693
    )
    
    
    (967
    )
    
    
    (7,100
    )Restructuring balance, December 31, 2002
    
    
    5,104
    
    
    
    4,433
    
    
    
    740
    
    
    
    10,277Adjustments
    
    
    (45
    )
    
    
    (604
    )
    
    
    (92
    )
    
    
    (741
    )Cash payments
    
    
    (4,928
    )
    
    
    (1,469
    )
    
    
    (375
    )
    
    
    (6,772
    )Restructuring balance, December 31, 2003
    
    
    131
    
    
    
    2,360
    
    
    
    273
    
    
    
    2,764Adjustments
    
    
    (78
    )
    
    
    401
    
    
    
    246
    
    
    
    569Cash payments
    
    
    (29
    )
    
    
    (378
    )
    
    
    (35
    )
    
    
    (442
    )Restructuring balance, June 30, 2004
    
    $
    24
    
    
    $
    2,383
    
    
    $
    484
    
    
    $
    2,891
   2001 Restructuring Plan
  23




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
   Severanceand Other
    
    Facility
    
    OtherPersonnel Costs
    
    Closing Costs
    
    Exit Costs
    
    TotalCharged to costs and expenses
    
    $
    6,774
    
    
    $
    8,669
    
    
    $
    4,364
    
    
    $
    19,807Adjustments
    
    
    (23
    )
    
    
    
    
    
    
    (994
    )
    
    
    (1,017
    )Cash payments
    
    
    (4,468
    )
    
    
    (267
    )
    
    
    (2,423
    )
    
    
    (7,158
    )Restructuring balance, December 31, 2001
    
    
    2,283
    
    
    
    8,402
    
    
    
    947
    
    
    
    11,632Adjustments
    
    
    (135
    )
    
    
    (459
    )
    
    
    (422
    )
    
    
    (1,016
    )Cash payments
    
    
    (2,129
    )
    
    
    (1,590
    )
    
    
    (250
    )
    
    
    (3,969
    )Restructuring balance, December 31, 2002
    
    
    19
    
    
    
    6,353
    
    
    
    275
    
    
    
    6,647Adjustments
    
    
    (8
    )
    
    
    598
    
    
    
    82
    
    
    
    672Cash payments
    
    
    (11
    )
    
    
    (1,304
    )
    
    
    (357
    )
    
    
    (1,672
    )Restructuring balance, December 31, 2003
    
    
    
    
    
    
    5,647
    
    
    
    
    
    
    
    5,647Adjustments
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    1Cash payments
    
    
    
    
    
    
    (824
    )
    
    
    
    
    
    
    (824
    )Restructuring balance, June 30, 2004
    
    $
    
    
    
    $
    4,824
    
    
    $
    
    
    
    $
    4,824
  Estimated Future Payments
    Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    2004
    
    2003Industry
    
    $
    294
    
    
    $
    216
    
    
    $
    644
    
    
    $
    168Technology
    
    
    554
    
    
    
    1,103
    
    
    
    807
    
    
    
    1,148Lifestyle
    
    
    (3
    )
    
    
    45
    
    
    
    
    
    
    
    45Retail
    
    
    681
    
    
    
    
    
    
    
    699
    
    
    
    Corporate
    
    
    1,997
    
    
    
    (41
    )
    
    
    2,163
    
    
    
    (111
    )Total
    
    $
    3,523
    
    
    $
    1,323
    
    
    $
    4,313
    
    
    $
    1,250
  24




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 16  SEGMENT INFORMATION
    Industry
    
    Technology
    
    Lifestyle
    
    Retail
    
    Total2004Revenues
    
    $
    20,912
    
    
    $
    19,956
    
    
    $
    3,884
    
    
    $
    6,184
    
    
    $
    50,936Adjusted segment EBITDA
    
    $
    4,556
    
    
    $
    3,432
    
    
    $
    (617
    )
    
    $
    1,455
    
    
    $
    8,8262003 (Restated)Revenues
    
    $
    20,998
    
    
    $
    19,781
    
    
    $
    3,362
    
    
    $
    6,042
    
    
    $
    50,183Adjusted segment EBITDA
    
    $
    4,788
    
    
    $
    2,989
    
    
    $
    (667
    )
    
    $
    1,451
    
    
    $
    8,561
  Industry
    
    Technology
    
    Lifestyle
    
    Retail
    
    Total2004Revenues
    
    $
    39,300
    
    
    $
    34,234
    
    
    $
    21,108
    
    
    $
    10,761
    
    
    $
    105,403Adjusted segment EBITDA
    
    $
    7,629
    
    
    $
    4,481
    
    
    $
    10,491
    
    
    $
    1,982
    
    
    $
    24,5832003 (Restated)Revenues
    
    $
    40,360
    
    
    $
    34,993
    
    
    $
    18,411
    
    
    $
    10,811
    
    
    $
    104,575Adjusted segment EBITDA
    
    $
    8,064
    
    
    $
    3,782
    
    
    $
    8,635
    
    
    $
    2,182
    
    
    $
    22,663
 25




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
  Restated
    
    RestatedThree Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    2004
    
    2003Total adjusted segment EBITDA
    
    $
    8,826
    
    
    $
    8,561
    
    
    $
    24,583
    
    
    $
    22,663Depreciation and amortization
    
    
    (2,969
    )
    
    
    (3,785
    )
    
    
    (5,990
    )
    
    
    (7,511
    )Provision for loan impairment
    
    
    (1,717
    )
    
    
    (7,600
    )
    
    
    (1,717
    )
    
    
    (7,600
    )Restructuring and other charges
    
    
    (3,524
    )
    
    
    (1,901
    )
    
    
    (4,392
    )
    
    
    (1,817
    )Executive separation costs
    
    
    (347
    )
    
    
    
    
    
    
    (2,701
    )
    
    
    Non-cash compensation
    
    
    (559
    )
    
    
    (347
    )
    
    
    (681
    )
    
    
    (1,268
    )Interest expense
    
    
    (9,362
    )
    
    
    (9,412
    )
    
    
    (18,820
    )
    
    
    (19,750
    )Interest income
    
    
    64
    
    
    
    128
    
    
    
    166
    
    
    
    237Other, net
    
    
    (10
    )
    
    
    66
    
    
    
    (16
    )
    
    
    (308
    )General and administrative costs
    
    
    (4,859
    )
    
    
    (4,086
    )
    
    
    (9,548
    )
    
    
    (8,865
    )Loss from continuing operations before income
taxes
    
    
    (14,457
    )
    
    
    (18,376
    )
    
    
    (19,116
    )
    
    
    (24,219
    )Provision for income taxes
    
    
    (769
    )
    
    
    (760
    )
    
    
    (2,012
    )
    
    
    (5,649
    )Discontinued operations
    
    
    
    
    
    
    (188
    )
    
    
    
    
    
    
    678Net loss
    
    $
    (15,226
    )
    
    $
    (19,324
    )
    
    $
    (21,128
    )
    
    $
    (29,190
    )
 NOTE
17  SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
     NOTE
18  GUARANTOR AND NON-GUARANTOR SUBSIDIARIES
  26




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 18  GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Continued)
 PENTON MEDIA, INC.
 CONDENSED CONSOLIDATIED BALANCE SHEETS (As Restated)
As of June 30, 2004
 Guarantor
    
    Non-guarantor
    
    
    
    
    
    PentonParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(Dollars in thousands)AssetsCurrent assets:Cash and cash equivalents
    
    $
    12,447
    
    
    $
    93
    
    
    $
    3,379
    
    
    $
    
    
    
    $
    15,919Restricted cash
    
    
    193
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    193Accounts receivable, net
    
    
    19,710
    
    
    
    6,298
    
    
    
    5,663
    
    
    
    
    
    
    
    31,671Notes receivable
    
    
    
    
    
    
    
    
    
    
    760
    
    
    
    
    
    
    
    760Inventories
    
    
    515
    
    
    
    384
    
    
    
    6
    
    
    
    
    
    
    
    905Deferred tax asset
    
    
    372
    
    
    
    (119
    )
    
    
    
    
    
    
    
    
    
    
    253Prepayments, deposits and other
    
    
    8,406
    
    
    
    581
    
    
    
    2,295
    
    
    
    
    
    
    
    11,28241,643
    
    
    
    7,237
    
    
    
    12,103
    
    
    
    
    
    
    
    60,983Property, plant and equipment, net
    
    
    13,117
    
    
    
    2,268
    
    
    
    1,304
    
    
    
    
    
    
    
    16,689Goodwill
    
    
    122,289
    
    
    
    90,755
    
    
    
    1,367
    
    
    
    
    
    
    
    214,411Other intangibles, net
    
    
    4,660
    
    
    
    4,844
    
    
    
    173
    
    
    
    
    
    
    
    9,677Other non-current assets
    
    
    7,243
    
    
    
    143
    
    
    
    56
    
    
    
    
    
    
    
    7,442Investments in subsidiaries (1)
    
    
    (182,878
    )
    
    
    
    
    
    
    
    
    
    
    182,878
    
    
    
    (35,569
    )
    
    
    98,010
    
    
    
    2,900
    
    
    
    182,878
    
    
    
    248,219$
    6,074
    
    
    $
    105,247
    
    
    $
    15,003
    
    
    $
    182,878
    
    
    $
    309,202Liabilities and stockholders deficitCurrent liabilities:Accounts payable and accrued expenses
    
    $
    23,954
    
    
    $
    8,044
    
    
    $
    2,166
    
    
    $
    
    
    
    $
    34,164Accrued compensation and benefits
    
    
    8,590
    
    
    
    1,159
    
    
    
    343
    
    
    
    
    
    
    
    10,092Unearned income
    
    
    11,476
    
    
    
    3,523
    
    
    
    6,871
    
    
    
    
    
    
    
    21,87044,020
    
    
    
    12,726
    
    
    
    9,380
    
    
    
    
    
    
    
    66,126Long-term liabilities and deferred credits:Senior secured notes, net of discount
    
    
    80,059
    
    
    
    76,920
    
    
    
    
    
    
    
    
    
    
    
    156,979Senior subordinated notes, net of discount
    
    
    87,642
    
    
    
    84,205
    
    
    
    
    
    
    
    
    
    
    
    171,847Net deferred pension credits
    
    
    10,764
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,764Deferred tax liability
    
    
    17,802
    
    
    
    833
    

    
    
    
    
    
    
    
    
    
    
    18,635Intercompany advances
    
    
    (114,683
    )
    
    
    80,792
    
    
    
    33,891
    
    
    
    
    
    
    
    Other non-current liabilities
    
    
    4,363
    
    
    
    2,014
    
    
    
    1,943
    
    
    
    
    
    
    
    8,32085,947
    
    
    
    244,764
    
    
    
    35,834
    
    
    
    
    
    
    
    366,545Commitments and contingenciesMinority interest
    
    
    
    
    
    
    
    
    
    
    424
    
    
    
    
    
    
    
    424Mandatorily redeemable convertible
preferred stock
    
    
    63,572
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,572Stockholders deficit:Common stock and capital in excess
of par value
    
    
    218,701
    
    
    
    216,087
    
    
    
    16,614
    
    
    
    (232,701
    )
    
    
    218,701Retained deficit
    
    
    (404,003
    )
    
    
    (368,302
    )
    
    
    (45,137
    )
    
    
    413,439
    
    
    
    (404,003
    )Notes receivable from officers, less
reserve of $5,848
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulated other comprehensive
income (loss)
    
    
    (2,163
    )
    
    
    (28
    )
    
    
    (2,112
    )
    
    
    2,140
    
    
    
    (2,163
    )(187,465
    )
    
    
    (152,243
    )
    
    
    (30,635
    )
    
    
    182,878
    
    
    
    (187,465
    )$
    6,074
    
    
    $
    105,247
    
    
    $
    15,003
    
    
    $
    182,878
    
    
    $
    309,202
 
 (1)
    
    Reflects investments in subsidiaries utilizing the equity method. 27




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 18  GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Continued)
 PENTON MEDIA, INC.
 CONDENSED CONSOLIDATING BALANCE SHEETS (As Restated)
As of December 31, 2003
 Guarantor
    
    Non-guarantor
    
    
    
    
    
    PentonParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(Dollars in thousands)AssetsCurrent assets:Cash and cash equivalents
    
    $
    27,249
    
    
    $
    23
    
    
    $
    2,354
    
    
    $
    
    
    
    $
    29,626Accounts receivable, net
    
    
    17,967
    
    
    
    3,894
    
    
    
    5,309
    
    
    
    
    
    
    
    27,170Notes receivable
    
    
    
    
    
    
    
    
    
    
    571
    
    
    
    
    
    
    
    571Inventories
    
    
    613
    
    
    
    256
    
    
    
    6
    
    
    
    
    
    
    
    875Deferred tax asset
    
    
    372
    
    
    
    (119
    )
    
    
    
    
    
    
    
    
    
    
    253Prepayments, deposits and other
    
    
    7,642
    
    
    
    309
    
    
    
    1,674
    
    
    
    
    
    
    
    9,62553,843
    
    
    
    4,363
    
    
    
    9,914
    
    
    
    
    
    
    
    68,120Property, plant and equipment, net
    
    
    14,948
    
    
    
    2,446
    
    
    
    1,534
    
    
    
    
    
    
    
    18,928Goodwill
    
    
    148,035
    
    
    
    65,009
    
    
    
    1,367
    
    
    
    
    
    
    
    214,411Other intangibles, net
    
    
    5,656
    
    
    
    5,036
    
    
    
    191
    
    
    
    
    
    
    
    10,883Other non-current assets
    
    
    8,443
    
    
    
    125
    
    
    
    534
    
    
    
    
    
    
    
    9,102Investment in subsidiaries
    
    
    (164,319
    )
    
    
    
    
    
    
    
    
    
    
    164,319
    
    
    
    12,763
    
    
    
    72,616
    
    
    
    3,626
    
    
    
    164,319
    
    
    
    253,324$
    66,606
    
    
    $
    76,979
    
    
    $
    13,540
    
    
    $
    164,319
    
    
    $
    321,444Liabilities and stockholders equity (deficit)Current liabilities:Accounts payable and accrued expenses
    
    $
    22,243
    
    
    $
    5,001
    
    
    $
    1,905
    
    
    $
    
    
    
    $
    29,149Accrued compensation and benefits
    
    
    7,683
    
    
    
    770
    
    
    
    5
    
    
    
    
    
    
    
    8,458Unearned income
    
    
    14,584
    
    
    
    3,305
    
    
    
    4,646
    
    
    
    
    
    
    
    22,53544,510
    
    
    
    9,076
    
    
    
    6,556
    
    
    
    
    
    
    
    60,142Long-term liabilities and deferred credits:Senior secured notes, net of discount
    
    
    80,027
    
    
    
    76,888
    
    
    
    
    
    
    
    
    
    
    
    156,915Senior subordinated notes, net of discount
    
    
    87,566
    
    
    
    84,132
    
    
    
    
    
    
    
    
    
    
    
    171,698Net deferred pension credits
    
    
    11,040
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,040Deferred tax liability
    
    
    16,412
    
    
    
    833
    
    
    
    
    
    
    
    
    
    
    
    17,245Intercompany advances
    
    
    (72,440
    )
    
    
    39,704
    
    
    
    32,736
    
    
    
    
    
    
    
    Other non-current liabilities
    
    
    4,807
    
    
    
    2,251
    
    
    
    2,212
    
    
    
    
    
    
    
    9,270127,412
    
    
    
    203,808
    
    
    
    34,948
    
    
    
    
    
    
    
    366,168Minority interest
    
    
    
    
    
    
    
    
    
    
    450
    
    
    
    
    
    
    
    450Mandatorily redeemable convertible
preferred stock
    
    
    54,972
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    54,972Redeemable common stock
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Stockholders equity (deficit):Common stock and capital in excess
of par value
    
    
    226,687
    
    
    
    204,210
    
    
    
    16,614
    
    
    
    (220,824
    )
    
    
    226,687Retained earnings (deficit)
    
    
    (382,876
    )
    
    
    (340,094
    )
    
    
    (42,867
    )
    
    
    382,961
    
    
    
    (382,876
    )Notes receivable from officers, less
reserve of $7,600
    
    
    (1,897
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,897
    )Accumulated other comprehensive loss
    
    
    (2,204
    )
    
    
    (21
    )
    
    
    (2,161
    )
    
    
    2,182
    
    
    
    (2,204
    )(160,290
    )
    
    
    (135,905
    )
    
    
    (28,414
    )
    
    
    164,319
    
    
    
    (160,290
    )$
    66,606
    
    
    $
    76,979
    
    
    $
    13,540
    
    
    $
    164,319
    
    
    $
    321,444
 28




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 18  GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Continued)
 PENTON MEDIA, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (As Restated)
For the Three Months Ended June 30, 2004
 Guarantor
    
    Non-guarantor
    
    
    
    
    
    PentonParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(Dollars in thousands)Revenues
    
    $
    32,586
    
    
    $
    11,870
    
    
    $
    6,480
    
    
    $
    
    
    
    $
    50,936Operating expenses:Editorial, production and circulation
    
    
    15,527
    
    
    
    5,732
    
    
    
    2,506
    
    
    
    
    
    
    
    23,765Selling, general and administrative
    
    
    11,770
    
    
    
    8,575
    
    
    
    3,765
    
    
    
    
    
    
    
    24,110Provision for loan impairment
    
    
    1,717
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,717Restructuring and other charges
    
    
    2,307
    
    
    
    1,195
    
    
    
    22
    
    
    
    
    
    
    
    3,524Depreciation and amortization
    
    
    2,144
    
    
    
    652
    
    
    
    173
    
    
    
    
    
    
    
    2,96933,465
    
    
    
    16,154
    
    
    
    6,466
    
    
    
    
    
    
    
    56,085Operating income (loss)
    
    
    (879
    )
    
    
    (4,284
    )
    
    
    14
    
    
    
    
    
    
    
    (5,149
    )Other income (expense):Interest expense
    
    
    (4,816
    )
    
    
    (4,467
    )
    
    
    (79
    )
    
    
    
    
    
    
    (9,362
    )Interest income
    
    
    50
    
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    64Equity in losses of subsidiaries
    
    
    (8,831
    )
    
    
    
    
    
    
    
    
    
    
    8,831
    
    
    
    Other, net
    
    
    6
    
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    (10
    )(13,591
    )
    
    
    (4,467
    )
    
    
    (81
    )
    
    
    8,831
    
    
    
    (9,308
    )Loss from continuing operations before
income taxes
    
    
    (14,470
    )
    
    
    (8,751
    )
    
    
    (67
    )
    
    
    8,831
    
    
    
    (14,457
    )Provision for income taxes
    
    
    (756
    )
    
    
    (10
    )
    
    
    (3
    )
    
    
    
    
    
    
    (769
    )Net loss
    
    $
    (15,226
    )
    
    $
    (8,761
    )
    
    $
    (70
    )
    
    $
    8,831
    
    
    $
    (15,226
    )
 29




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 18  GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Continued)
 PENTON MEDIA, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (As Restated)
For the Three Months Ended June 30, 2003
 Guarantor
    
    Non-guarantor
    
    
    
    
    
    PentonParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(Dollars in thousands)Revenues
    
    $
    31,718
    
    
    $
    12,593
    
    
    $
    5,872
    
    
    $
    
    
    
    $
    50,183Operating expenses:Editorial, production and circulation
    
    
    15,117
    
    
    
    5,988
    
    
    
    2,362
    
    
    
    
    
    
    
    23,467Selling, general and administrative
    
    
    10,751
    
    
    
    8,531
    
    
    
    3,306
    
    
    
    
    
    
    
    22,588Provision for loan impairment
    
    
    7,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,600Restructuring other charges
    
    
    798
    
    
    
    562
    
    
    
    541
    
    
    
    
    
    
    
    1,901Depreciation and amortization
    
    
    2,320
    
    
    
    994
    
    
    
    471
    
    
    
    
    
    
    
    3,78536,586
    
    
    
    16,075
    
    
    
    6,680
    
    
    
    
    
    
    
    59,341Operating loss
    
    
    (4,868
    )
    
    
    (3,482
    )
    
    
    (808
    )
    
    
    
    
    
    
    (9,158
    )Other income (expense):Interest expense
    
    
    (4,762
    )
    
    
    (4,565
    )
    
    
    (85
    )
    
    
    
    
    
    
    (9,412
    )Interest income
    
    
    128
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    128Equity in losses of subsidiaries
    
    
    (8,900
    )
    
    
    
    
    
    
    
    
    
    
    8,900
    
    
    
    Other, net
    
    
    (68
    )
    
    
    (145
    )
    
    
    279
    
    
    
    
    
    
    
    66(13,602
    )
    
    
    (4,710
    )
    
    
    194
    
    
    
    8,900
    
    
    
    (9,218
    )Loss from continuing operations before
income taxes
    
    
    (18,470
    )
    
    
    (8,192
    )
    
    
    (614
    )
    
    
    8,900
    
    
    
    (18,376
    )Benefit (provision) for income taxes
    
    
    (762
    )
    
    
    (5
    )
    
    
    7
    
    
    
    
    
    
    
    (760
    )Loss from continuing operations
    
    
    (19,232
    )
    
    
    (8,197
    )
    
    
    (607
    )
    
    
    8,900
    
    
    
    (19,136
    )Income (loss) from discontinued operations
    
    
    (92
    )
    
    
    9
    
    
    
    (105
    )
    
    
    
    
    
    
    (188
    )Net loss
    
    $
    (19,324
    )
    
    $
    (8,188
    )
    
    $
    (712
    )
    
    $
    8,900
    
    
    $
    (19,324
    )
 30




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 18  GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Continued)
 PENTON MEDIA, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (As Restated)
For the Six Months Ended June 30, 2004
 Guarantor
    
    Non-guarantor
    
    
    
    
    
    PentonParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(Dollars in thousands)Revenues
    
    $
    76,163
    
    
    $
    20,586
    
    
    $
    8,654
    
    
    $
    
    
    
    $
    105,403Operating expenses:Editorial, production and circulation
    
    
    31,342
    
    
    
    10,119
    
    
    
    3,685
    
    
    
    
    
    
    
    45,146Selling, general and administrative
    
    
    27,412
    
    
    
    15,012
    
    
    
    6,180
    
    
    
    
    
    
    
    48,604Provision for loan impairment
    
    
    1,717
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,717Restructuring and other charges
    
    
    2,920
    
    
    
    1,432
    
    
    
    40
    
    
    
    
    
    
    
    4,392Depreciation and amortization
    
    
    4,293
    
    
    
    1,316
    
    
    
    381
    
    
    
    
    
    
    
    5,99067,684
    
    
    
    27,879
    
    
    
    10,286
    
    
    
    
    
    
    
    105,849Operating income (loss)
    
    
    8,479
    
    
    
    (7,293
    )
    
    
    (1,632
    )
    
    
    
    
    
    
    (446
    )Other income (expense):Interest expense
    
    
    (9,674
    )
    
    
    (8,978
    )
    
    
    (168
    )
    
    
    
    
    
    
    (18,820
    )Interest income
    
    
    136
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    166Equity in losses of subsidiaries
    
    
    (18,559
    )
    
    
    
    
    
    
    
    
    
    
    18,559
    
    
    
    Other, net
    
    
    3
    
    
    
    
    
    
    
    (19
    )
    
    
    
    
    
    
    (16
    )(28,094
    )
    
    
    (8,978
    )
    
    
    (157
    )
    
    
    18,559
    
    
    
    (18,670
    )Loss from continuing operations before
income taxes
    
    
    (19,615
    )
    
    
    (16,271
    )
    
    
    (1,789
    )
    
    
    18,559
    
    
    
    (19,116
    )Provision for income taxes
    
    
    (1,513
    )
    
    
    (18
    )
    
    
    (481
    )
    
    
    
    
    
    
    (2,012
    )Net loss
    
    $
    (21,128
    )
    
    $
    (16,289
    )
    
    $
    (2,270
    )
    
    $
    18,559
    
    
    $
    (21,128
    )
 31




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 18  GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Continued)
 PENTON MEDIA, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (As Restated)
For the Six Months Ended June 30, 2003
 Guarantor
    
    Non-guarantor
    
    
    
    
    
    PentonParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(Dollars in thousands)Revenues
    
    $
    73,830
    
    
    $
    22,734
    
    
    $
    8,011
    
    
    $
    
    
    
    $
    104,575Operating expenses:Editorial, production and circulation
    
    
    31,112
    
    
    
    11,186
    
    
    
    3,522
    
    
    
    
    
    
    
    45,820Selling, general and administrative
    
    
    24,622
    
    
    
    15,703
    
    
    
    5,900
    
    
    
    
    
    
    
    46,225Provision for loan impairment
    
    
    7,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,600Restructuring and other charges
    
    
    669
    
    
    
    607
    
    
    
    541
    
    
    
    
    
    
    
    1,817Depreciation and amortization
    
    
    4,685
    
    
    
    1,949
    
    
    
    877
    
    
    
    
    
    
    
    7,51168,688
    
    
    
    29,445
    
    
    
    10,840
    
    
    
    
    
    
    
    108,973Operating income (loss)
    
    
    5,142
    
    
    
    (6,711
    )
    
    
    (2,829
    )
    
    
    
    
    
    
    (4,398
    )Other income (expense):Interest expense
    
    
    (10,138
    )
    
    
    (9,453
    )
    
    
    (159
    )
    
    
    
    
    
    
    (19,750
    )Interest income
    
    
    237
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    237Equity in losses of subsidiaries
    
    
    (19,301
    )
    
    
    
    
    
    
    
    
    
    
    19,301
    
    
    
    Other, net
    
    
    (369
    )
    
    
    (147
    )
    
    
    208
    
    
    
    
    
    
    
    (308
    )(29,571
    )
    
    
    (9,600
    )
    
    
    49
    
    
    
    19,301
    
    
    
    (19,821
    )Loss from continuing operations before
income taxes
    
    
    (24,429
    )
    
    
    (16,311
    )
    
    
    (2,780
    )
    
    
    19,301
    
    
    
    (24,219
    )Provision for income taxes
    
    
    (5,595
    )
    
    
    (10
    )
    
    
    (44
    )
    
    
    
    
    
    
    (5,649
    )Loss from continuing operations
    
    
    (30,024
    )
    
    
    (16,321
    )
    
    
    (2,824
    )
    
    
    19,301
    
    
    
    (29,868
    )Income (loss) from discontinued operations
    
    
    834
    
    
    
    9
    
    
    
    (165
    )
    
    
    
    
    
    
    678Net loss
    
    $
    (29,190
    )
    
    $
    (16,312
    )
    
    $
    (2,989
    )
    
    $
    19,301
    
    
    $
    (29,190
    )
 32




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 18  GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Continued)
 PENTON MEDIA, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
For the Six Months Ended June 30, 2004
 Guarantor
    
    Non-guarantor
    
    
    
    
    
    PentonParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(Dollars in thousands)Net cash provided by (used for)
operating activities
    
    $
    (12,825
    )

    
    $
    (15
    )
    
    $
    1,083
    
    
    $
    
    
    
    $
    (11,757
    )Cash flows from investing activities:Capital expenditures
    
    
    (1,449
    )
    
    
    (39
    )
    
    
    (31
    )
    
    
    
    
    
    
    (1,519
    )Net notes receivable
    
    
    
    
    
    
    
    
    
    
    (188
    )
    
    
    
    
    
    
    (188
    )Net cash used for investing activities
    
    
    (1,449
    )
    
    
    (39
    )
    
    
    (219
    )
    
    
    
    
    
    
    (1,707
    )Cash flows from financing activities:Payment of financing costs
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )Increase in restricted cash
    
    
    (193
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (193
    )Increase (decrease) in book overdrafts
    
    
    (224
    )
    
    
    
    
    
    
    161
    
    
    
    
    
    
    
    (63
    )Net cash provided by (used for) financing activities
    
    
    (423
    )
    
    
    
    
    
    
    161
    
    
    
    
    
    
    
    (262
    )Effect of exchange rate changes on cash
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19Net increase (decrease) in cash and cash equivalents
    
    
    (14,678
    )
    
    
    (54
    )
    
    
    1,025
    
    
    
    
    
    
    
    (13,707
    )Cash and cash equivalents at beginning of period
    
    
    27,125
    
    
    
    147
    
    
    
    2,354
    
    
    
    
    
    
    
    29,626Cash and cash equivalents at end of period
    
    $
    12,447
    
    
    $
    93
    
    
    $
    3,379
    
    
    $
    
    
    
    $
    15,919
 33




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##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE 18  GUARANTOR AND NON-GUARANTOR SUBSIDIARIES (Continued)
 PENTON MEDIA, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
For the Six Months Ended June 30, 2003
 Guarantor
    
    Non-guarantor
    
    
    
    
    
    PentonParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    Consolidated(Dollars in thousands)Net cash provided by (used for) operating
activities
    
    $
    35,298
    
    
    $
    182
    
    
    $
    (758
    )
    
    $
    
    
    
    $
    34,722Cash flows from investing activities:Capital expenditures
    
    
    (881
    )
    
    
    (410
    )
    
    
    (52
    )
    
    
    
    
    
    
    (1,343
    )Earnouts paid
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    (7
    )Net notes receivable
    
    
    
    
    
    
    
    
    
    
    1,549
    
    
    
    
    
    
    
    1,549Proceeds from sale of Professional Trade
Shows group
    
    
    3,250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,250Net cash provided by (used for) investing activities
    
    
    2,369
    
    
    
    (417
    )
    
    
    1,497
    
    
    
    
    
    
    
    3,449Cash flows from financing activities:Repayment of senior secured credit facility
    
    
    (4,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,500
    )Payment of notes payable
    
    
    
    
    
    
    
    
    
    
    (417
    )
    
    
    
    
    
    
    (417
    )Employee stock purchase plan payments
    
    
    (107
    )
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    (113
    )Proceeds from repayment of officers loans
    
    
    250
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    250Decrease in restricted cash
    
    
    14
    
    
    
    
    
    
    
    253
    
    
    
    
    
    
    
    267Increase in book overdrafts
    
    
    25
    
    
    
    
    
    
    
    168
    
    
    
    
    
    
    
    193Payment of financing costs
    
    
    (200
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (200
    )Net cash used for financing activities
    
    
    (4,518
    )
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (4,520
    )Effect of exchange rate changes on cash
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52
    )Net increase (decrease) in cash and equivalents
    
    
    33,097
    
    
    
    (235
    )
    
    
    737
    
    
    
    
    
    
    
    33,599Cash and cash equivalents at beginning of period
    
    
    5,165
    
    
    
    460
    
    
    
    1,146
    
    
    
    
    
    
    
    6,771Cash and cash equivalents at end of period
    
    $
    38,262
    
    
    $
    225
    
    
    $
    1,883
    
    
    $
    
    
    
    $
    40,370
 34




---



##### Table of Contents



PENTON MEDIA, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 NOTE
19  Subsequent Events
 Contingency
  Board of Director Changes
   Series M Preferred Stock
  35




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   Overview
  Industry
 Lifestyle
 Technology
 Retail
   36




---



##### Table of Contents



Recent Developments
 Restatement
  New Chairman and Chief Executive Officer
    Board of Director Changes
  37




---



##### Table of Contents



Management Restructuring
  
    
    Daniel J. Ramella, president and chief operating officer of Penton Media, Inc. and
president of the Companys Industry Media Division, and William C. Donohue, who managed the
Retail Media group operation, left the Company as of June 30,2004.
    
    David B. Nussbaum, the Companys new CEO, assumed the senior operating responsibilities
for the Industry group and Darrell Denny, president of the Companys IT Media and Lifestyle
Media groups, assumed the operating responsibilities for the Retail group as well as the IT
Media and Lifestyle Media groups.
    
    Eric Shanfelt, director of eMedia strategy for Pentons IT Media Group and New Hope
Natural Media businesses, assumed the newly created corporate position of vice president of
eMedia Strategy as Penton moves to expand its e-Media portfolio.
 Senior Executive Bonus and Termination Benefits
   
    
    A lump-sum payment of approximately $2.3 million, of which $0.8 million has been placed
in escrow. Included in this payment is severance of approximately $1.8 million per Mr.
Kemps employment agreement; $0.3 million related to performance units granted on May 22,
2003; and $0.2 million related to the settlement of Mr. Kemps accrued supplemental
executive retirement plan obligation;
    
    The accelerated vesting of 100,000 stock options granted to Mr. Kemp prior to his
termination making them immediately exercisable; and
    
    The immediate vesting of 125,000 performance shares in accordance with the terms of his
performance share agreement dated February 5, 2002.
  38




---



##### Table of Contents




    
    A lump-sum payment of approximately $1.7 million. Included in this payment is
severance of approximately $1.4 million per Mr. Ramellas employment agreement; $0.1
million related to performance units granted on May 22, 2003; and $0.2 million related to
the settlement of Mr. Ramellas accrued supplemental executive retirement plan
obligation;
    
    The accelerated vesting of 139,999 stock options granted to Mr. Ramella prior to his
termination making them immediately exercisable; and
    
    The immediate vesting of 90,000 performance shares in accordance with the terms of his
performance share agreement dated February 5, 2002.
   Defined Benefit Plan and SERP Freeze Effective January 1, 2004
   Series M Preferred Stock
  Preferred Stock Leverage Ratio Event of Non-Compliance
  39




---



##### Table of Contents



RESULTS OF OPERATIONS
 Revenues
   Restated
    
    RestatedThree Months Ended
    
    Six Months EndedJune 30,
    
    
    
    
    
    
    
    
    
    June 30,2004
    
    2003
    
    Change
    
    2004
    
    2003
    
    ChangeRevenues
    
    $
    50.9
    
    
    $
    50.2
    
    
    
    1.5
    %
    
    $
    105.4
    
    
    $
    104.6
    
    
    
    0.8
    %
  40




---



##### Table of Contents



Internet World
   Editorial, Production and Circulation
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    Change
    
    2004
    
    2003
    
    Change(In millions)Editorial, production and circulation
    
    $
    23.8
    
    
    $
    23.5
    
    
    
    1.3
    %
    
    $
    45.1
    
    
    $
    45.8
    
    
    
    (1.5
    )%Percent of revenues
    
    
    46.7
    %
    
    
    46.5
    %
    
    
    
    
    
    
    42.8
    %
    
    
    43.7
    %
 Internet World
 41




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##### Table of Contents



Selling, General and Administrative
 Restated
    
    RestatedThree Months Ended
    
    Six Months EndedJune 30,
    
    
    
    
    
    
    
    
    
    June 30,2004
    
    2003
    
    Change
    
    2004
    
    2003
    
    Change(In millions)Selling, general and administrative
    
    $
    24.1
    
    
    $
    22.6
    
    
    
    6.7
    %
    
    $
    48.6
    
    
    $
    46.2
    
    
    
    5.1
    %Percent of revenues
    
    
    47.3
    %
    
    
    44.8
    %
    
    
    
    
    
    
    46.1
    %
    
    
    44.1
    %
  Restructuring and Other Charges
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    Change
    
    2004
    
    2003
    
    Change(In millions)Restructuring and other charges
    
    $
    3.5
    
    
    $
    1.9
    
    
    
    85.4
    %
    
    $
    4.4
    
    
    $
    1.8
    
    
    
    141.7
    %Percent of revenues
    
    
    6.9
    %
    
    
    3.8
    %
    
    
    
    
    
    
    4.2
    %
    
    
    1.7
    %
  2004 Restructuring Plan
  42




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##### Table of Contents



Summary of Restructuring Activities
  Severanceand Other
    
    Facility
    
    OtherPersonnel Costs
    
    Closing Costs
    
    Exit Costs
    
    TotalCharges
    
    $
    6,774
    
    
    $
    8,669
    
    
    $
    4,364
    
    
    $
    19,807Adjustments
    
    
    (23
    )
    
    
    
    
    
    
    (994
    )
    
    
    (1,017
    )Cash payments
    
    
    (4,468
    )
    
    
    (267
    )
    
    
    (2,423
    )
    
    
    (7,158
    )Accrual at December 31, 2001
    
    
    2,283
    
    
    
    8,402
    
    
    
    947
    
    
    
    11,632Charges
    
    
    10,344
    
    
    
    3,421
    
    
    
    1,648
    
    
    
    15,413Adjustments
    
    
    65
    
    
    
    1,246
    
    
    
    (363
    )
    
    
    948Cash payments
    
    
    (7,569
    )
    
    
    (2,283
    )
    
    
    (1,217
    )
    
    
    (11,069
    )Accrual at December 31, 2002
    
    
    5,123
    
    
    
    10,786
    
    
    
    1,015
    
    
    
    16,924Charges
    
    
    2,736
    
    
    
    1,505
    
    
    
    661
    
    
    
    4,902Adjustments
    
    
    (18
    )
    
    
    (17
    )
    
    
    (10
    )
    
    
    (45
    )Cash payments
    
    
    (6,044
    )
    
    
    (3,273
    )
    
    
    (965
    )
    
    
    (10,282
    )Accrual at December 31, 2003(restated)
    
    
    1,797
    
    
    
    9,001
    
    
    
    701
    
    
    
    11,499Charges
    
    
    3,563
    
    
    
    
    
    
    
    116
    
    
    
    3,679Adjustments
    
    
    (7
    )
    
    
    402
    
    
    
    239
    
    
    
    634Cash payments
    
    
    (1,489
    )
    
    
    (1,407
    )
    
    
    (262
    )
    
    
    (3,158
    )Accrual at June 30, 2004 (restated)
    
    $
    3,864
    
    
    $
    7,996
    
    
    $
    794
    
    
    $
    12,654
   Other Income (Expense)
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2004
    
    2003
    
    Change
    
    2004
    
    2003
    
    Change(In millions)Interest expense
    
    $
    (9.4
    )
    
    $
    (9.4
    )
    
    
    
    %
    
    $
    (18.8
    )
    
    $
    (19.8
    )
    
    
    (4.7
    )%Interest income
    
    $
    0.1
    
    
    $
    0.1
    
    
    
    
    %
    
    $
    0.2
    
    
    $
    0.2
    
    
    
    
    %Other, net
    
    $
    
    
    
    $
    0.1
    
    
    
    n/m
    
    
    $
    
    
    
    $
    (0.3
    )
    
    
    n/m
  43




---



##### Table of Contents



Effective Tax Rates
  Discontinued Operations
   Segments
    Adjusted
    
    Adjusted SegmentRevenues
    
    Segment EBITDA
    
    EBITDA MarginRestated
    
    
    
    
    
    Restated
    
    
    
    
    
    Restated2004
    
    2003
    
    2004
    
    2003
    
    2004
    
    2003Industry
    
    $
    20,912
    
    
    $
    20,998
    
    
    $
    4,556
    
    
    $
    4,788
    
    
    
    21.8
    %
    
    
    22.8
    %Technology
    
    
    19,956
    
    
    
    19,781
    
    
    
    3,432
    
    
    
    2,989
    
    
    
    17.2
    %
    
    
    15.1
    %Lifestyle
    
    
    3,884
    
    
    
    3,362
    
    
    
    (617
    )
    
    
    (667
    )
    
    
    (15.9
    )%
    
    
    (19.8
    )%Retail
    
    
    6,184
    
    
    
    6,042
    
    
    
    1,455
    
    
    
    1,451
    
    
    
    23.5
    %
    
    
    24.0
    %Total
    
    $
    50,936
    
    
    $
    50,183
    
    
    $
    8,826
    
    
    $
    8,561
 44




---



##### Table of Contents



Adjusted
    
    Adjusted SegmentRevenues
    
    Segment EBITDA
    
    EBITDA MarginRestated
    
    
    
    
    
    Restated
    
    
    
    
    
    Restated2004
    
    2003
    
    2004
    
    2003
    
    2004
    
    2003Industry
    
    $
    39,300
    
    
    $
    40,360
    
    
    $
    7,629
    
    
    $
    8,064
    
    
    
    19.4
    %
    
    
    20.0
    %Technology
    
    
    34,234
    
    
    
    34,993
    
    
    
    4,481
    
    
    
    3,782
    
    
    
    13.1
    %
    
    
    10.8
    %Lifestyle
    
    
    21,108
    
    
    
    18,411
    
    
    
    10,491
    
    
    
    8,635
    
    
    
    49.7
    %
    
    
    46.9
    %Retail
    
    
    10,761
    
    
    
    10,811
    
    
    
    1,982
    
    
    
    2,182
    
    
    
    18.4
    %
    
    
    20.2
    %Total
    
    $
    105,403
    
    
    $
    104,575
    
    
    $
    24,583
    
    
    $
    22,663
 Industry
 Three Months
    Six Months
    Technology
 Three Months
  45




---



##### Table of Contents



Internet World
 Internet World
 Six Months
  Internet World
 Internet World
 Lifestyle
 Three Months
  The Natural Foods Merchandiser Delicious Living
  Six Months
  46




---



##### Table of Contents



Retail
 Three Months
    Six Months
    Liquidity and Capital Resources
 Current Liquidity
   47




---



##### Table of Contents



Analysis of Cash Flows
     Risk Factors
  New Accounting Pronouncements
  48




---



##### Table of Contents



Critical Accounting Policies and Estimates
  Foreign Currency
  Seasonality
  
 ITEM 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
      49




---



##### Table of Contents



Changes in Internal Control Over Financial Reporting
  50




---



##### Table of Contents



Part II  OTHER INFORMATION
 
 ITEM 6.
    
    EXHIBITS AND REPORTS ON FORM 8-K
 (a)
    
    Exhibits
 Exhibit No.
    
    Description of Document10.1*
    
    
    
    Separation Agreement and General Release, dated July 1, 2004,
between Penton Media, Inc. and Thomas L. Kemp.10.2*
    
    
    
    Separation Agreement and General Release, dated July 1, 2004,
between Penton Media, Inc. and Daniel J. Ramella.10.3*
    
    
    
    Amended and Restated Employment Agreement, dated June 23, 2004,
between Penton Media, Inc. and David Nussbaum.31.1
    
    
    
    Principal executive officers certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.31.2
    
    
    
    Principal financial officers certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.32
    
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Previously filed. (b)
    
    Reports on Form 8-K
  Date of Report
    
    Items ReportedMay 17, 2004
    
    Item 7. Financial Statements, Pro Forma Financial
Information and ExhibitsItem 12. Results of Operations and Financial ConditionJune 14, 2004
    
    Item 5. Other EventsJune 22, 2004
    
    Item 5. Other EventsJune 24, 2004
    
    Item 5. Other Events
 51




---



##### Table of Contents



SIGNATURE
  Penton Media, Inc.
(Registrant)By:
    /s/ PRESTON L. VICEPreston L. ViceChief Financial Officer  52




---



##### Table of Contents



EXHIBIT INDEX
 Exhibit No.
    
    Description of Document10.1*
    
    Separation Agreement and General Release, dated July 1, 2004, between Penton Media, Inc. and
Thomas L. Kemp.10.2*
    
    Separation Agreement and General Release, dated July 1, 2004, between Penton Media, Inc. and
Daniel J. Ramella.10.3*
    
    Amended and Restated Employment Agreement, dated June 23, 2004, between Penton Media, Inc.
and David Nussbaum.31.1
    
    Principal executive officers certification pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.31.2
    
    Principal financial officers certification pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.32
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
 
 *
    
    Previously filed. 53