Producer of Comdex may go bankrupt

Matthew Fordahl

Friday, Nov. 15, 2002 | 11:15 a.m.

SAN JOSE, Calif. -- Key3Media Group Inc., producer of the Comdex tech trade show which open next week in Las Vegas, said Thursday it may not be able to make debt payments and may have to file for bankruptcy protection.

The announcement, made in its third-quarter financial results, also said the Los Angeles-based company was exploring other alternatives, such as a merger or raising additional capital.

"Key3Media's board believes this process represents the best alternative in these difficult times for preserving the value of its brands and businesses for its stakeholders," the company said.

No decision will be made until after the fall Comdex show, which is scheduled to open Sunday and run through Friday.

Microsoft Chairman Bill Gates will kick off the event with a keynote address Sunday at the MGM Grand Garden. The Comdex trade show -- the largest convention on the Las Vegas Convention and Visitors Authority calendar by attendance -- is scheduled at the Las Vegas Convention Center.

Comdex, like most trade shows, has struggled with weak attendance after the Sept. 11 terrorist attacks and the sour economy. Key3Media shows -- which include Comdex, NetWorld+Interop and Seybold Seminars -- also focus on the struggling tech industry.

About 125,000 attendees are expected at the fall Comdex show -- about the same as last year. The number of exhibiting companies is expected to drop to 1,000, from 1,685 in 2001 and 2,337 in 2000.

In September, Key3Media canceled a number of regional shows, including Comdex shows in Atlanta, Chicago, Vancouver and Montreal. It also laid off nearly half its staff and is closing an office in Needham, Mass.

For the three months ended Sept. 30, Key3Media lost $299.3 million excluding interest, taxes, depreciation and amortization. That compares with a profit of $14.1 million in the same period of 2001.

Shares of Key3Media fell 41 percent, or 1 cent, to 14 cents in Thursday trading on the over-the-counter bulletin board market.

The Sun's Richard N. Velotta contributed to this report.