- Strong momentum continues for leisure travel to Pursuit’s
markets and GES live event activity
- GES second quarter results exceeded prior guidance; raising
full year outlook
- Second quarter year-over-year results impacted by sale of ON
Services and known shifts in timing of events that resumed normal
schedules in 2023 at GES
Viad Corp (NYSE: VVI), a leading provider of experiential
leisure travel and live events and marketing experiences, today
reported results for the 2023 second quarter.
Financial Highlights
Three months ended June
30,
(in millions)
2023
2022
Change
Revenue
$
320.3
$
319.2
$
1.1
Net Income Attributable to Viad
$
11.0
$
19.8
$
(8.9
)
Net Income Before Other Items*
$
11.8
$
22.2
$
(10.3
)
Consolidated Adjusted EBITDA*
$
42.9
$
47.5
$
(4.6
)
- Revenue of $320.3 million increased $1.1 million as higher
international tourism in Western Canada and Iceland and stronger
demand for exhibitions and events more than offset a revenue
decline of approximately $16 million due to the sale of ON Services
and anticipated shifts in timing of events at GES.
- Net income attributable to Viad of $11.0 million and income
before other items of $11.8 million decreased $8.9 million and
$10.3 million, respectively, primarily due to anticipated lower GES
adjusted EBITDA, higher interest expense, and higher taxes,
partially offset by higher Pursuit adjusted EBITDA.
- Consolidated adjusted EBITDA* of $42.9 million declined $4.6
million primarily due to lower GES revenue and increased staffing
levels at GES as compared to the 2022 second quarter when a faster
than expected recovery in event activity significantly outpaced
workforce restaffing, partially offset by stronger visitation and
margins at Pursuit.
* Refer to Table Two of this press release for a discussion and
reconciliation of this non-GAAP financial measure to its most
directly comparable GAAP financial measure.
Steve Moster, Viad’s president and chief executive officer,
commented, “We delivered solid second quarter results and are
pleased to once again be raising our full year guidance on stronger
than expected GES performance. Pursuit delivered significant
year-over-year growth in the quarter, which continues to accelerate
as we move through the seasonally strong third quarter.”
Moster continued, “We are very encouraged by the robust demand
we’re seeing for Pursuit’s leisure travel markets and the continued
growth in GES’ live events, and we remain confident that we will
deliver substantial growth this year.”
Pursuit Results
Three months ended June
30,
(in millions)
2023
2022
Change
Revenue
$
88.5
$
77.6
$
10.9
Adjusted EBITDA*
$
19.5
$
15.6
$
3.9
* Refer to Table Two of this press release for a discussion and
reconciliation of this non-GAAP financial measure to its most
directly comparable GAAP financial measure.
- Pursuit revenue of $88.5 million increased $10.9 million
(14.0%) from the 2022 second quarter primarily due to stronger
international visitation.
- Pursuit adjusted EBITDA of $19.5 million improved by $3.9
million from the 2022 second quarter primarily due to higher
revenue and improved margin.
Regarding Pursuit’s results, Moster commented, “Pursuit’s
revenue and adjusted EBITDA reached a new all-time high for the
second quarter reflecting the strength of our Refresh, Build, Buy
growth strategy. The new experiences that we’ve acquired or opened
from 2019 to present contributed about 30 percent of Pursuit’s
second quarter revenue and posted year-over-year growth of 27
percent. Additionally, our same-store experiences posted strong
year-over-year revenue growth of 9 percent.”
Moster continued, “Our team did a terrific job maximizing
revenue by strategically driving rate while increasing attraction
visitation and maintaining strong hotel occupancy during the
quarter. Additionally, we continue to benefit from the acceleration
of international leisure travel to our markets. Demand for our
iconic, unforgettable and inspiring hotels and attractions is
strong and with our seasonally robust third quarter ahead, we
remain confident in our ability to continue driving significant
growth at Pursuit.”
GES Results
Three months ended June
30,
(in millions)
2023
2022
Change
Revenue
Spiro
$
80.4
$
89.4
$
(9.1
)
GES Exhibitions
154.5
154.6
(0.1
)
Inter-segment Eliminations
(3.1
)
(2.4
)
(0.6
)
Total GES
$
231.8
$
241.6
$
(9.8
)
Adjusted EBITDA*
Spiro
$
8.9
$
15.8
$
(6.8
)
GES Exhibitions
17.9
19.4
(1.5
)
Total GES
$
26.8
$
35.1
$
(8.3
)
* Refer to Table Two of this press release for a discussion and
reconciliation of this non-GAAP financial measure to its most
directly comparable GAAP financial measure.
- Total GES revenue of $231.8 million decreased 4.0% from the
2022 second quarter primarily due to the sale of ON Services and
2022 shows that were postponed from the first quarter into the
second quarter that returned to their normal first quarter
schedules in 2023, partially offset by live event activity strength
and major non-annual shows in the 2023 second quarter.
- Total GES adjusted EBITDA of $26.8 million decreased by $8.3
million from the 2022 second quarter primarily due to lower revenue
and the rebuilding of the workforce from pandemic levels.
Regarding GES’ results, Moster commented, “GES’ results exceeded
our expectations for the second quarter with higher than
anticipated same-show revenue growth and the benefits of a series
of margin enhancing lean activities. Same-show revenues for events
produced by our U.S. Exhibitions team grew to 99 percent of 2019
pre-pandemic levels as compared to 87 percent in the 2022 second
quarter. At Spiro, spend from existing corporate clients is also
near 2019 pre-pandemic levels, and we continue to win new clients
in this large, fragmented market.”
Moster continued, “I continue to be impressed with the team’s
focus on margin enhancement and the speed and strength of GES’
recovery from the pandemic. We remain committed to driving
meaningful free cash flow through ongoing lean initiatives at GES
Exhibitions and profitable growth at Spiro.”
Cash Flow and Balance Sheet Highlights
Our 2023 second quarter cash flow from operations was
approximately $28.7 million and our capital expenditures totaled
approximately $21 million. We paid approximately $2 million in cash
dividends on our convertible preferred equity and our net debt
payments were approximately $1 million.
We ended the second quarter with total liquidity of $148.2
million, comprising cash and cash equivalents of $53 million and
$95 million of capacity available on our revolving credit facility
($100 million total facility size, less $5 million in letters of
credit). Our debt totaled $477.9 million, including $393 million
outstanding on our Term Loan B, financing lease obligations of
approximately $64 million (which primarily comprises real estate
leases at Pursuit), and approximately $21 million in other
debt.
Moster commented, “We remain committed to maintaining a solid
liquidity position by maximizing our cash flows from operations and
selectively investing in high-return opportunities to continue
scaling Pursuit through our Refresh, Build, Buy growth
strategy.”
2023 Outlook
Regarding Viad’s outlook, Moster commented, “We are pleased to
be raising our full year guidance based on GES’ second quarter
performance and our outlook for continued strong demand for GES’
live events and Pursuit’s leisure travel markets over the balance
of the year.”
Moster continued, “For the third quarter, we expect another
record-breaking quarter at Pursuit with significant growth in
adjusted EBITDA, partially offset by lower GES revenue due to show
rotation and the sale of ON Services.”
Our guidance for Viad consolidated is as follows:
(in millions)
Third Quarter
Full Year
Viad
Consolidated
Revenue
$340 to $370
vs. $382.7 in 2022
Up mid-single digits
vs. $1,127.3 in 2022
Adjusted EBITDA
$77.5 to $89.5
vs. $82.0 in 2022
$126 to $143
vs. $116.1 in 2022
Cash flow from Operations
$55 to $60
$75 to $85
Capital Expenditures
$25 to $30
$70 to $75
(including growth capex of
~$35)
Our guidance for Pursuit is as follows:
(in millions)
Third Quarter
Full Year
Key Assumptions
Pursuit
Revenue
$175 to $190
vs. $163.8 in 2022
Up ~15%
vs. $299.3 in 2022
- Expect revenue growth in 2023 will be driven by:
- Lifting of all COVID restrictions at the Canadian border
- Acceleration of new experiences
- Ongoing focus on improving the guest experience
Adjusted EBITDA
$87 to $95
vs. $75.1 in 2022
$85 to $95
vs. $67.9 in 2022
- Anticipate FY margin expansion as visitation increases, the
performance of newer experiences improves, and pandemic-era cost
pressures ease
Our guidance for GES is as follows:
(in millions)
Third Quarter
Full Year
Key Assumptions
GES
Revenue
$165 to $180
vs. $218.9 in 2022
Up low
single digits
vs. $828.0 in 2022
- Expect FY revenue growth from stronger demand for exhibition
and event services and new Spiro wins will more than offset
negative show rotation ($30M for FY; $50M for Q3) and the sale of
ON Services ($50M for FY; $14M for Q3)
- Exhibitions same show revenue expected to approach 2019
levels
- Spiro clients’ marketing spend expected to be similar to 2022,
plus new client wins
Adjusted EBITDA
($6) to ($2)
vs. $10.7 in 2022
$54 to $62
vs. $61.3 in 2022
- We intend to prudently invest in talent and capabilities at
Spiro to fuel growth in 2023 and beyond
Conference Call Details
Management will host a conference call to
review second quarter 2023 results on Thursday, August 3, 2023, at
5 p.m. (Eastern Time).
To join the live conference call, please
register at least 10 minutes before the start of the call using the
following link: https://conferencingportals.com/event/tQSnvHGq.
After registering, an email confirmation will be sent that includes
dial-in information as well as unique codes for entry into the live
call. Registration will be open throughout the call.
A live audio webcast of the call will also be
available in listen-only mode through the “Investors" section of
our website. A replay of the webcast will be available on our
website shortly after the call and, for a limited time, by calling
(800) 770-2030 or (647) 362-9199 and entering the conference ID
90039.
Additionally, we will post a supplemental
presentation, containing highlights of our results, trends and
outlook, on the “Investors” section of our website prior to the
conference call. We will refer to this presentation during the
call.
About Viad
Viad (NYSE: VVI), is a leading global provider of extraordinary
experiences, including hospitality and leisure activities,
experiential marketing, and live events through two businesses:
Pursuit and GES. Our business strategy focuses on delivering
extraordinary experiences for our teams, clients and guests, and
significant and sustainable growth and above-market returns for our
shareholders. Viad is an S&P SmallCap 600 company.
Pursuit is a collection of inspiring and unforgettable travel
experiences in Alaska, Nevada, and Montana in the United States, in
and around Banff, Jasper, and Vancouver in Canada, and in
Reykjavik, Iceland. Pursuit’s collection includes attractions,
lodges and hotels, and sightseeing tours that connect guests with
iconic places.
GES is a global, full-service live events company offering a
comprehensive range of services to the world's leading brands and
event organizers through two reportable segments, Spiro and GES
Exhibitions. Spiro is an experiential marketing agency that
partners with leading brands around the world to manage and elevate
their global experiential marketing activities. GES Exhibitions is
a global exhibition services company that partners with leading
exhibition and conference organizers as a full-service provider of
strategic and logistics solutions to manage the complexity of their
shows with teams throughout North America, Europe, and the Middle
East.
For more information, visit www.viad.com.
Forward-Looking Statements
This press release contains a number of forward-looking
statements. Words, and variations of words, such as “will,” “may,”
“expect,” “would,” “could,” “might,” “intend,” “plan,” “believe,”
“estimate,” “anticipate,” “deliver,” “seek,” “aim,” “potential,”
“target,” “outlook,” and similar expressions are intended to
identify our forward-looking statements. Similarly, statements that
describe our business strategy, outlook, objectives, plans,
intentions, or goals also are forward-looking statements. These
forward-looking statements are not historical facts and are subject
to a host of risks and uncertainties, many of which are beyond our
control, which could cause actual results to differ materially from
those in the forward-looking statements.
Important factors that could cause actual results to differ
materially from those described in our forward-looking statements
include, but are not limited to, the following:
- general economic uncertainty in key global markets and a
worsening of global economic conditions;
- travel industry disruptions;
- the impact of our overall level of indebtedness, as well as our
financial flexibility;
- identified material weaknesses in our internal control over
financial reporting;
- seasonality of our businesses;
- the impact of the COVID-19 pandemic on our financial condition,
liquidity, and cash flow;
- our ability to anticipate and adjust for the impact of the
COVID-19 pandemic on our businesses;
- unanticipated delays and cost overruns of our capital projects,
and our ability to achieve established financial and strategic
goals for such projects;
- our exposure to labor shortages, turnover, and labor cost
increases;
- the importance of key members of our account teams to our
business relationships;
- our ability to manage our business and continue our growth if
we lose any of our key personnel;
- the competitive nature of the industries in which we
operate;
- our dependence on large exhibition event clients;
- adverse effects of show rotation on our periodic results and
operating margins;
- transportation disruptions and increases in transportation
costs;
- natural disasters, weather conditions, accidents, and other
catastrophic events;
- our exposure to labor cost increases and work stoppages related
to unionized employees;
- our multi-employer pension plan funding obligations;
- our ability to successfully integrate and achieve established
financial and strategic goals from acquisitions;
- our exposure to cybersecurity attacks and threats;
- our exposure to currency exchange rate fluctuations;
- liabilities relating to prior and discontinued operations;
and
- compliance with laws governing the storage, collection,
handling, and transfer of personal data and our exposure to legal
claims and fines for data breaches or improper handling of such
data.
For a more complete discussion of the risks and
uncertainties that may affect our business or financial results,
please see Item 1A, “Risk Factors,” of our most recent annual
report on Form 10-K filed with the SEC and in subsequent filings we
make with the SEC. We disclaim and do not undertake any obligation
to update or revise any forward-looking statement in this press
release except as required by applicable law or regulation.
Forward-Looking Non-GAAP Measures
The company has not quantitatively reconciled its guidance for
adjusted EBITDA to its respective most comparable GAAP financial
measure because certain reconciling items that impact this metric,
including provision for income taxes, interest expense,
restructuring or impairment charges, acquisition-related costs, and
attraction start-up costs have not occurred, are out of the
company’s control, or cannot be reasonably predicted. Accordingly,
reconciliations to the nearest GAAP financial measure are not
available without unreasonable effort. Please note that the
unavailable reconciling items could significantly impact the
company’s results as reported under GAAP.
VIAD CORP AND
SUBSIDIARIES
TABLE ONE - QUARTERLY
RESULTS
(UNAUDITED)
Three months ended June 30,
Six months ended June 30,
(in thousands, except per share
data)
2023
2022
$ Change
% Change
2023
2022
$ Change
% Change
Revenue: Pursuit
$
88,474
$
77,599
$
10,875
14.0
%
121,137
101,383
19,754
19.5
%
GES: Spiro
80,368
89,425
(9,057
)
-10.1
%
$
140,730
$
132,241
$
8,489
6.4
%
GES Exhibitions
154,534
154,600
(66
)
0.0
%
324,031
266,431
57,600
21.6
%
Inter-segment eliminations
(3,065
)
(2,421
)
(644
)
-26.6
%
(4,796
)
(3,492
)
(1,304
)
-37.3
%
Total GES
231,837
241,604
(9,767
)
-4.0
%
$
459,965
$
395,180
$
64,785
16.4
%
Total revenue
$
320,311
$
319,203
$
1,108
0.3
%
$
581,102
$
496,563
$
84,539
17.0
%
Segment operating income (loss): Pursuit
$
9,811
$
5,571
4,240
76.1
%
(9,301
)
(15,627
)
6,326
40.5
%
GES: Spiro
8,279
14,847
(6,568
)
-44.2
%
11,453
14,608
$
(3,155
)
-21.6
%
GES Exhibitions
15,354
16,273
(919
)
-5.6
%
25,764
14,918
10,846
72.7
%
Total GES
23,633
31,120
(7,487
)
-24.1
%
37,217
29,526
7,691
26.0
%
Segment operating income
$
33,444
$
36,691
$
(3,247
)
-8.8
%
$
27,916
$
13,899
$
14,017
** Corporate eliminations
16
17
(1
)
-5.9
%
32
34
(2
)
-5.9
%
Corporate activities
(3,511
)
(3,440
)
(71
)
-2.1
%
(6,676
)
(6,113
)
(563
)
-9.2
%
ON Services sale purchase price adjustment
(204
)
-
(204
)
**
(204
)
-
(204
)
** Restructuring charges (Note A)
(192
)
(1,426
)
1,234
86.5
%
(645
)
(2,080
)
1,435
69.0
%
Impairment charges
-
-
-
**
-
(583
)
583
-100.0
%
Other expense, net
(448
)
(612
)
164
26.8
%
(979
)
(1,250
)
271
21.7
%
Net interest expense (Note B)
(12,356
)
(7,761
)
(4,595
)
-59.2
%
(24,605
)
(13,638
)
(10,967
)
-80.4
%
Income (loss) from continuing operations before income taxes
16,749
23,469
(6,720
)
-28.6
%
(5,161
)
(9,731
)
4,570
47.0
%
Income tax expense (Note C)
(5,028
)
(3,359
)
(1,669
)
-49.7
%
(4,450
)
(777
)
(3,673
)
** Income (loss) from continuing operations
11,721
20,110
(8,389
)
-41.7
%
(9,611
)
(10,508
)
897
8.5
%
Income (loss) from discontinued operations
(143
)
52
(195
)
**
(201
)
327
(528
)
** Net income (loss)
11,578
20,162
(8,584
)
-42.6
%
(9,812
)
(10,181
)
369
3.6
%
Net (income) loss attributable to noncontrolling interest
(903
)
(451
)
(452
)
**
(505
)
753
(1,258
)
** Net loss attributable to redeemable noncontrolling interest
286
128
158
**
409
266
143
53.8
%
Net income (loss) attributable to Viad
$
10,961
$
19,839
$
(8,878
)
-44.8
%
$
(9,908
)
$
(9,162
)
$
(746
)
-8.1
%
Amounts Attributable to Viad: Income (loss) from
continuing operations
$
11,104
$
19,787
$
(8,683
)
-43.9
%
$
(9,707
)
$
(9,489
)
$
(218
)
-2.3
%
Income (loss) from discontinued operations
(143
)
52
(195
)
**
(201
)
327
(528
)
**
Net income (loss)
$
10,961
$
19,839
$
(8,878
)
-44.8
%
$
(9,908
)
$
(9,162
)
$
(746
)
-8.1
%
Income (loss) per common share attributable to Viad (Note
D): Basic income (loss) per common share
$
0.33
$
0.64
$
(0.31
)
-48.4
%
$
(0.66
)
$
(0.67
)
$
0.01
1.5
%
Diluted income (loss) per common share
$
0.33
$
0.64
$
(0.31
)
-48.4
%
$
(0.66
)
$
(0.67
)
$
0.01
1.5
%
Weighted-average common shares outstanding: Basic
weighted-average outstanding common shares
20,840
20,571
269
1.3
%
20,796
20,544
252
1.2
%
Additional dilutive shares related to share-based compensation
135
160
(25
)
-15.6
%
-
-
-
** Diluted weighted-average outstanding common shares
20,975
20,731
244
1.2
%
20,796
20,544
252
1.2
%
Adjusted EBITDA* by Reportable Segment: Pursuit
$
19,482
$
15,613
$
3,869
24.8
%
$
9,167
$
4,115
$
5,052
** GES: Spiro
8,940
15,750
(6,810
)
-43.2
%
12,677
16,492
(3,815
)
-23.1
%
GES Exhibitions
17,905
19,381
(1,476
)
-7.6
%
30,912
21,359
9,553
44.7
%
Total GES
26,845
35,131
(8,286
)
-23.6
%
43,589
37,851
5,738
15.2
%
Corporate
(3,470
)
(3,268
)
(202
)
-6.2
%
(6,507
)
(5,802
)
(705
)
-12.2
%
Consolidated Adjusted EBITDA
42,857
47,476
(4,619
)
-9.7
%
46,249
36,164
10,085
27.9
%
As of June 30,
Capitalization Data:
2023
2022
$ Change % Change Cash and cash equivalents
53,179
54,516
(1,337
)
-2.5
%
Total debt
477,876
492,297
(14,421
)
-2.9
%
Viad shareholders' equity
16,487
(7,591
)
24,078
** Non-controlling interests (redeemable and non-redeemable)
88,216
88,779
(563
)
-0.6
%
Convertible Series A Preferred Stock (Note E): Convertible
preferred stock (including accumulated dividends paid in kind)***
141,827
141,827
-
0.0
%
Equivalent number of common shares
6,674
6,674
-
0.0
%
* Refer to Table Two for a discussion and reconciliation of
this non-GAAP financial measure to its most directly comparable
GAAP financial measure. ** Change is greater than +/- 100 percent
*** Amount shown excludes transaction costs, which are netted
against the value of the preferred shares when presented on Viad's
balance sheet.
VIAD CORP AND SUBSIDIARIES TABLE ONE -
NOTES TO QUARTERLY RESULTS (UNAUDITED) (A) Restructuring
Charges — The decrease in restructuring charges during the three
and six months ended June 30, 2023 was primarily related to our
2022 transformation and streamlining efforts at GES to
significantly reduce costs and create a lower and more flexible
cost structure focused on servicing our more profitable market
segments. (B) Net Interest Expense — The increase in
interest expense during the three and six months ended June 30,
2023 was primarily due to higher interest rates in 2023, and to a
lesser extent to a $1.9 million reduction in capitalized interest
recorded during the six months ended June 30, 2023 as compared to
the six months ended June 30, 2022. (C) Income Tax Expense –
The effective tax rate was 30.0% for the three months ended June
30, 2023 and 14.3% for the three months ended June 30, 2022. The
effective tax rate was a negative 86.2% for the six months ended
June 30, 2023 and negative 8.0% for the six months ended June 30,
2022. The effective rate differed from the 21% federal rate for the
three months ended June 30, 2023 and the three months ended June
30, 2022 as a result of excluding the tax benefit on jurisdictions
where we have a valuation allowance and the change in income or
loss in our jurisdictions. The effective rate differed from the
federal rate for the six months ended June 30, 2023 and the six
months ended June 30, 2022 also as a result of excluding tax
benefits in certain jurisdictions, the mix of income or loss by
jurisdiction, and the $2.1 million benefit taken in the first
quarter of 2023 on certain separate U.S. state jurisdictions.
(D) Income (Loss) per Common Share — We apply the two-class
method in calculating income (loss) per common share as preferred
stock and unvested share-based payment awards that contain
nonforteitable rights to dividends are considered participating
securities. Accordingly, such securities are included in the
earnings allocation in calculating income per share. Diluted
income (loss) per common share is calculated using the more
dilutive of the two-class method or as-converted method. The
two-class method uses net income (loss) available to common
stockholders and assumes conversion of all potential shares other
than participating securities. The as-converted method uses net
income (loss) available to common shareholders and assumes
conversion of all potential shares including participating
securities. Dilutive potential common shares include outstanding
stock options, unvested restricted share units and convertible
preferred stock. Additionally, the adjustment to the
carrying value of redeemable non-controlling interests is reflected
in income (loss) per common share. The components of basic
and diluted income (loss) per share are as follows:
Three months ended June 30,
Six months ended June 30,
(in thousands)
2023
2022
$ Change
% Change
2023
2022
$ Change
% Change
Net income (loss) attributable to Viad
$
10,961
$
19,839
$
(8,878
)
-44.8
%
$
(9,908
)
$
(9,162
)
$
(746
)
-8.1
%
Convertible preferred stock dividends paid in cash
(1,950
)
(1,950
)
-
0.0
%
(3,900
)
(3,900
)
-
0.0
%
Adjustment to the redemption value of redeemable noncontrolling
interest
-
(412
)
412
-100.0
%
-
(763
)
763
-100.0
%
Undistributed income (loss) attributable to Viad
9,011
17,477
(8,466
)
-48.4
%
(13,808
)
(13,825
)
17
0.1
%
Less: Allocation to participating securities
(2,186
)
(4,293
)
2,107
49.1
%
-
-
-
**
Net income (loss) allocated to Viad common shareholders
(basic)
$
6,825
$
13,184
$
(6,359
)
-48.2
%
$
(13,808
)
$
(13,825
)
$
17
0.1
%
Add: Allocation to participating securities
11
25
-
-56.0
%
-
-
-
**
Net income (loss) allocated to Viad common shareholders
(diluted)
$
6,836
$
13,209
$
(6,359
)
-48.2
%
$
(13,808
)
$
(13,825
)
$
17
0.1
%
Basic weighted-average outstanding common shares
20,840
20,571
269
1.3
%
20,796
20,544
252
1.2
%
Additional dilutive shares related to share-based compensation
135
160
(25
)
-15.6
%
-
-
-
**
Diluted weighted-average outstanding common shares
20,975
20,731
244
1.2
%
20,796
20,544
252
1.2
%
(E) Convertible Series A Preferred Stock — On August
5, 2020, we entered into an Investment Agreement with funds managed
by private equity firm Crestview Partners, relating to the issuance
of 135,000 shares of newly issued Convertible Series A Preferred
Stock, par value $0.01 per share, for an aggregate purchase price
of $135 million or $1,000 per share. The Convertible Series A
Preferred Stock carries a 5.5% cumulative quarterly dividend, which
is payable in cash or in-kind at Viad’s option and is convertible
into shares of our common stock at a conversion price of $21.25 per
share.
VIAD CORP AND SUBSIDIARIES TABLE TWO - NON-GAAP
FINANCIAL MEASURES (UNAUDITED) IMPORTANT
DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES This
document includes the presentation of "Income (Loss) Before Other
Items", "Adjusted EBITDA", "Segment Operating Income (Loss)", and
"Adjusted Segment Operating Income (Loss)", which are supplemental
to results presented under accounting principles generally accepted
in the United States of America (“GAAP”) and may not be comparable
to similarly titled measures presented by other companies. These
non-GAAP measures are utilized by management to facilitate
period-to-period comparisons and analysis of Viad’s operating
performance and should be considered in addition to, but not as
substitutes for, other similar measures reported in accordance with
GAAP. The use of these non-GAAP financial measures is limited,
compared to the GAAP measure of net income attributable to Viad,
because they do not consider a variety of items affecting Viad’s
consolidated financial performance as reconciled below. Because
these non-GAAP measures do not consider all items affecting Viad’s
consolidated financial performance, a user of Viad’s financial
information should consider net income attributable to Viad as an
important measure of financial performance because it provides a
more complete measure of the Company’s performance. Income
(Loss) Before Other Items, Segment Operating Income (Loss), and
Adjusted Segment Operating Income (Loss) are considered useful
operating metrics, in addition to net income attributable to Viad,
as potential variations arising from non-operational
expenses/income are eliminated, thus resulting in additional
measures considered to be indicative of Viad’s performance.
Management believes that the presentation of Adjusted EBITDA
provides useful information to investors regarding Viad’s results
of operations for trending, analyzing and benchmarking the
performance and value of Viad’s business. Management also believes
that the presentation of Adjusted EBITDA for acquisitions and other
major capital projects enables investors to assess how effectively
management is investing capital into major corporate development
projects, both from a valuation and return perspective.
Three months ended June 30,
Six months ended June 30,
(in thousands, except per share data)
2023
2022
$ Change
% Change
2023
2022
$ Change
% Change
Income (loss) before other items: Net income (loss)
attributable to Viad
$
10,961
$
19,839
$
(8,878
)
-44.8
%
$
(9,908
)
$
(9,162
)
$
(746
)
-8.1
%
(Income) loss from discontinued operations attributable to Viad
143
(52
)
195
**
201
(327
)
528
** Income (loss) from continuing operations attributable to Viad
11,104
19,787
(8,683
)
-43.9
%
(9,707
)
(9,489
)
(218
)
-2.3
%
ON Services sale purchase price adjustment, pre-tax
204
-
204
**
204
-
204
** Restructuring charges, pre-tax
192
1,426
(1,234
)
-86.5
%
645
2,080
(1,435
)
-69.0
%
Impairment charges, pre-tax
-
-
-
**
-
583
(583
)
-100.0
%
Acquisition-related costs and other non-recurring expenses, pre-tax
(Note A)
465
1,001
(536
)
-53.5
%
1,311
1,858
(547
)
-29.4
%
Remeasurement of finance lease obligation attributable to Viad,
pre-tax (Note B)
(184
)
-
(184
)
**
(823
)
-
(823
)
** Tax expense (benefit) on above items
60
(61
)
121
**
309
(138
)
447
** Favorable tax matters
-
-
-
**
(2,103
)
-
(2,103
)
**
Income (loss) before other items
$
11,841
$
22,153
$
(10,312
)
-46.5
%
$
(10,164
)
$
(5,106
)
$
(5,058
)
-99.1
%
The components of income (loss) before other items
per share are as follows: Income (loss) before other items
(as reconciled above)
11,841
22,153
(10,312
)
-46.5
%
(10,164
)
(5,106
)
(5,058
)
-99.1
%
Convertible preferred stock dividends paid in cash
(1,950
)
(1,950
)
-
0.0
%
(3,900
)
(3,900
)
-
0.0
%
Undistributed income (loss) before other items attributable to Viad
(Note C)
9,891
20,203
(10,312
)
-51.0
%
(14,064
)
(9,006
)
(5,058
)
-56.2
%
Less: Allocation to participating securities (Note D)
(2,388
)
(4,934
)
2,546
51.6
%
-
-
-
** Diluted income (loss) before other items allocated to Viad
common shareholders
$
7,503
$
15,269
$
(7,766
)
-50.9
%
$
(14,064
)
$
(9,006
)
$
(5,058
)
-56.2
%
Diluted weighted-average outstanding common shares
20,975
20,731
244
1.2
%
20,796
20,544
252
1.2
%
Income (loss) before other items per common share
$
0.36
$
0.74
$
(0.38
)
-51.4
%
$
(0.68
)
`
$
(0.44
)
$
(0.24
)
-54.5
%
(A) Acquisition-related costs and other non-recurring
expenses include:
Three months ended June 30,
Six months ended June 30,
(in thousands)
2023
2022
2023
2022
Acquisition integration costs - Pursuit1
$
-
$
119
$
30
$
119
Acquisition transaction-related costs - Pursuit1
42
93
74
401
Acquisition transaction-related costs - Corporate2
6
(2
)
3
108
Attraction start-up costs1, 3
417
648
1,109
1,079
Other non-recurring expenses2, 4
-
143
95
151
Acquisition-related and other non-recurring expenses, pre-tax
$
465
$
1,001
$
1,311
$
1,858
1 Included in segment operating loss 2 Included in corporate
activities 3 Includes costs related to the development of Pursuit's
new FlyOver attractions in Chicago and Toronto, and Forest Park
Hotel in Canada. 4 Includes non-capitalizable fees and expenses
related to Viad’s credit facility refinancing efforts. (B)
Remeasurement of finance lease obligation attributable to Viad
represents the non-cash foreign exchange loss/(gain) included
within Cost of Services related to the periodic remeasurement of
the Sky Lagoon finance lease obligation that is attributed to
Viad’s 51% interest in Sky Lagoon. (C) We exclude the
adjustment to the redemption value of redeemable noncontrolling
interest from the calculation of income before other items per
share as it is a non-cash adjustment that does not affect net
income or loss attributable to Viad. (D) Preferred stock and
unvested share-based payment awards that contain nonforteitable
rights to dividends are considered participating securities.
Accordingly, such securities are included in the earnings
allocation in calculating income (loss) before other items per
common share unless the effect of such inclusion is anti-dilutive.
The following table provides the share data used for calculating
the allocation to participating securities if applicable:
Three months ended June 30,
Six months ended June 30,
(in thousands)
2023
2022
2023
2022
Weighted-average outstanding common shares
20,975
20,731
20,796
20,544
Effect of participating convertible preferred shares (if
applicable)
6,674
6,674
-
-
Effect of participating non-vested shares (if applicable)
-
25
-
-
Weighted-average shares including effect of participating interests
(if applicable)
27,649
27,430
20,796
20,544
** Change is greater than +/- 100 percent
VIAD CORP AND
SUBSIDIARIES
TABLE TWO - NON-GAAP FINANCIAL
MEASURES (CONTINUED)
(UNAUDITED)
Three months ended June 30,
Six months ended June 30,
($ in thousands)
2023
2022
$ Change
% Change
2023
2022
$ Change
% Change
Viad Consolidated: Revenue
$
320,311
$
319,203
$
1,108
0.3
%
$
581,102
$
496,563
$
84,539
17.0
%
Net income (loss) attributable to Viad
$
10,961
$
19,839
$
(8,878
)
-44.8
%
$
(9,908
)
$
(9,162
)
$
(746
)
-8.1
%
Net income (loss) attributable to noncontrolling interest
903
451
452
**
505
(753
)
1,258
** Net loss attributable to redeemable noncontrolling interest
(286
)
(128
)
(158
)
**
(409
)
(266
)
(143
)
-53.8
%
(Income) loss from discontinued operations
143
(52
)
195
**
201
(327
)
528
** Net interest expense
12,356
7,761
4,595
59.2
%
24,605
13,638
10,967
80.4
%
Income tax expense
5,028
3,359
1,669
49.7
%
4,450
777
3,673
** Depreciation and amortization
12,804
13,207
(403
)
-3.1
%
25,279
26,486
(1,207
)
-4.6
%
ON Services sale purchase price adjustment
204
-
204
**
204
-
204
** Restructuring charges
192
1,426
(1,234
)
-86.5
%
645
2,080
(1,435
)
-69.0
%
Impairment charges
-
-
-
**
-
583
(583
)
-100.0
%
Other expense
448
612
(164
)
-26.8
%
979
1,250
(271
)
-21.7
%
Start-up costs (A)
417
648
(231
)
-35.6
%
1,109
1,079
30
2.8
%
Acquisition transaction-related costs
48
91
(43
)
-47.3
%
77
509
(432
)
-84.9
%
Integration costs
-
119
(119
)
-100.0
%
30
119
(89
)
-74.8
%
Other non-recurring expenses
-
143
(143
)
-100.0
%
95
151
(56
)
-37.1
%
Remeasurement of finance lease obligation (B)
(361
)
-
(361
)
**
(1,613
)
-
(1,613
)
**
Consolidated Adjusted EBITDA
$
42,857
$
47,476
$
(4,619
)
-9.7
%
$
46,249
$
36,164
$
10,085
27.9
%
Adjusted EBITDA attributable to noncontrolling interest
(2,781
)
(2,092
)
(689
)
-32.9
%
(3,426
)
(2,404
)
(1,022
)
-42.5
%
Consolidated Adjusted EBITDA attributable to Viad
$
40,076
$
45,384
$
(5,308
)
-11.7
%
$
42,823
$
33,760
$
9,063
26.8
%
Consolidated Adjusted EBITDA by Business: Pursuit
$
19,482
$
15,613
$
3,869
24.8
%
$
9,167
$
4,115
$
5,052
** Total GES
26,845
35,131
(8,286
)
-23.6
%
43,589
37,851
5,738
15.2
%
Total Segment EBITDA
46,327
50,744
(4,417
)
-8.7
%
52,756
41,966
10,790
25.7
%
Corporate EBITDA
(3,470
)
(3,268
)
(202
)
-6.2
%
(6,507
)
(5,802
)
(705
)
-12.2
%
Consolidated Adjusted EBITDA
$
42,857
$
47,476
$
(4,619
)
-9.7
%
$
46,249
$
36,164
$
10,085
27.9
%
Pursuit Adjusted EBITDA: Revenue
$
88,474
$
77,599
$
10,875
14.0
%
$
121,137
$
101,383
$
19,754
19.5
%
Cost of services and products
(78,663
)
(72,028
)
(6,635
)
-9.2
%
(130,438
)
(117,010
)
(13,428
)
-11.5
%
Segment operating income (loss)
9,811
5,571
4,240
76.1
%
(9,301
)
(15,627
)
6,326
40.5
%
Depreciation
8,279
7,866
413
5.3
%
16,413
15,648
765
4.9
%
Amortization
1,294
1,316
(22
)
-1.7
%
2,455
2,495
(40
)
-1.6
%
Start-up costs (A)
417
648
(231
)
-35.6
%
1,109
1,079
30
2.8
%
Acquisition transaction-related costs
42
93
(51
)
-54.8
%
74
401
(327
)
-81.5
%
Integration costs
-
119
(119
)
-100.0
%
30
119
(89
)
-74.8
%
Remeasurement of finance lease obligation (B)
(361
)
-
(361
)
**
(1,613
)
-
(1,613
)
**
Adjusted EBITDA
$
19,482
$
15,613
$
3,869
24.8
%
$
9,167
$
4,115
$
5,052
** Adjusted EBITDA attributable to noncontrolling interest
(2,781
)
(2,092
)
(689
)
-32.9
%
(3,426
)
(2,404
)
(1,022
)
-42.5
%
Adjusted EBITDA attributable to Viad
$
16,701
$
13,521
$
3,180
23.5
%
$
5,741
$
1,711
$
4,030
** Pursuit Operating margin
11.1
%
7.2
%
3.9
%
-7.7
%
-15.4
%
7.7
%
Pursuit Adjusted EBITDA margin
22.0
%
20.1
%
1.9
%
7.6
%
4.1
%
3.5
%
Total GES Adjusted EBITDA: Revenue
$
231,837
$
241,604
$
(9,767
)
-4.0
%
$
459,965
$
395,180
$
64,785
16.4
%
Cost of services and products
(208,204
)
(210,484
)
2,280
1.1
%
(422,748
)
(365,654
)
(57,094
)
-15.6
%
Segment operating income
23,633
31,120
(7,487
)
-24.1
%
37,217
29,526
7,691
26.0
%
Depreciation
2,240
2,922
(682
)
-23.3
%
4,418
6,142
(1,724
)
-28.1
%
Amortization
972
1,089
(117
)
-10.7
%
1,954
2,183
(229
)
-10.5
%
Total GES Adjusted EBITDA
$
26,845
$
35,131
$
(8,286
)
-23.6
%
$
43,589
$
37,851
$
5,738
15.2
%
Total GES Operating margin
10.2
%
12.9
%
-2.7
%
8.1
%
7.5
%
0.6
%
Total GES Adjusted EBITDA margin
11.6
%
14.5
%
-3.0
%
9.5
%
9.6
%
-0.1
%
GES Adjusted EBITDA by Reportable Segment: Spiro
$
8,940
$
15,750
$
(6,810
)
-43.2
%
$
12,677
$
16,492
$
(3,815
)
-23.1
%
GES Exhibitions
17,905
19,381
(1,476
)
-7.6
%
30,912
21,359
9,553
44.7
%
Total GES
$
26,845
$
35,131
$
(8,286
)
-23.6
%
$
43,589
$
37,851
$
5,738
15.2
%
Spiro Revenue
$
80,368
$
89,425
$
(9,057
)
-10.1
%
$
140,730
$
132,241
$
8,489
6.4
%
Spiro Adjusted EBITDA Margin
11.1
%
17.6
%
-6.5
%
9.0
%
12.5
%
-3.5
%
GES Exhibitions Revenue
$
154,534
$
154,600
$
(66
)
0.0
%
$
324,031
$
266,431
$
57,600
21.6
%
GES Exhibitions Adjusted EBITDA Margin
11.6
%
12.5
%
-0.9
%
9.5
%
8.0
%
1.5
%
(A) Includes costs related to the development
of Pursuit's new FlyOver attractions in Chicago and Toronto, and
Forest Park Hotel in Canada. (B) Remeasurement of finance lease
obligation represents the non-cash foreign exchange loss/(gain)
included within Cost of Services related to the periodic
remeasurement of the Sky Lagoon finance lease obligation.
VIAD CORP AND
SUBSIDIARIES
TABLE TWO - NON-GAAP FINANCIAL
MEASURES (CONTINUED)
(UNAUDITED)
The following table provides 2022 revenue and Adjusted
EBITDA, along with reconciliations of Adjusted EBITDA to the
nearest GAAP measure, net income attributable to Viad.
2022
($ in thousands)
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
Viad Consolidated: Net income (loss) attributable to
Viad
$
(29,001
)
$
19,839
$
38,121
$
(5,739
)
$
23,220
Net income (loss) attributable to noncontrolling interest
(1,204
)
451
3,784
(708
)
2,323
Net loss attributable to redeemable noncontrolling interest
(138
)
(128
)
(88
)
(394
)
(748
)
(Income) loss from discontinued operations
(275
)
(52
)
42
137
(148
)
Net interest expense
5,877
7,761
10,252
11,001
34,891
Income tax expense (benefit)
(2,582
)
3,359
8,810
386
9,973
Depreciation and amortization
13,279
13,207
12,956
13,041
52,483
Gain on sale of ON Services
-
-
-
(19,637
)
(19,637
)
Restructuring charges (recoveries)
654
1,426
1,387
(408
)
3,059
Impairment charges
583
-
-
-
583
Other expense
638
612
280
547
2,077
Start-up costs (A)
431
648
672
418
2,169
Acquisition transaction-related costs
418
91
765
53
1,327
Integration costs
-
119
17
101
237
Remeasurement of finance lease obligation (B)
-
-
4,961
(804
)
4,157
Other non-recurring expenses (C)
8
143
-
-
151
Consolidated Adjusted EBITDA
$
(11,312
)
$
47,476
$
81,959
$
(2,006
)
$
116,117
Consolidated Adjusted EBITDA by Business: Pursuit
$
(11,498
)
$
15,613
$
75,085
$
(11,251
)
$
67,949
Total GES
2,720
35,131
10,685
12,721
61,257
Total Segment EBITDA
(8,778
)
50,744
85,770
1,470
129,206
Corporate EBITDA
(2,534
)
(3,268
)
(3,811
)
(3,476
)
(13,089
)
Consolidated Adjusted EBITDA
$
(11,312
)
$
47,476
$
81,959
$
(2,006
)
$
116,117
Pursuit Adjusted EBITDA: Revenue
$
23,784
$
77,599
$
163,796
$
34,148
$
299,327
Cost of services and products
(44,982
)
(72,028
)
(104,047
)
(54,239
)
(275,296
)
Segment operating income (loss)
(21,198
)
5,571
59,749
(20,091
)
24,031
Depreciation
7,782
7,866
7,501
7,926
31,075
Amortization
1,179
1,316
1,351
1,175
5,021
Start-up costs (A)
431
648
672
418
2,169
Acquisition transaction-related costs
308
93
834
24
1,259
Integration costs
-
119
17
101
237
Remeasurement of finance lease obligation (B)
-
-
4,961
(804
)
4,157
Adjusted EBITDA
$
(11,498
)
$
15,613
$
75,085
$
(11,251
)
$
67,949
Pursuit Operating margin
-89.1
%
7.2
%
36.5
%
-58.8
%
8.0
%
Pursuit Adjusted EBITDA margin
-48.3
%
20.1
%
45.8
%
-32.9
%
22.7
%
Total GES Adjusted EBITDA: Revenue
$
153,576
$
241,604
$
218,925
$
213,879
$
827,984
Cost of services and products
(155,170
)
(210,484
)
(212,335
)
(205,082
)
(783,071
)
Segment operating income (loss)
(1,594
)
31,120
6,590
8,797
44,913
Depreciation
3,220
2,922
2,970
2,802
11,914
Amortization
1,094
1,089
1,125
1,122
4,430
Total GES Adjusted EBITDA
$
2,720
$
35,131
$
10,685
$
12,721
$
61,257
Total GES Operating margin
-1.0
%
12.9
%
3.0
%
4.1
%
5.4
%
Total GES Adjusted EBITDA margin
1.8
%
14.5
%
4.9
%
5.9
%
7.4
%
GES Adjusted EBITDA by Reportable Segment: Spiro
$
742
$
15,750
$
4,688
$
5,795
$
26,975
GES Exhibitions
1,978
19,381
5,997
6,926
34,282
Total GES
$
2,720
$
35,131
$
10,685
$
12,721
$
61,257
Spiro Revenue
$
42,816
$
89,425
$
73,277
$
72,123
$
277,641
Spiro Adjusted EBITDA Margin
1.7
%
17.6
%
6.4
%
8.0
%
9.7
%
GES Exhibitions Revenue
$
111,831
$
154,600
$
147,872
$
143,577
$
557,880
GES Exhibitions Adjusted EBITDA Margin
1.8
%
12.5
%
4.1
%
4.8
%
6.1
%
(A) Includes costs related to the development of
Pursuit's new FlyOver attractions in Chicago and Toronto, and
Forest Park Hotel in Canada. (B) Remeasurement of finance lease
obligation represents the non-cash foreign exchange loss/(gain)
included within Cost of Services related to the periodic
remeasurement of the Sky Lagoon finance lease obligation. (C)
Includes non-capitalizable fees and expenses related to Viad’s
credit facility refinancing efforts.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230803104126/en/
Carrie Long or Michelle Porhola Investor Relations (602)
207-2681 ir@viad.com
Viad (NYSE:VVI)
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