Viad Corp Reports 2019 First Quarter Results

Underlying Business Performance was Stronger than Expected
GES Base Same Show Revenue Grew 4.0%
Pursuit Revenue Grew 9.7%

PHOENIX--()--Viad Corp (NYSE: VVI) today announced first quarter 2019 results that reflect stronger than anticipated performance at both GES and Pursuit.

  Q1

2019

  Q1

2018

 

y-o-y
Change

$ in millions, except per share data    
Revenue $ 285.6 $ 277.4 2.9 %
Organic Revenue* 290.1 277.4 4.6 %
 
Net Loss Attributable to Viad $ (17.8 ) $ (9.4 ) -89.4 %
Loss Before Other Items* (10.2 ) (9.9 ) -2.8 %
Loss Before Other Items per Share* (0.51 ) (0.49 ) -4.1 %
 
Adjusted Segment Operating Loss* $ (11.0 ) $ (10.5 ) -4.7 %
Adjusted Segment EBITDA* 2.1 2.5 -15.1 %
  • Revenue of $285.6 million increased 2.9% ($8.2 million) year-over-year, or 4.6% ($12.7 million) on an organic basis (which excludes the impact of exchange rate variances).
    • The organic revenue increase primarily reflects same-show growth and new business wins at GES, as well as incremental revenue from Pursuit’s Mount Royal Hotel.
    • Exchange rate variances had an unfavorable impact on revenue of $4.5 million.
  • The expected declines in adjusted segment EBITDA and adjusted segment operating results were primarily driven by increased costs to support continued growth at Pursuit.
  • The loss before other items increased primarily due to higher interest expense and lower adjusted segment operating results. The GAAP-basis net loss attributable to Viad for the 2019 first quarter also included a $6.4 million, after-tax, charge related to a legal settlement.

Steve Moster, president and chief executive officer, commented, “We delivered better than expected revenue growth and adjusted segment EBITDA during the first quarter. GES continues to drive growth on a same-show basis as well as from new corporate wins. At Pursuit, we continue to realize the benefits of our revenue management efforts and refresh initiatives, and the team is preparing for a strong peak season with many new expansion projects opening in the coming months.”

GES Results

Moster said, “GES realized stronger than anticipated revenue growth during the first quarter, with U.S. base same-show growth of 4 percent and continued progress from our efforts to increase our share of live event spend from corporate brands. As we continue our journey to position GES as the preferred, global full-service provider for live events, with a focus on driving growth in higher margin areas, we also remain focused on generating operating efficiencies across the business. To help ensure we are aligned optimally against our best opportunities, we recently organized the global business under two geographical leaders, one for North America and one for EMEA, who are focused on three strategic themes - Simplify, Grow, and Transform. Accordingly, we are now reporting on the results of each of those geographical segments.”

  Q1

2019

  Q1

2018

  y-o-y

Change

$ in millions
Revenue $ 274.9 $ 267.7 2.7 %
North America Organic Revenue* 224.0 222.1 0.9 %
EMEA Organic Revenue* 57.7 48.9 18.0 %
 
Adjusted Segment Operating Income* $ 1.7 $ 0.6 **
Adjusted Segment Operating Margin* 0.6 % 0.2 % 40 bps
 
Adjusted Segment EBITDA* $ 10.9 $ 10.4 4.7 %
Adjusted Segment EBITDA Margin* 4.0 % 3.9 % 10 bps
Key Performance Indicators:  
 
U.S. Base Same-Show Revenue Growth(1)   4.0 %
Show Rotation Revenue Change – North America (approx.)(2) $(6 )
Show Rotation Revenue Change – EMEA (approx.)(2) $4
(1)   Base same-shows are defined as shows produced by GES out of the same U.S. city during the same quarter in both the current year and prior year. Base same-shows represented 41.7% of GES North America’s organic revenue during the 2019 first quarter.
(2) Show rotation refers to shows that take place once every two, three or four years, as well as annual shows that change quarters from one year to the next.

**

Greater than 100%.

  • GES revenue of $274.9 million increased 2.7% ($7.2 million) year-over-year. On an organic basis, which excludes the impact of exchange rate variances, revenue increased 4.2% ($11.3 million).
    • North America organic revenue increased 0.9% ($1.9 million) primarily due to U.S. base same-show growth of 4.0% and growth from corporate clients, partially offset by negative show rotation of approximately $6 million.
    • EMEA organic revenue increased 18.0% ($8.8 million) primarily due to new business wins, underlying growth and positive show rotation of approximately $4 million.
  • GES adjusted segment operating income of $1.7 million* increased $1.1 million year-over-year, and $1.1 million on an organic basis.
    • North America organic adjusted segment operating income of $0.6 million* increased by $0.7 million primarily due to the increase in revenue.
    • EMEA organic adjusted segment operating income of $1.1 million* increased $0.4 million primarily due to the increase in revenue partially offset by higher compensation expense, including performance-based incentives, as well as the timing of expenses.

Pursuit Results

Moster said, “Pursuit delivered organic revenue growth of 14.6 percent during its seasonally slow first quarter, driven primarily by the Mount Royal Hotel, which continues to perform very well since re-opening in July of last year. Most of our properties across Pursuit are just beginning to open for the season, and we continue to be on track to open many new experiences over the next few months, including FlyOver Iceland, the West Glacier RV Park and Cabin Village and the fully remodeled, all-inclusive Glacier View Lodge. We are excited to welcome guests to our new and improved assets during the busy summer tourism season.”

  Q1

2019

  Q1

2018

  y-o-y

Change

$ in millions    
Revenue $ 10.7 $ 9.7 9.7 %
Organic Revenue* 11.1 9.7 14.6 %
 
Adjusted Segment Operating Loss* $ (12.8 ) $ (11.2 ) -14.4 %
Adjusted Segment Operating Margin* ** ** **
 
Adjusted Segment EBITDA* $ (8.8 ) $ (7.9 ) -10.9 %
Adjusted Segment EBITDA Margin* -82.3 % -81.4 % (90) bps
 
Key Performance Indicators:
Same-Store Passengers(1) 151,166 158,472 -4.6 %
Same-Store Effective Ticket Price(1) $ 23 $ 21 9.5 %
Same-Store Revenue per Passenger(1) $ 31 $ 27 14.8 %
Same-Store RevPAR(2) $ 51 $ 53 -3.8 %
Same-Store Room Nights Available(2) 27,810 27,810 -
(1)   Same-store effective ticket price is calculated as revenue from the sale of attraction tickets divided by the total number of passengers for all comparable Pursuit attractions, expressed on a constant currency basis. Same-store revenue per passenger is a similar measure but also takes into consideration ancillary revenue derived from food and beverage and retail offerings at the comparable attractions. Comparable attractions are defined as those operated by Pursuit for the entirety of both periods.
(2) Same-store RevPAR is calculated as total rooms revenue divided by the total number of room nights available for all comparable Pursuit properties during the periods presented, expressed on a constant currency basis. Comparable properties are defined as those operated by Pursuit for the entirety of both periods. Accordingly, the measures shown above do not include the Mount Royal Hotel, which was closed from December 2016 through June 2018 due to fire damage.
** Greater than 100% or 1,000 basis points.
  • Pursuit revenue of $10.7 million increased 9.7% ($0.9 million) year-over-year. On an organic basis, which excludes the impact of exchange rate variances, revenue increased 14.6% ($1.4 million) primarily due to the re-opening of the Mount Royal Hotel, as well as continued focus on revenue management and refresh efforts to maximize revenues across our attraction and hotel portfolio.
  • Pursuit adjusted segment operating loss of $12.8 million* increased $1.6 million year-over-year. On an organic basis, the operating loss of $13.1 million increased $1.9 million primarily due to higher depreciation expense, as well as additional costs to support continued growth initiatives and the timing of certain other expenses.

Cash Flow / Capital Structure

  • Our cash flow from operations was $8.2 million for the 2019 first quarter.
  • Our capital expenditures for the quarter totaled $19.5 million, comprising $12.4 million for Pursuit and $7.1 million for GES.
  • Our return of capital totaled $2.0 million for the quarter (which represented quarterly dividends of $0.10 per share). We had 600,067 shares remaining under our current repurchase authorization at March 31, 2019.
  • Our debt proceeds (net) totaled $13.9 million for the quarter.
  • Our cash and cash equivalents were $43.5 million, debt was $251.0 million and our debt-to-capital ratio was 36.6% at March 31, 2019.

Business Outlook

2019 Full Year Guidance

Moster said, “We are encouraged by our solid start to 2019 and our forecast for the full year remains largely unchanged. At GES, we are focused on driving continued same-show growth, new business wins, and efficiency gains as we work to improve the margin profile of the business. At Pursuit, we expect another year of profitable growth and we have many expansion projects underway that we expect will deliver strong returns, revenue and margins. We remain committed to our growth strategies for GES and Pursuit, and to delivering enhanced shareholder value.”

  • We expect consolidated revenue to increase at a mid-single digit rate from 2018 full year revenue, driven by growth at both GES and Pursuit.
  • We expect consolidated adjusted segment EBITDA to be in the range of $152.5 million to $158.5 million, as compared to $146.3 million* in 2018.
  • The outlook for our business units is as follows:
                  GES   Pursuit
$ in millions
Revenue Up low-single digits

(from $1,111 in 2018)

  Up 15% to 17%

(from $185 in 2018)

Adjusted Segment EBITDA $76 to $80

(vs. $77.7* in 2018)

$76 to $79

(vs. $68.6* in 2018)

Depreciation & Amortization $37 to $39 $22 to $23
Adjusted Segment Operating Income $38 to $42

(vs. $39.8* in 2018)

$53.5 to $56.5

(vs. $49.9* in 2018)

Capital Expenditures $30 to $33

(inclusive of about $10 for growth projects)

$64 to $68

(inclusive of about $50

for growth projects, including FlyOver Las Vegas)

  • Our guidance assumes that exchange rates during the remainder of 2019 will approximate $0.76 U.S. Dollars per Canadian Dollar and $1.30 U.S. Dollars per British Pound. As compared to 2018, we expect exchange rate variances to impact 2019 full year results as follows:
                  Viad Total   GES   Pursuit
$ in millions, except per share data
Revenue $ (8.5 )   $ (7.0 )   $ (1.5 )
Adjusted Segment Operating Income $ (0.5 ) $ (0.5 ) -
Income per Share Before Other Items $ (0.01 )
  • We expect GES show rotation to have a net negative impact on full year revenue of about $25 million versus 2018. Show rotation refers to shows that occur less frequently than annually, as well as annual shows that shift quarters from one year to the next.
                  Q1 Act.   Q2 Est.   Q3 Est.   Q4 Est.   FY Est.
Show Rotation Revenue ($ in millions) $(2)   $20   $(45)   $5   $(25)
  • We expect GES U.S. base same-show revenue to increase at a low single digit rate.
  • We expect Pursuit’s 2019 growth to be fueled primarily by investments to support our Refresh, Build, Buy strategy, which are expected to contribute incremental revenue of approximately $15 million to $17 million during 2019. Additionally, we expect to realize mid- to high-single digit revenue growth across the rest of our attractions and hospitality assets driven by a combination of our revenue management efforts and strong visitation to our iconic destinations.
  • We expect start-up costs related to the development of Pursuit’s FlyOver Iceland attraction, which is expected to open in July 2019, to approximate $1 million during the first six months of 2019. These costs are not included in the adjusted segment EBITDA or adjusted segment operating income guidance ranges above.
  • We expect corporate activities expense to approximate $11 million.
  • We expect our effective tax rate on income before other items to approximate 29%.

2019 Second Quarter Guidance

    2019 Guidance
  2018   Low End   High End   FX Impact(1)
$ in millions, except per share data
Revenue:    
GES $ 315.3 $ 335 to $ 350 $ (3.0 )
Pursuit 48.4 54 to 57 (0.5 )

Adjusted Segment Operating Income:

GES $29.1* $ 33 to $ 36 $ -
Pursuit 10.0* 10.0 to 12.5 -
 
Income per Share Before Other Items $1.20* $ 1.28 to $ 1.43 $ (0.01 )
(1)     FX Impact represents the expected effect of year-over-year changes in exchange rates that is incorporated in the low end and high end guidance ranges presented.
  • We expect GES second quarter results to increase primarily due to positive show rotation revenue of approximately $20 million and new business wins, partially offset by unfavorable exchange rate variances. Our operating income guidance reflects higher performance-based incentive expense and additional resources to drive growth and profitability in high-value areas.
  • We expect Pursuit second quarter revenue to increase primarily due to our refresh efforts and continued focus on revenue management across our attraction and hospitality portfolio. Our operating income guidance reflects additional costs to support continued growth initiatives.

Conference Call and Web Cast

We will hold a conference call with investors and analysts for a review of first quarter 2019 results on Thursday, April 25, 2019 at 5:00 p.m. (ET). To join the live conference, call (877) 917-8933, passcode “Viad”, or access the webcast through Viad’s Web site at www.viad.com. A replay will be available for a limited time at (866) 396-6249 or (203) 369-0511 (no passcode is required), or visit the Viad Web site and link to a replay of the webcast.

About Viad

Viad (NYSE: VVI) generates revenue and shareholder value through two business units: GES and Pursuit. GES is a global, full-service live events company offering a comprehensive range of services to the world's leading brands and event organizers. Pursuit is a collection of inspiring and unforgettable travel experiences in Alaska, Montana, the Canadian Rockies, Vancouver, Reykjavik (opening in July 2019), and Las Vegas (opening in 2021) that includes attractions, lodges and hotels, and sightseeing tours that connect guests with iconic places. Our business strategy focuses on providing superior experiential services to our customers and sustainable returns on invested capital to our shareholders. Viad is an S&P SmallCap 600 company. 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:

  • our ability to successfully integrate and achieve established financial and strategic goals from acquisitions;
  • fluctuations in general economic conditions;
  • our dependence on large exhibition event clients;
  • the importance of key members of our account teams to our business relationships;
  • the competitive nature of the industries in which we operate;
  • travel industry disruptions;
  • unanticipated delays and cost overruns of our capital projects, and our ability to achieve established financial and strategic goals of such projects;
  • seasonality of our businesses;
  • transportation disruptions and increases in transportation costs;
  • natural disasters and other catastrophic events;
  • the impact of recent U.S. tax legislation;
  • our multi-employer pension plan funding obligations;
  • our exposure to labor cost increases and work stoppages related to unionized employees;
  • liabilities relating to prior and discontinued operations;
  • adverse effects of show rotation on our periodic results and operating margins;
  • our exposure to currency exchange rate fluctuations; our exposure to cybersecurity attacks and threats;
  • 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;
  • the effects of the United Kingdom’s exit from the European Union; and
  • the effects of changes in the U.S. trade policy.

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. 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

We have provided the following forward-looking non-GAAP financial measures: Adjusted Segment EBITDA, Adjusted Segment Operating Income and Income Before Other Items. We do not provide quantitative reconciliations of these forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures because, due to variability and difficulty in developing accurate projections and/or certain information not being ascertainable or accessible, not all of the information necessary to do so is available to us without unreasonable effort. Consequently, any attempt to disclose such reconciliations would imply a degree of precision that could be confusing or misleading to investors. It is probable that our forward-looking non-GAAP financial measures may be materially different from the corresponding GAAP financial measures.

* 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

 
VIAD CORP AND SUBSIDIARIES
TABLE ONE - QUARTERLY RESULTS
(UNAUDITED)
 
 
    Three months ended March 31,
($ in thousands, except per share data)   2019     2018       $ Change     % Change  
Revenue:
GES:
North America $ 223,241 $ 222,064 $ 1,177 0.5 %
EMEA 54,376 48,920 5,456 11.2 %
Intersegment eliminations   (2,690 )   (3,278 )   588   17.9 %
Total GES 274,927 267,706 7,221 2.7 %
Pursuit   10,667   9,722     945   9.7 %
Total revenue $ 285,594 $ 277,428   $ 8,166   2.9 %
 
Segment operating income (loss):
GES:
North America $ 608 $ (79 ) $ 687 **
EMEA   1,135   659     476   72.2 %
Total GES 1,743 580 1,163 **
Pursuit   (12,995 )   (11,395 )   (1,600 ) -14.0 %
Segment operating loss (11,252 ) (10,815 ) (437 ) -4.0 %
Corporate eliminations 16 16 - 0.0 %
Corporate activities (Note A) (1,833 ) (2,217 ) 384 17.3 %
Restructuring charges (Note B) (688 ) (162 ) (526 ) **
Legal settlement (Note C) (8,500 ) - (8,500 ) **
Other expense (455 ) (238 ) (217 ) -91.2 %
Net interest expense (Note D)   (2,817 )   (1,985 )   (832 ) -41.9 %
Loss from continuing operations before
income taxes (25,529 ) (15,401 ) (10,128 ) -65.8 %
Income tax benefit (Note E)   7,595   4,638     2,957   63.8 %
Loss from continuing operations (17,934 ) (10,763 ) (7,171 ) -66.6 %
Income (loss) from discontinued operations (Note F)   (287 )   928     (1,215 ) **
Net loss (18,221 ) (9,835 ) (8,386 ) -85.3 %
Net loss attributable to noncontrolling interest 420 364 56 15.4 %
Net loss attributable to redeemable noncontrolling interest   24   84     (60 ) -71.4 %
Net loss attributable to Viad $ (17,777 ) $ (9,387 ) $ (8,390 ) -89.4 %
 
Amounts Attributable to Viad Common Stockholders:
Loss from continuing operations $ (17,490 ) $ (10,315 ) $ (7,175 ) -69.6 %
Income (loss) from discontinued operations (Note F)   (287 )   928     (1,215 ) **
Net loss $ (17,777 ) $ (9,387 ) $ (8,390 ) -89.4 %
 
Diluted loss per common share:
Loss from continuing operations
attributable to Viad common shareholders $ (0.88 ) $ (0.51 ) $ (0.37 ) -72.5 %
Income (loss) from discontinued operations
attributable to Viad common shareholders   (0.01 )   0.04     (0.05 ) **
Net loss attributable to Viad common
shareholders $ (0.89 ) $ (0.47 ) $ (0.42 ) -89.4 %
 
Basic loss per common share:
Loss from continuing operations
attributable to Viad common shareholders $ (0.88 ) $ (0.51 ) $ (0.37 ) -72.5 %
Income (loss) from discontinued operations
attributable to Viad common shareholders   (0.01 )   0.04     (0.05 ) **
Net loss attributable to Viad common
shareholders $ (0.89 ) $ (0.47 ) $ (0.42 ) -89.4 %
 
Common shares treated as outstanding for
loss per share calculations:
Weighted-average outstanding common shares   20,076   20,207     (131 ) -0.6 %
 
Weighted-average outstanding and potentially
dilutive common shares   20,076   20,207     (131 ) -0.6 %
 
** Change is greater than +/- 100 percent
 
 

VIAD CORP AND SUBSIDIARIES

TABLE ONE - NOTES TO QUARTERLY RESULTS

(UNAUDITED)

   

(A)

Corporate Activities — The decrease in corporate activities expense for the three months ended March 31, 2019 relative to 2018 was primarily due to a gain on sale of corporate fixed assets, offset in part by an increase in performance-based compensation expense.
 

(B)

Restructuring Charges — During the three months ended March 31, 2019, we recorded restructuring charges primarily related to the elimination of certain positions at GES. During the three months ended March 31, 2018, we recorded restructuring charges primarily related to the elimination of certain positions at Pursuit.
 

(C)

Legal Settlement — During the three months ended March 31, 2019, we recorded a charge related to a legal settlement at GES involving a former industry contractor.
 

(D)

Net Interest Expense — The increase in net interest expense for the three months ended March 31, 2019 relative to 2018 was primarily due to higher debt balances and interest rates in 2019.
 

(E)

Income Taxes — Income taxes were at an effective tax rate of 30% for the three months ended March 31, 2019 and March 31, 2018.
 

(F)

Income (Loss) from Discontinued Operations — The loss from discontinued operations for the three months ended March 31, 2019 was primarily related to legal expenses associated with previously sold operations. The income from discontinued operations for the three months ended March 31, 2018 was primarily related to a favorable legal settlement related to previously sold operations.
 
 
    Three months ended March 31,
($ in thousands, except per share data)   2019         2018       $ Change     % Change  
 
Net loss attributable to Viad $ (17,777 ) $ (9,387 ) $ (8,390 ) -89.4 %
Less: Allocation to nonvested shares - - - **
Adjustment to the redemption value of redeemable
noncontrolling interest   (87 )   (38 )   (49 ) **
Net loss allocated to Viad common
shareholders $ (17,864 ) $ (9,425 ) $ (8,439 ) -89.5 %
 
Weighted-average outstanding common shares 20,076 20,207 (131 ) -0.6 %
 
Basic loss per common share attributable
to Viad common shareholders $ (0.89 ) $ (0.47 ) $ (0.42 ) -89.4 %
 
** Change is greater than +/- 100 percent
 

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", "Adjusted Segment EBITDA" 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 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 and Adjusted Segment EBITDA provide 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 Segment 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 March 31,
($ in thousands)   2019         2018      

$ Change

    % Change  
Loss before other items:
Net loss attributable to Viad $ (17,777 ) $ (9,387 ) $ (8,390 ) -89.4 %
(Income) loss from discontinued operations attributable to Viad   287     (928 )   1,215   **
Loss from continuing operations attributable to Viad (17,490 ) (10,315 ) (7,175 ) -69.6 %
Restructuring charges, pre-tax 688 162 526 **
Legal settlement, pre-tax 8,500 - 8,500 **
Acquisition-related costs and other non-recurring expenses, pre-tax (Note A) 537 440 97 22.0 %
Tax expense on above items (2,419 ) (133 ) (2,286 ) **
Net loss attributable to FlyOver Iceland noncontrolling interest   (24 )   (84 )   60   71.4 %
Loss before other items $ (10,208 ) $ (9,930 ) $ (278 ) -2.8 %

 

(per diluted share)
Loss before other items:
Net loss attributable to Viad $ (0.89 ) $ (0.47 ) $ (0.42 ) -89.4 %
(Income) loss from discontinued operations attributable to Viad   0.01     (0.04 )   0.05   **
Loss from continuing operations attributable to Viad (0.88 ) (0.51 ) (0.37 ) -72.5 %
Restructuring charges, pre-tax 0.03 0.01 0.02 **
Legal settlement, pre-tax 0.42 - 0.42 **
Acquisition-related costs and other non-recurring expenses, pre-tax (Note A) 0.03 0.02 0.01 50.0 %
Tax expense on above items (0.11 ) (0.01 ) (0.10 ) **
Net loss attributable to FlyOver Iceland noncontrolling interest   -     -     -   **
Loss before other items $ (0.51 ) $ (0.49 ) $ (0.02 ) -4.1 %
 
($ in thousands)
Adjusted EBITDA:
Net loss attributable to Viad $ (17,777 ) $ (9,387 ) $ (8,390 ) -89.4 %
(Income) loss from discontinued operations attributable to Viad 287 (928 ) 1,215 **
Interest expense 2,915 2,069 846 40.9 %
Income tax benefit (7,595 ) (4,638 ) (2,957 ) -63.8 %
Depreciation and amortization 13,188 13,063 125 1.0 %
Other noncontrolling interest   55     72     (17 ) -23.6 %
Adjusted EBITDA $ (8,927 ) $ 251   $ (9,178 ) **
 
 

(A) Acquisition-related costs and other non-recurring expenses include:

Three months ended March 31,
  2019     2018  

$ Change

% Change  
Acquisition integration costs - GES1 $ - $ 61 $ (61 ) -100.0 %
Acquisition transaction-related costs - Pursuit1 185 12 173 **
Acquisition transaction-related costs - Corporate2 295 136 159 **
FlyOver start-up costs1   57     231     (174 ) -75.3 %
Acquisition-related and other non-recurring expenses, pre-tax $ 537   $ 440   $ 97   22.0 %
 
1 Included in segment operating income (loss)
2 Included in corporate activities
 
** Change is greater than +/- 100 percent
 

VIAD CORP AND SUBSIDIARIES

TABLE TWO - NON-GAAP FINANCIAL MEASURES (CONTINUED)

(UNAUDITED)

Organic - The term "organic" is used within this document to refer to results without the impact of exchange rate variances and acquisitions, if any, until such acquisitions are included in the entirety of both comparable periods. The impact of exchange rate variances (or "FX Impact") is calculated as the difference between current period activity translated at the current period's exchange rates and the comparable prior period's exchange rates. Management believes that the presentation of "organic" results permits investors to better understand Viad's performance without the effects of exchange rate variances or acquisitions.

    Three months ended March 31, 2019     Three months ended March 31, 2018
($ in thousands) As Reported    

Acquisitions
(Note A)

    FX Impact     Organic As Reported    

Acquisitions
(Note A)

    Organic
 
Viad Consolidated:
Revenue $ 285,594   $ - $ (4,525 ) $ 290,119   $ 277,428   $ - $ 277,428  
 
Net loss attributable to Viad $ (17,777 ) $ (9,387 )
Net loss attributable to noncontrolling interest (420 ) (364 )
Net loss attributable to redeemable noncontrolling interest (24 ) (84 )
(Income) loss from discontinued operations 287 (928 )
Income tax benefit (7,595 ) (4,638 )
Net interest expense 2,817 1,985
Other expense 455 238
Legal settlement 8,500 -
Restructuring charges 688 162
Corporate activities expense 1,833 2,217
Corporate eliminations   (16 )   (16 )
Segment operating loss $ (11,252 ) $ - $ 354 $ (11,606 ) $ (10,815 ) $ - $ (10,815 )
FlyOver Iceland start-up costs 57 - - 57 231 - 231
Integration costs - - - - 61 - 61
Acquisition transaction-related costs   185     -   (7 )   192     12     -   12  
Adjusted segment operating loss (11,010 ) - 347 (11,357 ) (10,511 ) - (10,511 )
Segment depreciation 10,057 - (217 ) 10,274 10,319 - 10,319
Segment amortization   3,073     -   (32 )   3,105     2,688     -   2,688  
Adjusted Segment EBITDA $ 2,120   $ - $ 98   $ 2,022   $ 2,496   $ - $ 2,496  
 
Adjusted segment operating margin -3.9 % -7.7 % -3.9 % -3.8 % -3.8 %
Adjusted segment EBITDA margin 0.7 % -2.2 % 0.7 % 0.9 % 0.9 %
 
GES:
Revenue $ 274,927   $ - $ (4,051 ) $ 278,978   $ 267,706   $ - $ 267,706  
 
Segment operating income $ 1,743 $ - $ 25 $ 1,718 $ 580 $ - $ 580
Integration costs   -     -   -     -     61     -   61  
Adjusted segment operating income 1,743 - 25 1,718 641 - 641
Depreciation 6,389 - (90 ) 6,479 7,352 - 7,352
Amortization   2,766     -   (19 )   2,785     2,415     -   2,415  
Adjusted Segment EBITDA $ 10,898   $ - $ (84 ) $ 10,982   $ 10,408   $ - $ 10,408  
 
Adjusted segment operating margin 0.6 % -0.6 % 0.6 % 0.2 % 0.2 %
Adjusted segment EBITDA margin 4.0 % 2.1 % 3.9 % 3.9 % 3.9 %
 
GES North America:
Revenue $ 223,241   $ - $ (717 ) $ 223,958   $ 222,064   $ - $ 222,064  
 
Segment operating income (loss) $ 608 $ - $ (28 ) $ 636 $ (79 ) $ - $ (79 )
Integration costs   -     -   -     -     61     -   61  
Adjusted segment operating income (loss) 608 - (28 ) 636 (18 ) - (18 )
Depreciation 5,098 - (13 ) 5,111 5,748 - 5,748
Amortization   2,495     -   -     2,495     2,094     -   2,094  
Adjusted Segment EBITDA $ 8,201   $ - $ (41 ) $ 8,242   $ 7,824   $ - $ 7,824  
 
Adjusted segment operating margin 0.3 % 3.9 % 0.3 % 0.0 % 0.0 %
Adjusted segment EBITDA margin 3.7 % 5.7 % 3.7 % 3.5 % 3.5 %
 
GES EMEA:
Revenue $ 54,376   $ - $ (3,334 ) $ 57,710   $ 48,920   $ - $ 48,920  
 
Segment operating income $ 1,135 $ - $ 53 $ 1,082 $ 659 $ - $ 659
Integration costs   -     -   -     -     -     -   -  
Adjusted segment operating income 1,135 - 53 1,082 659 - 659
Depreciation 1,291 - (77 ) 1,368 1,604 - 1,604
Amortization   271     -   (19 )   290     321     -   321  
Adjusted Segment EBITDA $ 2,697   $ - $ (43 ) $ 2,740   $ 2,584   $ - $ 2,584  
 
Adjusted segment operating margin 2.1 % -1.6 % 1.9 % 1.3 % 1.3 %
Adjusted segment EBITDA margin 5.0 % 1.3 % 4.7 % 5.3 % 5.3 %
 
Pursuit:
Revenue $ 10,667   $ - $ (474 ) $ 11,141   $ 9,722   $ - $ 9,722  
 
Segment operating loss $ (12,995 ) $ - $ 329 $ (13,324 ) $ (11,395 ) $ - $ (11,395 )
Integration costs - - - - - - -
Acquisition transaction-related costs 185 - (7 ) 192 12 - 12
FlyOver Iceland start-up costs   57     -   -     57     231     -   231  
Adjusted segment operating loss (12,753 ) - 322 (13,075 ) (11,152 ) - (11,152 )
Depreciation 3,668 - (127 ) 3,795 2,967 - 2,967
Amortization   307     -   (13 )   320     273     -   273  
Adjusted Segment EBITDA $ (8,778 ) $ - $ 182   $ (8,960 ) $ (7,912 ) $ - $ (7,912 )
 
Adjusted segment operating margin ** -67.9 % ** ** **
Adjusted segment EBITDA margin -82.3 % -38.4 % -80.4 % -81.4 % -81.4 %
 
** Greater than +/- 100 percent
(A) No acquisitions were completed during the three months ended March 31, 2019 or the year ended December 31, 2018.
 
VIAD CORP AND SUBSIDIARIES
TABLE TWO - NON-GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
 
ADDITIONAL NON-GAAP FINANCIAL MEASURES
 
(per diluted share)     2018
Income (loss) before other items: Q1     Q2     Q3     Q4     Full Year
Net income (loss) attributable to Viad $ (0.47 ) $ 1.15 $ 1.83 $ (0.12 ) $ 2.40
(Income) loss from discontinued operations attributable to Viad   (0.04 )   0.01     0.01     (0.05 )   (0.07 )
Income (loss) from continuing operations attributable to Viad (0.51 ) 1.16 1.84 (0.17 ) 2.33
Restructuring charges, pre-tax 0.01 0.03 0.01 0.03 0.08
Acquisition-related costs and other non-recurring expenses, pre-tax 0.02 0.02 0.03 0.01 0.08
Tax benefit on above items (0.01 ) (0.01 ) - (0.01 ) (0.03 )
Adjustment related to Tax Reform - - (0.15 ) - (0.15 )
Unfavorable tax matters - - - 0.05 0.05
Net loss attributable to FlyOver Iceland noncontrolling interest   -     -     (0.01 )   -     (0.02 )
Income (loss) before other items $ (0.49 ) $ 1.20   $ 1.72   $ (0.09 ) $ 2.34  
 
           
Q2 2018 FY 2018
Adjusted segment operating income and adjusted segment EBITDA: GES     Pursuit     Viad GES     Pursuit     Viad
Net income attributable to Viad $ 23,490 $ 49,170
Net income (loss) attributable to noncontrolling interest (33 ) 542
Net loss attributable to redeemable noncontrolling interest (77 ) (317 )
(Income) loss from discontinued operations 279 (1,481 )
Income tax expense 9,114 17,095
Net interest expense 2,301 9,286
Other expense, pre-tax 543 1,744
Impairment recoveries, pre-tax (35 ) (35 )
Restructuring charges, pre-tax 662 1,587
Corporate activities expense 2,535 10,993
Corporate eliminations   (17 )   (67 )
Segment operating income $ 29,005 $ 9,757 $ 38,762 $ 39,602 $ 48,915 $ 88,517
FlyOver Iceland start-up costs - 206 206 - 862 862
Integration costs 69 - 69 155 - 155
Acquisition transaction-related costs   -   56   56     -   136   136  
Adjusted segment operating income 29,074 10,019 39,093 39,757 49,913 89,670
Segment depreciation 7,268 4,939 12,207 28,456 17,167 45,623
Segment amortization   2,400   452   2,852     9,470   1,523   10,993  
Adjusted segment EBITDA $ 38,742 $ 15,410 $ 54,152   $ 77,683 $ 68,603 $ 146,286  
 
 
VIAD CORP AND SUBSIDIARIES
TABLE TWO - NON-GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
 
 
 
    2018  
($ in thousands) Q1     Q2     Q3     Q4     Full Year
 
Viad Consolidated:
Revenue $ 277,428   $ 363,677   $ 358,163   $ 296,916   $ 1,296,184  
 
Net income (loss) attributable to Viad $ (9,387 ) $ 23,490 $ 37,389 $ (2,322 ) $ 49,170
Net income (loss) attributable to noncontrolling interest (364 ) (33 ) 1,287 (348 ) 542
Net loss attributable to redeemable noncontrolling interest (84 ) (77 ) (128 ) (28 ) (317 )
(Income) loss from discontinued operations (928 ) 279 246 (1,078 ) (1,481 )
Income tax expense (benefit) (4,638 ) 9,114 10,806 1,813 17,095
Net interest expense 1,985 2,301 2,507 2,493 9,286
Other expense 238 543 527 436 1,744
Impairment recoveries - (35 ) - - (35 )
Restructuring charges 162 662 175 588 1,587
Corporate activities expense 2,217 2,535 3,777 2,464 10,993
Corporate eliminations   (16 )   (17 )   (18 )   (16 )   (67 )
Segment operating income (loss) $ (10,815 ) $ 38,762 $ 56,568 $ 4,002 $ 88,517
FlyOver Iceland start-up costs 231 206 351 74 862
Integration costs 61 69 25 - 155
Acquisition transaction-related costs   12     56     29     39     136  
Adjusted segment operating income (loss) (10,511 ) 39,093 56,973 4,115 89,670
Segment depreciation 10,319 12,207 13,233 9,864 45,623
Segment amortization   2,688     2,852     2,896     2,557     10,993  
Adjusted Segment EBITDA $ 2,496   $ 54,152   $ 73,102   $ 16,536   $ 146,286  
 
Adjusted segment operating margin -3.8 % 10.7 % 15.9 % 1.4 % 6.9 %
Adjusted segment EBITDA margin 0.9 % 14.9 % 20.4 % 5.6 % 11.3 %
 
GES:
Revenue $ 267,706   $ 315,322   $ 246,110   $ 281,759   $ 1,110,897  
 
Segment operating income $ 580 $ 29,005 $ 1,160 $ 8,857 $ 39,602
Integration costs   61     69     25     -     155  
Adjusted segment operating income 641 29,074 1,185 8,857 39,757
Depreciation 7,352 7,268 7,077 6,759 28,456
Amortization   2,415     2,400     2,354     2,301     9,470  
Adjusted Segment EBITDA $ 10,408   $ 38,742   $ 10,616   $ 17,917   $ 77,683  
 
Adjusted segment operating margin 0.2 % 9.2 % 0.5 % 3.1 % 3.6 %
Adjusted segment EBITDA margin 3.9 % 12.3 % 4.3 % 6.4 % 7.0 %
 
GES North America:
Revenue $ 222,064   $ 260,891   $ 200,855   $ 225,980   $ 909,790  
 
Segment operating income (loss) $ (79 ) $ 23,767 $ 1,367 $ 4,926 $ 29,981
Integration costs   61     69     25     -     155  
Adjusted segment operating income (loss) (18 ) 23,836 1,392 4,926 30,136
Depreciation 5,748 5,751 5,577 5,505 22,581
Amortization   2,094     2,095     2,060     2,026     8,275  
Adjusted Segment EBITDA $ 7,824   $ 31,682   $ 9,029   $ 12,457   $ 60,992  
 
Adjusted segment operating margin 0.0 % 9.1 % 0.7 % 2.2 % 3.3 %
Adjusted segment EBITDA margin 3.5 % 12.1 % 4.5 % 5.5 % 6.7 %
 
GES EMEA:
Revenue $ 48,920   $ 60,662   $ 47,634   $ 61,031   $ 218,247  
 
Segment operating income (loss) $ 659 $ 5,238 $ (207 ) $ 3,931 $ 9,621
Integration costs   -     -     -     -     -  
Adjusted segment operating income (loss) 659 5,238 (207 ) 3,931 9,621
Depreciation 1,604 1,517 1,500 1,254 5,875
Amortization   321     305     294     275     1,195  
Adjusted Segment EBITDA $ 2,584   $ 7,060   $ 1,587   $ 5,460   $ 16,691  
 
Adjusted segment operating margin 1.3 % 8.6 % -0.4 % 6.4 % 4.4 %
Adjusted segment EBITDA margin 5.3 % 11.6 % 3.3 % 8.9 % 7.6 %
 
Pursuit:
Revenue $ 9,722   $ 48,355   $ 112,053   $ 15,157   $ 185,287  
 
Segment operating income (loss) $ (11,395 ) $ 9,757 $ 55,408 $ (4,855 ) $ 48,915
Integration costs - - - - -
Acquisition transaction-related costs 12 56 29 39 136
FlyOver Iceland start-up costs   231     206     351     74     862  
Adjusted segment operating income (loss) (11,152 ) 10,019 55,788 (4,742 ) 49,913
Depreciation 2,967 4,939 6,156 3,105 17,167
Amortization   273     452     542     256     1,523  
Adjusted Segment EBITDA $ (7,912 ) $ 15,410   $ 62,486   $ (1,381 ) $ 68,603  
 
Adjusted segment operating margin ** 20.7 % 49.8 % -31.3 % 26.9 %
Adjusted segment EBITDA margin -81.4 % 31.9 % 55.8 % -9.1 % 37.0 %
 
** Greater than +/- 100 percent
 
 
VIAD CORP AND SUBSIDIARIES
TABLE TWO - NON-GAAP FINANCIAL MEASURES (CONTINUED)
(UNAUDITED)
 
 
 
    2017
($ in thousands) Q1     Q2     Q3     Q4     Full Year
 
Viad Consolidated:
Revenue $ 325,807   $ 364,774   $ 339,099   $ 277,285   $ 1,306,965  
 
Net income (loss) attributable to Viad $ 6,777 $ 27,947 $ 44,657 $ (21,674 ) $ 57,707
Net income (loss) attributable to noncontrolling interest (264 ) (73 ) 1,084 (224 ) 523
Net loss attributable to redeemable noncontrolling interest - - - (46 ) (46 )
(Income) loss from discontinued operations 816 (509 ) 101 (140 ) 268
Income tax expense 2,741 10,178 20,010 12,969 45,898
Net interest expense 2,047 2,017 2,043 1,878 7,985
Other expense 452 222 248 1,106 2,028
Impairment recoveries (2,384 ) (2,247 ) (24,467 ) - (29,098 )
Restructuring charges 394 168 255 187 1,004
Corporate activities expense 2,541 2,920 4,425 2,510 12,396
Corporate eliminations   (16 )   (16 )   (18 )   (17 )   (67 )
Segment operating income (loss) $ 13,104 $ 40,607 $ 48,338 $ (3,451 ) $ 98,598
FlyOver Iceland start-up costs - - - 125 125
Integration costs 213 49 25 48 335
Acquisition transaction-related costs   188     -     -     12     200  
Adjusted segment operating income (loss) 13,505 40,656 48,363 (3,266 ) 99,258
Segment depreciation 9,036 11,220 12,485 9,768 42,509
Segment amortization   3,059     3,253     3,301     2,795     12,408  
Adjusted Segment EBITDA $ 25,600   $ 55,129   $ 64,149   $ 9,297   $ 154,175  
 
Adjusted segment operating margin 4.1 % 11.1 % 14.3 % -1.2 % 7.6 %
Adjusted segment EBITDA margin 7.9 % 15.1 % 18.9 % 3.4 % 11.8 %
 
GES:
Revenue $ 317,871   $ 320,109   $ 232,119   $ 262,998   $ 1,133,097  
 
Segment operating income (loss) $ 23,379 $ 30,669 $ (5,522 ) $ 2,205 $ 50,731
Integration costs   125     (30 )   20     46     161  
Adjusted segment operating income (loss) 23,504 30,639 (5,502 ) 2,251 50,892
Depreciation 6,285 6,638 6,691 6,830 26,444
Amortization   2,787     2,799     2,715     2,518     10,819  
Adjusted Segment EBITDA $ 32,576   $ 40,076   $ 3,904   $ 11,599   $ 88,155  
 
Adjusted segment operating margin 7.4 % 9.6 % -2.4 % 0.9 % 4.5 %
Adjusted segment EBITDA margin 10.2 % 12.5 % 1.7 % 4.4 % 7.8 %
 
GES North America:
Revenue $ 273,589   $ 263,664   $ 199,153   $ 207,546   $ 943,952  
 
Segment operating income (loss) $ 21,767 $ 25,110 $ (2,967 ) $ (2,715 ) $ 41,195
Integration costs   125     (59 )   9     36     111  
Adjusted segment operating income (loss) 21,892 25,051 (2,958 ) (2,679 ) 41,306
Depreciation 5,039 5,264 5,341 5,416 21,060
Amortization   2,371     2,370     2,276     2,182     9,199  
Adjusted Segment EBITDA $ 29,302   $ 32,685   $ 4,659   $ 4,919   $ 71,565  
 
Adjusted segment operating margin 8.0 % 9.5 % -1.5 % -1.3 % 4.4 %
Adjusted segment EBITDA margin 10.7 % 12.4 % 2.3 % 2.4 % 7.6 %
 
GES EMEA:
Revenue $ 47,506   $ 63,208   $ 39,668   $ 59,443   $ 209,825  
 
Segment operating income (loss) $ 1,612 $ 5,559 $ (2,555 ) $ 4,920 $ 9,536
Integration costs   -     29     11     10     50  
Adjusted segment operating income (loss) 1,612 5,588 (2,544 ) 4,930 9,586
Depreciation 1,246 1,374 1,350 1,414 5,384
Amortization   416     429     439     336     1,620  
Adjusted Segment EBITDA $ 3,274   $ 7,391   $ (755 ) $ 6,680   $ 16,590  
 
Adjusted segment operating margin 3.4 % 8.8 % -6.4 % 8.3 % 4.6 %
Adjusted segment EBITDA margin 6.9 % 11.7 % -1.9 % 11.2 % 7.9 %
 
Pursuit:
Revenue $ 7,936   $ 44,665   $ 106,980   $ 14,287   $ 173,868  
 
Segment operating income (loss) $ (10,275 ) $ 9,938 $ 53,860 $ (5,656 ) $ 47,867
Integration costs 88 79 5 2 174
Acquisition transaction-related costs 188 - - 12 200
FlyOver Iceland start-up costs   -     -     -     125     125  
Adjusted segment operating income (loss) (9,999 ) 10,017 53,865 (5,517 ) 48,366
Depreciation 2,751 4,582 5,794 2,938 16,065
Amortization   272     454     586     277     1,589  
Adjusted Segment EBITDA $ (6,976 ) $ 15,053   $ 60,245   $ (2,302 ) $ 66,020  
 
Adjusted segment operating margin ** 22.4 % 50.4 % -38.6 % 27.8 %
Adjusted segment EBITDA margin -87.9 % 33.7 % 56.3 % -16.1 % 38.0 %
 
** Greater than +/- 100 percent

Contacts

Carrie Long
Investor Relations
(602) 207-2681
ir@viad.com

Release Summary

Viad Corp Reports 2019 First Quarter Results

Contacts

Carrie Long
Investor Relations
(602) 207-2681
ir@viad.com