Yahoo Finance Viad Corp Reports Results for the 2023 First Quarter
Year-over-year growth significantly exceeded expectations
Strong momentum continues for GES live event activity and leisure travel to Pursuit’s markets
Raising full year guidance for revenue, adjusted EBITDA, and free cash flow
SCOTTSDALE, Ariz., May 04, 2023--(BUSINESS WIRE)--Viad Corp (NYSE: VVI), a leading provider of experiential leisure travel and live events and marketing experiences, today reported results for the 2023 first quarter.
Financial Highlights
Three months ended March 31, | |||||||||||
(in millions) | 2023 | 2022 | Change | ||||||||
Revenue | $ | 260.8 | $ | 177.4 | $ | 83.4 | |||||
Net Loss Attributable to Viad | $ | (20.9 | ) | $ | (29.0 | ) | $ | 8.1 | |||
Net Loss Before Other Items* | $ | (22.0 | ) | $ | (27.3 | ) | $ | 5.3 | |||
Consolidated Adjusted EBITDA* | $ | 3.4 | $ | (11.3 | ) | $ | 14.7 | ||||
Revenue increased by $83.4 million driven by improvements in live event activity and leisure travel relative to the 2022 first quarter.
Net loss attributable to Viad improved by $8.1 million primarily due to strengthening demand for exhibitions and events and higher international tourism in Western Canada and Iceland.
Consolidated adjusted EBITDA* improved by $14.7 million and exceeded the high-end of our prior guidance range.
* 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 are very encouraged by the strong first quarter demand we experienced and our better than expected financial performance at both GES and Pursuit. GES continues to see positive momentum in the live events sector with improving revenue and healthy margins. At Pursuit, we saw ongoing acceleration of international visitation during this seasonally slow quarter that drove significant year-over-year revenue growth."
Moster continued, "We’re off to a great start in 2023 and I am excited about the rest of the year as we expect the momentum to continue. Our actions to scale Pursuit, transform GES Exhibitions’ cost structure, and strengthen Spiro’s capabilities are positioning us for strong growth in revenue and profitability."
Pursuit Results
Three months ended March 31, | |||||||||||
(in millions) | 2023 | 2022 | Change | ||||||||
Revenue | $ | 32.7 | $ | 23.8 | $ | 8.9 | |||||
Adjusted EBITDA* | $ | (10.3 | ) | $ | (11.5 | ) | $ | 1.2 | |||
* 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.
Revenue increased $8.9 million (37%) from the 2022 first quarter.
Same-store revenue from experiences that were owned and open prior to 2022 increased $8.2 million primarily due to stronger international visitation at Sky Lagoon, our year-round Canadian experiences, and our FlyOver locations.
New experiences opened or acquired from 2022 forward contributed revenue of $0.7 million, mainly reflecting the addition of the Forest Park Alpine Hotel.
Adjusted EBITDA improved by $1.2 million from the 2022 first quarter primarily due to the increase in revenue during the seasonally slow quarter.
Regarding Pursuit’s results, Moster commented, "Pursuit continues to post record levels of revenue, with first quarter revenue more than tripling the amount we generated in 2019. International leisure travel to our markets continues to accelerate and our new experiences continue to gain momentum. As compared to 2022, first quarter visitation to our year-round attractions increased about 40 percent, reflecting strong growth at Sky Lagoon, the Banff Gondola, and across our FlyOver locations."
Moster continued, "The level of visitation we experienced across Pursuit during the seasonally slower first quarter was stronger than we had previously anticipated and gives us confidence that we will continue to see higher year-over-year revenues during the remainder of 2023. And the strong flow through of each incremental visitor is an important driver of margin expansion for Pursuit."
GES Results
Three months ended March 31, | ||||||||||||
(in millions) | 2023 | 2022 | Change | |||||||||
Revenue | ||||||||||||
Spiro | $ | 60.4 | $ | 42.8 | $ | 17.5 | ||||||
GES Exhibitions | 169.5 | 111.8 | 57.7 | |||||||||
Inter-segment Eliminations | (1.7 | ) | (1.1 | ) | (0.7 | ) | ||||||
Total GES | $ | 228.1 | $ | 153.6 | $ | 74.6 | ||||||
Adjusted EBITDA* | ||||||||||||
Spiro | $ | 3.7 | $ | 0.7 | $ | 3.0 | ||||||
GES Exhibitions | 13.0 | 2.0 | 11.0 | |||||||||
Total GES | $ | 16.7 | $ | 2.7 | $ | 14.0 | ||||||
* 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.
Revenue increased $74.6 million (49%) primarily driven by increased live event activity at both GES Exhibitions and Spiro relative to the 2022 first quarter that was impacted by cancellations and postponements due to COVID.
Adjusted EBITDA increased by $14.0 million primarily due to higher revenue.
Regarding GES’ results, Moster commented, "GES delivered substantial year-over-year growth from both Spiro and GES Exhibitions as live event activity continued to rebound. Unlike last year when the industry was navigating the Omicron variant during the first quarter, events were able to stage as scheduled this quarter. Additionally, same-show revenues for events produced by our U.S. Exhibitions team grew to 91 percent of 2019 pre-pandemic levels as compared to 73 percent in the 2022 first quarter. At Spiro, spend from existing corporate clients’ is near 2019 pre-pandemic levels and we continue to benefit from new wins and a healthy pipeline of additional opportunities."
Moster continued, "Our Exhibitions and Spiro teams executed extremely well during the quarter, servicing the increased client activity and delivering solid margins and cash flow. Our efforts to improve the cost structure within Exhibitions and to drive profitable growth at Spiro from new client wins and increased spend from existing clients are yielding great results. We remain focused on driving meaningful free cash flow through ongoing lean initiatives at GES Exhibitions and accelerated growth at Spiro."
Cash Flow and Balance Sheet Highlights
Our 2023 first quarter cash flow from operations was an inflow of approximately $10 million and our capital expenditures totaled approximately $11 million. We paid approximately $2 million in cash dividends on our convertible preferred equity and our net debt payments were approximately $4 million.
We ended the first quarter with total liquidity of $139.9 million, comprising cash and cash equivalents of $50.8 million and $89.1 million of capacity available on our revolving credit facility ($100 million total facility size, less $10.9 million in letters of credit). Our debt totaled $478.4 million, including $394 million outstanding on our Term Loan B, financing lease obligations of approximately $65 million (which primarily comprises real estate leases at Pursuit), and approximately $20 million in other debt.
Moster commented, "We remain committed to protecting our balance sheet, maximizing our cash flows from operations, and selectively investing in high-return opportunities to continue scaling Pursuit. During the first quarter, we entered into an interest rate cap agreement that limits our exposure to continued interest rate increases and we amended the financial covenants for our revolving credit facility to provide additional cushion on our interest coverage ratio."
2023 Outlook
Regarding Viad’s outlook, Moster commented, "With our stronger than expected start to 2023, we are pleased to be raising our full year guidance. We continue to see strengthening demand across the exhibition and event sector and from international leisure travel to Pursuit’s markets, along with acceleration of visitation at Pursuit’s new experiences."
Our guidance for Viad consolidated is as follows:
(in millions) | Second Quarter | Full Year | |||
Viad Consolidated | |||||
Revenue | $289 to $313 | Up low single digits | |||
Adjusted EBITDA | $39 to $46 | $124 to $141 | |||
Cash flow from Operations | $15 to $20 | $70 to $80 | |||
Capital Expenditures | $25 to $30 | $70 to $75 |
Our guidance for Pursuit is as follows:
(in millions) | Second Quarter | Full Year | Key Assumptions | |||
Pursuit | ||||||
Revenue | $89 to $93 | Up ~10% to 15% |
| |||
Adjusted EBITDA | $19 to $22 | $85 to $95 |
|
Our guidance for GES is as follows:
(in millions) | Second Quarter | Full Year | Key Assumptions | |||
GES | ||||||
Revenue | $200 to $220 | Down low single digits |
| |||
Adjusted EBITDA | $20 to $24 | $52 to $60 |
|
Conference Call Details
Management will host a conference call to review first quarter 2023 results on Thursday, May 4, 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/KFfVIwkJ. 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. 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 March 31, | ||||||||||||||||
(in thousands, except per share data) | 2023 | 2022 | $ Change | % Change | ||||||||||||
Revenue: | ||||||||||||||||
Pursuit | $ | 32,663 | $ | 23,784 | $ | 8,879 | 37.3 | % | ||||||||
GES: | ||||||||||||||||
Spiro | 60,362 | 42,816 | 17,546 | 41.0 | % | |||||||||||
GES Exhibitions | 169,497 | 111,831 | 57,666 | 51.6 | % | |||||||||||
Inter-segment eliminations | (1,731 | ) | (1,071 | ) | (660 | ) | -61.6 | % | ||||||||
Total GES | 228,128 | 153,576 | 74,552 | 48.5 | % | |||||||||||
Total revenue | $ | 260,791 | $ | 177,360 | $ | 83,431 | 47.0 | % | ||||||||
Segment operating loss: | ||||||||||||||||
Pursuit | $ | (19,112 | ) | $ | (21,198 | ) | 2,086 | 9.8 | % | |||||||
GES: | ||||||||||||||||
Spiro | 3,174 | (239 | ) | 3,413 | ** | |||||||||||
GES Exhibitions | 10,410 | (1,355 | ) | 11,765 | ** | |||||||||||
Total GES | 13,584 | (1,594 | ) | 15,178 | ** | |||||||||||
Segment operating loss | $ | (5,528 | ) | $ | (22,792 | ) | $ | 17,264 | 75.7 | % | ||||||
Corporate eliminations | 16 | 17 | (1 | ) | -5.9 | % | ||||||||||
Corporate activities | (3,165 | ) | (2,673 | ) | (492 | ) | -18.4 | % | ||||||||
Restructuring charges | (453 | ) | (654 | ) | 201 | 30.7 | % | |||||||||
Impairment charges | - | (583 | ) | 583 | -100.0 | % | ||||||||||
Other expense | (531 | ) | (638 | ) | 107 | 16.8 | % | |||||||||
Net interest expense (Note A) | (12,249 | ) | (5,877 | ) | (6,372 | ) | ** | |||||||||
Loss from continuing operations before income taxes | (21,910 | ) | (33,200 | ) | 11,290 | 34.0 | % | |||||||||
Income tax benefit (Note B) | 578 | 2,582 | (2,004 | ) | -77.6 | % | ||||||||||
Loss from continuing operations | (21,332 | ) | (30,618 | ) | 9,286 | 30.3 | % | |||||||||
Income (loss) from discontinued operations | (58 | ) | 275 | (333 | ) | ** | ||||||||||
Net loss | (21,390 | ) | (30,343 | ) | 8,953 | 29.5 | % | |||||||||
Net loss attributable to noncontrolling interest | 398 | 1,204 | (806 | ) | -66.9 | % | ||||||||||
Net loss attributable to redeemable noncontrolling interest | 123 | 138 | (15 | ) | -10.9 | % | ||||||||||
Net loss attributable to Viad | $ | (20,869 | ) | $ | (29,001 | ) | $ | 8,132 | 28.0 | % | ||||||
Amounts Attributable to Viad: | ||||||||||||||||
Loss from continuing operations | $ | (20,811 | ) | $ | (29,276 | ) | $ | 8,465 | 28.9 | % | ||||||
Income (loss) from discontinued operations | (58 | ) | 275 | (333 | ) | ** | ||||||||||
Net loss | $ | (20,869 | ) | $ | (29,001 | ) | $ | 8,132 | 28.0 | % | ||||||
Loss per common share attributable to Viad (Note C): | ||||||||||||||||
Basic loss per common share | $ | (1.10 | ) | $ | (1.53 | ) | $ | 0.43 | 28.1 | % | ||||||
Diluted loss per common share | $ | (1.10 | ) | $ | (1.53 | ) | $ | 0.43 | 28.1 | % | ||||||
Weighted-average common shares outstanding: | ||||||||||||||||
Basic weighted-average outstanding common shares | 20,751 | 20,518 | 233 | 1.1 | % | |||||||||||
Additional dilutive shares related to share-based compensation | - | - | - | ** | ||||||||||||
Diluted weighted-average outstanding common shares | 20,751 | 20,518 | 233 | 1.1 | % | |||||||||||
Adjusted EBITDA* by Reportable Segment: | ||||||||||||||||
Pursuit | $ | (10,315 | ) | $ | (11,498 | ) | $ | 1,183 | 10.3 | % | ||||||
GES: | ||||||||||||||||
Spiro | 3,737 | 742 | 2,995 | ** | ||||||||||||
GES Exhibitions | 13,007 | 1,978 | 11,029 | ** | ||||||||||||
Total GES | 16,744 | 2,720 | 14,024 | ** | ||||||||||||
Corporate | (3,037 | ) | (2,534 | ) | (503 | ) | -19.9 | % | ||||||||
Consolidated Adjusted EBITDA | 3,392 | (11,312 | ) | 14,704 | ** | |||||||||||
As of March 31, | ||||||||||||||||
Capitalization Data: | 2023 | 2022 | $ Change | % Change | ||||||||||||
Cash and cash equivalents | 50,818 | 57,902 | (7,084 | ) | -12.2 | % | ||||||||||
Total debt | 478,422 | 473,845 | 4,577 | 1.0 | % | |||||||||||
Viad shareholders' equity | (4,248 | ) | (18,169 | ) | 13,921 | 76.6 | % | |||||||||
Non-controlling interests (redeemable and non-redeemable) | 87,452 | 90,795 | (3,343 | ) | -3.7 | % | ||||||||||
Convertible Series A Preferred Stock (Note D): | ||||||||||||||||
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) | Net Interest Expense — The increase in interest expense during the three months ended March 31, 2023 was primarily due to higher interest rates in 2023, and to a lesser extent to lower capitalized interest recorded during the three months ended March 31, 2023 of $0.3 million as compared to $1.9 million during the three months ended March 31, 2022. On January 4, 2023, we entered into an interest rate cap agreement with an effective date of January 31, 2023 to manage our exposure to interest rate increases on $300 million in borrowings under our 2021 Credit Facility. On February 6, 2023, we entered into the LIBOR Transition Amendment to the 2021 Credit Facility to replace LIBOR with the SOFR. | |||||||||
(B) | Income Tax Benefit – The effective tax rate was 2.6% for the three months ended March 31, 2023 and 7.8% for the three months ended March 31, 2022. During the quarter ended March 31, 2023, we released the valuation allowance of $2.1 million that was recorded on deferred tax assets associated with certain separate states, which more than offset taxes due in jurisdictions without a valuation allowance. The rates for both periods were lower than the 21% federal rate as a result of excluding the tax benefit in jurisdictions with a valuation allowance. | |||||||||
(C) | 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 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 loss per share are as follows: | ||||||||||||||||
Three months ended March 31, | ||||||||||||||||
(in thousands) | 2023 | 2022 | $ Change | % Change | ||||||||||||
Net loss attributable to Viad | $ | (20,869 | ) | $ | (29,001 | ) | $ | 8,132 | 28.0 | % | ||||||
Convertible preferred stock dividends paid in cash | (1,950 | ) | (1,950 | ) | - | 0.0 | % | |||||||||
Adjustment to the redemption value of redeemable noncontrolling interest | - | (351 | ) | 351 | -100.0 | % | ||||||||||
Undistributed loss attributable to Viad | (22,819 | ) | (31,302 | ) | 8,483 | 27.1 | % | |||||||||
Less: Allocation to participating securities | - | - | - | ** | ||||||||||||
Net loss allocated to Viad common shareholders (basic) | $ | (22,819 | ) | $ | (31,302 | ) | $ | 8,483 | 27.1 | % | ||||||
Add: Allocation to participating securities | - | - | - | ** | ||||||||||||
Net loss allocated to Viad common shareholders (diluted) | $ | (22,819 | ) | $ | (31,302 | ) | $ | 8,483 | 27.1 | % | ||||||
Basic weighted-average outstanding common shares | 20,751 | 20,518 | 233 | 1.1 | % | |||||||||||
Additional dilutive shares related to share-based compensation | - | - | - | ** | ||||||||||||
Diluted weighted-average outstanding common shares | 20,751 | 20,518 | 233 | 1.1 | % | |||||||||||
(D) | 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 March 31, | |||||||||||||||||
(in thousands, except per share data) | 2023 | 2022 | $ Change | % Change | |||||||||||||
Loss before other items: | |||||||||||||||||
Net loss attributable to Viad | $ | (20,869 | ) | $ | (29,001 | ) | $ | 8,132 | 28.0 | % | |||||||
(Income) loss from discontinued operations attributable to Viad | 58 | (275 | ) | 333 | ** | ||||||||||||
Loss from continuing operations attributable to Viad | (20,811 | ) | (29,276 | ) | 8,465 | 28.9 | % | ||||||||||
Restructuring charges, pre-tax | 453 | 654 | (201 | ) | -30.7 | % | |||||||||||
Impairment charges, pre-tax | - | 583 | (583 | ) | -100.0 | % | |||||||||||
Acquisition-related costs and other non-recurring expenses, pre-tax (Note A) | 846 | 857 | (11 | ) | -1.3 | % | |||||||||||
Remeasurement of finance lease obligation attributable to Viad, pre-tax (Note B) | (639 | ) | - | (639 | ) | ** | |||||||||||
Tax expense (benefit) on above items | 249 | (77 | ) | 326 | ** | ||||||||||||
Favorable tax matters | (2,103 | ) | - | (2,103 | ) | ** | |||||||||||
Loss before other items | $ | (22,005 | ) | $ | (27,259 | ) | $ | 5,254 | 19.3 | % | |||||||
The components of loss before other items per share are as follows: | |||||||||||||||||
Loss before other items (as reconciled above) | (22,005 | ) | (27,259 | ) | 5,254 | 19.3 | % | ||||||||||
Convertible preferred stock dividends paid in cash | (1,950 | ) | (1,950 | ) | - | 0.0 | % | ||||||||||
Undistributed loss before other items attributable to Viad (Note C) | (23,955 | ) | (29,209 | ) | 5,254 | 18.0 | % | ||||||||||
Less: Allocation to participating securities (Note D) | - | - | - | ** | |||||||||||||
Diluted loss before other items allocated to Viad common shareholders | $ | (23,955 | ) | $ | (29,209 | ) | $ | 5,254 | 18.0 | % | |||||||
Diluted weighted-average outstanding common shares | 20,751 | 20,518 | 233 | 1.1 | % | ||||||||||||
Loss before other items per common share | $ | (1.15 | ) | $ | (1.42 | ) | $ | 0.27 | 19.0 | % | |||||||
(A) Acquisition-related costs and other non-recurring expenses include: | |||||||||||||||||
Three months ended March 31, | |||||||||||||||||
(in thousands) | 2023 | 2022 | |||||||||||||||
Acquisition integration costs - Pursuit1 | $ | 30 | $ | - | |||||||||||||
Acquisition transaction-related costs - Pursuit1 | 32 | 308 | |||||||||||||||
Acquisition transaction-related costs - Corporate2 | (3 | ) | 110 | ||||||||||||||
Attraction start-up costs1, 3 | 692 | 431 | |||||||||||||||
Other non-recurring expenses2, 4 | 95 | 8 | |||||||||||||||
Acquisition-related and other non-recurring expenses, pre-tax | $ | 846 | $ | 857 | |||||||||||||
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 March 31, | ||||||
(in thousands) | 2023 | 2022 | ||||
Weighted-average outstanding common shares | 20,751 | 20,518 | ||||
Effect of participating convertible preferred shares (if applicable) | - | - | ||||
Effect of participating non-vested shares (if applicable) | - | - | ||||
Weighted-average shares including effect of participating interests (if applicable) | 20,751 | 20,518 | ||||
** Change is greater than +/- 100 percent | ||||||
VIAD CORP AND SUBSIDIARIES | ||||||||||||||||
TABLE TWO - NON-GAAP FINANCIAL MEASURES (CONTINUED) | ||||||||||||||||
(UNAUDITED) | ||||||||||||||||
Three months ended March 31, | ||||||||||||||||
($ in thousands) | 2023 | 2022 | $ Change | % Change | ||||||||||||
Viad Consolidated: | ||||||||||||||||
Revenue | $ | 260,791 | $ | 177,360 | $ | 83,431 | 47.0 | % | ||||||||
Net loss attributable to Viad | $ | (20,869 | ) | $ | (29,001 | ) | $ | 8,132 | 28.0 | % | ||||||
Net loss attributable to noncontrolling interest | (398 | ) | (1,204 | ) | 806 | 66.9 | % | |||||||||
Net loss attributable to redeemable noncontrolling interest | (123 | ) | (138 | ) | 15 | 10.9 | % | |||||||||
(Income) loss from discontinued operations | 58 | (275 | ) | 333 | ** | |||||||||||
Net interest expense | 12,249 | 5,877 | 6,372 | ** | ||||||||||||
Income tax benefit | (578 | ) | (2,582 | ) | 2,004 | 77.6 | % | |||||||||
Depreciation and amortization | 12,475 | 13,279 | (804 | ) | -6.1 | % | ||||||||||
Restructuring charges | 453 | 654 | (201 | ) | -30.7 | % | ||||||||||
Impairment charges | - | 583 | (583 | ) | -100.0 | % | ||||||||||
Other expense | 531 | 638 | (107 | ) | -16.8 | % | ||||||||||
Start-up costs (A) | 692 | 431 | 261 | 60.6 | % | |||||||||||
Acquisition transaction-related costs | 29 | 418 | (389 | ) | -93.1 | % | ||||||||||
Integration costs | 30 | - | 30 | ** | ||||||||||||
Other non-recurring expenses | 95 | 8 | 87 | ** | ||||||||||||
Remeasurement of finance lease obligation (B) | (1,252 | ) | - | (1,252 | ) | ** | ||||||||||
Consolidated Adjusted EBITDA | $ | 3,392 | $ | (11,312 | ) | $ | 14,704 | ** | ||||||||
Adjusted EBITDA attributable to noncontrolling interest | (645 | ) | (312 | ) | (333 | ) | ** | |||||||||
Consolidated Adjusted EBITDA attributable to Viad | $ | 2,747 | $ | (11,624 | ) | $ | 14,371 | ** | ||||||||
Consolidated Adjusted EBITDA by Business: | ||||||||||||||||
Pursuit | $ | (10,315 | ) | $ | (11,498 | ) | $ | 1,183 | 10.3 | % | ||||||
Total GES | 16,744 | 2,720 | 14,024 | ** | ||||||||||||
Total Segment EBITDA | 6,429 | (8,778 | ) | 15,207 | ** | |||||||||||
Corporate EBITDA | (3,037 | ) | (2,534 | ) | (503 | ) | -19.9 | % | ||||||||
Consolidated Adjusted EBITDA | $ | 3,392 | $ | (11,312 | ) | $ | 14,704 | ** | ||||||||
Pursuit Adjusted EBITDA: | ||||||||||||||||
Revenue | $ | 32,663 | $ | 23,784 | $ | 8,879 | 37.3 | % | ||||||||
Cost of services and products | (51,775 | ) | (44,982 | ) | (6,793 | ) | -15.1 | % | ||||||||
Segment operating loss | (19,112 | ) | (21,198 | ) | 2,086 | 9.8 | % | |||||||||
Depreciation | 8,134 | 7,782 | 352 | 4.5 | % | |||||||||||
Amortization | 1,161 | 1,179 | (18 | ) | -1.5 | % | ||||||||||
Start-up costs (A) | 692 | 431 | 261 | 60.6 | % | |||||||||||
Acquisition transaction-related costs | 32 | 308 | (276 | ) | -89.6 | % | ||||||||||
Integration costs | 30 | - | 30 | ** | ||||||||||||
Remeasurement of finance lease obligation (B) | (1,252 | ) | - | (1,252 | ) | ** | ||||||||||
Adjusted EBITDA | $ | (10,315 | ) | $ | (11,498 | ) | $ | 1,183 | 10.3 | % | ||||||
Adjusted EBITDA attributable to noncontrolling interest | (645 | ) | (312 | ) | (333 | ) | ** | |||||||||
Adjusted EBITDA attributable to Viad | $ | (10,960 | ) | $ | (11,810 | ) | $ | 850 | 7.2 | % | ||||||
Pursuit Operating margin | -58.5 | % | -89.1 | % | 30.6 | % | ||||||||||
Pursuit Adjusted EBITDA margin | -31.6 | % | -48.3 | % | 16.8 | % | ||||||||||
Total GES Adjusted EBITDA: | ||||||||||||||||
Revenue | $ | 228,128 | $ | 153,576 | $ | 74,552 | 48.5 | % | ||||||||
Cost of services and products | (214,544 | ) | (155,170 | ) | (59,374 | ) | -38.3 | % | ||||||||
Segment operating income (loss) | 13,584 | (1,594 | ) | 15,178 | ** | |||||||||||
Depreciation | 2,178 | 3,220 | (1,042 | ) | -32.4 | % | ||||||||||
Amortization | 982 | 1,094 | (112 | ) | -10.2 | % | ||||||||||
Total GES Adjusted EBITDA | $ | 16,744 | $ | 2,720 | $ | 14,024 | ** | |||||||||
Total GES Operating margin | 6.0 | % | -1.0 | % | 7.0 | % | ||||||||||
Total GES Adjusted EBITDA margin | 7.3 | % | 1.8 | % | 5.6 | % | ||||||||||
GES Adjusted EBITDA by Reportable Segment: | ||||||||||||||||
Spiro | $ | 3,737 | $ | 742 | $ | 2,995 | ** | |||||||||
GES Exhibitions | 13,007 | 1,978 | 11,029 | ** | ||||||||||||
Total GES | $ | 16,744 | $ | 2,720 | $ | 14,024 | ** | |||||||||
Spiro Revenue | $ | 60,362 | $ | 42,816 | $ | 17,546 | 41.0 | % | ||||||||
Spiro Adjusted EBITDA Margin | 6.2 | % | 1.7 | % | 4.5 | % | ||||||||||
GES Exhibitions Revenue | $ | 169,497 | $ | 111,831 | $ | 57,666 | 51.6 | % | ||||||||
GES Exhibitions Adjusted EBITDA Margin | 7.7 | % | 1.8 | % | 5.9 | % | ||||||||||
(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 income (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/20230504005507/en/
Contacts
Carrie Long or Michelle Porhola
Investor Relations
(602) 207-2681
ir@viad.com
