Viad Corp Reports 2019 Second Quarter Results

Organic Growth Continues at Both Business Units
Pursuit Growth Investments Accelerate with Recent Transactions

PHOENIX--()--Viad Corp (NYSE: VVI) today announced second quarter 2019 results that reflect continued underlying business growth and contributions from the recent Mountain Park Lodges acquisition.

Q2

Q2

y-o-y

2019

2018

Change

$ in millions, except per share data

 

Revenue

$

402.3

$

363.7

10.6

%

Organic Revenue*

 

404.2

 

363.7

11.1

%

 

Net Income Attributable to Viad

$

13.8

$

23.5

-41.1

%

Income Before Other Items*

 

29.2

 

24.5

19.3

%

 

 

 

 

Net Income Attributable to Viad per Share

$

0.67

$

1.15

-41.7

%

Income Before Other Items per Share*

 

1.44

 

1.20

20.0

%

 

Adjusted Segment Operating Income*

$

47.3

$

39.1

21.0

%

Adjusted Segment EBITDA*

 

61.8

 

54.2

14.1

%

  • Revenue of $402.3 million increased 10.6% ($38.6 million) year-over-year, or 11.1% ($40.5 million) on an organic basis (which excludes the impact of acquisitions and exchange rate variances).
    • The organic revenue increase reflects continued growth at both GES and Pursuit.
    • The acquisitions of Mountain Park Lodges and the Belton Chalet contributed revenue of $3.0 million.
    • Exchange rate variances had an unfavorable impact on revenue of $4.9 million.
  • Adjusted segment operating income, adjusted segment EBITDA and income before other items increased compared to the prior year quarter primarily due to the increase in revenue.
  • The GAAP-basis net income attributable to Viad for the 2019 second quarter also included an $11.6 million, after-tax, charge related to our previously anticipated partial withdrawal from the Central States Pension Plan.

Steve Moster, president and chief executive officer, commented, “I am happy to report that GES and Pursuit delivered solid year-over-year growth during the second quarter with operating results that were in line with our prior guidance. Additionally, we are accelerating our pace of growth investments at Pursuit. During the second quarter, we acquired a majority stake in the seven Mountain Park Lodges properties in Jasper National Park, as well as the 27-room Belton Chalet near Glacier National Park. We are preparing to open FlyOver Iceland in Reykjavik next month, and we are underway with plans to develop two additional FlyOver locations that are expected to open in 2021 and 2022. We also recently entered into an agreement to be the controlling operator of a new geothermal lagoon attraction in Iceland that is expected to open in 2021.”

GES Results

Moster said, “GES delivered revenue growth of 10 percent and strong margin performance during the second quarter. As expected, our U.S. base same-show revenue was under pressure from select events. We were successful in driving growth in other areas, including the strategically important corporate client segment where we continue to win new business. Additionally, we completed some strategic simplification actions during the quarter, including a facility consolidation in Las Vegas and other restructuring actions that will deliver annualized cost savings of about $8 million primarily within our exhibitions line of business.”

Q2

Q2

y-o-y

2019

2018

Change

$ in millions

 

Revenue

$

346.9

 

$

315.3

 

 

10.0

%

North America Organic Revenue*

 

284.4

 

 

260.9

 

 

9.0

%

EMEA Organic Revenue*

 

72.7

 

 

60.7

 

 

19.9

%

 

Adjusted Segment Operating Income*

$

35.3

 

$

29.1

 

 

21.3

%

Adjusted Segment Operating Margin*

 

10.2

%

 

9.2

%

100 bps

 

Adjusted Segment EBITDA*

$

44.3

 

$

38.7

 

 

14.5

%

Adjusted Segment EBITDA Margin*

 

12.8

%

 

12.3

%

50 bps

 

Key Performance Indicators:

U.S. Base Same-Show Revenue Growth(1)

 

-1.7

%

Show Rotation Revenue Change – North America (approx.)(2)

$

7

 

Show Rotation Revenue Change – EMEA (approx.)(2)

$

12

 

(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 26.2% of GES North America’s organic revenue during the 2019 second 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.

  • GES revenue of $346.9 million increased 10.0% ($31.5 million) year-over-year. On an organic basis, which excludes the impact of exchange rate variances, revenue increased 11.3% ($35.5 million).
    • North America organic revenue increased 9.0% ($23.5 million) primarily due to growth from corporate clients and new business wins, as well as positive show rotation of approximately $7 million.
    • EMEA organic revenue increased 19.9% ($12.1 million) primarily due to positive show rotation of approximately $12 million.
  • GES adjusted segment operating income of $35.3 million* increased $6.2 million year-over-year, and $6.5 million on an organic basis.
    • North America organic adjusted segment operating income of $30.7 million* increased by $6.9 million primarily due to the increase in revenue and cost reductions resulting from the restructuring actions.
    • EMEA organic adjusted segment operating income of $4.9 million* decreased $0.4 million primarily due to the timing of certain expenses and the revenue mix.

Pursuit Results

Moster said, “Pursuit continues to drive meaningful revenue growth through ongoing efforts to refresh, improve and expand our global collection of travel experiences. On a same-store basis, we realized continued growth in attractions revenue from our revenue management efforts, as well as our enhanced food and beverage and retail offerings. And our same-store RevPAR growth was a healthy 4.9 percent year-over-year. Additionally, we are pleased with the strong start of our new Mountain Park Lodges properties in Jasper National Park. These properties are a great addition to our Banff Jasper Collection, and give us a meaningful bed base in close proximity to several of our high-margin attractions.”

Q2

Q2

y-o-y

2019

2018

Change

$ in millions

 

Revenue

$

55.4

 

$

48.4

 

14.6

%

Organic Revenue*

 

53.3

 

 

48.4

 

10.3

%

 

Adjusted Segment Operating Income*

$

12.0

 

$

10.0

 

20.2

%

Adjusted Segment Operating Margin*

 

21.7

%

 

20.7

%

100 bps

 

Adjusted Segment EBITDA*

$

17.4

 

$

15.4

 

13.0

%

Adjusted Segment EBITDA Margin*

 

31.4

%

 

31.9

%

-50 bps

 

Key Performance Indicators:

Same-Store Effective Ticket Price(1)

$

35

 

$

33

 

6.1

%

Same-Store Revenue per Attraction Visitor(1)

$

46

 

$

42

 

9.5

%

Same-Store Attraction Visitors(1)

 

650,724

 

 

671,920

 

-3.2

%

Same-Store RevPAR(2)

$

128

 

$

122

 

4.9

%

Same-Store Room Nights Available(2)

 

66,689

 

 

66,181

 

0.8

%

(1)

Same-store effective ticket price is calculated as revenue from the sale of attraction tickets divided by the total number of tickets sold for all comparable Pursuit attractions, expressed on a constant currency basis. Same-store revenue per attraction visitor 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 Mountain Park Lodges (acquired June 2019), the Belton Chalet (acquired May 2019), and the Mount Royal Hotel (closed from December 2016 through June 2018 due to fire damage).

  • Pursuit revenue of $55.4 million increased 14.6% ($7.1 million) year-over-year. On an organic basis, which excludes the impact of acquisitions and exchange rate variances, revenue increased 10.3% ($5.0 million) primarily due to stronger performance from our food and beverage and retail operations as a result of our refresh projects, our revenue management efforts, and the re-opening of the Mount Royal Hotel.
  • Pursuit adjusted segment operating income of $12.0 million* increased $2.0 million year-over-year. Organic adjusted segment operating income of $10.6 million* increased $0.6 million primarily due to the increase in revenue, partially offset by additional costs to support continued expansion of the business.
  • The acquisition of Mountain Park Lodges (on June 8, 2019) and the Belton Chalet (on May 21, 2019) contributed $3.0 million in revenue and $1.9 million in adjusted segment EBITDA ($1.2 million attributable to Viad shareholders).
  • Exchange rate variances had a negative impact of $0.9 million on revenue and $0.1 million on adjusted segment operating income.

Cash Flow / Capital Structure

  • Our cash flow from operations was $31.4 million for the 2019 second quarter.
  • Our capital expenditures for the quarter totaled $27.0 million, comprising $20.0 million for Pursuit and $7.0 million for GES.
  • We acquired the Mountain Park Lodges properties and the Belton Chalet for an aggregate purchase price of approximately $79 million.
  • 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 June 30, 2019.
  • Our debt proceeds (net) totaled $71.7 million for the quarter.
  • Our cash and cash equivalents were $45.6 million, debt was $326.6 million, and our debt-to-capital ratio was 39.3% at June 30, 2019.

Business Outlook

2019 Full Year Guidance

Moster said, “We have updated our guidance to reflect additional revenue and profits from our acquisitions of the Mountain Park Lodges properties and the Belton Chalet, partially offset by a later than previously anticipated opening of FlyOver Iceland due to construction delays and a revised outlook for group visitation from certain long-haul markets. Overall, we have raised our adjusted segment EBITDA guidance by approximately $7 million, and we continue to expect healthy underlying revenue growth at both business units.”

  • 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 $159 million to $166 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 20% to 23.5%

(from $185 in 2018)

Adjusted Segment EBITDA

$76 to $80

(vs. $77.7* in 2018)

 

$82.5 to $86.5

(vs. $68.6* in 2018)

Depreciation & Amortization

$37 to $39

 

$23 to $24

Adjusted Segment Operating Income

$38 to $42

(vs. $39.8* in 2018)

 

$59 to $63

(vs. $49.9* in 2018)

Capital Expenditures

 

 

$30 to $33

(inclusive of about $10 for growth projects)

 

$58 to $62

(inclusive of about $45

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 $1.27 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

$

(12.0

)

$

(10.0

)

$

(2.0

)

Adjusted Segment Operating Income

$

(0.5

)

$

(0.5

)

 

-

 

Income per Share Before Other Items

$

(0.02

)

 

 

  • We expect GES show rotation to have a net negative impact on full year revenue of about $20 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 Act.

Q3 Est.

Q4 Est.

FY Est.

Show Rotation Revenue ($ in millions)

$(2)

$19

$(45)

$5 - $10

$(20)

  • 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 $28 million to $32 million during 2019, inclusive of $17 million to $19 million from the Mountain Park Lodges and Belton Chalet acquisitions. Additionally, we expect to realize mid-single digit revenue growth across the rest of our attractions and hospitality assets.
  • We expect start-up costs related to the development of Pursuit’s FlyOver attractions to approximate $1.5 million during 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 be in the range of $11 million to $12 million, including $1.1 million of year-to-date acquisition transaction-related costs.
  • We expect our effective tax rate on income before other items to be approximately 29%.

2019 Third Quarter Guidance

 

 

2019 Guidance

 

2018

Low End

High End

FX Impact(1)

 

$ in millions, except per share data

Revenue:

 

 

 

 

 

GES

$

246.1

$

215

 

to

$

230

 

$

(1.0

)

Pursuit

 

112.1

 

135

 

to

 

140

 

 

(0.5

)

Adjusted Segment Operating Income:

 

 

 

 

 

GES

$

1.2*

$

(14.0

)

to

$

(11.0

)

$

-

 

Pursuit

 

55.8*

 

68.0

 

to

 

71.0

 

 

(0.5

)

 

 

 

 

 

 

Income per Share Before Other Items

$

1.72*

$

1.58

 

to

$

1.73

 

$

(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 third quarter results to decrease primarily due to negative show rotation revenue of approximately $45 million, partially offset by continued new business wins. Our operating income guidance also reflects higher performance-based incentive expense, partially offset by savings from the second quarter restructuring actions.
  • We expect Pursuit third quarter results to increase primarily due to our Refresh, Build, Buy investments, and continued focus on revenue management across our attraction and hospitality portfolio. We expect the Mountain Park Lodges and Belton Chalet acquisitions to contribute third quarter revenue of $11 million to $13 million.

Conference Call and Web Cast

We will hold a conference call with investors and analysts for a review of second quarter 2019 results on Thursday, July 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 (800) 846-0305 or (402) 998-0543 (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 businesses: 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, 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 June 30,

 

Six months ended June 30,

($ in thousands, except per share data)

2019

 

2018

 

$ Change

 

% Change

 

2019

 

2018

 

$ Change

 

% Change

Revenue:
GES:
North America

$

283,682

 

$

260,891

 

$

22,791

 

8.7

%

$

506,923

 

$

482,955

 

$

23,968

 

5.0

%

EMEA

 

69,505

 

 

60,662

 

 

8,843

 

14.6

%

 

123,881

 

 

109,582

 

 

14,299

 

13.0

%

Intersegment eliminations

 

(6,317

)

 

(6,231

)

 

(86

)

-1.4

%

 

(9,007

)

 

(9,509

)

 

502

 

5.3

%

Total GES

 

346,870

 

 

315,322

 

 

31,548

 

10.0

%

 

621,797

 

 

583,028

 

 

38,769

 

6.6

%

Pursuit

 

55,409

 

 

48,355

 

 

7,054

 

14.6

%

 

66,076

 

 

58,077

 

 

7,999

 

13.8

%

Total revenue

$

402,279

 

$

363,677

 

$

38,602

 

10.6

%

$

687,873

 

$

641,105

 

$

46,768

 

7.3

%

 
Segment operating income (loss):
GES:
North America

$

30,589

 

$

23,767

 

$

6,822

 

28.7

%

$

31,197

 

$

23,688

 

$

7,509

 

31.7

%

EMEA

 

4,664

 

 

5,238

 

 

(574

)

-11.0

%

 

5,799

 

 

5,897

 

 

(98

)

-1.7

%

Total GES

 

35,253

 

 

29,005

 

 

6,248

 

21.5

%

 

36,996

 

 

29,585

 

 

7,411

 

25.0

%

Pursuit

 

11,313

 

 

9,757

 

 

1,556

 

15.9

%

 

(1,682

)

 

(1,638

)

 

(44

)

-2.7

%

Segment operating income

 

46,566

 

 

38,762

 

 

7,804

 

20.1

%

 

35,314

 

 

27,947

 

 

7,367

 

26.4

%

Corporate eliminations

 

17

 

 

17

 

 

-

 

0.0

%

 

33

 

 

33

 

 

-

 

0.0

%

Corporate activities (Note A)

 

(3,282

)

 

(2,535

)

 

(747

)

-29.5

%

 

(5,115

)

 

(4,752

)

 

(363

)

-7.6

%

Restructuring charges (Note B)

 

(4,455

)

 

(662

)

 

(3,793

)

**

 

(5,143

)

 

(824

)

 

(4,319

)

**
Impairment recoveries

 

-

 

 

35

 

 

(35

)

-100.0

%

 

-

 

 

35

 

 

(35

)

-100.0

%

Legal settlement (Note C)

 

-

 

 

-

 

 

-

 

**

 

(8,500

)

 

-

 

 

(8,500

)

**
Pension plan withdrawal (Note D)

 

(15,508

)

 

-

 

 

(15,508

)

**

 

(15,508

)

 

-

 

 

(15,508

)

**
Other expense

 

(456

)

 

(543

)

 

87

 

16.0

%

 

(911

)

 

(781

)

 

(130

)

-16.6

%

Net interest expense (Note E)

 

(2,874

)

 

(2,301

)

 

(573

)

-24.9

%

 

(5,691

)

 

(4,286

)

 

(1,405

)

-32.8

%

Income (loss) from continuing operations before income taxes

 

20,008

 

 

32,773

 

 

(12,765

)

-38.9

%

 

(5,521

)

 

17,372

 

 

(22,893

)

**
Income tax (expense) benefit (Note F)

 

(6,565

)

 

(9,114

)

 

2,549

 

28.0

%

 

1,030

 

 

(4,476

)

 

5,506

 

**
Income (loss) from continuing operations

 

13,443

 

 

23,659

 

 

(10,216

)

-43.2

%

 

(4,491

)

 

12,896

 

 

(17,387

)

**
Income (loss) from discontinued operations (Note G)

 

460

 

 

(279

)

 

739

 

**

 

173

 

 

649

 

 

(476

)

-73.3

%

Net income (loss)

 

13,903

 

 

23,380

 

 

(9,477

)

-40.5

%

 

(4,318

)

 

13,545

 

 

(17,863

)

**
Net (income) loss attributable to noncontrolling interest

 

(331

)

 

33

 

 

(364

)

**

 

89

 

 

397

 

 

(308

)

-77.6

%

Net loss attributable to redeemable noncontrolling interest

 

252

 

 

77

 

 

175

 

**

 

276

 

 

161

 

 

115

 

71.4

%

Net income (loss) attributable to Viad

$

13,824

 

$

23,490

 

$

(9,666

)

-41.1

%

$

(3,953

)

$

14,103

 

$

(18,056

)

**
 
Amounts Attributable to Viad Common Stockholders:
Income (loss) from continuing operations

$

13,364

 

$

23,769

 

$

(10,405

)

-43.8

%

$

(4,126

)

$

13,454

 

$

(17,580

)

**
Income (loss) from discontinued operations (Note G)

 

460

 

 

(279

)

 

739

 

**

 

173

 

 

649

 

 

(476

)

-73.3

%

Net income (loss)

$

13,824

 

$

23,490

 

$

(9,666

)

-41.1

%

$

(3,953

)

$

14,103

 

$

(18,056

)

**
 
Diluted income (loss) per common share:
Income (loss) from continuing operations attributable to Viad common shareholders

$

0.65

 

$

1.16

 

$

(0.51

)

-44.0

%

$

(0.22

)

$

0.65

 

$

(0.87

)

**
Income (loss) from discontinued operations attributable to Viad common shareholders

 

0.02

 

 

(0.01

)

 

0.03

 

**

 

0.01

 

 

0.04

 

 

(0.03

)

-75.0

%

Net income (loss) attributable to Viad common shareholders

$

0.67

 

$

1.15

 

$

(0.48

)

-41.7

%

$

(0.21

)

$

0.69

 

$

(0.90

)

**
 
Basic income (loss) per common share:
Income (loss) from continuing operations attributable to Viad common shareholders

$

0.65

 

$

1.16

 

$

(0.51

)

-44.0

%

$

(0.22

)

$

0.65

 

$

(0.87

)

**
Income (loss) from discontinued operations attributable to Viad common shareholders

 

0.02

 

 

(0.01

)

 

0.03

 

**

 

0.01

 

 

0.04

 

 

(0.03

)

-75.0

%

Net income (loss) attributable to Viad common shareholders

$

0.67

 

$

1.15

 

$

(0.48

)

-41.7

%

$

(0.21

)

$

0.69

 

$

(0.90

)

**
 
Common shares treated as outstanding for income (loss) per share calculations:
Weighted-average outstanding common shares

 

20,143

 

 

20,209

 

 

(66

)

-0.3

%

 

20,110

 

 

20,208

 

 

(98

)

-0.5

%

 
Weighted-average outstanding and potentially dilutive common shares

 

20,266

 

 

20,436

 

 

(170

)

-0.8

%

 

20,110

 

 

20,446

 

 

(336

)

-1.6

%

 
** Change is greater than +/- 100 percent

VIAD CORP AND SUBSIDIARIES

TABLE ONE - NOTES TO QUARTERLY RESULTS
(UNAUDITED)
 
(A) Corporate Activities — The increase in corporate activities expense during the three months ended June 30, 2019 relative to 2018 was primarily due to higher acquisition transaction-related costs in 2019. The increase in corporate activities expense during the six months ended June 30, 2019 relative to 2018 was primarily due to an increase in performance-based compensation expense and higher acquisition transaction-related costs in 2019, offset in part by a gain on sale of corporate fixed assets.
 
(B) Restructuring Charges — During the three and six months ended June 30, 2019, we recorded restructuring charges primarily related to the elimination of certain positions and facility consolidations at GES. During the three months ended June 30, 2018, we recorded restructuring charges primarily related to the elimination of certain positions at GES. During the six months ended June 30, 2018, we recorded restructuring charges primarily related to the elimination of certain positions at GES and Pursuit.
 
(C) Legal Settlement — During the six months ended June 30, 2019, we recorded a charge related to a legal settlement at GES involving a former industry contractor.
 
(D) Pension Plan Withdrawal — During the three months ended June 30, 2019, we finalized the terms of a new collective-bargaining agreement with a certain union. The terms include a withdrawal from the under-funded Central States Pension Plan. Accordingly, we recorded a charge of $15.5 million, which represents the estimated present value of future contributions we will be required to make to the plan as a result of this partial withdrawal from the plan.
 
(E) Net Interest Expense — The increase in net interest expense for the three and six months ended June 30, 2019 relative to 2018 was primarily due to higher debt balances and interest rates in 2019.
 
(F) Income Taxes — Our effective income tax rate for the three months ended June 30, 2019 was 33%, as compared to 28% for the three months ended June 30, 2018. The increase in the effective rate was primarily related to increased non-deductible expenses and our mix of domestic versus foreign income, which is taxed at higher rates. For the six months ended June 30, 2019, our effective income tax rate was a 19% benefit on our pre-tax loss, as compared to a 26% tax expense rate on our pre-tax income during the six months ended June 30, 2018. The lower rate in 2019 was primarily due to increased non-deductible expenses and our mix of domestic versus foreign income, which is taxed at higher rates.
 
(G) Income (Loss) from Discontinued Operations — Income from discontinued operations for the three and six months ended June 30, 2019 was primarily related to a favorable legal settlement related to previously sold operations. Loss from discontinued operations for the three months ended June 30, 2018 was primarily related to legal expenses associated with previously sold operations. Income from discontinued operations for the six months ended June 30, 2018 was primarily related to a favorable legal settlement related to previously sold operations.

Three months ended June 30,

 

Six months ended June 30,

($ in thousands, except per share data)

2019

 

2018

 

$ Change

 

% Change

 

2019

 

2018

 

$ Change

 

% Change

 
Net income (loss) attributable to Viad

$

13,824

 

$

23,490

 

$

(9,666

)

-41.1

%

$

(3,953

)

$

14,103

 

$

(18,056

)

**
Less: Allocation to nonvested shares

 

(102

)

 

(222

)

 

120

 

54.1

%

 

-

 

 

(139

)

 

139

 

-100.0

%

Adjustment to the redemption value of redeemable noncontrolling interest

 

(179

)

 

(52

)

 

(127

)

**

 

(266

)

 

(90

)

 

(176

)

**
Net income (loss) allocated to Viad common shareholders

$

13,543

 

$

23,216

 

$

(9,673

)

-41.7

%

$

(4,219

)

$

13,874

 

$

(18,093

)

**
 
Weighted-average outstanding common shares

 

20,143

 

 

20,209

 

 

(66

)

-0.3

%

 

20,110

 

 

20,208

 

 

(98

)

-0.5

%

 
 
Basic income (loss) per common share attributable to Viad common shareholders

$

0.67

 

$

1.15

 

$

(0.48

)

-41.7

%

$

(0.21

)

$

0.69

 

$

(0.90

)

**
 
** 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 June 30,

 

Six months ended June 30,

($ in thousands)

2019

2018

 

$ Change

 

% Change

 

2019

 

2018

 

$ Change

 

% Change

Income before other items:
Net income (loss) attributable to Viad

$

13,824

 

$

23,490

 

$

(9,666

)

-41.1

%

$

(3,953

)

$

14,103

 

$

(18,056

)

**
(Income) loss from discontinued operations attributable to Viad

 

(460

)

 

279

 

 

(739

)

**

 

(173

)

 

(649

)

 

476

 

73.3

%

Income (loss) from continuing operations attributable to Viad

 

13,364

 

 

23,769

 

 

(10,405

)

-43.8

%

 

(4,126

)

 

13,454

 

 

(17,580

)

**
Restructuring charges, pre-tax

 

4,455

 

 

662

 

 

3,793

 

**

 

5,143

 

 

824

 

 

4,319

 

**
Impairment recoveries, pre-tax

 

-

 

 

(35

)

 

35

 

-100.0

%

 

-

 

 

(35

)

 

35

 

-100.0

%

Legal settlement, pre-tax

 

-

 

 

-

 

 

-

 

**

 

8,500

 

 

-

 

 

8,500

 

**
Pension plan withdrawal, pre-tax

 

15,508

 

 

-

 

 

15,508

 

**

 

15,508

 

 

-

 

 

15,508

 

**
Acquisition-related costs and other non-recurring expenses, pre-tax (Note A)

 

1,481

 

 

381

 

 

1,100

 

**

 

2,018

 

 

821

 

 

1,197

 

**
Tax expense on above items

 

(5,376

)

 

(231

)

 

(5,145

)

**

 

(7,795

)

 

(364

)

 

(7,431

)

**
Net loss attributable to FlyOver Iceland noncontrolling interest

 

(252

)

 

(77

)

 

(175

)

**

 

(276

)

 

(161

)

 

(115

)

-71.4

%

Income before other items

$

29,180

 

$

24,469

 

$

4,711

 

19.3

%

$

18,972

 

$

14,539

 

$

4,433

 

30.5

%

 
(per diluted share)
Income before other items:
Net income (loss) attributable to Viad

$

0.67

 

$

1.15

 

$

(0.48

)

-41.7

%

$

(0.21

)

$

0.69

 

$

(0.90

)

**
(Income) loss from discontinued operations attributable to Viad

 

(0.02

)

 

0.01

 

 

(0.03

)

**

 

(0.01

)

 

(0.04

)

 

0.03

 

75.0

%

Income (loss) from continuing operations attributable to Viad

 

0.65

 

 

1.16

 

 

(0.51

)

-44.0

%

 

(0.22

)

 

0.65

 

 

(0.87

)

**
Restructuring charges, pre-tax

 

0.22

 

 

0.03

 

 

0.19

 

**

 

0.25

 

 

0.04

 

 

0.21

 

**
Impairment recoveries, pre-tax

 

-

 

 

-

 

 

-

 

**

 

-

 

 

-

 

 

-

 

**
Legal settlement, pre-tax

 

-

 

 

-

 

 

-

 

**

 

0.42

 

 

-

 

 

0.42

 

**
Pension plan withdrawal, pre-tax

 

0.77

 

 

-

 

 

0.77

 

**

 

0.77

 

 

-

 

 

0.77

 

**
Acquisition-related costs and other non-recurring expenses, pre-tax (Note A)

 

0.07

 

 

0.02

 

 

0.05

 

**

 

0.10

 

 

0.04

 

 

0.06

 

**
Tax expense on above items

 

(0.26

)

 

(0.01

)

 

(0.25

)

**

 

(0.37

)

 

(0.01

)

 

(0.36

)

**
Net loss attributable to FlyOver Iceland noncontrolling interest

 

(0.01

)

 

-

 

 

(0.01

)

**

 

(0.01

)

 

(0.01

)

 

-

 

0.0

%

Income before other items

$

1.44

 

$

1.20

 

$

0.24

 

20.0

%

$

0.94

 

$

0.71

 

$

0.23

 

32.4

%

 
($ in thousands)
Adjusted EBITDA:
Net income (loss) attributable to Viad

$

13,824

 

$

23,490

 

$

(9,666

)

-41.1

%

$

(3,953

)

$

14,103

 

$

(18,056

)

**
(Income) loss from discontinued operations attributable to Viad

 

(460

)

 

279

 

 

(739

)

**

 

(173

)

 

(649

)

 

476

 

73.3

%

Impairment recoveries, pre-tax

 

-

 

 

(35

)

 

35

 

-100.0

%

 

-

 

 

(35

)

 

35

 

-100.0

%

Interest expense

 

2,957

 

 

2,354

 

 

603

 

25.6

%

 

5,872

 

 

4,423

 

 

1,449

 

32.8

%

Income tax expense (benefit)

 

6,565

 

 

9,114

 

 

(2,549

)

-28.0

%

 

(1,030

)

 

4,476

 

 

(5,506

)

**
Depreciation and amortization

 

14,527

 

 

15,115

 

 

(588

)

-3.9

%

 

27,715

 

 

28,178

 

 

(463

)

-1.6

%

Other noncontrolling interest

 

(322

)

 

(54

)

 

(268

)

**

 

(267

)

 

18

 

 

(285

)

**
Adjusted EBITDA

$

37,091

 

$

50,263

 

$

(13,172

)

-26.2

%

$

28,164

 

$

50,514

 

$

(22,350

)

-44.2

%

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

Three months ended June 30,

 

Six months ended June 30,

2019

 

2018

 

$ Change

 

% Change

 

2019

 

2018

 

$ Change

 

% Change

Acquisition integration costs - GES1

$

-

 

$

69

 

$

(69

)

-100.0

%

$

-

 

$

130

 

$

(130

)

-100.0

%

Acquisition integration costs - Pursuit1

 

33

 

 

-

 

 

33

 

**

 

33

 

 

-

 

 

33

 

**
Acquisition transaction-related costs - Pursuit1

 

86

 

 

56

 

 

30

 

53.6

%

 

271

 

 

68

 

 

203

 

**
Acquisition transaction-related costs - Corporate2

 

755

 

 

50

 

 

705

 

**

 

1,050

 

 

186

 

 

864

 

**
FlyOver start-up costs1, 3

 

607

 

 

206

 

 

401

 

**

 

664

 

 

437

 

 

227

 

51.9

%

Acquisition-related and other non-recurring expenses, pre-tax

$

1,481

 

$

381

 

$

1,100

 

**

$

2,018

 

$

821

 

$

1,197

 

**
 
1 Included in segment operating income (loss)
2 Included in corporate activities
3 Includes costs related to the development of Pursuit's new FlyOver attractions in Iceland and Las Vegas
** 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 June 30, 2019

 

Three months ended June 30, 2018

($ in thousands)

As Reported

 

Acquisitions
(Note A)

 

FX Impact

 

Organic

 

As Reported

 

Acquisitions
(Note A)

 

Organic

 
Viad Consolidated:
Revenue

$

402,279

 

$

3,018

 

$

(4,891

)

$

404,152

 

$

363,677

 

$

-

$

363,677

 

 
Net income attributable to Viad

$

13,824

 

$

23,490

 

Net income (loss) attributable to noncontrolling interest

 

331

 

 

(33

)

Net loss attributable to redeemable noncontrolling interest

 

(252

)

 

(77

)

(Income) loss from discontinued operations

 

(460

)

 

279

 

Income tax expense

 

6,565

 

 

9,114

 

Net interest expense

 

2,874

 

 

2,301

 

Other expense

 

456

 

 

543

 

Pension plan withdrawal

 

15,508

 

 

-

 

Impairment recoveries

 

-

 

 

(35

)

Restructuring charges

 

4,455

 

 

662

 

Corporate activities expense

 

3,282

 

 

2,535

 

Corporate eliminations

 

(17

)

 

(17

)

Segment operating income

$

46,566

 

$

1,518

 

$

(457

)

$

45,505

 

$

38,762

 

$

-

$

38,762

 

FlyOver start-up costs1

 

607

 

 

-

 

 

-

 

 

607

 

 

206

 

 

-

 

206

 

Integration costs

 

33

 

 

33

 

 

-

 

 

-

 

 

69

 

 

-

 

69

 

Acquisition transaction-related costs

 

86

 

 

-

 

 

(1

)

 

87

 

 

56

 

 

-

 

56

 

Adjusted segment operating income

 

47,292

 

 

1,551

 

 

(458

)

 

46,199

 

 

39,093

 

 

-

 

39,093

 

Segment depreciation

 

11,098

 

 

255

 

 

(162

)

 

11,005

 

 

12,207

 

 

-

 

12,207

 

Segment amortization

 

3,371

 

 

98

 

 

(31

)

 

3,304

 

 

2,852

 

 

-

 

2,852

 

Adjusted Segment EBITDA

$

61,761

 

$

1,904

 

$

(651

)

$

60,508

 

$

54,152

 

$

-

$

54,152

 

Adjusted Segment EBITDA Attributable to Noncontrolling Interest

 

(647

)

 

(711

)

 

(1

)

 

65

 

 

(6

)

 

-

 

(6

)

Adjusted Segment EBITDA Attributable to Viad

$

61,114

 

$

1,193

 

$

(652

)

$

60,573

 

$

54,146

 

$

-

$

54,146

 

 
Adjusted segment operating margin

 

11.8

%

 

51.4

%

 

9.4

%

 

11.4

%

 

10.7

%

 

10.7

%

Adjusted segment EBITDA margin

 

15.4

%

 

63.1

%

 

13.3

%

 

15.0

%

 

14.9

%

 

14.9

%

 
GES:
Revenue

$

346,870

 

$

-

 

$

(3,963

)

$

350,833

 

$

315,322

 

$

-

$

315,322

 

 
Segment operating income

$

35,253

 

$

-

 

$

(328

)

$

35,581

 

$

29,005

 

$

-

$

29,005

 

Integration costs

 

-

 

 

-

 

 

-

 

 

-

 

 

69

 

 

-

 

69

 

Adjusted segment operating income

 

35,253

 

 

-

 

 

(328

)

 

35,581

 

 

29,074

 

 

-

 

29,074

 

Depreciation

 

6,322

 

 

-

 

 

(72

)

 

6,394

 

 

7,268

 

 

-

 

7,268

 

Amortization

 

2,768

 

 

-

 

 

(16

)

 

2,784

 

 

2,400

 

 

-

 

2,400

 

Adjusted Segment EBITDA

$

44,343

 

$

-

 

$

(416

)

$

44,759

 

$

38,742

 

$

-

$

38,742

 

Adjusted Segment EBITDA Attributable to Noncontrolling Interest

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

-

 

Adjusted Segment EBITDA Attributable to Viad

$

44,343

 

$

-

 

$

(416

)

$

44,759

 

$

38,742

 

$

-

$

38,742

 

 
Adjusted segment operating margin

 

10.2

%

 

8.3

%

 

10.1

%

 

9.2

%

 

9.2

%

Adjusted segment EBITDA margin

 

12.8

%

 

10.5

%

 

12.8

%

 

12.3

%

 

12.3

%

 
GES North America:
Revenue

$

283,682

 

$

-

 

$

(731

)

$

284,413

 

$

260,891

 

$

-

$

260,891

 

 
Segment operating income

$

30,589

 

$

-

 

$

(128

)

$

30,717

 

$

23,767

 

$

-

$

23,767

 

Integration costs

 

-

 

 

-

 

 

-

 

 

-

 

 

69

 

 

-

 

69

 

Adjusted segment operating income

 

30,589

 

 

-

 

 

(128

)

 

30,717

 

 

23,836

 

 

-

 

23,836

 

Depreciation

 

5,030

 

 

-

 

 

(8

)

 

5,038

 

 

5,751

 

 

-

 

5,751

 

Amortization

 

2,500

 

 

-

 

 

-

 

 

2,500

 

 

2,095

 

 

-

 

2,095

 

Adjusted Segment EBITDA

$

38,119

 

$

-

 

$

(136

)

$

38,255

 

$

31,682

 

$

-

$

31,682

 

Adjusted Segment EBITDA Attributable to Noncontrolling Interest

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

-

 

Adjusted Segment EBITDA Attributable to Viad

$

38,119

 

$

-

 

$

(136

)

$

38,255

 

$

31,682

 

$

-

$

31,682

 

 
Adjusted segment operating margin

 

10.8

%

 

17.5

%

 

10.8

%

 

9.1

%

 

9.1

%

Adjusted segment EBITDA margin

 

13.4

%

 

18.6

%

 

13.5

%

 

12.1

%

 

12.1

%

 
GES EMEA:
Revenue

$

69,505

 

$

-

 

$

(3,232

)

$

72,737

 

$

60,662

 

$

-

$

60,662

 

 
Segment operating income

$

4,664

 

$

-

 

$

(200

)

$

4,864

 

$

5,238

 

$

-

$

5,238

 

Integration costs

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

-

 

Adjusted segment operating income

 

4,664

 

 

-

 

 

(200

)

 

4,864

 

 

5,238

 

 

-

 

5,238

 

Depreciation

 

1,292

 

 

-

 

 

(64

)

 

1,356

 

 

1,517

 

 

-

 

1,517

 

Amortization

 

268

 

 

-

 

 

(16

)

 

284

 

 

305

 

 

-

 

305

 

Adjusted Segment EBITDA

$

6,224

 

$

-

 

$

(280

)

$

6,504

 

$

7,060

 

$

-

$

7,060

 

Adjusted Segment EBITDA Attributable to Noncontrolling Interest

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

 

-

 

-

 

Adjusted Segment EBITDA Attributable to Viad

$

6,224

 

$

-

 

$

(280

)

$

6,504

 

$

7,060

 

$

-

$

7,060

 

 
Adjusted segment operating margin

 

6.7

%

 

6.2

%

 

6.7

%

 

8.6

%

 

8.6

%

Adjusted segment EBITDA margin

 

9.0

%

 

8.7

%

 

8.9

%

 

11.6

%

 

11.6

%

 
Pursuit:
Revenue

$

55,409

 

$

3,018

 

$

(928

)

$

53,319

 

$

48,355

 

$

-

$

48,355

 

 
Segment operating income

$

11,313

 

$

1,518

 

$

(129

)

$

9,924

 

$

9,757

 

$

-

$

9,757

 

Integration costs

 

33

 

 

33

 

 

-

 

 

-

 

 

-

 

 

-

 

-

 

Acquisition transaction-related costs

 

86

 

 

-

 

 

(1

)

 

87

 

 

56

 

 

-

 

56

 

FlyOver start-up costs1

 

607

 

 

-

 

 

-

 

 

607

 

 

206

 

 

-

 

206

 

Adjusted segment operating income

 

12,039

 

 

1,551

 

 

(130

)

 

10,618

 

 

10,019

 

 

-

 

10,019

 

Depreciation

 

4,776

 

 

255

 

 

(90

)

 

4,611

 

 

4,939

 

 

-

 

4,939

 

Amortization

 

603

 

 

98

 

 

(15

)

 

520

 

 

452

 

 

-

 

452

 

Adjusted Segment EBITDA

$

17,418

 

$

1,904

 

$

(235

)

$

15,749

 

$

15,410

 

$

-

$

15,410

 

Adjusted Segment EBITDA Attributable to Noncontrolling Interest

 

(647

)

 

(711

)

 

(1

)

 

65

 

 

(6

)

 

-

 

(6

)

Adjusted Segment EBITDA Attributable to Viad

$

16,771

 

$

1,193

 

$

(236

)

$

15,814

 

$

15,404

 

$

-

$

15,404

 

 
Adjusted segment operating margin

 

21.7

%

 

51.4

%

 

14.0

%

 

19.9

%

 

20.7

%

 

20.7

%

Adjusted segment EBITDA margin

 

31.4

%

 

63.1

%

 

25.3

%

 

29.5

%

 

31.9

%

 

31.9

%

(A) Acquisitions include Mountain Park Lodges (acquired June 2019) and Belton Chalet (acquired May 2019) for Pursuit.

1 Includes costs related to the development of Pursuit's new FlyOver attractions in Iceland and Las Vegas

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

 

 
 
 

Q3 2018

 

 

 

FY 2018

Adjusted segment operating income and adjusted segment EBITDA:

GES

 

Pursuit

 

Viad

 

 

 

GES

 

Pursuit

 

Viad

Net income attributable to Viad

$

37,389

 

$

49,170

 

Net income attributable to noncontrolling interest

 

1,287

 

 

542

 

Net loss attributable to redeemable noncontrolling interest

 

(128

)

 

(317

)

(Income) loss from discontinued operations

 

246

 

 

(1,481

)

Income tax expense

 

10,806

 

 

17,095

 

Net interest expense

 

2,507

 

 

9,286

 

Other expense, pre-tax

 

527

 

 

1,744

 

Impairment recoveries, pre-tax

 

-

 

 

(35

)

Restructuring charges, pre-tax

 

175

 

 

1,587

 

Corporate activities expense

 

3,777

 

 

10,993

 

Corporate eliminations

 

(18

)

 

(67

)

Segment operating income

$

1,160

 

$

55,408

 

$

56,568

 

$

39,602

 

$

48,915

 

$

88,517

 

FlyOver Iceland start-up costs

 

-

 

 

351

 

 

351

 

 

-

 

 

862

 

 

862

 

Integration costs

 

25

 

 

-

 

 

25

 

 

155

 

 

-

 

 

155

 

Acquisition transaction-related costs

 

-

 

 

29

 

 

29

 

 

-

 

 

136

 

 

136

 

Adjusted segment operating income

 

1,185

 

 

55,788

 

 

56,973

 

 

39,757

 

 

49,913

 

 

89,670

 

Segment depreciation

 

7,077

 

 

6,156

 

 

13,233

 

 

28,456

 

 

17,167

 

 

45,623

 

Segment amortization

 

2,354

 

 

542

 

 

2,896

 

 

9,470

 

 

1,523

 

 

10,993

 

Adjusted segment EBITDA

$

10,616

 

$

62,486

 

$

73,102

 

$

77,683

 

$

68,603

 

$

146,286

 

Adjusted segment EBITDA attributable to noncontrolling interest

 

-

 

 

(1,959

)

 

(1,959

)

 

-

 

 

(1,117

)

 

(1,117

)

Adjusted segment EBITDA attributable to Viad

$

10,616

 

$

60,527

 

$

71,143

 

$

77,683

 

$

67,486

 

$

145,169

 

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 EBITDA Attributable to Noncontrolling Interest

479

(6)

(1,959)

369

(1,117)

Adjusted Segment EBITDA Attributable to Viad

$ 2,975

$ 54,146

$ 71,143

$ 16,905

$ 145,169

 
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 EBITDA Attributable to Noncontrolling Interest

-

-

-

-

-

Adjusted Segment EBITDA Attributable to Viad

$ 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 EBITDA Attributable to Noncontrolling Interest

-

-

-

-

-

Adjusted Segment EBITDA Attributable to Viad

$ 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 EBITDA Attributable to Noncontrolling Interest

-

-

-

-

-

Adjusted Segment EBITDA Attributable to Viad

$ 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 EBITDA Attributable to Noncontrolling Interest

479

(6)

(1,959)

369

(1,117)

Adjusted Segment EBITDA Attributable to Viad

$ (7,433)

$ 15,404

$ 60,527

$ (1,012)

$ 67,486

 
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 EBITDA Attributable to Noncontrolling Interest

363

46

(1,848)

295

(1,144)

Adjusted Segment EBITDA Attributable to Viad

$ 25,963

$ 55,175

$ 62,301

$ 9,592

$ 153,031

 
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 EBITDA Attributable to Noncontrolling Interest

-

-

-

-

-

Adjusted Segment EBITDA Attributable to Viad

$ 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 EBITDA Attributable to Noncontrolling Interest

-

-

-

-

-

Adjusted Segment EBITDA Attributable to Viad

$ 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 EBITDA Attributable to Noncontrolling Interest

-

-

-

-

-

Adjusted Segment EBITDA Attributable to Viad

$ 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 EBITDA Attributable to Noncontrolling Interest

363

46

(1,848)

295

(1,144)

Adjusted Segment EBITDA Attributable to Viad

$ (6,613)

$ 15,099

$ 58,397

$ (2,007)

$ 64,876

 
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 Second Quarter Results

Contacts

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