Viad(VVI) - 2024 Q1 - Quarterly Results

Executive Summary & Q1 2024 Highlights Viad Corp reported solid Q1 2024 results with strong revenue growth for Pursuit and improved Adjusted EBITDA margin for GES, maintaining its positive full-year outlook President & CEO Commentary Steve Moster reported solid Q1 results, highlighting strong Pursuit revenue growth and improved GES Adjusted EBITDA margin, while reaffirming the full-year outlook - Pursuit achieved 14% revenue growth, driven by strong attractions performance, including the successful launch of the new FlyOver Chicago attraction[2] - GES delivered strong profitable growth, with a 70 basis point year-over-year improvement in its Adjusted EBITDA margin[2] - Viad maintains its full-year outlook, expecting consolidated adjusted EBITDA growth of approximately 16% to 30% in 2024, alongside strong free cash flow[2] Financial Highlights Viad Corp's Q1 2024 total revenue increased by 4.9% to $273.5 million, driven by Pursuit, with consolidated adjusted EBITDA rising significantly by 27.1% Q1 2024 Financial Performance (Millions) | Metric | Q1 2024 (Millions) | Q1 2023 (Millions) | $ Change | % Change | | :--------------------------------- | :------------------ | :------------------ | :------- | :------- | | Revenue | $273.5 | $260.8 | $12.7 | 4.9% | | Pursuit Revenue | $37.2 | $32.7 | $4.6 | 14.0% | | GES Revenue | $236.3 | $228.1 | $8.1 | 3.6% | | Net Loss Attributable to Viad | $(25.1) | $(20.9) | $(4.2) | (20.4%) | | Adjusted Net Loss* | $(21.7) | $(22.0) | $0.3 | 1.2% | | Diluted EPS Attributable to Viad | $(1.29) | $(1.10) | $(0.19) | (17.3%) | | Adjusted Diluted EPS* | $(1.13) | $(1.15) | $0.02 | 1.7% | | Consolidated Adjusted EBITDA* | $4.3 | $3.4 | $0.9 | 27.1% | | Pursuit Adjusted EBITDA* | $(11.1) | $(10.3) | $(0.8) | (8.1%) | | GES Adjusted EBITDA* | $18.9 | $16.7 | $2.2 | 13.0% | First Quarter 2024 Results Overview Viad's Q1 2024 saw consolidated revenue growth, a widened net loss due to non-operational items, and increased adjusted EBITDA, with varied segment performance Consolidated Financial Performance Viad's consolidated revenue grew by 4.9% to $273.5 million, while net loss increased due to non-operational items and tax expense, and adjusted EBITDA improved by $0.9 million - Consolidated revenue increased by $12.7 million (4.9%) to $273.5 million from the 2023 first quarter[7] - Net loss attributable to Viad increased by $4.2 million to $25.1 million, primarily due to higher non-operational items and income tax expense[7] - Consolidated adjusted EBITDA increased by $0.9 million to $4.3 million, reflecting stronger overall performance[7] Segment Performance Pursuit's revenue grew 14.0% from attractions like Sky Lagoon and FlyOver Chicago, while GES revenue increased 3.6% with a 13.0% rise in Adjusted EBITDA due to improved margins - Pursuit revenue increased by $4.6 million (14.0%) year-over-year to $37.2 million, primarily driven by growth at year-round attractions like Sky Lagoon and the opening of FlyOver Chicago[7] - GES revenue increased by $8.1 million (3.6%) year-over-year to $236.3 million, primarily due to continued underlying growth[7] - GES adjusted EBITDA increased by $2.2 million (13.0%) year-over-year to $18.9 million, attributed to higher revenue and improved margin[7] Cash Flow and Balance Sheet Viad reported a Q1 cash flow from operations outflow of $7.5 million, capital expenditures of $20.7 million, total liquidity of $137.2 million, and a net leverage ratio of 2.7 - Cash flow from operations was an outflow of $7.5 million for the first quarter[7] - Capital expenditures totaled $20.7 million, with $16.4 million for Pursuit (including $8 million for growth projects) and $4.3 million for GES[7] - Total liquidity at March 31, 2024, was $137.2 million, comprising $48.8 million in cash and $88.4 million available on the revolving credit facility, with total debt at $488.4 million and a net leverage ratio of 2.7[7] 2024 Financial Outlook Viad projects high-single to low-double digit revenue growth and Adjusted EBITDA between $171 million and $191 million for 2024, with both segments contributing 2024 Outlook Viad projects high-single to low-double digit revenue growth and Adjusted EBITDA between $171 million and $191 million for the full year 2024, with specific targets for Q2 2024 Financial Outlook (Millions) | (in millions) | Second Quarter | Full Year | | :-------------------------- | :------------- | :--------------------------------- | | Viad Consolidated | | | | Revenue | $352 to $377 | Up high-single to low-double digits | | Adjusted EBITDA | $51 to $59 | $171 to $191 | | Cash flow from Operations | $35 to $45 | $120 to $140 | | Capital Expenditures | $20 to $25 | $65 to $70 | | Pursuit | | | | Revenue | $92 to $97 | Up mid-single digits | | Adjusted EBITDA | $20 to $24 | $105 to $115 | | GES | | | | Revenue | $260 to $280 | Up low-double digits | | Adjusted EBITDA | $34.5 to $38.5 | $80 to $90 | Company Overview Viad Corp is a global provider of extraordinary experiences through its Pursuit and GES segments, focused on sustainable growth and above-market shareholder returns About Viad Corp Viad (NYSE: VVI) is a global provider of extraordinary experiences, including attractions, hospitality, and exhibition services, aiming for sustainable growth and above-market returns - Viad (NYSE: VVI) is a leading global provider of extraordinary experiences, including attractions, hospitality, exhibition management services, and experiential marketing[12] - The company's business strategy emphasizes delivering extraordinary experiences for teams, clients, and guests, and achieving significant, sustainable growth and above-market returns for shareholders[12] - Viad is recognized as an S&P SmallCap 600 company[12] Business Segments Viad operates through Pursuit, focusing on global attractions and hospitality, and GES, providing exhibition management and experiential marketing services worldwide Pursuit Pursuit is a global attractions and hospitality company operating experiences in iconic destinations, offering world-class attractions, lodges, and tours - Pursuit is a global attractions and hospitality company that owns and operates a collection of experiences in iconic destinations[13] - It offers world-class attractions, distinctive lodges, and engaging tours in national parks and global travel locations[13] - Pursuit also includes Flyover Attractions in Vancouver, Reykjavik, Las Vegas, and Chicago[13] GES GES is a global exhibition management and experiential marketing company, comprising GES Exhibitions and Spiro, serving various industries worldwide - GES is a global exhibition management and experiential marketing company[14] - It comprises two reportable segments: GES Exhibitions and Spiro[14] - GES Exhibitions provides full-service strategic and logistics solutions for exhibition and conference organizers across North America, Europe, and the Middle East, while Spiro is a global experiential marketing agency[14] Conference Call Information Viad Corp held a conference call on May 2, 2024, to discuss Q1 2024 results, with access details provided for participants and a supplemental earnings presentation Conference Call Details Viad Corp hosted a conference call on May 2, 2024, to discuss Q1 2024 results, providing access via operator, pre-registration, and a live audio webcast with a supplemental presentation - A conference call to review first quarter 2024 results was held on Thursday, May 2, 2024, at 5 p.m. (Eastern Time)[8] - Participants could access the call via operator assistance or pre-register online to bypass the operator[8][9] - A live audio webcast and a replay were made available through the 'Investors' section of Viad's website, where a supplemental earnings presentation was also posted[10][11] Detailed Financial Statements (Unaudited) This section presents Viad Corp's unaudited detailed quarterly financial statements for Q1 2024, including revenue, operating income, net loss, EPS, Adjusted EBITDA, and capitalization data Quarterly Results (Table One) Table One details Viad Corp's unaudited Q1 2024 quarterly results, providing comprehensive data on revenue, operating income/loss, net loss, EPS, Adjusted EBITDA by segment, and capitalization Revenue by Segment This table details Viad Corp's Q1 2024 revenue breakdown by segment, including Pursuit, Spiro, and GES Exhibitions, showing year-over-year changes | Segment | Q1 2024 (Thousands) | Q1 2023 (Thousands) | $ Change | % Change | | :---------------- | :------------------ | :------------------ | :------- | :------- | | Pursuit | $37,231 | $32,663 | $4,568 | 14.0% | | Spiro | $61,248 | $60,362 | $886 | 1.5% | | GES Exhibitions | $175,840 | $169,497 | $6,343 | 3.7% | | Total GES | $236,266 | $228,128 | $8,138 | 3.6% | | Total revenue | $273,497 | $260,791 | $12,706 | 4.9% | Segment Operating Income (Loss) This table presents Viad Corp's Q1 2024 operating income and loss for Pursuit, Spiro, and GES Exhibitions, highlighting segment performance | Segment | Q1 2024 (Thousands) | Q1 2023 (Thousands) | $ Change | % Change | | :---------------------- | :------------------ | :------------------ | :------- | :------- | | Pursuit | $(23,831) | $(19,112) | $(4,719) | (24.7%) | | Spiro | $4,001 | $3,174 | $827 | 26.1% | | GES Exhibitions | $11,357 | $10,410 | $947 | 9.1% | | Total GES | $15,358 | $13,584 | $1,774 | 13.1% | | Segment operating loss | $(8,473) | $(5,528) | $(2,945) | (53.3%) | Net Loss and EPS This table outlines Viad Corp's Q1 2024 net loss attributable to Viad and basic and diluted loss per common share, with year-over-year comparisons | Metric | Q1 2024 (Thousands) | Q1 2023 (Thousands) | $ Change | % Change | | :----------------------------------- | :------------------ | :------------------ | :------- | :------- | | Net loss attributable to Viad | $(25,117) | $(20,869) | $(4,248) | (20.4%) | | Basic loss per common share | $(1.29) | $(1.10) | $(0.19) | (17.3%) | | Diluted loss per common share | $(1.29) | $(1.10) | $(0.19) | (17.3%) | Adjusted EBITDA by Segment This table provides Viad Corp's Q1 2024 Adjusted EBITDA for Pursuit, Spiro, GES Exhibitions, and Corporate, along with consolidated figures | Segment | Q1 2024 (Thousands) | Q1 2023 (Thousands) | $ Change | % Change | | :-------------------------- | :------------------ | :------------------ | :------- | :------- | | Pursuit | $(11,148) | $(10,315) | $(833) | (8.1%) | | Spiro | $4,640 | $3,737 | $903 | 24.2% | | GES Exhibitions | $14,275 | $13,007 | $1,268 | 9.7% | | Total GES | $18,915 | $16,744 | $2,171 | 13.0% | | Corporate | $(3,456) | $(3,037) | $(419) | (13.8%) | | Consolidated Adjusted EBITDA | $4,311 | $3,392 | $919 | 27.1% | Capitalization Data This table presents Viad Corp's capitalization data as of March 31, 2024, including cash, total debt, shareholders' equity, and convertible preferred stock | Metric | March 31, 2024 (Thousands) | March 31, 2023 (Thousands) | $ Change | % Change | | :------------------------------------------------ | :------------------------- | :------------------------- | :------- | :------- | | Cash and cash equivalents | $48,799 | $50,818 | $(2,019) | (4.0%) | | Total debt | $488,381 | $478,422 | $9,959 | 2.1% | | Viad shareholders' equity | $12,247 | $(4,248) | $16,495 | ** | | Convertible preferred stock (including accumulated dividends paid in kind) | $141,827 | $141,827 | $- | 0.0% | Notes to Quarterly Results (Table One) The notes provide context for Q1 2024 financial results, explaining corporate activities, income tax rates, income per common share calculation, and convertible preferred stock details Corporate Activities The increase in corporate activities is primarily attributed to higher transaction-related consulting costs incurred during the first quarter - The increase in corporate activities is primarily due to increased transaction-related consulting costs[25] Income Tax Expense The effective tax rate was negative 3.5% for Q1 2024, influenced by a valuation allowance release and estimated withholding taxes on Sky Lagoon earnings - The effective tax rate was negative 3.5% for Q1 2024, compared to positive 2.6% for Q1 2023[26] - The 2024 rate included a $1.1 million benefit from the release of a valuation allowance on UK tax loss carryforwards, offset by a $0.5 million expense for estimated withholding taxes on Sky Lagoon earnings[26] Income (Loss) per Common Share Viad applies the two-class method for calculating income (loss) per common share, treating preferred stock and unvested share-based awards as participating securities - The company applies the two-class method for calculating income (loss) per common share, considering preferred stock and unvested share-based payment awards as participating securities[27] Net Loss Allocated to Common Shareholders (Thousands) | Metric | Q1 2024 (Thousands) | Q1 2023 (Thousands) | | :------------------------------------------ | :------------------ | :------------------ | | Net loss attributable to Viad | $(25,117) | $(20,869) | | Convertible preferred stock dividends | $(1,950) | $(1,950) | | Net loss allocated to Viad common shareholders (basic) | $(27,067) | $(22,819) | | Basic weighted-average outstanding common shares | 21,029 | 20,751 | Convertible Series A Preferred Stock Viad issued 135,000 shares of Convertible Series A Preferred Stock for $135 million on August 5, 2020, with a 5.5% cumulative quarterly dividend - On August 5, 2020, Viad issued 135,000 shares of Convertible Series A Preferred Stock for $135 million[30] - The preferred stock carries a 5.5% cumulative quarterly dividend, payable in cash or in-kind, and is convertible into common stock at $21.25 per share[30] Non-GAAP Financial Measures (Table Two) Table Two provides disclosures and reconciliations of non-GAAP measures like Adjusted Net Loss, Adjusted Diluted EPS, and Adjusted EBITDA to comparable GAAP measures, clarifying adjustments Important Disclosures The document uses non-GAAP measures like Adjusted Net Income (Loss) and Adjusted EBITDA to supplement GAAP results for management's performance analysis - The document includes non-GAAP measures such as 'Adjusted Net Income (Loss)', 'Adjusted EBITDA', and 'Segment Operating Income (Loss)' to supplement GAAP results[32] - These non-GAAP measures are used by management for period-to-period comparisons and analysis of operating performance, but should not be considered substitutes for GAAP measures[32] - Management believes Adjusted EBITDA provides useful information for investors regarding Viad's results, performance, and capital investment effectiveness[33] Adjusted Net Loss and EPS Reconciliation This table reconciles Viad Corp's Q1 2024 net loss attributable to Viad to adjusted net loss and adjusted diluted EPS, detailing various adjustments | Metric | Q1 2024 (Thousands) | Q1 2023 (Thousands) | $ Change | % Change | | :------------------------------------------------ | :------------------ | :------------------ | :------- | :------- | | Net loss attributable to Viad | $(25,117) | $(20,869) | $(4,248) | (20.4%) | | Loss from discontinued operations attributable to Viad | $67 | $58 | $9 | 15.5% | | Restructuring charges, pre-tax | $116 | $453 | $(337) | (74.4%) | | Transaction-related costs and other non-recurring expenses, pre-tax | $2,877 | $846 | $2,031 | ** | | Remeasurement of finance lease obligation attributable to Viad, pre-tax | $512 | $(639) | $1,151 | ** | | Tax expense (benefit) on above items | $(201) | $249 | $(450) | ** | | Favorable tax matters | $- | $(2,103) | $2,103 | (100.0%) | | Adjusted net loss | $(21,746) | $(22,005) | $259 | 1.2% | | Adjusted diluted EPS | $(1.13) | $(1.15) | $0.02 | 1.7% | Consolidated Adjusted EBITDA Reconciliation This table reconciles Viad Corp's Q1 2024 net loss attributable to Viad to consolidated Adjusted EBITDA, detailing adjustments for interest, taxes, depreciation, and other items | Metric | Q1 2024 (Thousands) | Q1 2023 (Thousands) | $ Change | % Change | | :------------------------------------ | :------------------ | :------------------ | :------- | :------- | | Net loss attributable to Viad | $(25,117) | $(20,869) | $(4,248) | (20.4%) | | Net interest expense | $11,845 | $12,249 | $(404) | (3.3%) | | Income tax expense (benefit) | $887 | $(578) | $1,465 | ** | | Depreciation and amortization | $13,320 | $12,475 | $845 | 6.8% | | Restructuring charges | $116 | $453 | $(337) | (74.4%) | | Start-up costs | $1,940 | $692 | $1,248 | ** | | Transaction-related costs | $862 | $29 | $833 | ** | | Remeasurement of finance lease obligation | $1,004 | $(1,252) | $2,256 | ** | | Consolidated Adjusted EBITDA | $4,311 | $3,392 | $919 | 27.1% | Segment Adjusted EBITDA Reconciliation This table reconciles Viad Corp's Q1 2024 Adjusted EBITDA for Pursuit, GES, Spiro, and GES Exhibitions, including their respective margins | Segment | Q1 2024 (Thousands) | Q1 2023 (Thousands) | $ Change | % Change | | :-------------------------- | :------------------ | :------------------ | :------- | :------- | | Pursuit Adjusted EBITDA | $(11,148) | $(10,315) | $(833) | (8.1%) | | Total GES Adjusted EBITDA | $18,915 | $16,744 | $2,171 | 13.0% | | Spiro Adjusted EBITDA | $4,640 | $3,737 | $903 | 24.2% | | GES Exhibitions Adjusted EBITDA | $14,275 | $13,007 | $1,268 | 9.7% | | Pursuit Adjusted EBITDA margin | (29.9%) | (31.6%) | | 1.6% | | Total GES Adjusted EBITDA margin | 8.0% | 7.3% | | 0.7% | | Spiro Adjusted EBITDA Margin | 7.6% | 6.2% | | 1.4% | | GES Exhibitions Adjusted EBITDA Margin | 8.1% | 7.7% | | 0.4% | Legal Disclosures & Investor Relations This section provides legal disclaimers regarding forward-looking statements and non-GAAP measures, along with contact information for investor relations Forward-Looking Statements This section identifies forward-looking statements and outlines risks that could cause actual results to differ, directing readers to the Form 10-K for comprehensive risk discussions - The press release contains forward-looking statements, identified by words such as 'will,' 'expect,' 'plan,' 'believe,' and 'outlook,' which are subject to risks and uncertainties[17] - Important factors that could cause actual results to differ include general economic uncertainty, travel industry disruptions, indebtedness, seasonality, project delays, competition, and cybersecurity threats[18] - Readers are advised to refer to Item 1A, 'Risk Factors,' of the company's most recent annual report on Form 10-K for a more complete discussion of risks[18] Forward-Looking Non-GAAP Measures Viad has not quantitatively reconciled its adjusted EBITDA guidance to GAAP due to the unpredictability of certain reconciling items that could significantly impact GAAP results - The company has not quantitatively reconciled its guidance for adjusted EBITDA to its most comparable GAAP financial measure[19] - This is because certain reconciling items, such as income taxes, interest expense, restructuring charges, and attraction start-up costs, are out of the company's control or cannot be reasonably predicted[19] - The unavailable reconciling items could significantly impact the company's results as reported under GAAP[19] Investor Contact Contact information for Viad Corp's Investor Relations department is provided for all investor inquiries - For investor relations inquiries, contact Carrie Long or Michelle Porhola at (602) 207-2681 or ir@viad.com[20]