Viad(US:VVI)2023-11-05 11:47Financial Performance and Key Metrics - Net income attributable to Viad was $41.3 million for Q3 2023, an increase of approximately $3.2 million from Q3 2022 [9] - Consolidated adjusted EBITDA was $86.3 million, up approximately $4.3 million year-over-year, primarily due to strong growth and margin performance at Pursuit [9][10] - Consolidated revenue reached $365.9 million, approximately $11 million above the midpoint of guidance, with a year-over-year revenue decline anticipated due to timing of major non-annual shows and the sale of a noncore business [9][10] Business Line Performance - Pursuit's Q3 revenue grew 14% to $186.9 million, driven by increased international tourists and investments in experiences [10][11] - GES delivered consolidated revenue of $179 million with adjusted EBITDA of negative $2 million, both at the high end of guidance ranges [11][12] - Pursuit's adjusted EBITDA increased to $91.8 million, with a margin improvement of 330 basis points to 49.1% [11][12] Market Data and Key Metrics - Pursuit's attractions ticket revenue grew 18% year-over-year, with a 15% increase in visitors [10] - GES Exhibitions posted revenue growth of about 19% over the prior year, with same-show revenue growth of 14% from U.S. exhibitions [12] - GES's full year underlying revenue growth is expected to be about 15%, excluding impacts from major non-annual shows and the sale of ON Services [31] Company Strategy and Industry Competition - The company is focused on a "Refresh-Build-Buy" growth strategy, aiming to triple Pursuit's adjusted EBITDA by the end of 2024 [24] - GES is positioned for continued growth with favorable trends in live events and experiential marketing, targeting an adjusted EBITDA margin of greater than 8% by 2024 [33][34] - The company remains committed to creating extraordinary experiences and strong returns for shareholders [35] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the growth outlook for 2023 and 2024, driven by strong demand for leisure travel and live events [6][7] - The company anticipates continued visitation growth, particularly in Western Canada, supported by improved international travel [39][40] - Management highlighted the importance of maintaining a lean cost structure and improving efficiency to enhance profitability [33][34] Other Important Information - The company ended Q3 with total liquidity of $201.3 million, reflecting strong cash flows from operations [14] - A $70 million prepayment of the term loan B was made, providing a lower cost of debt and increased flexibility [15] - The company expects operating cash outflows in Q4 to be approximately $37 million to $27 million, with capital expenditures of about $20 million to $25 million [15] Q&A Session Summary Question: Development timeline and cost for Golden SkyBridge - Management is in the master planning phase for potential expansions and will provide updates as developments occur [37] Question: Impact of weather on visitation in Western Canada - Management noted that strong visitation continued through the fall, aided by favorable weather conditions [38] Question: Expected growth in visitation for 2024 - Management is optimistic about continued growth in visitation, particularly with improved international travel [39][40] Question: Future margin growth for GES - Management indicated that there is significant room for margin improvement beyond the 8% target for 2024, driven by efficiency initiatives and increased event sizes [41] Question: Recovery of square footage in GES - Management expects meaningful progress in closing the gap on square footage compared to 2019 levels over the next few years [43] Question: Performance of Spiro business - Management anticipates significant growth in Spiro as investments made in 2023 begin to pay off [44] Question: Performance of new attractions in Pursuit - Management confirmed that new attractions are performing well, with ample room for continued growth in visitation and pricing [46] Question: RevPAR growth and demand for high-end experiences - Management is confident in the continued demand for high-end experiences and expects RevPAR growth to persist [62]