8-K
Pursuit Attractions & Hospitality, Inc. (PRSU)
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 2022
VIAD CORP
(Exact name of registrant as specified in its charter)
| Delaware | 001-11015 | 36-1169950 |
|---|---|---|
| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission File Number) | (IRS Employer<br><br> <br>Identification No.) |
| 7000 East 1st Avenue<br><br> <br>Scottsdale, Arizona | 85251-4304 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (602) 207-1000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions \(see General Instruction A.2. below\):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br> <br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $1.50 Par Value | VVI | New York Stock Exchange |
| Preferred Stock Purchase Rights | __ | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 3, 2022, we issued a press release announcing our earnings for the third quarter ended September 30, 2022. A copy of the earnings press release is furnished as Exhibit 99.1 to this current report.
This press release, including Exhibit 99.1, will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and it will not be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure
On November 3, 2022, we posted an investor presentation to our website at www.viad.com. The information found on, or otherwise accessible through, our website is not incorporated by reference herein. A copy of the investor presentation is furnished as Exhibit 99.2 to this current report.
This investor presentation, including Exhibit 99.2, will not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section and it will not be incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit<br><br> <br>Number | Description |
|---|---|
| 99.1 | Viad Corp<br> Press Release dated November 3 , 2022 |
| 99.2 | Investor Presentation dated November 3, 2022 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Viad Corp | ||
|---|---|---|
| (Registrant) | ||
| November 3, 2022 | By: | /s/ Leslie S. Striedel |
| Leslie S. Striedel | ||
| Chief Accounting Officer |
Exhibit 99.1
NEWS FOR IMMEDIATE RELEASE
Viad Corp Reports Results for the 2022 Third Quarter
| ● | Q3’22 results were significantly ahead of 2021, in line with prior guidance |
|---|---|
| ● | Pursuit posted record revenue driven by new experiences and strengthening international leisure travel |
| --- | --- |
| ● | GES delivered strong growth driven by continued industry recovery, improved cost structure, and solid execution |
| --- | --- |
SCOTTSDALE, November 3, 2022 -- Viad Corp (NYSE: VVI), a leading provider of experiential leisure travel and live events and marketing experiences, today reported net income attributable to Viad of $40.1 million for the 2022 third quarter.
Steve Moster, Viad’s president and chief executive officer, commented, “We delivered substantial growth during the third quarter as Pursuit and GES both experienced stronger demand. Revenue increased nearly 64 percent year-over-year and consolidated Adjusted EBITDA reached $82 million, surpassing the amount we realized in the 2019 third quarter.”
Moster continued, “Our actions to scale Pursuit, transform GES Exhibitions’ cost structure, and strengthen Spiro’s capabilities are accelerating our growth as we capitalize on the recovery of our industries. I am very pleased with our performance thus far and excited about our trajectory.”
Third Quarter 2022 Financial Highlights
| Three months ended September 30, | ||||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | 2022 | 2021 | Change | |||||
| Revenue | $ | 382.7 | $ | 233.6 | ||||
| Pursuit Revenue | 163.8 | 117.6 | ||||||
| GES Revenue | 218.9 | 116.0 | ||||||
| Net income attributable to Viad | $ | 40.1 | $ | 15.1 | ||||
| Consolidated Adjusted EBITDA* | $ | 82.0 | $ | 52.3 | ||||
| Pursuit Adjusted EBITDA* | 75.1 | 59.6 | ||||||
| GES Adjusted EBITDA* | 10.7 | (4.2 | ) | |||||
| Corporate Adjusted EBITDA* | (3.8 | ) | (3.1 | ) | ) |
All values are in US Dollars.
* 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.
Net income attributable to Viad improved by $25 million from the 2021 third quarter primarily driven by higher revenue at GES and Pursuit.
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Pursuit Results
Pursuit’s third quarter revenue increased $46.2 million (39%) from the 2021 quarter. Pursuit’s same-store revenue from experiences that were owned and open prior to 2021 was $145.1 million, up $34.9 million from the 2021 third quarter primarily due to stronger visitation at our Canadian experiences, which were impacted in 2021 by border restrictions. Revenue from new experiences opened or acquired from 2021 forward was $18.7 million versus $7.4 million in the prior year quarter, reflecting the continued ramping of Sky Lagoon and Golden Skybridge and the additions of FlyOver Las Vegas and Glacier Raft Company.
Pursuit’s third quarter adjusted EBITDA increased by $15.5 million versus the 2021 third quarter primarily due to the increase in revenue.
Regarding Pursuit’s results, Moster commented, “Pursuit delivered significant year-over-year growth during the third quarter as international tourism to Canada and Iceland improved versus 2021 and our U.S. hotels and attractions continued to post very strong results. Although we haven’t yet seen a full recovery of long-haul international guests to our Canadian experiences, Pursuit continues to achieve record levels of revenue due to our ongoing Refresh, Build, Buy efforts. We are driving growth through investments in new attractions and hotels, as well as upgraded food and beverage and retail offerings across our existing portfolio.”
Moster continued, “As long-haul leisure travel continues to recover and awareness of our newest attractions builds, we expect strong growth will continue beyond 2022.”
GES Results
GES’ third quarter revenue increased $102.9 million (89%) from the 2021 third quarter and Adjusted EBITDA improved by $14.9 million. These improvements are primarily due to increased live event activity as compared to the 2021 third quarter.
Regarding GES’ overall results, Moster commented, “GES posted strong third quarter results as live event activity continued to improve and we realized the benefits of an improved cost structure. Same-show revenues for events produced by our U.S. exhibitions team grew to 91% of 2019 pre-pandemic levels, up from 46% in the 2021 third quarter, and we continued to see solid spending from Spiro’s corporate clients.”
Moster continued, “The benefits of our cost structure improvements are apparent when comparing our third quarter results to those achieved in the 2019 third quarter. On essentially the same level of revenue, we delivered adjusted EBITDA that was $13.5 million better than the 2019 third quarter. I remain confident that the actions we took during the pandemic have positioned GES Exhibitions and Spiro for greater success in the future.”
The following table provides a comparison of 2022 third quarter revenue and Adjusted EBITDA to the comparable period in 2021 for GES’ two reportable segments.
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| Three months ended September 30, | |||||||
|---|---|---|---|---|---|---|---|
| (in millions) | 2022 | 2021 | Change | ||||
| Revenue: | |||||||
| Spiro | $ | 73.3 | $ | 37.9 | |||
| GES Exhibitions | 147.9 | 81.1 | |||||
| Inter-segment Eliminations | (2.2 | ) | (3.0 | ) | |||
| Total GES | $ | 218.9 | $ | 116.0 | |||
| Adjusted EBITDA*: | |||||||
| Spiro | $ | 4.7 | $ | 0.9 | |||
| GES Exhibitions | 6.0 | (5.1 | ) | ||||
| Total GES | $ | 10.7 | $ | (4.2 | ) |
All values are in US Dollars.
* 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.
Balance Sheet and Cash Flow Highlights
We ended the third quarter with total liquidity of $165.8 million, comprising cash and cash equivalents of $79.2 million and $86.6 million of capacity available on our revolving credit facility ($100 million total facility size, less $13.4 million in letters of credit). Our debt totaled $479.4 million, including $397 million outstanding on our Term Loan B, financing lease obligations of approximately $60 million (which primarily comprises real estate leases at Pursuit), and approximately $22 million in other debt.
Our 2022 third quarter cash flow from operations was an inflow of approximately $61 million, our capital expenditures totaled approximately $23 million, and we paid approximately $2 million in cash dividends on our convertible preferred equity. Our net debt payments during the quarter were approximately $8 million, including $15 million on our revolver offset in part by other borrowings of approximately $7 million.
Moster commented, “During the third quarter, we completed construction of and opened our new Forest Park Hotel in downtown Jasper and continued to make progress with other growth investments including FlyOver Chicago and a new mountain coaster at our Golden Skybridge attraction. We remain focused on prudent cash management to maintain a strong liquidity position while also making smart investments in high-return growth opportunities through Pursuit’s Refresh, Build, Buy strategy.”
2022 Outlook
Regarding Viad’s outlook, Moster commented, “We have experienced very strong recovery across our businesses this year and we expect that will continue into the fourth quarter. At Pursuit, we’ll enter a seasonally slower part of the year, but we expect to deliver higher adjusted EBITDA as compared to the 2021 fourth quarter as same-store revenue improves and our newer year-round attractions continue to grow. At GES, we expect the recent positive trends we have experienced in same-show revenue and corporate client spending will continue and result in higher fourth quarter revenue than we experienced in 2021.”
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Our guidance for Adjusted EBITDA is as follows:
| (in millions) | Fourth Quarter | Full Year | Key Assumptions for Q4 | |
|---|---|---|---|---|
| Pursuit | $(9) to $(5) | $70 to $74 | ● | Canada Q4 same store revenue improves<br> year-over-year during this seasonally slow quarter |
| (vs. negative $9.9 in 2021) | (vs. $42.7 in 2021 and prior guidance of $70 to $80) | ● | New year-round experiences<br> continue to ramp up as guest awareness builds | |
| ● | Revenue management efforts<br> and pricing power help offset wage rate and other inflationary pressures | |||
| GES | $6 to $11 | $54 to $60 | ● | Exhibitions same-show revenue will generally remain at or better than 90% of pre-pandemic levels in Q4 |
| (vs. $9.6 in 2021) | (vs. negative $30.4 in 2021 and prior guidance of $50 to $60) | ● | Experiential marketing budgets of major Spiro clients will remain at 80%+ of pre-pandemic levels | |
| ● | SG&A higher year-over-year to support increased business<br> activity and future revenue growth | |||
| Corporate | ~$(3.5) | ~$(13.5) | ● | Run rate remains similar to YTD |
Conference Call Details
Management will host a conference call to review third quarter 2022 results on Thursday, November 3, 2022, 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://www.netroadshow.com/events/login?show=7bb85684&confId=41918. 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 (866) 813-9403 or (929) 458-6194 and entering the conference ID 371624.
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, Montana, the Canadian Rockies, Vancouver, Reykjavik, and Las Vegas, as well as new experiences planned in Chicago and Toronto. Pursuit’s collection includes attractions, lodges and hotels, and sightseeing tours that connect guests with iconic places.
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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; |
| --- | --- |
| ● | 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; |
| --- | --- |
| ● | 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<br> improper handling of such data. |
| --- | --- |
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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.
Contact
Carrie Long or Michelle Porhola
Investor Relations
(602) 207-2681
ir@viad.com
| VIAD CORP AND SUBSIDIARIES | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TABLE ONE - QUARTERLY RESULTS | ||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
| (in thousands, except per share data) | 2022 | 2021 | Change | % Change | 2022 | 2021 | Change | % Change | ||||||||||||||
| Revenue: | ||||||||||||||||||||||
| Pursuit | $ | 163,796 | $ | 117,555 | 39.3 | % | 265,179 | 163,658 | 62.0 | % | ||||||||||||
| GES: | ||||||||||||||||||||||
| Spiro | 73,277 | 37,866 | 93.5 | % | $ | 205,518 | $ | 61,869 | ** | |||||||||||||
| GES Exhibitions | 147,872 | 81,138 | 82.2 | % | 414,303 | 101,347 | ** | |||||||||||||||
| Inter-segment eliminations | (2,224 | ) | (2,960 | ) | 24.9 | % | (5,716 | ) | (3,107 | ) | ) | -84.0 | % | |||||||||
| Total GES | 218,925 | 116,044 | 88.7 | % | $ | 614,105 | $ | 160,109 | ** | |||||||||||||
| Total revenue | $ | 382,721 | $ | 233,599 | 63.8 | % | $ | 879,284 | $ | 323,767 | ** | |||||||||||
| Segment operating income (loss) | ||||||||||||||||||||||
| Pursuit | $ | 64,710 | $ | 49,601 | 30.5 | % | 49,083 | 23,183 | ** | |||||||||||||
| GES: | ||||||||||||||||||||||
| Spiro | 3,720 | (399 | ) | ** | 18,328 | (14,779 | ) | ** | ||||||||||||||
| GES Exhibitions | 2,870 | (9,100 | ) | ** | 17,788 | (41,521 | ) | ** | ||||||||||||||
| Total GES | 6,590 | (9,499 | ) | ** | 36,116 | (56,300 | ) | ** | ||||||||||||||
| Segment operating income (loss) | $ | 71,300 | $ | 40,102 | 77.8 | % | $ | 85,199 | $ | (33,117 | ) | ** | ||||||||||
| Corporate eliminations | 17 | 17 | 0.0 | % | 51 | 52 | ) | -1.9 | % | |||||||||||||
| Corporate activities (Note A) | (3,768 | ) | (3,093 | ) | ) | -21.8 | % | (9,881 | ) | (8,104 | ) | ) | -21.9 | % | ||||||||
| Restructuring charges (Note B) | (1,387 | ) | (2,186 | ) | 36.6 | % | (3,467 | ) | (5,799 | ) | 40.2 | % | ||||||||||
| Impairment charges | - | - | ** | (583 | ) | - | ) | ** | ||||||||||||||
| Other expense | (280 | ) | (466 | ) | 39.9 | % | (1,530 | ) | (1,563 | ) | 2.1 | % | ||||||||||
| Net interest expense (Note C) | (10,252 | ) | (9,518 | ) | ) | -7.7 | % | (23,890 | ) | (20,168 | ) | ) | -18.5 | % | ||||||||
| Income (loss) from continuing operations before income taxes | 55,630 | 24,856 | ** | 45,899 | (68,699 | ) | ** | |||||||||||||||
| Income tax expense (Note D) | (9,802 | ) | (5,329 | ) | ) | -83.9 | % | (10,579 | ) | (118 | ) | ) | ** | |||||||||
| Income (loss) from continuing operations | 45,828 | 19,527 | ** | 35,320 | (68,817 | ) | ** | |||||||||||||||
| Income (loss) from discontinued operations | (42 | ) | 248 | ) | ** | 285 | 534 | ) | -46.6 | % | ||||||||||||
| Net income (loss) | 45,786 | 19,775 | ** | 35,605 | (68,283 | ) | ** | |||||||||||||||
| Net income attributable to noncontrolling interest | (5,729 | ) | (5,004 | ) | ) | -14.5 | % | (4,976 | ) | (3,049 | ) | ) | -63.2 | % | ||||||||
| Net loss attributable to redeemable noncontrolling interest | 88 | 296 | ) | -70.3 | % | 354 | 1,221 | ) | -71.0 | % | ||||||||||||
| Net income (loss) attributable to Viad | $ | 40,145 | $ | 15,067 | ** | $ | 30,983 | $ | (70,111 | ) | ** | |||||||||||
| Amounts Attributable to Viad: | ||||||||||||||||||||||
| Income (loss) from continuing operations | $ | 40,187 | $ | 14,819 | ** | $ | 30,698 | $ | (70,645 | ) | ** | |||||||||||
| Income (loss) from discontinued operations | (42 | ) | 248 | ) | ** | 285 | 534 | ) | -46.6 | % | ||||||||||||
| Net income (loss) | $ | 40,145 | $ | 15,067 | ** | $ | 30,983 | $ | (70,111 | ) | ** | |||||||||||
| Income (loss) per common share attributable to Viad (Note E): | ||||||||||||||||||||||
| Basic income (loss) per common share | $ | 1.40 | $ | 0.46 | ** | $ | 0.89 | $ | (3.77 | ) | ** | |||||||||||
| Diluted income (loss) per common share | $ | 1.38 | $ | 0.46 | ** | $ | 0.89 | $ | (3.77 | ) | ** | |||||||||||
| Weighted-average common shares outstanding: | ||||||||||||||||||||||
| Basic weighted-average outstanding common shares | 20,612 | 20,420 | 0.9 | % | 20,567 | 20,396 | 0.8 | % | ||||||||||||||
| Additional dilutive shares related to share-based compensation | 277 | 322 | ) | -14.0 | % | 214 | - | ** | ||||||||||||||
| Diluted weighted-average outstanding common shares | 20,889 | 20,742 | 0.7 | % | 20,781 | 20,396 | 1.9 | % | ||||||||||||||
| Adjusted EBITDA* by Reportable Segment: | ||||||||||||||||||||||
| Pursuit | $ | 75,085 | $ | 59,593 | 26.0 | % | $ | 79,200 | $ | 52,543 | 50.7 | % | ||||||||||
| GES: | ||||||||||||||||||||||
| Spiro | 4,688 | 890 | ** | 21,180 | (10,709 | ) | ** | |||||||||||||||
| GES Exhibitions | 5,997 | (5,115 | ) | ** | 27,356 | (29,303 | ) | ** | ||||||||||||||
| Total GES | 10,685 | (4,225 | ) | ** | 48,536 | (40,012 | ) | ** | ||||||||||||||
| Corporate | (3,811 | ) | (3,064 | ) | ) | -24.4 | % | (9,613 | ) | (7,390 | ) | ) | -30.1 | % | ||||||||
| Consolidated Adjusted EBITDA | 81,959 | 52,304 | 56.7 | % | 118,123 | 5,141 | ** | |||||||||||||||
| As of September 30, | ||||||||||||||||||||||
| Capitalization Data: | 2022 | 2021 | Change | % Change | ||||||||||||||||||
| Cash and cash equivalents | 79,151 | 110,756 | ) | -28.5 | % | |||||||||||||||||
| Total debt | 479,378 | 469,905 | 2.0 | % | ||||||||||||||||||
| Viad shareholders' equity | 7,759 | 25,608 | ) | -69.7 | % | |||||||||||||||||
| Non-controlling interests (redeemable and non-redeemable) | 88,886 | 91,902 | ) | -3.3 | % | |||||||||||||||||
| Convertible Series A Preferred Stock (Note F): | ||||||||||||||||||||||
| 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 | % |
All values are in US Dollars.
| * Refer to Table Two for a discussion and reconciliation of this non-GAAP financial measure to its most directly comparable<br> 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<br> Viad's balance sheet. |
| VIAD CORP AND SUBSIDIARIES | ||||||||||||||||||||||
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| TABLE ONE - NOTES TO QUARTERLY RESULTS | ||||||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||||||
| (A) | Corporate Activities — The increase in corporate activities expense during the three and nine months ended September 30,<br> 2022 was primarily due to higher performance-based compensation expense. | |||||||||||||||||||||
| (B) | Restructuring Charges — Restructuring charges during the three and nine months ended September 30, 2022 and 2021 were<br> primarily related to facility closures and severance at GES. In response to the COVID-19 pandemic, we accelerated our transformation and streamlining efforts at GES to significantly reduce costs and create a lower and more flexible<br> cost structure focused on servicing our more profitable market segments. | |||||||||||||||||||||
| (C) | Net Interest Expense — The increase in interest expense during the three and nine months ended September 30, 2022 was<br> primarily due to higher interest rates and higher debt balances in 2022, offset in part by $0.1 million in capitalized interest recorded during the three months ended September 30, 2022 and $2.7 million during the nine months ended<br> September 30, 2022. | |||||||||||||||||||||
| (D) | Income Tax Expense – The effective rate was 18% for the three months ended September 30, 2022 and 21% for the three<br> months ended September 30, 2021. The effective rate was 23% for the nine months ended September 30, 2022 and 0% for the nine months ended September 30, 2021. The effective tax rates differed from the blended statutory rate primarily<br> as a result of excluding the tax expense or benefit in jurisdictions where we have a valuation allowance. The minimal tax expense recorded for the nine months ended September 30, 2021 on a pre-tax loss was due to the minimal pre-tax<br> income earned in jurisdictions with no valuation allowance. | |||||||||||||||||||||
| (E) | Income (Loss) per Common Share — We apply the two-class method in calculating income (loss) per common share as preferred<br> 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<br> share. | |||||||||||||||||||||
| Diluted income (loss) per common share is calculated using the more dilutive of the two-class method or as-converted<br> 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<br> 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<br> stock. | ||||||||||||||||||||||
| Additionally, the adjustment to the carrying value of redeemable non-controlling interests is reflected in income (loss)<br> per common share. | ||||||||||||||||||||||
| The components of basic and diluted income (loss) per share are as follows: | ||||||||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in thousands) | 2022 | 2021 | Change | % Change | 2022 | 2021 | Change | % Change | ||||||||||||||
| Net income (loss) attributable to Viad | $ | 40,145 | $ | 15,067 | ** | $ | 30,983 | $ | (70,111 | ) | ** | |||||||||||
| Convertible preferred stock dividends paid in cash | (1,950 | ) | (1,950 | ) | 0.0 | % | (5,850 | ) | (1,950 | ) | ) | ** | ||||||||||
| Convertible preferred stock dividends paid in kind | - | - | ** | - | (3,821 | ) | -100.0 | % | ||||||||||||||
| Adjustment to the redemption value of redeemable noncontrolling interest | - | (488 | ) | -100.0 | % | (763 | ) | (1,091 | ) | 30.1 | % | |||||||||||
| Undistributed income (loss) attributable to Viad | 38,195 | 12,629 | ** | 24,370 | (76,973 | ) | ** | |||||||||||||||
| Less: Allocation to participating securities | (9,368 | ) | (3,141 | ) | ) | ** | (5,991 | ) | - | ) | ** | |||||||||||
| Net income (loss) allocated to Viad common shareholders (basic) | $ | 28,827 | $ | 9,488 | ** | $ | 18,379 | $ | (76,973 | ) | ** | |||||||||||
| Add: Allocation to participating securities | 94 | 36 | ** | 46 | - | ** | ||||||||||||||||
| Net income (loss) allocated to Viad common shareholders (diluted) | $ | 28,921 | $ | 9,524 | ** | $ | 18,425 | $ | (76,973 | ) | ** | |||||||||||
| Basic weighted-average outstanding common shares | 20,612 | 20,420 | 0.9 | % | 20,567 | 20,396 | 0.8 | % | ||||||||||||||
| Additional dilutive shares related to share-based compensation | 277 | 322 | ) | -14.0 | % | 214 | - | ** | ||||||||||||||
| Diluted weighted-average outstanding common shares | 20,889 | 20,742 | 0.7 | % | 20,781 | 20,396 | 1.9 | % |
All values are in US Dollars.
| (F) | Convertible Series A Preferred Stock — On August 5, 2020, we entered into an Investment Agreement with funds managed by private equity<br> 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<br> 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. A total of $6.8<br> million of dividends have been paid in kind, including $3.8 million during the first and second quarters of 2021. We began paying preferred stock dividends in cash during the 2021 third quarter and we intend to pay in cash for the<br> foreseeable future. |
|---|
| 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<br> 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<br> 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<br> 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<br> 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<br> 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<br> 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<br> 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<br> 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<br> corporate development projects, both from a valuation and return perspective. | ||||||||||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in thousands, except per share data) | 2022 | 2021 | Change | % Change | 2022 | 2021 | Change | % Change | ||||||||||||||
| Income (loss) before other items: | ||||||||||||||||||||||
| Net income (loss) attributable to Viad | $ | 40,145 | $ | 15,067 | ** | $ | 30,983 | $ | (70,111 | ) | ** | |||||||||||
| (Income) loss from discontinued operations attributable to Viad | 42 | (248 | ) | ** | (285 | ) | (534 | ) | 46.6 | % | ||||||||||||
| Income (loss) from continuing operations attributable to Viad | 40,187 | 14,819 | ** | 30,698 | (70,645 | ) | ** | |||||||||||||||
| Restructuring charges, pre-tax | 1,387 | 2,186 | ) | -36.6 | % | 3,467 | 5,799 | ) | -40.2 | % | ||||||||||||
| Impairment charges, pre-tax | - | - | ** | 583 | - | ** | ||||||||||||||||
| Pension plan withdrawal, pre-tax | - | - | ** | - | 57 | ) | -100.0 | % | ||||||||||||||
| Acquisition-related costs and other non-recurring expenses, pre-tax (Note A) | 1,454 | 1,802 | ) | -19.3 | % | 3,312 | 6,324 | ) | -47.6 | % | ||||||||||||
| Tax benefit on above items | (127 | ) | (362 | ) | 64.9 | % | (265 | ) | (680 | ) | 61.0 | % | ||||||||||
| Income (loss) before other items | $ | 42,901 | $ | 18,445 | ** | $ | 37,795 | $ | (59,145 | ) | ** | |||||||||||
| The components of income (loss) before other items per share are as follows: | ||||||||||||||||||||||
| Income (loss) before other items (as reconciled above) | 42,901 | 18,445 | ** | 37,795 | (59,145 | ) | ** | |||||||||||||||
| Convertible preferred stock dividends paid in cash | (1,950 | ) | (1,950 | ) | 0.0 | % | (5,850 | ) | (1,950 | ) | ) | ** | ||||||||||
| Convertible preferred stock dividends paid in kind | - | - | ** | - | (3,821 | ) | -100.0 | % | ||||||||||||||
| Undistributed income (loss) before other items attributable to Viad (Note B) | 40,951 | 16,495 | ** | 31,945 | (64,916 | ) | ** | |||||||||||||||
| Less: Allocation to participating securities (Note C) | (9,943 | ) | (4,055 | ) | ) | ** | (7,792 | ) | - | ) | ** | |||||||||||
| Diluted income (loss) before other items allocated to Viad common shareholders | $ | 31,008 | $ | 12,440 | ** | $ | 24,153 | $ | (64,916 | ) | ** | |||||||||||
| Diluted weighted-average outstanding common shares | 20,889 | 20,742 | 0.7 | % | 20,781 | 20,396 | 1.9 | % | ||||||||||||||
| Income (loss) before other items per common share | $ | 1.48 | $ | 0.60 | ** | $ | 1.16 | $ | (3.18 | ) | ** |
All values are in US Dollars.
| (A) | Acquisition-related costs and other non-recurring expenses include: | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Three months ended September 30, | Nine months ended September 30, | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in thousands) | 2022 | 2021 | 2022 | 2021 | |||||
| Acquisition integration costs - Pursuit^1^ | $ | 17 | $ | - | $ | 136 | $ | 6 | |
| Acquisition transaction-related costs - Pursuit^1^ | 834 | 381 | 1,235 | 653 | |||||
| Acquisition transaction-related costs - Corporate^2^ | (69 | ) | 4 | 39 | 63 | ||||
| Attraction start-up costs^1, 3^ | 672 | 1,415 | 1,751 | 5,033 | |||||
| Other non-recurring expenses^2, 4^ | - | 2 | 151 | 569 | |||||
| Acquisition-related and other non-recurring expenses, pre-tax | $ | 1,454 | $ | 1,802 | $ | 3,312 | $ | 6,324 | |
| ^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 Las Vegas, Chicago, and<br> Toronto, the Sky Lagoon in Iceland, the Golden Skybridge and Forest Park Hotel in Canada. | |||||||||
| ^4^ Includes non-capitalizable fees and expenses related to Viad’s credit facility refinancing efforts. | |||||||||
| (B) | We exclude the adjustment to the redemption value of redeemable noncontrolling interest from the calculation of income<br> before other items per share as it is a non-cash adjustment that does not affect net income or loss attributable to Viad. | ||||||||
| --- | --- | ||||||||
| (C) | Preferred stock and unvested share-based payment awards that contain nonforteitable rights to dividends are considered<br> 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<br> table provides the share data used for calculating the allocation to participating securities if applicable: | ||||||||
| Three months ended September 30, | Nine months ended September 30, | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (in thousands) | 2022 | 2021 | 2022 | 2021 | |||||
| Weighted-average outstanding common shares | 20,889 | 20,742 | 20,781 | 20,396 | |||||
| Effect of participating convertible preferred shares (if applicable) | 6,674 | 6,674 | 6,674 | - | |||||
| Effect of participating non-vested shares (if applicable) | 24 | 87 | 30 | - | |||||
| Weighted-average shares including effect of participating interests (if applicable) | 27,587 | 27,503 | 27,485 | 20,396 | |||||
| ** Change is greater than +/- 100 percent |
| VIAD CORP AND SUBSIDIARIES | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TABLE TWO - NON-GAAP FINANCIAL MEASURES (CONTINUED) | ||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||
| Same-Store - The term<br> "same-store" is used within this document to refer to results without the impact of new experiences, if any, until such new experiences are included in the entirety of both comparable periods. Management believes that the<br> presentation of "same-store" results permits investors to better understand Viad's performance without the effects of new experiences. | ||||||||||||||||||
| Three months ended September 30, 2022 | Three months ended September 30, 2021 | |||||||||||||||||
| ($ in thousands) | As Reported | New<br><br> <br>Experiences<br><br> <br>(Note A) | Same-Store | As Reported | New<br><br> <br>Experiences<br><br> <br>(Note A) | Same-Store | ||||||||||||
| Viad Consolidated: | ||||||||||||||||||
| Revenue | $ | 382,721 | $ | 18,731 | $ | 363,990 | $ | 233,599 | $ | 7,377 | $ | 226,222 | ||||||
| Net income attributable to Viad | $ | 40,145 | $ | 15,067 | ||||||||||||||
| Net income attributable to noncontrolling interest | 5,729 | 5,004 | ||||||||||||||||
| Net loss attributable to redeemable noncontrolling interest | (88 | ) | (296 | ) | ||||||||||||||
| (Income) loss from discontinued operations | 42 | (248 | ) | |||||||||||||||
| Net interest expense | 10,252 | 9,518 | ||||||||||||||||
| Income tax expense | 9,802 | 5,329 | ||||||||||||||||
| Depreciation and amortization | 12,956 | 13,476 | ||||||||||||||||
| Restructuring charges | 1,387 | 2,186 | ||||||||||||||||
| Other expense | 280 | 466 | ||||||||||||||||
| Start-up costs (B) | 672 | 1,415 | ||||||||||||||||
| Acquisition transaction-related costs | 765 | 385 | ||||||||||||||||
| Integration costs | 17 | - | ||||||||||||||||
| Other non-recurring expenses | - | 2 | ||||||||||||||||
| Consolidated Adjusted EBITDA | $ | 81,959 | $ | 6,307 | $ | 75,652 | $ | 52,304 | $ | 3,118 | $ | 49,186 | ||||||
| Consolidated Adjusted EBITDA by Business: | ||||||||||||||||||
| Pursuit | $ | 75,085 | $ | 6,307 | $ | 68,778 | $ | 59,593 | $ | 3,118 | $ | 56,475 | ||||||
| Total GES | 10,685 | - | 10,685 | (4,225 | ) | - | (4,225 | ) | ||||||||||
| Total Segment EBITDA | 85,770 | 6,307 | 79,463 | 55,368 | 3,118 | 52,250 | ||||||||||||
| Corporate EBITDA | (3,811 | ) | - | (3,811 | ) | (3,064 | ) | - | (3,064 | ) | ||||||||
| Consolidated Adjusted EBITDA | $ | 81,959 | $ | 6,307 | $ | 75,652 | $ | 52,304 | $ | 3,118 | $ | 49,186 | ||||||
| Pursuit Adjusted EBITDA: | ||||||||||||||||||
| Revenue | $ | 163,796 | $ | 18,731 | $ | 145,065 | $ | 117,555 | $ | 7,377 | $ | 110,178 | ||||||
| Cost of services and products | (99,086 | ) | (14,743 | ) | (84,343 | ) | (67,954 | ) | (6,465 | ) | (61,489 | ) | ||||||
| Segment operating income | 64,710 | 3,988 | 60,722 | 49,601 | 912 | 48,689 | ||||||||||||
| Depreciation | 7,501 | 1,180 | 6,321 | 6,734 | 400 | 6,334 | ||||||||||||
| Amortization | 1,351 | 450 | 901 | 1,462 | 391 | 1,071 | ||||||||||||
| Start-up costs (B) | 672 | 672 | - | 1,415 | 1,415 | - | ||||||||||||
| Acquisition transaction-related costs | 834 | - | 834 | 381 | - | 381 | ||||||||||||
| Integration costs | 17 | 17 | - | - | - | - | ||||||||||||
| Adjusted EBITDA | $ | 75,085 | $ | 6,307 | $ | 68,778 | $ | 59,593 | $ | 3,118 | $ | 56,475 | ||||||
| Pursuit Operating margin | 39.5 | % | 21.3 | % | 41.9 | % | 42.2 | % | 12.4 | % | 44.2 | % | ||||||
| Pursuit Adjusted EBITDA margin | 45.8 | % | 33.7 | % | 47.4 | % | 50.7 | % | 42.3 | % | 51.3 | % | ||||||
| Total GES Adjusted EBITDA: | ||||||||||||||||||
| Revenue | $ | 218,925 | $ | - | $ | 218,925 | $ | 116,044 | $ | - | $ | 116,044 | ||||||
| Cost of services and products | (212,335 | ) | - | (212,335 | ) | (125,543 | ) | - | (125,543 | ) | ||||||||
| Segment operating income (loss) | 6,590 | - | 6,590 | (9,499 | ) | - | (9,499 | ) | ||||||||||
| Depreciation | 2,970 | - | 2,970 | 4,024 | - | 4,024 | ||||||||||||
| Amortization | 1,125 | - | 1,125 | 1,250 | - | 1,250 | ||||||||||||
| Total GES Adjusted EBITDA | $ | 10,685 | $ | - | $ | 10,685 | $ | (4,225 | ) | $ | - | $ | (4,225 | ) | ||||
| Total GES Operating margin | 3.0 | % | 3.0 | % | -8.2 | % | -8.2 | % | ||||||||||
| Total GES Adjusted EBITDA margin | 4.9 | % | 4.9 | % | -3.6 | % | -3.6 | % | ||||||||||
| GES Adjusted EBITDA by Reportable Segment: | ||||||||||||||||||
| Spiro | $ | 4,688 | $ | 4,688 | $ | 890 | $ | 890 | ||||||||||
| GES Exhibitions | 5,997 | 5,997 | (5,115 | ) | (5,115 | ) | ||||||||||||
| Total GES | $ | 10,685 | $ | - | $ | 10,685 | $ | (4,225 | ) | $ | - | $ | (4,225 | ) | ||||
| Spiro Revenue | $ | 73,277 | $ | - | $ | 73,277 | $ | 37,866 | $ | - | $ | 37,866 | ||||||
| Spiro Adjusted EBITDA Margin | 6.4 | % | 6.4 | % | 2.4 | % | 2.4 | % | ||||||||||
| GES Exhibitions Revenue | $ | 147,872 | $ | - | $ | 147,872 | $ | 81,138 | $ | - | $ | 81,138 | ||||||
| GES Exhibitions Adjusted EBITDA Margin | 4.1 | % | 4.1 | % | -6.3 | % | -6.3 | % | ||||||||||
| (A) New Experiences comprises the following attractions and hotel properties that were opened or acquired after January<br> 1, 2021: Sky Lagoon (opened May 2021), Golden Skybridge (acquired March 2021 and opened June 2021), FlyOver Las Vegas (opened September 2021), Glacier Raft Company (acquired April 2022), and Forest Park Hotel (opened August 2022)<br> and costs related to the development of new experiences. | ||||||||||||||||||
| (B) Includes costs related to the development of Pursuit's new FlyOver attractions in Las Vegas, Chicago, and Toronto,<br> and Forest Park Hotel in Canada. |
| VIAD CORP AND SUBSIDIARIES | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TABLE TWO - NON-GAAP FINANCIAL MEASURES (CONTINUED) | ||||||||||||||||||
| (UNAUDITED) | ||||||||||||||||||
| Same-Store - The term<br> "same-store" is used within this document to refer to results without the impact of new experiences, if any, until such new experiences are included in the entirety of both comparable periods. Management believes that the<br> presentation of "same-store" results permits investors to better understand Viad's performance without the effects of new experiences. | ||||||||||||||||||
| Nine months ended September 30, 2022 | Nine months ended September 30, 2021 | |||||||||||||||||
| ($ in thousands) | As Reported | New<br><br> <br>Experiences<br><br> <br>(Note A) | Same-Store | As Reported | New<br><br> <br>Experiences<br><br> <br>(Note A) | Same-Store | ||||||||||||
| Viad Consolidated: | ||||||||||||||||||
| Revenue | $ | 879,284 | $ | 33,219 | $ | 846,065 | $ | 323,767 | $ | 10,504 | $ | 313,263 | ||||||
| Net income (loss) attributable to Viad | $ | 30,983 | $ | (70,111 | ) | |||||||||||||
| Net income attributable to noncontrolling interest | 4,976 | 3,049 | ||||||||||||||||
| Net loss attributable to redeemable noncontrolling interest | (354 | ) | (1,221 | ) | ||||||||||||||
| Income from discontinued operations | (285 | ) | (534 | ) | ||||||||||||||
| Net interest expense | 23,890 | 20,168 | ||||||||||||||||
| Income tax expense | 10,579 | 118 | ||||||||||||||||
| Depreciation and amortization | 39,442 | 39,986 | ||||||||||||||||
| Restructuring charges | 3,467 | 5,799 | ||||||||||||||||
| Impairment charges | 583 | - | ||||||||||||||||
| Other expense | 1,530 | 1,563 | ||||||||||||||||
| Start-up costs (B) | 1,751 | 5,033 | ||||||||||||||||
| Acquisition transaction-related costs | 1,274 | 716 | ||||||||||||||||
| Integration costs | 136 | 6 | ||||||||||||||||
| Other non-recurring expenses (C) | 151 | 569 | ||||||||||||||||
| Consolidated Adjusted EBITDA | $ | 118,123 | $ | 6,175 | $ | 111,948 | $ | 5,141 | $ | 4,169 | $ | 972 | ||||||
| Consolidated Adjusted EBITDA by Business: | ||||||||||||||||||
| Pursuit | $ | 79,200 | $ | 6,175 | $ | 73,025 | $ | 52,543 | $ | 4,169 | $ | 48,374 | ||||||
| Total GES | 48,536 | - | 48,536 | (40,012 | ) | - | (40,012 | ) | ||||||||||
| Total Segment EBITDA | 127,736 | 6,175 | 121,561 | 12,531 | 4,169 | 8,362 | ||||||||||||
| Corporate EBITDA | (9,613 | ) | - | (9,613 | ) | (7,390 | ) | - | (7,390 | ) | ||||||||
| Consolidated Adjusted EBITDA | $ | 118,123 | $ | 6,175 | $ | 111,948 | $ | 5,141 | $ | 4,169 | $ | 972 | ||||||
| Pursuit Adjusted EBITDA: | ||||||||||||||||||
| Revenue | $ | 265,179 | $ | 33,219 | $ | 231,960 | $ | 163,658 | $ | 10,504 | $ | 153,154 | ||||||
| Cost of services and products | (216,096 | ) | (33,875 | ) | (182,221 | ) | (140,475 | ) | (12,865 | ) | (127,610 | ) | ||||||
| Segment operating income (loss) | 49,083 | (656 | ) | 49,739 | 23,183 | (2,361 | ) | 25,544 | ||||||||||
| Depreciation | 23,149 | 3,672 | 19,477 | 19,737 | 459 | 19,278 | ||||||||||||
| Amortization | 3,846 | 1,272 | 2,574 | 3,931 | 1,038 | 2,893 | ||||||||||||
| Start-up costs (B) | 1,751 | 1,751 | - | 5,033 | 5,033 | - | ||||||||||||
| Acquisition transaction-related costs | 1,235 | - | 1,235 | 653 | - | 653 | ||||||||||||
| Integration costs | 136 | 136 | - | 6 | - | 6 | ||||||||||||
| Adjusted EBITDA | $ | 79,200 | $ | 6,175 | $ | 73,025 | $ | 52,543 | $ | 4,169 | $ | 48,374 | ||||||
| Pursuit Operating margin | 18.5 | % | -2.0 | % | 21.4 | % | 14.2 | % | -22.5 | % | 16.7 | % | ||||||
| Pursuit Adjusted EBITDA margin | 29.9 | % | 18.6 | % | 31.5 | % | 32.1 | % | 39.7 | % | 31.6 | % | ||||||
| Total GES Adjusted EBITDA: | ||||||||||||||||||
| Revenue | $ | 614,105 | $ | - | $ | 614,105 | $ | 160,109 | $ | - | $ | 160,109 | ||||||
| Cost of services and products | (577,989 | ) | - | (577,989 | ) | (216,409 | ) | - | (216,409 | ) | ||||||||
| Segment operating income (loss) | 36,116 | - | 36,116 | (56,300 | ) | - | (56,300 | ) | ||||||||||
| Depreciation | 9,112 | - | 9,112 | 12,573 | - | 12,573 | ||||||||||||
| Amortization | 3,308 | - | 3,308 | 3,715 | - | 3,715 | ||||||||||||
| Total GES Adjusted EBITDA | $ | 48,536 | $ | - | $ | 48,536 | $ | (40,012 | ) | $ | - | $ | (40,012 | ) | ||||
| Total GES Operating margin | 5.9 | % | 5.9 | % | -35.2 | % | -35.2 | % | ||||||||||
| Total GES Adjusted EBITDA margin | 7.9 | % | 7.9 | % | -25.0 | % | -25.0 | % | ||||||||||
| GES Adjusted EBITDA by Reportable Segment: | ||||||||||||||||||
| Spiro | $ | 21,180 | $ | 21,180 | $ | (10,709 | ) | $ | (10,709 | ) | ||||||||
| GES Exhibitions | 27,356 | 27,356 | (29,303 | ) | (29,303 | ) | ||||||||||||
| Total GES | $ | 48,536 | $ | - | $ | 48,536 | $ | (40,012 | ) | $ | - | $ | (40,012 | ) | ||||
| Spiro Revenue | $ | 205,518 | $ | - | $ | 205,518 | $ | 61,869 | $ | - | $ | 61,869 | ||||||
| Spiro Adjusted EBITDA Margin | 10.3 | % | 10.3 | % | -17.3 | % | -17.3 | % | ||||||||||
| GES Exhibitions Revenue | $ | 414,303 | $ | - | $ | 414,303 | $ | 101,347 | $ | - | $ | 101,347 | ||||||
| GES Exhibitions Adjusted EBITDA Margin | 6.6 | % | 6.6 | % | -28.9 | % | -28.9 | % | ||||||||||
| (A) New Experiences comprises the following attractions and hotel properties that were opened or acquired after January<br> 1, 2021: Sky Lagoon (opened May 2021), Golden Skybridge (acquired March 2021 and opened June 2021), FlyOver Las Vegas (opened September 2021), Glacier Raft Company (acquired April 2022), and Forest Park Hotel (opened August 2022)<br> and costs related to the development of new experiences. | ||||||||||||||||||
| (B) Includes costs related to the development of Pursuit's new FlyOver attractions in Las Vegas, Chicago, and Toronto,<br> the Sky Lagoon in Iceland, the Golden Skybridge, and Forest Park Hotel in Canada. | ||||||||||||||||||
| (C) Includes non-capitalizable fees and expenses related to Viad’s credit facility refinancing efforts. |
| VIAD CORP AND SUBSIDIARIES | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| TABLE TWO - NON-GAAP FINANCIAL MEASURES (CONTINUED) | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| The following table provides revenue and Adjusted EBITDA by quarter for 2021, along with reconciliations of Adjusted<br> EBITDA to the nearest GAAP measure, net income attributable to Viad. | |||||||||||||||
| 2021 | |||||||||||||||
| ($ in thousands) | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | Full Year | ||||||||||
| Viad Consolidated: | |||||||||||||||
| Net (loss) income attributable to Viad | $ | (43,152 | ) | $ | (42,026 | ) | $ | 15,067 | $ | (22,544 | ) | $ | (92,655 | ) | |
| Net (loss) income attributable to noncontrolling interest | (1,445 | ) | (510 | ) | 5,004 | (1,363 | ) | 1,686 | |||||||
| Net loss attributable to redeemable noncontrolling interest | (494 | ) | (431 | ) | (296 | ) | (545 | ) | (1,766 | ) | |||||
| (Income) loss from discontinued operations | (348 | ) | 62 | (248 | ) | (24 | ) | (558 | ) | ||||||
| Net interest expense | 5,085 | 5,565 | 9,518 | 8,156 | 28,324 | ||||||||||
| Income tax expense (benefit) | (3,045 | ) | (2,166 | ) | 5,329 | (1,906 | ) | (1,788 | ) | ||||||
| Depreciation and amortization | 13,177 | 13,333 | 13,476 | 13,764 | 53,750 | ||||||||||
| Restructuring charges | 2,826 | 787 | 2,186 | 267 | 6,066 | ||||||||||
| Other expense | 360 | 680 | 466 | 507 | 2,013 | ||||||||||
| Pension plan withdrawal | - | 57 | - | - | 57 | ||||||||||
| Start-up costs (A) | 1,564 | 2,054 | 1,415 | (289 | ) | 4,744 | |||||||||
| Acquisition transaction-related costs | 243 | 88 | 385 | 176 | 892 | ||||||||||
| Integration costs | 1 | 5 | - | - | 6 | ||||||||||
| Other non-recurring expenses (B) | 10 | 557 | 2 | - | 569 | ||||||||||
| Consolidated Adjusted EBITDA | $ | (25,218 | ) | $ | (21,945 | ) | $ | 52,304 | $ | (3,801 | ) | $ | 1,340 | ||
| Consolidated Adjusted EBITDA by Business: | |||||||||||||||
| Pursuit | $ | (9,061 | ) | $ | 2,011 | $ | 59,593 | $ | (9,854 | ) | $ | 42,689 | |||
| Total GES | (14,226 | ) | (21,561 | ) | (4,225 | ) | 9,649 | (30,363 | ) | ||||||
| Total Segment EBITDA | (23,287 | ) | (19,550 | ) | 55,368 | (205 | ) | 12,326 | |||||||
| Corporate EBITDA | (1,931 | ) | (2,395 | ) | (3,064 | ) | (3,596 | ) | (10,986 | ) | |||||
| Consolidated Adjusted EBITDA | $ | (25,218 | ) | $ | (21,945 | ) | $ | 52,304 | $ | (3,801 | ) | $ | 1,340 | ||
| Pursuit Adjusted EBITDA: | |||||||||||||||
| Revenue | $ | 9,790 | $ | 36,313 | $ | 117,555 | $ | 23,390 | $ | 187,048 | |||||
| Cost of services and products | (28,111 | ) | (44,410 | ) | (67,954 | ) | (41,964 | ) | (182,439 | ) | |||||
| Segment operating income (loss) | (18,321 | ) | (8,097 | ) | 49,601 | (18,574 | ) | 4,609 | |||||||
| Depreciation | 6,457 | 6,546 | 6,734 | 7,623 | 27,360 | ||||||||||
| Amortization | 1,030 | 1,439 | 1,462 | 1,177 | 5,108 | ||||||||||
| Start-up costs (A) | 1,564 | 2,054 | 1,415 | (289 | ) | 4,744 | |||||||||
| Acquisition transaction-related costs | 208 | 64 | 381 | 209 | 862 | ||||||||||
| Integration costs | 1 | 5 | - | - | 6 | ||||||||||
| Adjusted EBITDA | $ | (9,061 | ) | $ | 2,011 | $ | 59,593 | $ | (9,854 | ) | $ | 42,689 | |||
| Pursuit Operating margin | ** | -22.3 | % | 42.2 | % | -79.4 | % | 2.5 | % | ||||||
| Pursuit Adjusted EBITDA margin | -92.6 | % | 5.5 | % | 50.7 | % | -42.1 | % | 22.8 | % | |||||
| Total GES Adjusted EBITDA: | |||||||||||||||
| Revenue | $ | 19,145 | $ | 24,920 | $ | 116,044 | $ | 160,183 | $ | 320,292 | |||||
| Cost of services and products | (39,049 | ) | (51,817 | ) | (125,543 | ) | (155,494 | ) | (371,903 | ) | |||||
| Segment operating income (loss) | (19,904 | ) | (26,897 | ) | (9,499 | ) | 4,689 | (51,611 | ) | ||||||
| Depreciation | 4,433 | 4,116 | 4,024 | 3,746 | 16,319 | ||||||||||
| Amortization | 1,245 | 1,220 | 1,250 | 1,214 | 4,929 | ||||||||||
| Total GES Adjusted EBITDA | $ | (14,226 | ) | $ | (21,561 | ) | $ | (4,225 | ) | $ | 9,649 | $ | (30,363 | ) | |
| Total GES Operating margin | ** | ** | -8.2 | % | 2.9 | % | -16.1 | % | |||||||
| Total GES Adjusted EBITDA margin | -74.3 | % | -86.5 | % | -3.6 | % | 6.0 | % | -9.5 | % | |||||
| GES Adjusted EBITDA by Reportable Segment: | |||||||||||||||
| Spiro | $ | (5,542 | ) | $ | (6,057 | ) | $ | 890 | $ | 6,430 | $ | (4,279 | ) | ||
| GES Exhibitions | (8,684 | ) | (15,504 | ) | (5,115 | ) | 3,219 | (26,084 | ) | ||||||
| Total GES | $ | (14,226 | ) | $ | (21,561 | ) | $ | (4,225 | ) | $ | 9,649 | $ | (30,363 | ) | |
| Spiro Revenue | $ | 12,059 | $ | 11,944 | $ | 37,866 | $ | 54,718 | $ | 116,587 | |||||
| Spiro Adjusted EBITDA Margin | -46.0 | % | -50.7 | % | 2.4 | % | 11.8 | % | -3.7 | % | |||||
| GES Exhibitions Revenue | $ | 7,152 | $ | 13,057 | $ | 81,129 | $ | 108,152 | $ | 209,490 | |||||
| GES Exhibitions Adjusted EBITDA Margin | ** | ** | -6.3 | % | 3.0 | % | -12.5 | % | |||||||
| (A) Includes costs related to the development of Pursuit's new FlyOver attractions in Las Vegas, Chicago, and Toronto,<br> the Sky Lagoon in Iceland, the Golden Skybridge and Forest Park Hotel in Canada. | |||||||||||||||
| (B) Includes non-capitalizable fees and expenses related to Viad’s credit facility refinancing efforts. |
Exhibit 99.2
THIRD QUARTER 2022 EARNINGS CALL NOVEMBER 3, 2022
Forward-looking statements This presentation 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, initiatives, 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: 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; general economic uncertainty in key global markets and a worsening of global economic conditions; travel industry disruptions; seasonality of 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; 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 presentation except as required by applicable law or regulation. 2
NON-GAAP FINANCIAL MEASURES This document includes the presentation of “Adjusted EBITDA” and ”Income (Loss) Before Other Items”, 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 should be considered in addition to, but not as a substitute 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 it does not consider a variety of items affecting Viad’s consolidated financial performance as explained 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. Adjusted EBITDA is defined by management as net income attributable to Viad before income (loss) from discontinued operations, interest expense and interest income, income taxes, depreciation and amortization, acquisition-related costs, attraction start-up costs, restructuring charges, impairment charges, and the reduction/increase for income/loss attributable to non-redeemable and redeemable non-controlling interests. Adjusted EBITDA is considered a useful operating metric, in addition to net income attributable to Viad, as potential variations arising from non-recurring integration costs, non-cash amortization and depreciation, and non-operational expenses/income are eliminated, thus resulting in an additional measure considered to be indicative of Viad’s consolidated and segment 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. Income (Loss) Before Other Items is defined by management as net income attributable to Viad before income (loss) from discontinued operations, acquisition-related costs, attraction start-up costs, restructuring charges, impairment charges, other non-recurring expenses, and tax matters. Income (Loss) Before Other Items is considered a useful operating metric, in addition to net income attributable to Viad, as potential variations arising from non-operational expenses/income are eliminated, thus resulting in an additional measure considered to be indicative of Viad’s performance. 3 Forward-Looking Non-GAAP Measures The company has not quantitatively reconciled its guidance for adjusted EBITDA to its respective most comparable GAAP 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.
Q3’22 HIGHLIGHTS 4
FINANCIAL PERFORMANCE
6 strong Q3’22 RESULTS IN LINE WITH GUIDANCE 6 Revenue grew 64% or $149 million driven by 39% growth at Pursuit and 89% growth at GES Net income attributable to Viad nearly tripled as our actions to scale Pursuit, transform GES Exhibitions’ cost structure, and strengthen Spiro’s capabilities accelerated our growth Consolidated Adjusted EBITDA of $82 million surpassed the level achieved in Q3’19 GES Adjusted EBITDA was near the high-end of guidance range on continued strengthening of live event activity and great execution Pursuit Adjusted EBITDA was near the low-end of guidance range primarily due to fire and supply chain disruptions * Refer to Appendix for a discussion and reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure. (in millions) Q3’22 Q3’21 $ Change Revenue $ 382.7 $ 233.6 $ 149.1 Pursuit Revenue 163.8 117.6 46.2 GES Revenue 218.9 116.0 102.9 Net income attributable to Viad $ 40.1 $ 15.1 $ 25.1 Consolidated Adjusted EBITDA* $ 82.0 $ 52.3 $ 29.7 Pursuit Adjusted EBITDA* 75.1 59.6 15.5 GES Adjusted EBITDA* 10.7 (4.2) 14.9 Corporate Adjusted EBITDA* (3.8) (3.1) (0.7)
7 Pursuit Q3’22 RESULTS Year-over-year 7 New Experiences include: Forest Park Hotel (opened August 2022) Glacier Raft Co (acquired April 2022) FlyOver Las Vegas (opened September 2021) Golden Skybridge (acquired March 2021 and opened June 2021) Sky Lagoon (opened May 2021) (in millions) Q3’22 Q3’21 $ Change Revenue: Same Store $ 145.1 $ 110.2 $ 34.9 New Experiences 18.7 7.4 11.4 Total Pursuit $ 163.8 $ 117.6 $ 46.2 Adjusted EBITDA*: Same Store $ 68.8 $ 56.5 $ 12.3 New Experiences 6.3 3.1 3.2 Total Pursuit $ 75.1 $ 59.6 $ 15.5 Record Q3 revenue was driven by: Strong guest demand and reduced COVID restrictions Pricing power for iconic experiences Growth from new experiences Adjusted EBITDA growth reflects: Higher revenue Q3’21 benefit of $4.3 million in wage subsidies from the Canadian government * Refer to Appendix for a discussion and reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure.
8 GES Q3’22 RESULTS Year-over-year 8 (in millions) Q3’22 Q3’21 $ Change Revenue: Spiro $ 73.3 $ 37.9 $ 35.4 GES Exhibitions 147.9 81.1 66.7 Inter-segment Elims (2.2) (3.0) 0.7 Total GES $ 218.9 $ 116.0 $ 102.9 Adjusted EBITDA*: Spiro $ 4.7 $ 0.9 $ 3.8 GES Exhibitions 6.0 (5.1) 11.1 Total GES $ 10.7 $ (4.2) $ 14.9 Revenue grew 88.7% year over year reflecting: Continued improvement in live event activity Favorable show rotation from large non-annual events Spiro revenue grew 93.5% Exhibitions revenue grew 82.2% Adjusted EBITDA growth reflects higher revenue and staffing levels to support increased business activity * Refer to Appendix for a discussion and reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure.
10 Pursuit delivered record q3 revenue Q3’22 revenue of $163.8 million increased 39% year over year and 21% from Q3’19 $38.5 million was generated by new experiences acquired/opened from 2019 to present As compared to Q3’19, we drove revenue growth of 3% from experiences owned/open prior to 2019 Pursuit Revenue (in millions) Acquired/opened after 2020 Acquired/opened in 2019-2020 Owned/opened prior to 2019 New Experiences Acquired/Opened After 2020: Forest Park Hotel (opened August 2022) Glacier Raft Co (acquired April 2022) FlyOver Las Vegas (opened September 2021) Sky Lagoon (opened May 2021) Golden Skybridge (acquired March 2021 / opened June 2021) New Experiences Acquired/Open in 2019-2020: Glacier Basecamp Lodge (acquired January 2020) Open Top Touring (opened September 2020) FlyOver Iceland (opened August 2019) West Glacier RV Park (opened July 2019) Mountain Park Lodges (acquired June 2019) Belton Chalet (acquired May 2019)
11 Pursuit attraction PERFORMANCE – Q3 Refresh Build Buy strategy has enabled us to grow attractions visitors and ticket revenue vs. 2019 through expanded portfolio of attractions Same-store visitor counts are behind 2019 as visitation (especially group) from certain long haul destination markets has yet to recover Attraction margins are strong but below 2019 due to: Lower same-store visitation Newer attractions that have yet to fully ramp Note: New attractions include Glacier Raft Co (acquired April 2022), FlyOver Las Vegas (opened September 2021), Sky Lagoon (opened May 2021), Golden Skybridge (acquired March 2021 / opened June 2021), Open Top Touring (opened September 2020), and FlyOver Iceland (opened August 2019). Same-store ETP is presented on a constant currency basis and excludes new attractions. 2019 2021 2022 +25% Ticket Revenue ($ Millions)
12 Pursuit LODGING PERFORMANCE – Q3 ADR and RevPAR up meaningfully Y/Y and vs. 2019 from ongoing revenue management focus Q3’22 occupancy approached 2019 levels, despite two weeks of forest fire and power outage impacts in Jasper Note: Same-store RevPAR is presented on a constant currency basis and excludes: Forest Park Hotel (opened August 2022), Glacier Raft Co (acquired April 2022), Glacier Basecamp Lodge (acquired January 2020), West Glacier RV Park (opened July 2019), Mountain Park Lodges (acquired June 2019), and Belton Chalet (acquired May 2019). 2019 2021 2022 +11% Rooms Revenue ($ Millions)
14 GES REVENUE reflects continued recovery and favorable show rotation GES Revenue (in millions) Q3’22 revenue of $219 million increased 88.7% year-over-year and was in line with Q3’19 Same-show revenue improved significantly from 2021 but remained below 2019 Large non-annual events* added ~$30 million in revenue vs. Q3’21 and ~$55 million vs. Q3’19 EBITDA increased $13.5 million vs. Q3’19 reflecting improved cost structure Spiro GES Exhibitions Note: Total GES revenue is net of inter-segment eliminations * Q3’22 included: IMTS; Farnborough Airshow; International Woodworking Fair. Q3’21 included: MINExpo.
15 SHOW SIZES continued to Improve in Q3 15 Same-show revenue for GES US Exhibitions was ~91% of 2019 pre-pandemic levels on average Still seeing wide variation in event performance with some at or above and some well-below pre-pandemic level Expect show sizes to remain around 90% during Q4 GES US EXHIBITIONS SAME-SHOW REVENUE* VS. 2019 PRE-PANDEMIC OCCURRENCE * The US same show metric compares tradeshows that occurred in the same city for both occurrences and represented between 30% and 50% of the total exhibition revenue during each of the last five quarters
16 Ges exhibitions IMPROVED COST STRUCTURE 16 GES Exhibitions YTD Revenue Flow-Through Transformation of GES’ cost structure during pandemic continues to yield results YTD flow-through of incremental GES Exhibitions revenue to Adjusted EBITDA met our target of >20%
17 FINANCIAL OUTLOOK
18 FINANCIAL OUTLOOK - pursuit 18 KEY ASSUMPTIONS FOR Q4 Canada Q4 same store revenue improves year-over-year during this seasonally slow quarter New year-round experiences continue to ramp up as guest awareness builds Revenue management efforts and pricing power help offset wage rate and other inflationary pressures Adjusted EBITDA Guidance ($millions) Q4’22 FY’22 ($9) to ($5) vs. ($9.9) in Q4’21 and ($2.5) in Q4’19 $70 to $74 vs. $42.7 in FY’21 and $81.2 in FY’19 FY guidance range tightened (was $70 to $80); lower mid-point due to Q3 results coming in near low end of guidance
19 FINANCIAL OUTLOOK - ges 19 KEY ASSUMPTIONS FOR Q4 Exhibitions same-show revenue will generally remain at or better than 90% of pre-pandemic levels in Q4 Experiential marketing budgets of major Spiro clients will remain at 80%+ of pre-pandemic levels SG&A higher year-over-year to support increased business activity and future revenue growth Adjusted EBITDA Guidance ($millions) Q4’22 FY’22 $6 to $11 vs. $9.6 in Q4’21 and $19.1 in Q4’19 $54 to $60 vs. ($30.4) in FY’21 and $71.5 in FY’19 FY guidance range tightened (was $50 to $60); higher mid-point due to Q3 results coming in near high-end of guidance
APPENDIX
21 Q3 REVENUE AND ADJUSTED EBITDA
FORWARD-LOOKING NON-GAAP FINANCIAL MEASURES We have also provided the following forward−looking non−GAAP financial measure: Adjusted EBITDA. We do not provide a reconciliation of this forward−looking non−GAAP financial measure to the most directly comparable GAAP financial measure because, due to variability and difficulty in making accurate forecasts and projections and/or certain information not being ascertainable or accessible, not all of the information necessary for quantitative reconciliations is available to us without unreasonable efforts. Consequently, any attempt to disclose such reconciliations would imply a degree of precision that could be confusing or misleading to investors. It is possible that the forward−looking non−GAAP financial measure may be materially different from the corresponding forward-looking non−GAAP financial measure. NON-GAAP FINANCIAL RECONCILIATION 22 Revenue has been adjusted in 2019 for immaterial errors related to the revenue recognition of GES’ Corporate Accounts’ third-party services, which are now reported on a net basis to reflect only the fees received for arranging these services. Includes costs related to the development of Pursuit's new FlyOver attractions in Las Vegas, Chicago, and Toronto, the Sky Lagoon in Iceland, and the Golden Skybridge and Forest Park Hotel in Canada. Includes non-capitalizable fees and expenses related to Viad’s credit facility refinancing efforts. Corporate Adjusted EBITDA is calculated as Corporate activities expense before depreciation, acquisition-transaction-related costs and other non-recurring costs included within Corporate activities expense. Includes inventory write-offs at GES in connection with transitioning to an outsourced model for trade show aisle carpet.
23 NON-GAAP FINANCIAL RECONCILIATION
24 Pursuit key performance metrics 24
25 Liquidity & Cash Flow Summary 25 Our liquidity position at September 30, 2022 was $166 million Pursuit capital expenditures included growth capital for the Forest Park Hotel (opened August 2022), FlyOver Chicago, and a new mountain coaster experience at the Golden Skybridge * Capacity available is equal to $100 million total facility size less outstanding balance and letters of credit.
26 BALANCE SHEET highlights 26 Term Loan B, which matures in 2028, has no financial covenants The financial covenants related to our revolving credit facility provide flexibility through Q1’23 Max leverage ratio of 5.25x for 9/30/22 TTM, declining to 4.75x at 12/31/22, 4.5x at 3/31/23, and 4.0x thereafter Convertible preferred stock has a conversion price of $21.25 per common share * Capacity available is equal to $100 million total facility size less outstanding balance and letters of credit.