Viad Corp Announces Third Quarter Results

                  Viad Corp Announces Third Quarter Results

Net Income Per Share of $0.99 versus $0.06

Income Before Other Items Per Share of $1.01 versus $0.06

PR Newswire

PHOENIX, Oct. 26, 2012

PHOENIX, Oct. 26, 2012 /PRNewswire/ -- Viad Corp (NYSE:VVI) today announced
third quarter 2012 revenue increased 42.2 percent to $307.5 million, with net
income of $20.0 million, or $0.99 per diluted share. Viad's income before
other items, which excludes net restructuring charges of $392,000 after tax,
was $20.4 million, or $1.01 per share. This compares to 2011 third quarter
income before other items of $1.2 million, or $0.06 per share, and the
Company's prior guidance of $0.73 per share to $0.83 per share. The improved
financial results were primarily driven by positive show rotation and strong
throughput at Viad's Marketing & Events Group and expanded revenue at the
Company's Travel & Recreation Group.

  o Revenue was $307.5 million, up 42.2% from $216.2 million in 2011.
  o Segment operating income was $34.2 million, up from $5.4 million in 2011.
  o Free cash flow was $45.2 million, up from $23.8 million in 2011.
  o Cash and cash equivalents were $124.2 million at September 30, 2012.
  o Debt was $2.3 million, with a debt-to-capital ratio of 0.5% at September
    30, 2012.

Paul B. Dykstra, chairman, president and chief executive officer, said, "Our
financial results for the third quarter of 2012 were very strong. Revenue from
our Marketing & Events Group increased 52 percent to $230.3 million primarily
driven by better than anticipated revenue from non-annual shows that took
place during the quarter. Base same-show revenue was up seven percent, marking
the ninth consecutive quarter of growth. In our Travel & Recreation Group,
revenue increased 20 percent during the quarter to $77.2 million as a result
of the first peak season quarterly contribution since the acquisitions of
Alaska Denali Travel and the Banff International Hotel, the newly renovated
rooms at the Many Glacier Hotel and increased organic revenue. For the first
nine months of 2012, consolidated revenue was up 10.4 percent; operating
income was up 54.3 percent; and our operating margin was 6.1 percent compared
to 4.4 percent for the first nine months of 2011. We are very pleased with the
revenue growth and performance of both business segments.  We are dedicated to
the consistent execution of our initiatives to operate in the most
cost-efficient manner, to drive organic growth and to integrate strategic
acquisitions that are accretive to Viad's results."

Business Group Highlights

                     Third Quarter                  September 30 Year-to-Date
 ($ in millions)     2012    2011    Change         2012    2011   Change
Revenue:
Marketing & Events
Group:
U.S.                 $       $       $       44.1%  $       $      $     8.4%
                     168.4   116.8    51.6          540.7   498.7   42.1
International        67.8    38.5    29.3    76.0%  180.2   159.4  20.8  13.0%
Intersegment         (5.9)   (3.6)   (2.2)   61.1%  (11.7)  (7.4)  (4.3) 58.5%
eliminations
Total                230.3   151.7   78.6    51.8%  709.3   650.8  58.5  9.0%
Travel & Recreation  77.2    64.5    12.7    19.7%  113.4   94.2   19.2  20.4%
Group
Total                $       $       $       42.2%  $       $      $     10.4%
                     307.5   216.2    91.3          822.7   745.0   77.7
Segment operating
income (loss):
Marketing & Events
Group:
U.S.                 $       $       $       96.6%  $       $      $     **
                      (0.6)  (17.1)   16.5           12.2    1.1    11.2
International        3.4     (3.1)   6.5     **     9.6     7.3    2.3   31.6%
Total                2.8     (20.2)  23.0    **     21.9    8.4    13.5  **
Travel & Recreation  31.3    25.6    5.7     22.4%  28.3    24.1   4.2   17.4%
Group
 Total               $       $       $       **     $       $      $     54.3%
                      34.2   5.4      28.8           50.2    32.5   17.7
Operating margins:
Marketing & Events   1.2%    -13.3%  **             3.1%    1.3%   180
Group                                                              bps
Travel & Recreation  40.6%   39.7%   90 bps         25.0%   25.6%  (60)
Group                                                              bps
 Total               11.1%   2.5%    860 bps        6.1%    4.4%   170
                                                                   bps
** Change is greater than +/- 100 percent.

Note: Calculated amounts presented above (including totals and
percentages) are calculated using dollars in thousands.

Marketing & Events Group

Marketing & Events Group revenue increased 51.8 percent in the third quarter
of 2012 to $230.3 million with operating income of $2.8 million, compared to
revenue of $151.7 million and an operating loss of $20.2 million in the
comparable quarter last year. The increases from 2011 were driven primarily by
positive show rotation revenue of approximately $67 million from non-annual
shows that took place during the third quarter, same-show growth and continued
focus on operating efficiencies, with throughput for the quarter at
approximately 30 percent.

U.S. segment revenue was $168.4 million with an operating loss of $585,000
compared to third quarter 2011 revenue of $116.8 million and an operating loss
of $17.1 million. Base same-show revenue, or revenue derived from shows that
take place in the same city during the same quarter each year, increased 7.3
percent to $49.5 million from $46.2 million in the third quarter of 2011. U.S.
segment revenue was impacted by positive show rotation totaling approximately
$56 million from non-annual shows that took place during the quarter.

International segment revenue increased 76 percent to $67.8 million with
operating income of $3.4 million compared to third quarter 2011 revenue of
$38.5 million with an operating loss of $3.1 million. The improved performance
was primarily driven by work that our Melville unit in the U.K. delivered for
the 2012 London Summer Olympics and Paralympic Games and net positive show
rotation of approximately $11 million. Foreign exchange rate variances had an
unfavorable impact on revenue of $1.6 million and a favorable impact on
operating income of $69,000 as compared to the 2011 quarter.

Dykstra said, "The third quarter performance of the Marketing & Events Group
was very strong both domestically and internationally. In the U.S., two major
non-annual shows, the International Manufacturing Technology Show (IMTS) and
MINExpo were significant contributors to quarterly revenue, as were the 2012
London Olympic and Paralympic Games to our International segment revenue,
where we delivered event services in more than 20 venues throughout
metropolitan London. During the quarter, we were awarded a contract to produce
The National Rifle Association (NRA) Annual Meetings and Exhibits commencing
in 2013 through 2015. The NRA Annual Meeting is a three-day major exhibition
covering more than 400,000 square feet with more than 500 exhibitors and an
estimated 70,000 attendees. We are very pleased with this competitive takeaway
and we look forward to working closely with the NRA for many years to come.
All in all, the Marketing & Events Group delivered solid performance and is on
track to deliver strong improvement in full year results."

Travel & Recreation Group

Travel & Recreation Group revenue for the third quarter of 2012 increased 19.7
percent to $77.2 million and operating income increased 22.4 percent to $31.3
million compared to 2011 third quarter revenue of $64.5 million with operating
income of $25.6 million. Operating margin for the quarter was 40.6 percent, up
from 39.7 percent in the 2011 quarter with throughput for the quarter at
approximately 45 percent. Revenue for the quarter was favorably impacted by
increased passenger traffic at Brewster's attractions, including the Banff
Gondola, the Columbia Icefield Glacier Adventure and the Banff Lake Cruise.
Revenue from hospitality properties benefitted from the initial peak season
contributions from the recently acquired Alaska Denali Travel business and the
Banff International Hotel. The St. Mary Lodge & Resort and Grouse Mountain
Lodge, both in their second year as part of the Travel & Recreation Group and
renovated as part of the Company's "Refresh-Build-Buy" initiative, also
increased revenue over 2011. Additionally, rooms that were under renovation at
the Many Glacier Hotel in 2011 provided a full revenue contribution in the
third quarter of 2012. During the quarter, construction work continued on the
Glacier Discovery Walk in Jasper National Park in Alberta, Canada, with an
anticipated August 2013 opening.  Foreign exchange rate variances had an
unfavorable impact on revenue and operating income of $918,000 and $451,000,
respectively, as compared to the third quarter of 2011.

Dykstra said, "The Travel & Recreation Group delivered strong top- and
bottom-line results in the third quarter of 2012.  We achieved revenue growth
across virtually every operation in the group.  Our recently acquired
properties, as well as the impact of our Refresh-Build-Buy initiative at our
renovated properties, generated substantially increased revenue and margins
during the quarter. As we enter the off-season, our focus now shifts to
improving our properties and planning for the 2013 tourism season with an eye
toward enhancing efficiencies and driving profitable top-line growth."

2012 Outlook

Guidance provided by Viad is subject to change as a variety of factors can
affect actual results. Those factors are identified in the safe harbor
language at the end of this press release.

Dykstra said, "We expect that both the Marketing & Events Group and the Travel
& Recreation Group will post significant revenue and operating income
increases in full year 2012 and will achieve our guidance targets. In 2012,
our Marketing & Events Group benefitted from positive non-annual show
rotation, improved market dynamics and a sharp focus on managing costs and
generating operational efficiencies. We remain optimistic with the
opportunities ahead to gain additional market share in our international
business. We expect that event square footage, freight-weight and
discretionary spend by exhibitors, as well as tradeshow attendance in 2012,
will show meaningful increases versus the previous two years.  We believe all
of these indicators will have a positive impact on our business in the coming
years. In our Travel & Recreation Group, we expect strong full year results
reflecting the benefit of the application of professional management processes
in our newly acquired properties, as well as the contribution from hotel rooms
that were under renovation in 2011 and fully operational in 2012."

2012 Full Year Guidance

Marketing & Events Group

  o Total revenue is expected to increase at a single-digit rate compared to
    2011.

       o Base same-show revenue is expected to increase at a mid-single-digit
         rate in the U.S. Base same shows are defined as shows that take place
         in the same city during the same quarter each year.
       o Show rotation is expected to have a positive impact on full year
         revenue of approximately $16 million.
         First quarter show rotation negatively impacted revenue by
         approximately $47 million.
         Second quarter show rotation negatively impacted revenue by
         approximately $9 million.
         Third quarter show rotation positively impacted revenue by
         approximately $67 million.
         Fourth quarter show rotation is expected to positively impact revenue
         by approximately $5 million.
       o Exchange rate variances are expected to negatively impact revenue by
         approximately $5 million versus 2011.

  o Operating income is expected to improve by $11 million to $13 million,
    driven primarily by continued improvements in U.S. segment profitability.

Travel & Recreation Group

  o Revenue is expected to increase by approximately 20 percent from 2011.
    Exchange rate variances are expected to negatively impact revenue by
    approximately $2 million versus 2011.
  o Operating margins are expected to be comparable to 2011 margins of 19.8
    percent.

Corporate & Other

  o Corporate activities expense is expected to approximate $9 million.
  o Exchange rates are assumed to approximate $1.00 U.S. Dollars per Canadian
    Dollar and $1.60 U.S. Dollars per British Pound (on a weighted-average
    basis). Currency translation is expected to negatively impact income by
    approximately $0.03 per share.
  o The effective tax rate on income before other items is assumed to
    approximate 32 percent, as compared to 31.4 percent in 2011.

2012 Fourth Quarter Guidance

For the fourth quarter, Viad's seasonal loss per share is expected to be in
the range of $0.43 to $0.33. This compares to the 2011 fourth quarter loss
before other items of $0.27 per share. Revenue is expected to be in the range
of $196 million to $207 million as compared to $197.4 million in the 2011
fourth quarter. Segment operating loss is expected to be in the range of $10.5
million to $7.5 million as compared to a loss of $7.2 million in the 2011
fourth quarter.

Implicit within this guidance, are the following group revenue and operating
loss expectations:

($ in millions)      Group Revenue                   Group Operating Loss
                               2012 Guidance                 2012 Guidance
                     2011      Low End   High End    2011    Low End High End
Marketing & Events   $189.8    $188.0    to $197.0   $ (3.2) $(5.5)  to $(3.5)
Group
Travel & Recreation  $     7.6 $     8.0 to $  10.0  $ (4.0) $(5.5)  to $(3.5)
Group

Conference Call and Web Cast

Viad Corp will hold a conference call with investors and analysts for a review
of third quarter 2012 results on Friday, October 26, 2012 at 9 a.m. (ET). To
join the live conference, call (800) 857-4380, passcode "Viad," or access the
webcast through Viad's Web site at www.viad.com. A replay will be available
for a limited time at (888) 568-0721 (no passcode required) or visit the Viad
Web site and link to a replay of the webcast.

About Viad

Viad is an S&P SmallCap 600 company. Viad operates through its Marketing &
Events Group, comprised of Global Experience Specialists and affiliates, and
its Travel & Recreation Group, comprised of Brewster, Glacier Park, Inc. and
Alaska Denali Travel. For more information, visit the company's Web site at
www.viad.com.

Forward-Looking Statements

As provided by the safe harbor provision under the Private Securities
Litigation Reform Act of 1995, Viad cautions readers that, in addition to
historical information contained herein, this press release includes certain
information, assumptions and discussions that may constitute forward-looking
statements. These forward-looking statements are not historical facts, but
reflect current estimates, projections, expectations, or trends concerning
future growth, operating cash flows, availability of short-term borrowings,
consumer demand, new or renewal business, investment policies, productivity
improvements, ongoing cost reduction efforts, efficiency, competitiveness,
legal expenses, tax rates and other tax matters, foreign exchange rates, and
the realization of restructuring cost savings. Actual results could differ
materially from those discussed in the forward-looking statements. Viad's
businesses can be affected by a host of risks and uncertainties. Among other
things, natural disasters, gains and losses of customers, consumer demand
patterns, labor relations, purchasing decisions related to customer demand for
exhibition and event services, existing and new competition, industry
alliances, consolidation and growth patterns within the industries in which
Viad competes, acquisitions, capital allocations, adverse developments in
liabilities associated with discontinued operations and any deterioration in
the economy, may individually or in combination impact future results. In
addition to factors mentioned elsewhere, economic, competitive, governmental,
technological, capital marketplace and other factors, including terrorist
activities or war, a pandemic health crisis and international conditions,
could affect the forward-looking statements in this press release. Additional
information concerning business and other risk factors that could cause actual
results to materially differ from those in the forward-looking statements can
be found in Viad's annual and quarterly reports filed with the Securities and
Exchange Commission.

Information about Viad Corp obtained from sources other than the company may
be out-of-date or incorrect. Please rely only on company press releases, SEC
filings and other information provided by the company,  keeping in mind that
forward-looking statements speak only as of the date made. Viad undertakes no
obligation to update any forward-looking statements, including prior
forward-looking statements, to reflect events or circumstances arising after
the date as of which the forward-looking statements were made.

 

Contacts:
Joe Diaz                Carrie Long
Lytham Partners         Viad Corp
(602) 889-9660          (602) 207-2681
diaz@lythampartners.com IR@viad.com

VIAD CORP AND SUBSIDIARIES
TABLE ONE - QUARTERLY RESULTS
(UNAUDITED)
                   Three months ended September 30,     Nine months ended September 30,
(000 omitted,                          $        %                           $        %
except per share   2012      2011      Change   Change  2012      2011      Change   Change
data)
Revenues           $         $         $        42.2%   $         $         $        10.4%
                    307,457   216,169   91,288           822,679   744,959   77,720
Segment operating  $         $         $        **      $         $         $        54.3%
income              34,182   5,412      28,770           50,213    32,533    17,680
Corporate
activities (Note   (2,036)   (2,356)   320      13.6%   (6,000)   (5,203)   (797)    -15.3%
A)
Restructuring      (608)     (75)      (533)    **      (3,511)   (1,550)   (1,961)  **
charges (Note B)
Net interest       (178)     (175)     (3)      -1.7%   (546)     (577)     31       5.4%
expense
Income from
continuing         31,360    2,806     28,554   **      40,156    25,203    14,953   59.3%
operations before
income taxes
Income taxes       (10,304)  (523)     (9,781)  **      (13,084)  (9,011)   (4,073)  -45.2%
Income from
continuing         21,056    2,283     18,773   **      27,072    16,192    10,880   67.2%
operations
Income from
discontinued       -         -         -        **      639       -         639      **
operations (Note
C)
Net income         21,056    2,283     18,773   **      27,711    16,192    11,519   71.1%
Net income
attributable to    (1,080)   (1,038)   (42)     -4.0%   (618)     (675)     57       8.4%
noncontrolling
interest
Net income         $         $         $                $         $         $
attributable to     19,976   1,245      18,731  **       27,093    15,517    11,576  74.6%
Viad
Amounts Attributable to
Viad Common Stockholders:
Income from        $         $         $                $         $         $
continuing          19,976   1,245      18,731  **       26,454    15,517    10,937  70.5%
operations
Income from
discontinued       -         -         -        **      639       -         639      **
operations
Net income         $         $         $        **      $         $         $        74.6%
                    19,976   1,245      18,731           27,093    15,517    11,576
Diluted income per
common share (Note
D):
 Income from
 continuing
 operations
 attributable
  to Viad common   $         $         $        **      $         $         $        72.4%
  stockholders       0.99      0.06    0.93               1.31      0.76    0.55
 Income from
 discontinued
 operations
 attributable
  to Viad common   -         -         -        **      0.03      -         0.03     **
  stockholders
 Net income
 attributable to
 Viad common
  stockholders     $         $         $        **      $         $         $        76.3%
                     0.99      0.06    0.93               1.34      0.76    0.58
Basic income per
common share (Note
D):
 Income from
 continuing
 operations
 attributable
  to Viad common   $         $         $        **      $         $         $        72.4%
  stockholders       0.99      0.06    0.93               1.31      0.76    0.55
 Income from
 discontinued
 operations
 attributable
  to Viad common   -         -         -        **      0.03      -         0.03     **
  stockholders
 Net income
 attributable to
 Viad common
  stockholders     $         $         $        **      $         $         $        76.3%
                     0.99      0.06    0.93               1.34      0.76    0.58
Common shares
treated as
outstanding for
income per share
calculations:
  Weighted-average
  outstanding      19,721    19,711    10       0.1%    19,694    19,768    (74)     -0.4%
  common shares
  Weighted-average
  outstanding and
                   20,017    20,033    (16)     -0.1%   19,993    20,089    (96)     -0.5%
      potentially
  dilutive common
  shares
** Change is greater than +/- 100 percent

 

VIAD CORP AND SUBSIDIARIES
TABLE ONE - NOTES TO QUARTERLY RESULTS
(UNAUDITED)
    Corporate Activities — The increase in corporate activities expense for
    the nine months ended September 30, 2012 was primarily due to costs
(A) related to the amendment and restatement of the Company's shareholder
    rights plan and higher legal costs related to employee benefits associated
    with previously divested operations.
    Restructuring Charges — During the nine months ended September 30, 2012
    and 2011, Viad recorded restructuring charges of $3.5 million ($2.2
(B) million after-tax) and $1.6 million ($952,000 after-tax), respectively.
    The charges primarily related to reorganization activities in the
    Marketing & Events Group, comprised of facility consolidations as well as
    the elimination of certain positions. 
    Income from Discontinued Operations — Income from discontinued operations
(C) for the nine months ended September 30, 2012 of $639,000 related to the
    sale of land associated with previously sold operations.
(D) Income per Common Share — Following is a reconciliation of net income
    attributable to Viad to net income allocated to Viad common shareholders:

                  Three months ended September 30,  Nine months ended September 30,
 (000 omitted,                     $        %                         $        %
 except per share 2012     2011    Change   Change  2012     2011     Change   Change
 data)
 Net income       $        $       $                $        $        $
 attributable to   19,976           18,731  **       27,093   15,517   11,576  74.6%
 Viad                      1,245
 Less: Allocation
 to nonvested     (532)    (34)    (498)    **      (735)    (412)    (323)    -78.4%
 shares
 Net income                $    
 allocated to     $                $        **      $        $        $        74.5%
 Viad common       19,444  1,211    18,233           26,358   15,105   11,253
 stockholders
 Weighted-average
 outstanding      19,721   19,711  10       0.1%    19,694   19,768   (74)     -0.4%
 common shares
 Basic income per
 common share
 attributable to
    Viad common   $        $       $                $        $        $      
    stockholders    0.99           0.93     **        1.34     0.76   0.58     76.3%
                           0.06
** Change is greater than +/- 100 percent

 

VIAD CORP AND SUBSIDIARIES
TABLE TWO - INCOME BEFORE OTHER ITEMS,
ADJUSTED EBITDA AND FREE CASH FLOW
(UNAUDITED)
               Three months ended September 30,   Nine months ended September 30,
(000 omitted)  2012     2011     $        %       2012      2011      $        %
                                 Change   Change                      Change   Change
Income before
other items
(Note A):
 Income from
 continuing
 operations
  attributable $        $        $        **      $         $         $        70.5%
  to Viad      19,976   1,245    18,731           26,454    15,517    10,937
 Restructuring
 charges, net  392      47       345      **      2,225     952       1,273    **
 of tax
 Resolution of -        (103)    103      **      -         (103)     103      **
 tax matters
 Income before $        $        $        **      $         $         $        75.2%
 other items   20,368   1,189    19,179           28,679    16,366    12,313
(per diluted
share)
Income before
other items:
 Income from
 continuing
 operations
  attributable $        $        $        **      $         $         $        72.4%
  to Viad      0.99     0.06     0.93             1.31      0.76      0.55
 Restructuring
 charges, net  0.02     -        0.02     **      0.11      0.05      0.06     **
 of tax
 Resolution of -        -        -        **      -         -         -        **
 tax matters
 Income before $        $        $        **      $         $         $        75.3%
 other items   1.01     0.06     0.95             1.42      0.81      0.61
                Three months ended September       Nine months ended September 30, 
               30, 
(000 omitted)  2012     2011     $        %       2012      2011      $        %
                                 Change   Change                      Change   Change
Adjusted
EBITDA (Note
A):
 Net income    $        $        $                $         $         $  
 attributable  19,976   1,245    18,731   **      27,093    15,517    11,576   74.6%
 to Viad
 Income from
 discontinued  -        -        -        **      (639)     -         (639)    **
 operations
 Interest      331      373      (42)     11.3%   991       1,165     (174)    14.9%
 expense
 Income taxes  10,304   523      9,781    **      13,084    9,011     4,073    -45.2%
 Depreciation
 and           8,560    7,589    971      -12.8%  23,560    21,882    1,678    -7.7%
 amortization
 Adjusted      $        $        $        **      $         $         $        34.7%
 EBITDA        39,171   9,730    29,441           64,089    47,575    16,514
                Three months ended September       Nine months ended September 30, 
               30, 
(000 omitted)  2012     2011     $        %       2012      2011      $        %
                                 Change   Change                      Change   Change
Free Cash
Flow  (Note
A):
 Net cash
 provided by   $        $        $        78.1%   $         $         $        96.2%
 operating     51,821   29,101   22,720           68,806    35,068    33,738
 activities
 Less:
  Capital      (5,824)  (4,456)  (1,368)  -30.7%  (19,912)  (17,251)  (2,661)  -15.4%
  expenditures
  Dividends    (806)    (805)    (1)      -0.1%   (2,429)   (2,435)   6        0.2%
  paid
  Free cash    $        $        $        89.6%   $         $         $        **
  flow         45,191   23,840   21,351           46,465    15,382    31,083
** Change is greater than +/- 100 percent

    Income before other items, Adjusted EBITDA and Free Cash Flow are
    supplemental to results presented under accounting principles generally
    accepted in the United States of America ("GAAP") and may not be
    comparable to similarly titled measures presented by other companies.
    These non-GAAP measures are used by management to facilitate
(A) period-to-period comparisons and analysis of Viad's operating performance
    and liquidity. Management believes these non-GAAP measures are useful to
    investors in trending, analyzing and benchmarking the performance and
    value of Viad's business. These non-GAAP measures should be considered in
    addition to, but not as a substitute for, other similar measures reported
    in accordance with GAAP.

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SOURCE Viad Corp

Website: http://www.viad.com