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VC

VIAD CORP (VVI)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 delivered “solid” results in line with expectations: revenue $273.5M (+4.9% y/y), consolidated Adjusted EBITDA $4.3M (+$0.9M y/y); management maintained FY24 outlook for strong growth and free cash flow .
  • Pursuit revenue rose 14% on attractions strength (Sky Lagoon demand; FlyOver Chicago launch), while GES expanded margins to 8.0% on healthy revenue growth; Adjusted EPS improved slightly y/y despite higher depreciation; GAAP EPS declined on non-operational items and tax .
  • FY24 guidance remained unchanged: consolidated Adjusted EBITDA $171–$191M; CFO $120–$140M; capex $65–$70M; Q2 guide implies acceleration (Revenue $352–$377M, Adj. EBITDA $51–$59M) .
  • Catalysts: robust summer season at Pursuit, FlyOver Chicago ramp, major non-annual shows at GES in Q3 (IMTS, MINExpo, Farnborough), and 75 bps term loan repricing lowering annual interest by >$2.5M .

What Went Well and What Went Wrong

  • What Went Well

    • Pursuit attractions outperformed: ticket revenue +25% y/y on higher effective ticket prices and +10% visitors; “impressive launch” of FlyOver Chicago with positive EBITDA in first month .
    • GES margin expansion: Adjusted EBITDA margin to 8.0% (+70 bps y/y); “transformed cost structure” supports 8.5% full-year target .
    • Debt cost reduced: term loan repriced to SOFR +4.25% (−75 bps), saving >$2.5M annually, improving cash generation .
    • Quote: “We’re off to a strong start… expect ~16–30% y/y growth in full year consolidated adjusted EBITDA” — CEO Steve Moster .

  • What Went Wrong

    • GAAP net loss widened: net loss attributable to Viad $(25.1)M vs $(20.9)M y/y, largely due to higher non-operational items and tax expense; diluted EPS $(1.29) vs $(1.10) .
    • Pursuit EBITDA seasonality: Adjusted EBITDA was $(11.1)M (seasonally slow quarter) with increased operating costs to support higher volume .
    • Working capital timing: CFO outflow $(7.5)M in Q1; capex $20.7M elevated by growth projects at Pursuit (~$8M) .
    • Analyst concern: Asia group travel recovery remains gradual; management reallocating inventory and expects multi-year normalization .

Financial Results

MetricQ3 2023Q4 2023Q1 2024
Consolidated Revenue ($USD Millions)$365.9 $291.7 $273.5
Diluted EPS ($USD)$1.41 $(0.83) $(1.29)
Adjusted Diluted EPS ($USD)$1.49 (Income before other items per share) $(0.79) $(1.13)
Consolidated Adjusted EBITDA ($USD Millions)$86.3 $14.5 $4.3
Pursuit Revenue ($USD Millions)$186.9 $42.2 $37.2
GES Revenue ($USD Millions)$179.0 $249.5 $236.3
GES Segment Detail ($USD Millions)Q3 2023Q4 2023Q1 2024
Spiro Revenue$58.9 $83.6 $61.2
GES Exhibitions Revenue$122.1 $168.3 $175.8
Inter-Segment Eliminations$(2.0) $(2.4) $(0.8)
Total GES Adjusted EBITDA$(2.0) $26.6 $18.9
Total GES Adjusted EBITDA Margin (%)−1.1% 10.7% 8.0%
Pursuit KPIsQ3 2023Q4 2023Q1 2024
Attraction Visitors (000s)1,668.2 549.0 451.8
Same-Store Attraction ETP ($)$42 $38 $41
Same-Store Hospitality RevPAR ($)$236 $66 $65
Pursuit Adjusted EBITDA ($USD Millions)$91.8 $(8.3) $(11.1)
Pursuit Adjusted EBITDA Margin (%)49.1% −19.7% −29.9%
Cash Flow & Balance SheetQ4 2023Q1 2024
Cash from Operations ($USD Millions)$(9.8) quarterly $(7.5) quarterly
Capital Expenditures ($USD Millions)$23.6 quarterly; $78.3 FY23 $20.7 quarterly
Total Liquidity ($USD Millions)$160.7 $137.2
Cash & Equivalents ($USD Millions)$52.7 $48.8
Total Debt ($USD Millions)$462.1 $488.4
Net Leverage Ratio (x)2.6 2.7

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Revenue ($USD Millions)Q2 2024—$352–$377 New quarterly guide
Consolidated Adjusted EBITDA ($USD Millions)Q2 2024—$51–$59 New quarterly guide
Cash from Operations ($USD Millions)Q2 2024—$35–$45 New quarterly guide
Capital Expenditures ($USD Millions)Q2 2024—$20–$25 (incl. ~$5 growth) New quarterly guide
Pursuit Revenue ($USD Millions)Q2 2024—$92–$97 New quarterly guide
Pursuit Adjusted EBITDA ($USD Millions)Q2 2024—$20–$24 New quarterly guide
GES Revenue ($USD Millions)Q2 2024—$260–$280 New quarterly guide
GES Adjusted EBITDA ($USD Millions)Q2 2024—$34.5–$38.5 New quarterly guide
Consolidated Adjusted EBITDA ($USD Millions)FY 2024$171–$191 (Feb 8) $171–$191 (unchanged) Maintained
Consolidated Revenue (y/y)FY 2024Up high-single to low-double digits Up high-single to low-double digits Maintained
Cash from Operations ($USD Millions)FY 2024$120–$140 $120–$140 Maintained
Capital Expenditures ($USD Millions)FY 2024$65–$70 (incl. ~$20 growth) $65–$70 (incl. ~$20 growth) Maintained
Pursuit Adjusted EBITDA ($USD Millions)FY 2024$105–$115 $105–$115 Maintained
GES Adjusted EBITDA ($USD Millions)FY 2024$80–$90 $80–$90 Maintained
Effective Tax Rate (%)FY 202427–28% 27–28% (Q2 15–16%) Clarified intra-year

Earnings Call Themes & Trends

TopicQ3 2023 (Nov 2)Q4 2023 (Feb 8)Q1 2024 (May 2)Trend
GES same-show revenue vs 2019Full recovery; square footage ~10–12% below Same-show revenue above 2019; sizes improving Continued improvement in size; mid-single-digit same-show growth expected Improving event size through 2025
Pricing powerStrong pricing at exhibitions; Spiro wins Pricing and show size recovery; budgets >2019 Sustain mid-single-digit pricing increases Durable pricing supports margins
Pursuit demand/visitationRecord summer; international tourism strength Strong attraction and lodging momentum; 2024 mid-single-digit revenue growth expected Q1 attractions +25% ticket revenue; strong summer ahead Robust demand into peak season
Asia group travelGradual recovery; inventory reallocation No meaningful change embedded in 2024 Strength from Japan/Korea/India; China gradual; Iceland Chinese travel rising Multi-year normalization
New builds/refreshSky Lagoon/Forest Park; pipeline FlyOver Chicago opening Mar 1 FlyOver Chicago positive EBITDA month 1; Sky Lagoon ritual expansion; Maligne Lake boat ROI-focused growth projects
Major non-annual showsLow in 2023; 2024 to benefit ~$65M IMTS, MINExpo, Farnborough in Q3’24 Q3 incremental $85–$90M; Q2 McDonald’s convention Clear Q3 revenue catalyst
Capital & leverageRevolver upsized; debt flexibility Liquidity $160.7M; net leverage 2.6x Liquidity $137.2M; net leverage 2.7x; term loan repriced (−75 bps) Lower interest cost; stable leverage

Management Commentary

  • “We delivered solid first quarter results… Pursuit's 14% revenue growth… impressive launch of our new FlyOver Chicago attraction. GES continues to deliver strong profitable growth, with a 70 bps y/y improvement in Adjusted EBITDA margin.” — Steve Moster .
  • “We reduced our borrowing rate by 75 basis points to SOFR plus 4.25%… This repricing will reduce our annual interest cost by more than $2.5 million.” — CFO Ellen Ingersoll .
  • “Sky Lagoon was a big contributor… robust demand… we continue to benefit from the increase in volcanic activity… bringing more visitors into the center of Reykjavik.” — David Barry .
  • “We achieved an 8% adjusted EBITDA margin for the first quarter, up 70 bps y/y… expect ~8.5% for full year.” — Steve Moster (GES) .

Q&A Highlights

  • Iceland dynamics: Blue Lagoon periodic closures shifted visitation to Reykjavik; beneficial for Sky Lagoon; overall Iceland summer outlook “all green lights” .
  • FlyOver Chicago: Strong early visitation, positive EBITDA in first month; less competitive than Las Vegas; focus on stabilizing Chicago before new markets; Toronto progressing with city authorities .
  • Asia travel: Japan/Korea airlift increases; China recovery gradual; inventory reallocated to other tour partners; 2025–2026 contracting healthy .
  • GES demand: No signs of slowdown; corporate marketing budgets healthy across trade shows and brand activations .
  • Pricing and show size: Mid-single-digit pricing increases sustainable; same-show square footage recovery expected through 2025 .

Estimates Context

  • Wall Street consensus estimates via S&P Global for VVI were unavailable through our data connection at this time; as a result, we cannot assess Q1 2024 beat/miss versus consensus. Values would ordinarily be retrieved from S&P Global for Revenue Consensus Mean and Primary EPS Consensus Mean, but mapping was unavailable.
  • Company met and maintained its own guidance ranges (Q1 actuals fell within Feb 8 guidance; FY24 outlook reaffirmed) .

Key Takeaways for Investors

  • Pursuit’s pricing power and visitation momentum, combined with FlyOver Chicago ramp and targeted refresh projects, support margin expansion toward ~30% in 2024 and longer-term ~33% target .
  • GES margin profile has structurally improved; expect ~8.5% FY24 Adjusted EBITDA margin with Q3 uplift from major non-annual shows; management aims to sustain ≥8% even in off-cycle years .
  • Interest expense tailwind: term loan repricing reduces annual interest >$2.5M, enhancing free cash flow and deleveraging capacity amid expected CFO $120–$140M in FY24 .
  • Seasonal upswing ahead: Q2 and Q3 are stronger quarters (Pursuit peak season; GES major events), with Q2 guide implying acceleration in revenue and EBITDA .
  • Risk watch: tax complexity and effective rate variability; macro/leisure trends remain favorable; Asia group travel normalization is a multi-year tailwind .
  • Guidance discipline: FY24 ranges unchanged after Q1; tracking “in line” increases confidence in execution and cash generation targets .
  • Trading setup: Near-term catalysts include summer visitation, FlyOver Chicago performance disclosures, and Q3 non-annual show revenue; watch for any updates on Toronto and additional refresh/buy projects .