Exhibit 99
Viad Corp Announces First Quarter Results;
First Quarter Income From Continuing Operations of $0.56 per Share
PHOENIX--(BUSINESS WIRE)--April 29, 2005--Viad Corp (NYSE:VVI)
today announced first quarter 2005 revenue of $249.5 million, segment
operating income of $22.8 million, and income from continuing
operations of $12.4 million, or $0.56 per diluted share, in line with
Viad's prior guidance. Net income for the quarter was $12.2 million,
or $0.55 per share, which includes a loss from discontinued operations
of $227,000, or $0.01 per share, relating to tax matters associated
with previously sold operations.
Robert H. Bohannon, chairman, president and chief executive
officer said, "We are very pleased with our results for the first
quarter. The strong year-over-year growth reflects positive show
rotation and increased discretionary services revenue at GES as well
as an overall increase in trade show activity that benefited both GES
and Exhibitgroup. Although the trade show industry remains
challenging, we are seeing real signs of improvement."
First Quarter 2005 Financial Highlights
Highlights of the 2005 first quarter, compared to first quarter
2004 results, are presented below.
Q1 2005 Q1 2004 Change
------- ------- --------
($ in millions)
Revenue $249.5 $207.6 20.2%
Segment operating income $22.8 $16.2 40.5%
Operating margins (a) 9.1% 7.8% 130 bps
Income from continuing operations $12.4 $7.6 64.4%
Net income $12.2 $7.6 61.4%
Adjusted EBITDA (b) $27.1 $19.3 40.3%
Cash from operations $10.7 $6.8 57.9%
Free cash flow (b) $6.3 $2.9 117.7%
(a) For operating margins, the change from the prior year period is
presented in basis points.
(b) Adjusted EBITDA is defined by Viad as net income before interest
expense, income taxes, depreciation and amortization, goodwill and
intangible asset impairments, changes in accounting principles and
the effects of discontinued operations. Free cash flow is defined
by Viad as net cash provided by operating activities minus capital
expenditures and dividends. 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
period-to-period comparisons and analysis of Viad's operating
performance and liquidity. Free cash flow is also used by
management to assess the company's ability to service debt, fund
capital expenditures and finance growth. Management believes these
non-GAAP measures are useful to investors in benchmarking and
trending 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. See Table Two for reconciliations of net income to
Adjusted EBITDA, and of net cash provided by operating activities
to free cash flow.
At the end of the first quarter 2005:
-- Cash and cash equivalents were $128.9 million.
-- Debt totaled $18.5 million, with a debt-to-capital ratio of
4.8 percent.
GES Exposition Services (GES)
GES' revenue for the first quarter of 2005 was $198.4 million, up
$34.8 million or 21.3 percent from $163.6 million in the first quarter
2004. Segment operating income was $26.8 million, up 30.1 percent from
$20.6 million in 2004 and operating margins were 13.5 percent as
compared to 12.6 percent in 2004.
Bohannon said, "GES had a record quarter, with revenue exceeding
the levels reached prior to September 11th, 2001. Approximately $22
million of the revenue increase over the 2004 first quarter was due to
positive show rotation. Additionally, revenue across all shows
benefited from continued growth in discretionary spending, driven by
GES' Products and Services group, as well as continued improvement in
the trade show industry. Operating income and margins were very
strong, but they were hampered somewhat by capacity constraints, high
fuel costs, and unusually high levels of precipitation in the West
that impeded productivity on certain shows."
Exhibitgroup/Giltspur (Exhibitgroup)
Exhibitgroup's first quarter revenue was $46.4 million, up $6.4
million or 15.9 percent from $40.1 million in the 2004 first quarter.
Segment operating results improved by $1.2 million to a loss of $1.8
million, as compared to the 2004 first quarter loss of $3.0 million.
The 2005 first quarter operating loss included $2.5 million in legal
expenses incurred to defend against unfair competitive practices,
including violation of intellectual property rights related to
Exhibitgroup's kiosk business.
Bohannon said, "Notwithstanding the kiosk legal expenses,
Exhibitgroup's results reflect substantial year-over-year improvements
in their core operations. The increase in revenue was due to an
overall increase in trade show activity, including revenue
attributable to clients exhibiting at CONEXPO-CON/AGG, which occurs
every three years. Additionally, gross margins were up significantly
and capacity utilization was improved."
Bohannon continued, "The legal expenses we are incurring in the
kiosk business are an unfortunate but necessary cost. Our intellectual
property rights protect our discernible differences and therefore the
value of our business. We cannot allow a competitor to violate these
rights."
Travel and Recreation Services
Travel and Recreation Services segment revenue for the 2005 first
quarter was $4.7 million, as compared to $3.9 million in the 2004
first quarter. Segment operating loss was $2.2 million, as compared to
a loss of $1.3 million in the 2004 first quarter.
Bohannon said, "The first quarter is seasonally slow for the
Travel and Recreation Services segment, contributing less than 10
percent of its full-year revenue. We look forward to this segment's
positive contributions to Viad's operating results during the next two
quarters."
2005 Outlook
Guidance provided by Viad is subject to change as a variety of
factors can affect actual operating results. Those factors are
identified in the safe harbor language at the end of this press
release.
Full Year 2005
Viad's guidance for the full year 2005 remains unchanged. Full
year income per diluted share is expected to be in the range of $1.23
to $1.36, as compared to income from continuing operations before
impairment losses of $1.07 per share in 2004. Revenue is expected to
increase by a low-single digit rate from the 2004 amount of $785.7
million. Segment operating income is expected to increase by a
mid-single digit to mid-teens rate from $53.4 million in 2004. This
improvement is expected to be driven mainly by cost reductions and
improved margins at Exhibitgroup. Despite negative show rotation of
approximately $10 million, GES' revenue is expected to be slightly
better than 2004, driven mainly by continued growth in the Products
and Services group.
Second Quarter 2005
The following second quarter guidance reflects a reduced outlook
for Exhibitgroup based primarily on an expected increase in legal fees
related to the kiosk business. In addition, Viad has reduced its
outlook for second quarter revenue at Exhibitgroup, based upon
expected reductions or delays in previously anticipated client
spending.
For the second quarter, income per share is expected to be in the
range of $0.44 to $0.52, as compared to $0.42 per share in the 2004
second quarter. Revenue is expected to increase by a single digit rate
from the 2004 amount of $207.4 million, driven mainly by revenue
growth at GES. Segment operating income is expected to be in the range
of $18.9 million to $21.9 million, as compared to $18.9 million in the
second quarter of 2004.
This guidance is based upon the following segment revenue and
operating income expectations.
Segment Segment
Revenue Operating Income
----------------- ------------------
low-end high-end low-end high-end
($ in millions)
GES $140 to $150 $15.8 to $17.5
Exhibitgroup $50 to $55 $(1.5) to $(0.5)
Travel & Recreation $19 to $21 $4.5 to $5.2
Third Quarter 2005
Viad has increased its guidance for the third quarter based on an
improved outlook for all of its businesses. For the third quarter,
income per share is expected to be in the range of $0.27 to $0.33, as
compared to income before impairment losses per share of $0.57 in the
2004 third quarter. Revenue is expected to decrease by 10 to 20
percent from the 2004 amount of $218.6 million. These decreases are
expected to be driven mainly by negative show rotation of
approximately $34 million at GES and $10 million at Exhibitgroup (from
the European airshow that will occur in the 2005 second quarter).
Fourth Quarter 2005
Viad's guidance for the fourth quarter remains unchanged. Loss per
share is expected to be in the range of $0.04 to $0.08, as compared to
loss from continuing operations before impairment charges per share of
$0.27 in the 2004 fourth quarter. This improvement is expected to be
driven mainly by cost reductions and improved margins at Exhibitgroup.
Revenue is expected to increase by a low to mid-single digit rate from
the 2004 amount of $152.1 million.
Bohannon said, "Our strong first quarter got us off to a good
start in 2005. We saw better than expected revenue at all of our
segments and the trade show industry seems to be holding its
moderately upward course. Certainly, it is still early in the year and
we have many challenges ahead of us, particularly at Exhibitgroup.
However, we continue to be more optimistic about the industries we
serve and we are committed to driving meaningful earnings growth in
2005."
Conference Call and Webcast
Viad Corp will hold a conference call with investors and analysts
for a review of first quarter 2005 results on Friday, April 29, 2005
at 9 a.m. (EDT). To join the live conference call, dial (800)
231-9012, passcode 5480586, or access the webcast through Viad's Web
site at www.viad.com. A replay will be available for a limited time at
(888) 203-1112, passcode 5480586, or visit the Viad Web site and link
to a replay of the webcast. Viad is an S&P SmallCap 600 company. Major
subsidiaries include GES Exposition Services of Las Vegas,
Exhibitgroup/Giltspur of Chicago, Brewster Transport Company Limited
of Banff, Alberta, Canada, and Glacier Park, Inc. of Phoenix. 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 business, investment policies, productivity improvements,
ongoing cost reduction efforts, efficiency, competitiveness, legal
expenses, tax rates and other tax matters, and the realization of
restructuring cost savings. Actual results could differ materially
from those projected 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 convention and event services, existing
and new competition, industry alliances, consolidation, and growth
patterns within the industries in which Viad competes 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 further terrorist activities or war, 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.
VIAD CORP AND SUBSIDIARIES
TABLE ONE - QUARTERLY RESULTS
(UNAUDITED)
Three months ended March 31,
----------------------------
(000 omitted, except per share data) 2005 2004 %
----------- --------- ------
Revenues (Note A) $249,512 $207,555 20.2%
=========== ========= ======
Segment operating income (Note A) $22,767 $16,206 40.5%
Corporate activities and minority
interests (2,619) (2,522) -3.8%
Restructuring recovery (Note B) 290 - NM
Net interest income (expense) 150 (341) NM
----------- --------- ------
Income before income taxes 20,588 13,343 54.3%
Income tax expense (8,163) (5,784) -41.1%
----------- --------- ------
Income from continuing operations 12,425 7,559 64.4%
Loss from discontinued operations (Note
C) (227) - NM
----------- --------- ------
Net income $12,198 $7,559 61.4%
=========== ========= ======
Diluted income per common share:
Income from continuing operations $0.56 $0.35 60.0%
Loss from discontinued operations (0.01) - NM
----------- --------- ------
Net income per share $0.55 $0.35 57.1%
=========== ========= ======
Basic income per common share:
Income from continuing operations $0.57 $0.35 62.9%
Loss from discontinued operations (0.01) - NM
----------- --------- ------
Net income per share $0.56 $0.35 60.0%
=========== ========= ======
Common shares treated as outstanding for
net income per share calculations:
Average outstanding shares 21,917 21,677 1.1%
=========== ========= ======
Average outstanding and potentially
dilutive shares 22,092 21,804 1.3%
=========== ========= ======
NM = not meaningful
VIAD CORP AND SUBSIDIARIES
TABLE ONE - NOTES TO QUARTERLY RESULTS
(UNAUDITED)
(A) Reportable Segments
Three months ended March 31,
----------------------------
(000 omitted) 2005 2004 %
----------- --------- ------
Revenues:
GES Exposition Services $198,350 $163,563 21.3%
Exhibitgroup/Giltspur 46,432 40,053 15.9%
Travel and Recreation Services 4,730 3,939 20.1%
----------- --------- ------
$249,512 $207,555 20.2%
=========== ========= ======
Segment operating income (loss):
GES Exposition Services $26,752 $20,558 30.1%
Exhibitgroup/Giltspur (1,828) (3,029) 39.7%
Travel and Recreation Services (2,157) (1,323) -63.0%
----------- --------- ------
$22,767 $16,206 40.5%
=========== ========= ======
(B) Restructuring Recovery -- In the first quarter of 2005, $290,000
($175,000 after-tax), primarily related to severance reserves
associated with Viad's 2001 restructuring, was reversed.
(C) Loss from Discontinued Operations -- In the first quarter of 2005,
Viad recorded a loss from discontinued operations of $227,000
relating to tax matters associated with previously sold
operations, primarily foreign tax settlements.
VIAD CORP AND SUBSIDIARIES
TABLE TWO - ADJUSTED EBITDA AND FREE CASH FLOW
(UNAUDITED)
Three months ended March 31,
----------------------------
(000 omitted) 2005 2004 %
------------ -------- ------
Adjusted EBITDA:
Net income $12,198 $7,559 61.4%
Loss from discontinued operations 227 - NM
------------ -------- ------
Income from continuing operations 12,425 7,559 64.4%
Interest expense 557 567 1.8%
Income tax expense 8,163 5,784 -41.1%
Depreciation and amortization 5,994 5,429 -10.4%
------------ -------- ------
Adjusted EBITDA $27,139 $19,339 40.3%
============ ======== ======
Three months ended March 31,
----------------------------
(000 omitted) 2005 2004 %
------------ -------- ------
Free Cash Flow:
Net cash provided by operating
activities $10,700 $6,776 57.9%
Less:
Capital expenditures (3,474) (3,862) 10.0%
Dividends paid (881) - NM
------------ -------- ------
Free cash flow $6,345 $2,914 117.7%
============ ======== ======
NM = not meaningful
CONTACT: Viad Corp, Phoenix
Carrie Long, 602-207-2681 (Investor Relations)
clong@viad.com