Exhibit 99
Viad Corp Announces Full Year and Fourth Quarter Results;
Full Year Income from Continuing Operations of $1.64 per Share
PHOENIX--(BUSINESS WIRE)--Feb. 3, 2006--Viad Corp (NYSE:VVI):
-- Fourth Quarter Income from Continuing Operations of $0.16 per
Share
-- Viad to Repurchase up to 1 Million Shares
Viad Corp (NYSE:VVI) today announced full year 2005 revenue of
$826.3 million, segment operating income of $64.2 million, and income
from continuing operations of $36.5 million, or $1.64 per diluted
share. Income before impairment losses was $37.0 million, or $1.66 per
diluted share, as compared to $23.3 million, or $1.07 per diluted
share, in 2004 and the company's prior guidance of $1.38 to $1.42 per
diluted share. Viad's 2005 full year results included favorable tax
settlements of $4.7 million, or $0.21 per diluted share.
Fourth quarter 2005 revenue was $158.6 million, segment operating
income was $2.8 million and income from continuing operations was $3.6
million, or $0.16 per diluted share. This compares favorably to Viad's
2004 loss before impairment losses of $6.0 million, or a loss of $0.27
per diluted share. Viad's 2005 fourth quarter results included
favorable tax settlements of $2.7 million, or $0.12 per diluted share.
Viad Corp also announced its intent, under a recent authorization
by its board of directors, to repurchase up to one million shares of
common stock of the corporation from time to time at prevailing prices
in the open market. This is in addition to an existing authorization
to repurchase common stock for the purpose of replacing common stock
issued upon exercise of stock options and in connection with other
stock compensation plans.
Robert H. Bohannon, chairman, president and chief executive
officer said, "For the full year, we realized 59 percent growth in
income before impairment losses as compared to 2004. Excluding the
favorable tax settlements of $4.7 million in 2005 and $2.4 million in
2004, this growth rate was 55 percent. Our 2005 fourth quarter results
were also significantly better than the 2004 fourth quarter. The
strong year-over-year operating growth was driven mainly by improved
profitability at Exhibitgroup/Giltspur. All of our operating companies
performed well during 2005."
Bohannon added, "During 2005, our cash balances grew by $37.6
million to $152.6 million. We continue to evaluate the best uses of
our cash to maximize shareholder value and total shareholder return.
Today's announcement concerning our plan to repurchase up to one
million common shares increases our flexibility to accomplish this
objective. As I've said before, our first priority for capital
deployment is a strategic acquisition and this has not changed. With
$152.6 million in cash and only $17.4 million in debt, we believe that
today's announcement regarding share repurchases will not preclude us
from making such an acquisition. Share repurchases continue to be our
first priority after acquisitions. Given the strength of our balance
sheet and the fact that our cash balances continue to grow, we believe
it is prudent now to repurchase some shares."
Fourth Quarter and Full Year 2005 Financial Highlights
Highlights of the 2005 full year and fourth quarter, compared to
full year and fourth quarter 2004 results, are presented below.
- -0-
*T
2005 2004 Change
------- ------- --------
($ in millions)
Revenue $ 826.3 $ 785.7 5.2%
Segment operating income $ 64.2 $ 53.4 20.3%
Operating margins (Note A) 7.8% 6.8% 100 bps
Income before impairment losses (Note B) $ 37.0 $ 23.3 59.0%
Net income (loss) (Note C) $ 37.8 $ (56.0) (a)
Adjusted EBITDA (Note B) $ 77.4 $ 61.4 26.1%
Cash from operations $ 49.9 $ 35.6 39.9%
Free cash flow (Note B) $ 26.3 $ 19.4 35.5%
Q4 2005 Q4 2004 Change
------- ------- --------
($ in millions)
Revenue $ 158.6 $ 152.1 4.2%
Segment operating income (loss) $ 2.8 $ (5.2) (a)
Operating margins (Note A) 1.8% -3.4% 520 bps
Income (loss) before impairment losses
(Note B) $ 3.6 $ (6.0) (a)
Net income (loss) (Note C) $ 3.7 $ (4.5) (a)
Adjusted EBITDA (Note B) $ 5.6 $ (2.0) (a)
Cash from operations $ 15.5 $ 2.8 (a)
Free cash flow (outflow) (Note B) $ 8.5 $ (4.1) (a)
(a) Change is greater than +/- 100 percent.
(A) For operating margins, the change from the prior year period is
presented in basis points.
(B) Income before impairment losses is defined by Viad as income from
continuing operations before the after-tax effects of impairment
losses. Adjusted EBITDA is defined by Viad as net income before
interest expense, income taxes, depreciation and amortization,
impairment losses, 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. Income before impairment losses,
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 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. See Table Two for reconciliations of income
from continuing operations to income before impairment losses, of
net income to Adjusted EBITDA, and of net cash provided by
operating activities to free cash flow.
(C) Net income includes after tax impairment losses of $508,000 in the
2005 third quarter relating to assets damaged as a result of
Hurricane Katrina, and $776,000 and $81.6 million in the 2004
fourth quarter and full year, respectively, relating to goodwill
and intangible assets at Exhibitgroup/Giltspur. Net income also
includes income from discontinued operations of $80,000 and $1.2
million in the 2005 fourth quarter and full year, respectively,
relating primarily to favorable tax settlements, and $2.3 million
in the 2004 fourth quarter and full year relating to tax matters
associated with sold operations.
*T
At the end of the fourth quarter 2005:
-- Cash and cash equivalents were $152.6 million.
-- Debt totaled $17.4 million, with a debt-to-capital ratio of
4.1 percent.
GES Exposition Services (GES)
For the fourth quarter of 2005, GES' revenue was $99.6 million, up
$1.3 million or 1.3 percent from $98.4 million in the fourth quarter
of 2004. Fourth quarter segment operating loss was $869,000, improved
from a loss of $3.0 million in 2004. Full year revenue was $568.0
million, up $27.9 million or 5.2 percent from $540.1 million in 2004.
Full year segment operating income was $43.6 million, as compared to
$43.3 million in 2004.
Bohannon said, "GES had a good year despite facing several
challenges, including lower freight density, high fuel costs, and the
disruption of exhibition and event activity caused by Hurricane
Katrina. Strong revenue growth, driven by the Products and Services
group, continued improvement in the exhibition and event industry and
productivity improvements helped to offset the impact of these
challenges. Overall, 2005 was another solid year for GES."
Exhibitgroup/Giltspur (Exhibitgroup)
Exhibitgroup's fourth quarter revenue was $52.1 million, up $4.8
million or 10.2 percent from $47.3 million in the fourth quarter of
2004. Segment operating income was $4.6 million, as compared to a loss
of $1.8 million in the 2004 fourth quarter. Full year revenue was
$184.3 million, up $6.2 million or 3.5 percent from $178.1 million in
2004. Full year segment operating income was $511,000, an improvement
of $10.2 million as compared to a loss of $9.6 million in 2004.
Bohannon said, "We are very pleased with Exhibitgroup's profitable
results in 2005 and the substantial improvement over 2004. As a result
of Exhibitgroup's efforts to increase the profitability of its show
service offerings and to drive continued productivity improvements,
operating results improved by $10.2 million on a revenue increase of
$6.2 million. The revenue growth over 2004 is also significant in that
it represents the first year of growth since 2000. This is very
encouraging."
Travel and Recreation Services
Travel and Recreation Services segment revenue for the 2005 fourth
quarter was $6.8 million, as compared to $6.5 million in the fourth
quarter of 2004. Fourth quarter segment operating loss was $930,000,
as compared to a loss of $501,000 in the 2004 fourth quarter. Full
year revenue was $73.9 million, up $6.5 million or 9.6 percent from
$67.5 million in 2004. Segment operating income was $20.1 million with
operating margins of 27.2 percent, as compared to 2004 operating
income of $19.8 million and operating margins of 29.3 percent.
Bohannon said, "Brewster and Glacier Park, Inc. both realized
strong revenue growth in 2005. This was driven mainly by increased
occupancy at Brewster's Mount Royal Hotel and at Glacier Park's lodges
and inns, as well as an increase in passenger volume at Brewster's
Banff Gondola. While operating income growth was modest as the result
of higher fuel costs and certain maintenance expenses, operating
margins of 27.2 percent were still very strong."
2006 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. The following guidance does not reflect any share repurchases
but does reflect the adoption of Statement of Financial Accounting
Standards No. 123R (SFAS 123R). SFAS 123R is effective for Viad
beginning January 1, 2006 and requires that all share-based
compensation awards be measured at fair value at the date of grant and
expensed over their vesting or service periods.
Full Year 2006
Viad has increased its full year guidance based upon a more
favorable outlook for Exhibitgroup. Full year income per diluted
share, including expected stock option expense of $0.06 per share, is
now expected to be in the range of $1.49 to $1.60, an increase from
the company's prior guidance of $1.45 to $1.56 per share. This
compares to 2005 income before impairment losses of $1.66 per share
(which included $0.21 per share of favorable tax settlements and did
not reflect the adoption of SFAS 123R). The guidance range for 2006
assumes an effective tax rate of 39 percent, as compared to the 2005
effective tax rate on income before impairment losses of 29.7 percent.
Revenue is expected to increase by a mid-single digit rate from
the 2005 amount of $826.3 million. Segment operating income is
expected to increase by a mid to high-single digit rate from $64.2
million in 2005. This growth is expected to be driven by improved
results at all of Viad's operating companies.
Show rotation is not expected to have a meaningful impact on full
year 2006 revenues, but is expected to impact Viad's quarterly
revenues. For the first quarter, show rotation at GES is expected to
negatively impact revenues by about $22 million. In the second
quarter, positive show rotation revenue at GES is expected to
essentially offset negative show rotation revenue at Exhibitgroup. For
the third quarter, Viad expects positive show rotation at both GES and
Exhibitgroup totaling about $34 million in revenue. Fourth quarter
show rotation at GES is expected to negatively impact revenues by
about $7 million.
First Quarter 2006
For the first quarter, Viad's income per diluted share, including
expected stock option expense of $0.02 per share, is expected to be in
the range of $0.35 to $0.43. This compares to income from continuing
operations of $0.56 per share in the 2005 first quarter (which did not
reflect the adoption of SFAS 123R). Revenue is expected to decrease by
a high-single digit to low-teens rate from the 2005 amount of $249.5
million. Segment operating income is expected to decrease by $5
million to $8 million from $22.8 million in 2005, primarily due to
negative show rotation at GES.
Implicit within this guidance, are the following segment revenue
and operating income expectations.
- -0-
*T
Segment
Segment Operating Income
Revenue (Loss)
---------------------- -------------------
low-end high-end low-end high-end
($ in millions)
GES $180.0 to $ 190.0 $ 18.5 to $ 20.5
Exhibitgroup $ 33.0 to $ 38.0 $ (2.5) to $ (1.0)
Travel & Recreation $ 4.5 to $ 5.0 $ (2.0) to $ (1.5)
- ----------------------- ------------- -------- ---------- ------
*T
Bohannon said, "Overall, 2005 was a great year for Viad. We
realized very strong growth in segment operating income as the result
of successful revenue initiatives that led to both incremental revenue
and increased profitability as well as continued improvement in the
industries we serve. Our 2005 earnings also benefited from favorable
tax settlements. We look forward to continued strong results in 2006
under Paul Dykstra's leadership."
Dykstra added, "2005 was indeed a great year. We continue to see
improvement in the exhibition and event industry and we are executing
very well internally to drive revenue growth and increased
profitability. Our goal is to carry this momentum into 2006. Our
guidance for 2006 anticipates continued growth across all of our
operating companies. We have now seen two consecutive quarters of
growth in exhibit construction revenue mix, and we are cautiously
optimistic that we will continue to see growth going forward. However,
because we don't have good visibility over exhibit construction
revenue, our guidance for Exhibitgroup assumes only a modest increase
in revenue. Given the productivity improvements that Exhibitgroup has
realized, we should have great upside if we can drive more revenue
through that business."
Conference Call and Webcast
Viad Corp will hold a conference call with investors and analysts
for a review of fourth quarter and full year 2005 results on Friday,
February 3, 2006 at 9 a.m. (EST). To join the live conference call,
dial 800-500-0177, passcode 4607853, 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 4607853, 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 AND FULL YEAR RESULTS
(UNAUDITED)
Three months ended Year ended
December 31, December 31,
-------------------------- -------------------------
(000 omitted,
except per
share data) 2005 2004 % 2005 2004 %
-------- -------- ------ -------- -------- ------
Revenues
(Note A) $158,574 $152,143 4.2% $826,254 $785,657 5.2%
======== ======== ====== ======== ======== ======
Segment operating
income (loss)
(Note A) $ 2,791 $ (5,232) (a) $ 64,213 $ 53,381 20.3%
Corporate
activities and
minority
interests (3,785) (4,941) 23.4% (13,654) (15,383) 11.2%
Restructuring
recoveries
(charges), net
(Note B) 150 463 -67.6% 743 (1,240) (a)
Impairment
losses (Note C) - (1,291) (a) (843) (88,699) 99.0%
Net interest
income (expense) 621 (42) (a) 1,381 (1,042) (a)
-------- -------- ------ -------- -------- ------
Income (loss)
before income
taxes (223) (11,043) 98.0% 51,840 (52,983) (a)
Income tax
(expense)
benefit 3,855 4,248 -9.3% (15,326) (5,346) (a)
-------- -------- ------ -------- -------- ------
Income (loss)
from continuing
operations 3,632 (6,795) (a) 36,514 (58,329) (a)
Income from
discontinued
operations
(Note D) 80 2,327 -96.6% 1,240 2,327 -46.7%
-------- -------- ------ -------- -------- ------
Net income
(loss) $ 3,712 $ (4,468) (a) $ 37,754 $(56,002) (a)
======== ======== ====== ======== ======== ======
Diluted income (loss) per
common share:
Income (loss)
from continuing
operations $ 0.16 $ (0.31) (a) $ 1.64 $ (2.68) (a)
Income from
discontinued
operations 0.01 0.10 -90.0% 0.06 0.10 -40.0%
-------- -------- ------ -------- -------- ------
Net income
(loss) per
share $ 0.17 $ (0.21) (a) $ 1.70 $ (2.58) (a)
======== ======== ====== ======== ======== ======
Basic income
(loss) per
common share:
Income (loss)
from continuing
operations $ 0.16 $ (0.31) (a) $ 1.65 $ (2.68) (a)
Income from
discontinued
operations 0.01 0.10 -90.0% 0.06 0.10 -40.0%
-------- -------- ------ -------- -------- ------
Net income
(loss) per
share $ 0.17 $ (0.21) (a) $ 1.71 $ (2.58) (a)
======== ======== ====== ======== ======== ======
Common shares treated as
outstanding for net
income per share
calculations:
Weighted-
average
outstanding
shares 22,195 21,786 1.9% 22,070 21,741 1.5%
======== ======== ====== ======== ======== ======
Weighted-average
outstanding and
potentially
dilutive shares 22,374 21,786 2.7% 22,253 21,741 2.4%
======== ======== ====== ======== ======== ======
(a) Change is greater than +/- 100 percent.
VIAD CORP AND SUBSIDIARIES
TABLE ONE - NOTES TO QUARTERLY AND FULL YEAR RESULTS
(UNAUDITED)
(A) Reportable Segments
Three months ended Year ended
December 31, December 31,
-------------------------- ------------------------
(000 omitted) 2005 2004 % 2005 2004 %
-------- -------- ------ -------- -------- -----
Revenues:
GES Exposition
Services $ 99,645 $ 98,385 1.3% $568,006 $540,085 5.2%
Exhibitgroup/
Giltspur 52,087 47,278 10.2% 184,315 178,112 3.5%
Travel and
Recreation
Services 6,842 6,480 5.6% 73,933 67,460 9.6%
-------- -------- ------ -------- -------- -----
$158,574 $152,143 4.2% $826,254 $785,657 5.2%
======== ======== ====== ======== ======== =====
Segment operating
income (loss):
GES Exposition
Services $ (869) $ (2,963) 70.7% $ 43,572 $ 43,262 0.7%
Exhibitgroup/
Giltspur 4,590 (1,768) (a) 511 (9,648) (a)
Travel and
Recreation
Services (930) (501) -85.6% 20,130 19,767 1.8%
-------- -------- ------ -------- -------- -----
$ 2,791 $ (5,232) (a) $ 64,213 $ 53,381 20.3%
======== ======== ====== ======== ======== =====
(a) Change is greater than +/- 100 percent.
(B) Restructuring Charges and Recoveries -- In the fourth quarter of
2005, Viad reversed $150,000 ($87,000 after-tax) of restructuring
reserves related to certain lease costs that were less than
previous estimates. Additionally, in the first, second and third
quarters of 2005, an aggregate $593,000 ($351,000 after-tax) of
restructuring reserves was also reversed. In 2004, Viad recorded
restructuring charges of $853,000 ($530,000 after-tax) primarily
related to planned employee reductions and $850,000 ($530,000
after-tax) related to the consolidation of leased office space.
Reversals of restructuring reserves of $463,000 ($297,000
after-tax) were recorded in the fourth quarter of 2004.
(C) Impairment Losses -- In the third quarter of 2005, GES' operations
in New Orleans were severely impacted by Hurricane Katrina and the
related events that occurred. Management has made an estimate of
the damage to GES' New Orleans property and has recorded an asset
impairment loss related to the net book value of fixed assets and
inventory of $843,000 ($508,000 after-tax). In the third quarter
of 2004, Viad recorded impairment charges at Exhibitgroup of $80.4
million ($76.6 million after-tax) and $7.0 million ($4.2 million
after-tax) related to goodwill and the intangible trademark asset,
respectively. Management finalized the valuation of the trademark
during the fourth quarter of 2004 and recorded an additional
impairment charge of $1.3 million ($776,000 after-tax).
(D) Income from Discontinued Operations -- In the fourth quarter of
2005, Viad recorded income from discontinued operations of $80,000
due to favorable tax settlements. In the first, second and third
quarters of 2005, Viad recorded aggregate income from discontinued
operations of $1.2 million relating to tax matters associated with
previously sold operations. In the fourth quarter of 2004, Viad
recorded income from discontinued operations of $2.3 million
related to tax matters associated with previously sold operations.
VIAD CORP AND SUBSIDIARIES
TABLE TWO - INCOME BEFORE IMPAIRMENT LOSSES, ADJUSTED EBITDA
AND FREE CASH FLOW
(UNAUDITED)
Three months ended Year ended
December 31, December 31,
------------------------ -------------------------
(000 omitted) 2005 2004 % 2005 2004 %
------- ------- ------ -------- -------- ------
Income (loss)
before impairment
losses:
Income (loss)
from
continuing
operations $ 3,632 $(6,795) (a) $ 36,514 $(58,329) (a)
Impairment
losses, net
of tax - 776 (a) 508 81,607 -99.4%
------- ------- ------ -------- -------- ------
Income (loss)
before
impairment
losses $ 3,632 $(6,019) (a) $ 37,022 $ 23,278 59.0%
======= ======= ====== ======== ======== ======
Three months ended Year ended
December 31, December 31,
------------------------ -------------------------
(per diluted share) 2005 2004 % 2005 2004 %
------- ------- ------ -------- -------- ------
Income (loss)
before impairment
losses:
Income (loss)
from
continuing
operations $ 0.16 $ (0.31) (a) $ 1.64 $ (2.68) (a)
Impairment
losses, net
of tax - 0.04 (a) 0.02 3.75 -99.5%
------- ------- ------ -------- -------- ------
Income (loss)
before
impairment
losses $ 0.16 $ (0.27) (a) $ 1.66 $ 1.07 55.1%
======= ======= ====== ======== ======== ======
Three months ended Year ended
December 31, December 31,
------------------------ -------------------------
(000 omitted) 2005 2004 % 2005 2004 %
------- ------- ------ -------- -------- ------
Adjusted EBITDA:
Net income
(loss) $ 3,712 $(4,468) (a) $ 37,754 $(56,002) (a)
Income from
discontinued
operations (80) (2,327) -96.6% (1,240) (2,327) -46.7%
------- ------- ------ -------- -------- ------
Income (loss)
from
continuing
operations 3,632 (6,795) (a) 36,514 (58,329) (a)
Impairment
losses - 1,291 (a) 843 88,699 99.0%
Interest
expense 682 533 -28.0% 2,554 2,267 -12.7%
Income tax
expense
(benefit) (3,855) (4,248) -9.3% 15,326 5,346 (a)
Depreciation
and
amortization 5,125 7,175 28.6% 22,113 23,370 5.4%
------- ------- ------ -------- -------- ------
Adjusted
EBITDA $ 5,584 $(2,044) (a) $ 77,350 $ 61,353 26.1%
======= ======= ====== ======== ======== ======
Three months ended Year ended
December 31, December 31,
------------------------ -------------------------
(000 omitted) 2005 2004 % 2005 2004 %
------- ------- ------ -------- -------- ------
Free Cash Flow:
Net cash
provided by
operating
activities $15,505 $ 2,836 (a) $ 49,864 $ 35,646 39.9%
Less:
Capital
expenditures (6,117) (6,108) -0.1% (20,038) (15,374) -30.3%
Dividends
paid (888) (871) -2.0% (3,537) (871) (a)
------- ------- ------ -------- -------- ------
Free cash
flow $ 8,500 $(4,143) (a) $ 26,289 $ 19,401 35.5%
======= ======= ====== ======== ======== ======
(a) Change is greater than +/- 100 percent.
CONTACT: Viad Corp
Carrie Long, 602-207-2681 (Investor Relations)
clong@viad.com