Exhibit 99
Viad Corp Announces First Quarter Results
Income from Continuing Operations of $0.62 Per Share
PHOENIX--(BUSINESS WIRE)--April 28, 2006--Viad Corp (NYSE:VVI)
today announced first quarter 2006 revenue of $233.8 million, segment
operating income of $17.7 million, and income from continuing
operations of $13.8 million, or $0.62 per diluted share. Income before
impairment recoveries was $13.2 million, or $0.60 per diluted share,
as compared to $12.4 million, or $0.56 per diluted share, in the 2005
first quarter and the company's prior guidance of $0.35 to $0.43 per
diluted share. Viad's 2006 first quarter results included gains from
the sale of assets of $2.2 million after tax, or $0.10 per diluted
share, and favorable tax settlements of $1.0 million, or $0.05 per
diluted share.
Paul B. Dykstra, president and chief executive officer, said, "Our
strong results for the first quarter were driven by great performance
at GES and gains from the sale of certain assets. Despite negative
show rotation revenue of $18 million, revenue at GES declined by only
$4.2 million. This was the result of strong same-show growth, which
offset most of the impact of the negative show rotation."
First Quarter 2006 Financial Highlights
Highlights of the 2006 first quarter, compared to first quarter
2005 results, are presented below.
Q1 2006 Q1 2005 Change
-------- --------- ---------
($ in millions)
Revenue $233.8 $249.5 -6.3%
Segment operating income $17.7 $22.8 -22.2%
Operating margins (Note A) 7.6% 9.1% -150 bps
Income before impairment recoveries
(Note B) $13.2 $12.4 6.6%
Net income (Note C) $13.6 $12.2 11.6%
Adjusted EBITDA (Note B) $26.1 $27.1 -3.9%
Cash from operations $5.8 $10.7 -45.9%
Free cash flow (Note B) $(1.2) $6.3 (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/recoveries is defined by Viad
as income from continuing operations before the after-tax effects of
impairment losses/recoveries. Adjusted EBITDA is defined by Viad as
net income before interest expense, income taxes, depreciation and
amortization, impairment losses/recoveries, 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/recoveries, 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/recoveries, 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 recoveries of
$508,000 in 2006 relating to insurance proceeds received for assets
damaged as a result of Hurricane Katrina. Net income also includes
losses from discontinued operations of $149,000 and $227,000 in 2006
and 2005, respectively, relating to tax matters associated with
previously sold operations.
At the end of the first quarter 2006:
-- Cash and cash equivalents were $154.7 million.
-- Debt totaled $17.1 million, with a debt-to-capital ratio of
4.0 percent.
Also relating to the first quarter 2006:
-- Viad repurchased 414,400 shares at an aggregate cost of $13.3
million.
-- Viad sold its remaining 50 percent interest in its corporate
aircraft and certain related equipment for $10.0 million in
cash, resulting in a gain of $1.7 million ($1.1 million after
tax). Viad also sold certain undeveloped land for $2.9 million
in cash, resulting in a gain of $1.7 million ($1.1 million
after tax).
-- Viad recorded favorable tax settlements of $1.0 million.
-- Viad recorded insurance recoveries of $843,000 ($508,000 after
tax) related to claims associated with Hurricane Katrina. The
final resolution of these claims remains pending with Viad's
insurance carriers, and the amounts of additional recoveries,
if any, remain uncertain.
GES Exposition Services (GES)
For the first quarter of 2006, GES' revenue was $194.1 million,
down $4.2 million or 2.1 percent from $198.4 million in the first
quarter of 2005. First quarter segment operating income was $22.4
million, down $4.3 million or 16.2 percent from $26.8 million in 2005.
Operating income was lower due to negative show rotation revenue and
higher performance-based incentive accruals.
Dykstra said, "We were expecting declines in GES' revenue and
operating income versus the prior year because of negative show
rotation. However, actual results were much better than we previously
expected due to very strong performance across many of GES' shows.
GES' base same-show growth was nearly 11 percent in the first quarter,
driven by the Products and Services group and continued improvement in
the industry. Kevin Rabbitt and his team are doing a great job of
driving profitable revenue growth, pricing initiatives and
productivity improvements."
Exhibitgroup/Giltspur (Exhibitgroup)
Exhibitgroup's first quarter revenue was $34.7 million, down $11.7
million or 25.2 percent from $46.4 million in the first quarter of
2005. Segment operating results decreased by $1.2 million to a loss of
$3.0 million, as compared to a loss of $1.8 million in the 2005 first
quarter.
Dykstra said, "As expected, Exhibitgroup's first quarter revenue
decreased as a result of three primary factors. First, the 2005 first
quarter included spending from clients that exhibited at a large
tradeshow that only occurs once every three years. Second, some
clients are experiencing shifts in their tradeshow program schedules.
Instead of exhibiting at first quarter shows, they plan to exhibit at
shows later in the year. Lastly, the 2005 first quarter included
revenue from two clients that were not re-signed in the second half of
2005."
Dykstra added, "Exhibitgroup's operating income declined as a
result of the overall revenue decline. Additionally, Exhibitgroup
experienced a slightly lower mix of construction revenue than we had
previously expected, which weighed on margins."
Travel and Recreation Services
Travel and Recreation Services segment revenue for the 2006 first
quarter was $4.9 million, as compared to $4.7 million in the first
quarter of 2005. First quarter segment operating loss was $1.7
million, as compared to a loss of $2.2 million in the 2005 first
quarter.
Dykstra said, "Due to its seasonal nature, the Travel and
Recreation Services segment generates less than 10 percent of its full
year revenues during the first quarter. As a result, our main focus
during this time is on cost containment. We look forward to this
segment's positive contributions to operating income during the second
and third quarters."
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.
Full Year 2006
Viad's guidance for the 2006 full year has been increased to
reflect the first quarter gains from the sale of assets of $0.10 per
share, the favorable tax settlements of $0.05 per share, and $0.06 per
share related to the effect of Viad's first quarter share repurchases
and an increase in interest rate expectations. Overall, the outlook
for Viad's core operating results remains unchanged. Full year income
before impairment recoveries is now expected to be in the range of
$1.70 to $1.81 per share, an increase from the company's prior
guidance of $1.49 to $1.60 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). The guidance range for 2006
assumes an effective tax rate of 39 percent for the remainder of the
year.
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 due to 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, negative show rotation at GES was $18
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.
Second Quarter 2006
For the second quarter, Viad's income per diluted share is
expected to be in the range of $0.52 to $0.60. This compares to income
from continuing operations of $0.50 per share in the 2005 second
quarter. Revenue is expected to be comparable to or slightly higher
than the 2005 amount of $227.0 million. Segment operating income is
expected to be in the range of $21.0 million to $24.5 million, as
compared to $22.3 million in the 2005 second quarter.
Implicit within this guidance are the following segment revenue
and operating income expectations.
Segment
Segment Operating Income
Revenue (Loss)
--------------------- --------------------
low-end high-end low-end high-end
($ in millions)
GES $165.0 to $175.0 $16.5 to $18.5
Exhibitgroup $42.0 to $48.0 $(0.5) to $1.5
Travel & Recreation $20.0 to $22.0 $4.5 to $5.0
Dykstra said, "Overall, the first quarter was a good start to
2006. We are very encouraged by the strong same-show growth at GES and
continued success of the Products and Services group. Exhibitgroup
continues to be the wild card. After finishing 2005 with two
consecutive quarters of improvement in the mix of construction
revenue, we experienced a softer than expected construction revenue
mix in the first quarter of 2006. While this is a bit disappointing,
we continue to see good strength in the exhibition and event industry
and signs that exhibitors are willing to spend more. The team at
Exhibitgroup is working hard to win profitable new exhibit
construction business and we are cautiously optimistic that we can
hold the line on the construction revenue mix for the year."
Dykstra concluded, "All of our companies remain focused on cost
control and profitable growth in order to provide quality products and
services at a good value to our customers and strong returns to our
shareholders. Our goal is to continue to carry the momentum we gained
in 2005 into 2006 to win for all of our stakeholders."
Conference Call and Web Cast
Viad Corp will hold a conference call with investors and analysts
for a review of first quarter 2006 results on Friday, April 28, 2006
at 9 a.m. (ET). To join the live conference call, dial (800) 811-0667,
passcode 7029184, 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 7029184, or visit the Viad Web site and link to a
replay of the webcast.
Viad is an S&P SmallCap 600 company. Major operating companies
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 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, 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 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) 2006 2005 %
---------- ---------- ------
Revenues (Note A) $233,770 $249,512 -6.3%
========== ========== ======
Segment operating income (Note A) $17,710 $22,767 -22.2%
Corporate activities and minority
interests (1,740) (2,619) 33.6%
Gain on sale of corporate assets
(Note B) 3,468 - (a)
Restructuring recoveries (Note C) 18 290 -93.8%
Impairment recoveries (Note D) 843 - (a)
Net interest income 1,437 150 (a)
---------- ---------- ------
Income before income taxes 21,736 20,588 5.6%
Income tax expense (7,979) (8,163) 2.3%
---------- ---------- ------
Income from continuing operations 13,757 12,425 10.7%
Loss from discontinued operations
(Note E) (149) (227) 34.4%
---------- ---------- ------
Net income $13,608 $12,198 11.6%
========== ========== ======
Diluted income per common share:
Income from continuing operations $0.62 $0.56 10.7%
Loss from discontinued operations (0.01) (0.01) 0.0%
---------- ---------- ------
Net income per share $0.61 $0.55 10.9%
========== ========== ======
Basic income per common share:
Income from continuing operations $0.63 $0.57 10.5%
Loss from discontinued operations (0.01) (0.01) 0.0%
---------- ---------- ------
Net income per share $0.62 $0.56 10.7%
========== ========== ======
Common shares treated as outstanding
for net income per share
calculations:
Average outstanding shares 21,812 21,917 -0.5%
========== ========== ======
Average outstanding and
potentially dilutive shares 22,202 22,092 0.5%
========== ========== ======
(a) Change is greater than +/- 100 percent.
VIAD CORP AND SUBSIDIARIES
TABLE ONE - NOTES TO QUARTERLY RESULTS
(UNAUDITED)
(A) Reportable Segments
Three months ended March 31,
----------------------------
(000 omitted) 2006 2005 %
---------- ---------- ------
Revenues:
GES Exposition Services $194,127 $198,350 -2.1%
Exhibitgroup/Giltspur 34,724 46,432 -25.2%
Travel and Recreation Services 4,919 4,730 4.0%
---------- ---------- ------
$233,770 $249,512 -6.3%
========== ========== ======
Segment operating income (loss):
GES Exposition Services $22,420 $26,752 -16.2%
Exhibitgroup/Giltspur (3,027) (1,828) -65.6%
Travel and Recreation Services (1,683) (2,157) 22.0%
---------- ---------- ------
$17,710 $22,767 -22.2%
========== ========== ======
(B) Gain on Sale of Corporate Assets -- In the first quarter of 2006,
Viad sold its remaining interest in its corporate aircraft along
with related equipment for $10.0 million, resulting in a gain of
$1.7 million ($1.1 million after-tax). Also in the quarter, Viad
sold certain undeveloped land in Phoenix, Arizona for $2.9
million, resulting in a gain of $1.7 million ($1.1 million
after-tax).
(C) Restructuring Recoveries -- In the first quarter of 2006 and
2005, Viad reversed restructuring reserves of $18,000 ($11,000
after-tax) and $290,000 ($175,000 after-tax), respectively.
(D) Impairment Recoveries -- In the third quarter of 2005, GES'
operations in New Orleans were severely impacted by Hurricane
Katrina and the related events that occurred. At that time,
management made an estimate of the damage to GES' New Orleans
property and 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 first quarter of 2006, Viad
recorded insurance recoveries of $843,000 ($508,000 after-tax)
related to claims associated with Hurricane Katrina. The final
resolution of these claims remains pending with Viad's insurance
carriers, and the amounts of additional recoveries, if any,
remain uncertain.
(E) Loss from Discontinued Operations -- In the first quarter of 2006
and 2005, Viad recorded losses from discontinued operations of
$149,000 and $227,000, respectively, relating to tax matters
associated with previously sold operations.
VIAD CORP AND SUBSIDIARIES
TABLE TWO - INCOME BEFORE IMPAIRMENT RECOVERIES,
ADJUSTED EBITDA AND FREE CASH FLOW
(UNAUDITED)
Three months ended March 31,
----------------------------
(000 omitted) 2006 2005 %
--------- --------- ------
Income before impairment recoveries:
Income from continuing operations $13,757 $12,425 10.7%
Impairment recoveries, net of tax (508) - (a)
--------- --------- ------
Income before impairment recoveries $13,249 $12,425 6.6%
========= ========= ======
Three months ended March 31,
----------------------------
(per diluted share) 2006 2005 %
--------- --------- ------
Income before impairment recoveries:
Income from continuing operations $0.62 $0.56 10.7%
Impairment recoveries, net of tax (0.02) - (a)
--------- --------- ------
Income before impairment recoveries $0.60 $0.56 7.1%
========= ========= ======
Three months ended March 31,
----------------------------
(000 omitted) 2006 2005 %
--------- --------- ------
Adjusted EBITDA:
Net income $13,608 $12,198 11.6%
Loss from discontinued operations 149 227 34.4%
--------- --------- ------
Income from continuing operations 13,757 12,425 10.7%
Impairment recoveries (843) - (a)
Interest expense 366 557 34.3%
Income tax expense 7,979 8,163 2.3%
Depreciation and amortization 4,823 5,994 19.5%
--------- --------- ------
Adjusted EBITDA $26,082 $27,139 -3.9%
========= ========= ======
Three months ended March 31,
----------------------------
(000 omitted) 2006 2005 %
--------- --------- ------
Free Cash Flow:
Net cash provided by operating
activities $5,785 $10,700 -45.9%
Less:
Capital expenditures (6,070) (3,474) -74.7%
Dividends paid (881) (881) 0.0%
--------- --------- ------
Free cash flow $(1,166) $6,345 (a)
========= ========= ======
(a) Change is greater than +/- 100 percent.
CONTACT: Viad Corp, Phoenix
Carrie Long, 602-207-2681 (Investor Relations)
clong@viad.com