VVI - Earnings call transcript Q3 2019 | Pursuit Attractions and Hospitality, Inc.

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Operator

Welcome to the Viad Corp Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode until the question-and-answer session of today’s conference. [Operator Instructions]. This call is being recorded.

If you have any objections, you may disconnect at this time.

speaker Carrie your ahead. please introduce I for Long, today, go May

Carrie Long

afternoon joining conference quarter for thank call. for Good you third us and Viad’s XXXX earnings

During our Steve Ellen the our hear CEO; Ingersoll, Officer. and and Moster, Financial Chief call, you’ll President from

our call, this in be business may to concerning SEC. are not other materially and actual the results risk can factors annual differ during constitute made historical in filed statements. those forward-looking forward-looking reports statements statements with found which Certain cause from Information and facts, quarterly that could the

income call, press to income adjusted can Viad, We’ll non-GAAP release, www.viad.com. segment Important reconciliations earnings be referring in or certain found and be on net these EBITDA loss measures operating X which items, loss during other attributable regarding of the or available our loss. including disclosures including to before income is Table adjusted or measures, segment to

over the to turn I’ll that, call With Steve.

Steve Moster

joining on you Thank us for today's call.

working an business. solid the Viad, and to drive several At third will growth new our important opened Our we accelerate GES quarter experiences we both was simplify execution strong to of strong businesses. and Pursuit, our with quarter value that the successful drive to At continue take our realize teams actions market our corporate growth strategies. shareholder at within growth are through hard of Across execution returns.

of XX.X%. hospitality strategy reflect quarter third Buy culture. adjusted results growth EBITDA of These delivered revenue margins strength and Pursuit strong Refresh, of XX% the Pursuit’s and Build, our segment

These are faster initially we experiences, near expected. performing had National our with side, in seven a Park Belton we RevPAR On great Glacier growth Mountain and Chalet properties our well. set the than Park Jasper of are delivering acquisitions Park very National are in properties Buy and recent existing Lodges

Additionally, future further efforts. projects on to for opportunities see investments revenue refresh enhance continued we to return these the and management continue

our experiences quarter, from of is continues much our in attraction travel Iceland and to ride partners. the Reykjavik. side, receiving anticipated the flight reviews during interest This scenery open including Iceland guest Build we amazing successfully and virtual tourists and third awareness great new On FlyOver the trade gain to over

Glacier ideally strong during also at building Cabin constructed & our the guest our West in West the our situated newly which our Glacier and National near forward is Park entrance XXXX to village, reviews RV offerings. existing retail beverage we look initial and We received We to opened success inaugural year Park and upon season. food

Windsong continued at the in the the very Finally, peak second season. opened the well third of our of room Alaska, which quarter XX end Lodge quarter expansion to perform during

we high new and addition the rooms, margin tours. of the cross-sell sightseeing were of With our Kenai to increase these marine Fjords popular able

Vancouver. transformation Lodge Maligne fantastic in with five Canadian the physical FlyOver at very side, the Lake at On recently beverage we're hotels happy Columbia our as and Canada Refresh Maligne Fodors, View Icefield as retail offering and Jasper the and our among which best well by food the was Canyon in Glacier and of listed

ensure enhance guest capturing all from across to to overall the investments. are these continue locations We our experience value we of maximum

use. continue success to their Banff Royal them confidence. and manage a nicely as Mount Hotel, proven members refresh to Our team give projects and projects our other Gondola These with us as will highest such best develop

RevPAR X.X% growth our existing our focus that at experiences, Pursuit’s utilizing of our initiative. stages the our much attractions. capitalizing And increase revenue of in continue first guest delivering increase performance we in early effective management. total properties, XX.X% a of realized same-store On was strong great year very diligent management, and we to ticket price through X.X% in drive at and a pricing. basis we on Across on hospitality assets, revenue cost visitor dynamic an are This per

We increase its visitor, at to effective and revenue high healthy and realized rolled FlyOver while experience revenue a ever in is and also this Gondola per a on strongest year price year of the track at both very ticket produce Banff scores. attractions. terms in Canada out it The Gondola maintaining guest

In Banff on fact, recently as ranked TripAdvisor. of the the fine number the one dining in reached was its number Gondola Bistro Banff ranking Sky attraction one and restaurant restaurants

long FlyOver haul enabled market. number four high remains in revenue us category popular very the to overall Vancouver in despite XXXX our with pricing hold dynamic line This margin visitation ranking a At its efforts attraction Canada, in Vancouver. of to with TripAdvisor lower

growth delivered various execution organic the organic to by the considering and Lodges. third the the projects Mountain especially team, great during quarter. required the X.X% deliver of on growth of revenue Pursuit Overall, integration This Park reflects effort

I'll comment financial Ellen on Now, ask for results quarter. Ellen? Pursuit’s to the

Ellen Ingersol

and everyone. Thanks Steve good afternoon

$XXX For EBITDA was adjusted segment was million the third adjusted million, segment revenue quarter income operating Pursuit’s was and million. $XX.X $XX.X

Lodges $XX Park Mountain the Chalet million quarter. The revenue XX.X%. the increased $XX.X revenue during quarter, acquisitions XXXX the contributed to or compared and million of Belton As of

Chalet million On and a group exchange result as as Mountain and X.X%. Park acquisitions Glacier or from an Belton which projects the our rate This and Alaska, unfavorable a the refresh West our our management was driven & Lodge as new mainly of variances, Park room projects, RV of performance Windsong organic the excludes well Cabin revenue efforts. expansion revenue XX and in Seward stronger opening build Lodges assets by basis existing our village increased of $XX.X

the EBITDA primarily the million The of acquisitions and contributed million $X.X Belton growth EBITDA $XX.X segment adjusted segment million due income Park quarter. income Chalet Pursuit’s segment operating by adjusted to quarter. adjusted and and improved from Mountain Lodges respectively and $X.X revenue. of segment operating in million This $XX.X XXXX increase of adjusted was the during

And back Steve. to you

Steve Moster

Ellen. Thanks,

revenue is favorable mix switch more with GES. margin and to and to the a of gears stronger achieving the on Now transform team The grow GES let strategy goal simplify, profile. me at focused a business ultimate

and the strong large within in continue area. is best both corporate profit that and at our event margin we One growth fragmented report to happy And of revenue I'm opportunities to GES space. to top-line grow that drive

represented During about XX% XXXX events GES’ total of revenue. corporate

year, this far year-on-year. events from our up corporate So XX% is almost revenue

The third clients us, strong quarter new CloudBees. with some notable Starbucks including for especially was and

biannual of third primarily business place revenue the conference represents majority we negative which that exhibition still in of was share year-on-year This and of the to XXXX our two side lower the third due the On and took GES’ expected rotation revenue, during saw result quarter. large events was quarter.

these events again produce will We XXXX. in

during reflecting experienced which a retail and from In growth a of our outlier drag and created general, Setting metric. on same-show continued low see produce. ability notable quarter exhibitions was events aside, the base conferences our our have growth we growth, to revenue focused pricing, We the exhibitor same-show produce. the a we that combination decline, that exhibition continue capture growth did discretionary revenue at base we one industry to overall large spend single-digit,

Simplify is another GES’ key of strategy. tenant

focused consolidations some streamlining satisfaction, including on lowering for serve restructuring improving execute operations. easier Vegas Here it business, we to this smaller and our client facility U.S. actions, making and in various our year, Las undertook teams our we're to clients. Earlier costs

simplification our footprint During actions the structure third rationalizing further Canada, facility to in streamlining operational efficiency, took and additional organizational in including we some strengthen our our quarter, EMEA.

that are pursuing better events removed across system is to year-to-date impactful from benefits. systematic one to that be clients, $XX of numerous our service made a other check example how million well both simplification in earlier standardized also about visually and structure. can to better event Through been to We're our simplification for and for is initiatives counter investment our year at growth organizers example smaller to us GES we've a more projects One This cost while exhibitor driving introduce a that enabling experience, actions, offering deliver. restructuring easier It's new GES. we this efficient. is also bring value registration received by just us

I position will for growth and truly to also commend ways approach GES business’ that opportunities, on cost profile. fundamental a finding the improvements the There transform taking structure. GES’ driving financial improve while is brand market team balanced capitalizing

I’ll turn more it commentary. back now, Ellen over for some And financial to

Ellen Ingersol

Thanks, Steve.

adjusted was segment and For the was segment third loss GES’ $X.X $XXX.X loss adjusted million, million. million EBITDA quarter operating $XX.X revenue was

quarter, clients to basis, million $XX.X $XX.X impact an or X.X%. million exchange the As million offset revenue unfavorable which and of wins. North rate of the was revenue decreased organic corporate excludes variances, or Organic decreased rotation new decrease other or was X.X%. growth negative On for America the XXXX $X.X segment compared X.X%, due revenue the share business which primarily approximately our by from continued million, to largely $XX

EBITDA business. GES’ a In negative the million, share EMEA, from $X.X operating by wins performance These partially and to $XX.X underlying from revenue. and X.X%, million or primarily decreased respectively XXXX the revenue based segment of $X higher approximately $XX.X rotation lower increased growth by and by adjusted million and new adjusted client were segment increases organic offset loss quarter. incentives total million due primary driven loss

For mostly as was Viad results which down third X.X% segment of XXXX million, as we lower from whole, at were consolidated growth a $XX.X GES Pursuit. adjusted EBITDA reported quarter the offset at by

reinvested million $XX.X $XX.X and business quarter cash into through operations we capital expenditures. from consolidated flow million the for back Our was the

September with of maintain sheet continue at to ratio We a XXth. leverage X.X balance strong a

quarter. $XX.X million cash equivalents of $XXX.X debt totaled and Our end million our was and cash the the at

share net restructuring for basis FlyOver to of tax third actions to acquisition Viad $X.X GAAP attributable GES, at of per the up after-tax $XXX,XXX quarter tax about simplification on which million costs costs after and related charges million. matters was $X.XX totaling $X.X favorable and Our primarily related included income start

reflects in before compared Our income per quarter. $X.XX an earnings primarily to third quarter, lower in adjusted EBITDA segment XXXX share XXXX the share versus the share increase to was and interest, non-controlling per quarter lower in the third $X.XX effective rate tax as other attributable higher a per income items

the income other well the Pursuit than a range driven certain Our projects higher group primarily delayed our at and also during per guidance before softer by and effective lower and prior builds refresh items of visitation as ramp-up tax as quarter. was completion share rate

current for Steve. XXXX fourth our pipeline at based at quickly updated reduced We've into back quarter the lower as growth sales our to well for our Pursuit which remainder quarter. outlook anticipated of quarter growth visibility third to the reflect the on I’ll is Next, GES, before it than full turning as outlook cover year guidance previously

We now million had as We be compared $XXX million segment $XXX.X to range to segment expecting in been $XXX the our million. million EBITDA it expect be of in of -- in $XXX.X the previously XXX.X million range to consolidated to XXXX. adjusted to

full revenue rotation. year buy culture clients hospitality and single-digit at year-over-year, wins efforts. corporate combined grow strength with our of client expect investments We offset more revenue EBITDA to share build, And and revenue events segment by the and we growth Pursuit expected our than reflecting about management through XX% full-year new growth in expect adjusted GES negative -- refresh, low that

GES million We be expect range to the adjusted to in of segment $XX.X at EBITDA

million is decrease million performance earn $XX.X $XX.X to none million, that based expectation by down the plan. incentive in versus in XXXX. under primary will $XX And our is GES driver management incentives XXXX, our of earned GES that which XXXX from

the CapEx full We year million cash of operations in growth $XX range of capital in be $XX million. $XXX range of $XXX expect which to from CapEx includes million to million growth at Pursuit, our about flow $XX we GES. $XX expenditures million expect million, and to to And the at approximately be

in fourth and earnings for guidance year Additional full quarter press found release. can our be both

And to I'll back it with that, you, Steve. turn

Steve Moster

plans Entering both Ellen. year, Pursuit aggressive and GES. we at Thanks, had this

more Although proud so our on accomplished to to actions this future members about the has those our to structure having prospects. excited our in growing for job our GES, short do year. we far initial improving what of I'm very we're we're team up continue a space, corporate even our coming to bit success take I'm At make and while their that are focus it on event easier cost simplification clients. team expectations,

closing note, very preparing focused while what out a a is XXXX. will on strong be also busy GES for The on XXXX team

events of events all base share drive same-shows. the during quarter. MINExpo million three first about produce to IMTS incremental XXXX, $XXX CONEXPO-CON/AGG corporate and major will from positive of Next quarter, and revenue continue realize its in in our gain year to we total while GES during rotation non-annual in growth the share we and expect In third

XXXX, are and that geothermal field continue XXXX implementation the Pursuit of busy in the progress to including executing Build, growth we We're Canada, open At some finalizing new make our Toronto, And organic for and continued good strategy Refresh, against very in projects FlyOver will Las of growth expected theme longer Iceland. pricing. FlyOver, lagoon remains investments undertake plan for we new on and the Buy to dynamic range XXXX. Vegas, our

increase locations remain active as attraction We thank locations. and well entire I'm strategies. very actively Viad to effort unforgettable to growth acquisition both evaluating team and development the shareholder we've about front, inspiring accomplished we excited for want the FlyOver value what in in are corporate hospitality as through continually additional proven on the targets, their iconic, growth and I tireless that our opportunities new pursuing.

And we will open please call the Simon, you with call? that, up questions. for open the can

Operator

you thank Absolutely, much. so

session. [Operator our Kartik, Kartik And first from Northcoast from Instructions]. We open. Mehta line have will now the Research. question begin line we to question-and-answer is your coming from

Kartik Mehta

in about little a bit rotation $XXX to wanted Steven GES and share Ellen, bit little a Steve, the on XXXX. million focus business. talked you the I

the that restructuring if that's at XX%. maybe some for generating look GES valid and still in million you’re going in today a incremental past about think done, $XXX do incremental realize for margins of XXXX? the that talked revenue you around number possibly think I you you've And you've margins

Steve Moster

Yes, up. producing non-annual are and the the that XXXX coming thanks question excited about We're very for Kartik. events

those to million we revenue flow so And the incremental have revenue. So through terms XX% on in incremental a that about bottom. of or be it'll that, believe $XXX will is still still events

into excited, the next of that So about very happen of been the is quarter up team And first for in we're some excited will going year. activity we've gearing XXXX.

Kartik Mehta

you GES, of mentioned of Steve, waterfall XXXX it impacting much wondering are, maybe the just those things one the the on how stay then impacts And pipeline to I'm sales is of down. slowing what And sales XXXX? versus that

Steve Moster

were year, of on offsetting Really focused we negative in. coming Kartik, rotation share when we some into this we had came very that the

was $XX to not to negative full million us. of on only impact share basis, offset going really but able that we $XX million kind to year that happy have that of I'm So grow that. beyond a we continue to rotation were

pipelines. enter So that we we've a a And bit we as look into adjustment. high fourth took business, the sales made our for we and quarter, the the recognized expectations were at little our

So not XXXX. 'XX, an in it's and impact in really

Kartik Mehta

you strong. question, seems Steve, had growth last organic less on just but one just we Park then attendance And to little business, strong be expecting. a at just bit the Pursuit very than X.X% were

said, result As softness thought? else was attendance the anything business, what was or long was you you of flights look haul the the or there at maybe a as than you just less

Steve Moster

was We had growth and created to drove the about off a XX%. the of during is a get those and really awards we've strong strong and of testament XXXX ground really they some talked a we organic we've talked that at that the year, Pursuit. to The -- These organic implemented. The for projects excited that the revenue around of growth kind lot experiences recognition are that call. the that the about last

at specific travel continue we volumes trade -- locations Pursuit lower network. So within did see but to the

saw the travel So Adventure, participation. the Glacier we trade at Icefields where less or specifically

Vancouver, the call, the revenue some big we lower brought dynamic as into saw lot able talked results increase business, -- some the passenger haul pricing for a some also our long well the like of about on as as that RevPAR Kartik to of of but We portion the well on, our as that in the asset. the based attraction, at offset of in hospitality pieces new were per we through in in we a visitation

lighter but underlying business. strong we're some weren't about travel So, of We overcome lot able I visitations look excited really trade feel there's super and the activity some things of at a of that to good we like fully of business, parts happening the the the the really when underlying about.

Operator

open. Our next from from Capital question Janney is Tyler Markets. coming line is Tyler, Batory of line your

Tyler Batory

can Just properties? a can than Mountain with the Pursuit Park about talk can side of a bit Steve, implemented Lodge discuss early that you you've what there but then know specifically guys the few owned faster seeing not side what the curious of do growth I there? management you've those days, about questions you it’s you're little you changes, you expected. talk me seeing any from if mentioned sure you also, have more think initially things. able since been properties. And revenue RevPAR you on to I'm you're what But I them? just on

Steve Moster

Tyler. Thanks, Sure.

First of properties. on Mountain the Park Lodge

And right acquired As the as seeing a these than I we're RevPAR increases mentioned, we we during expected. properties the before season peak started. call, reminder, greater

So executing take hotels season. we're fill that our the and during increases We fortunate season. against to the was main up emphasis able were peak price just the on

was in And perspective. serve strategic expectation. our beat of this believe revenue that management a that kind us acquisition So we well into going from high the a point really future will

dynamic this to only most mentioned specifically more Mountain did the we of like. a increases doing match Park couple just what point with really which management You revenue moving time, pricing, Lodges are were at at look demand we along locations the prices that in RevPAR

So it about more management. is pricing, less and just about revenue dynamic

Tyler Batory

also helpful. Okay, to about That's And perfect. want I ask FlyOver then Iceland.

that's is you're give detail for few that you and now. a Now more been seeing Can open over how months what that there? performing a little

Steve Moster

very construction TripAdvisor. a their guest fun visitors are than local rating to seen the fascinating from so a five never reviews. such started It's in from delays, far getting we're really we're some who on a because from Icelanders seen country a little excited that presented about the good way. reviews actually commenting the We've read are pick of up. they’ve saying We Yes, of seeing but we later all star what it's anticipated

we're into excited XXXX we're the Iceland. very about season high in getting. going about we're So the And excited response

Tyler Batory

you then things. little influencing the that mentioned a business. margin the bit incentives the Okay, in business? margin gears that's in I side more GES performance you'd Can switching to about Ellen think And of talk based the great. that EBITDA

with cost anything on side there going GES? of is the else So things within

Ellen Ingersoll

bit did based in incentives big we cost the year-over-year a due Well, did takeouts year but was earn to margin performance so out. Steve wiped that of during incentives. about, year, quite as XXXX, basically not incentives talked the difference GES

and an that difference that's So decreased. from that impact primary is the there the margin

Tyler Batory

with be thoughts And going that repurchases then you're about me. capital about question mean thinking versus some CapEx But these on last to up ramping of from well? here you're great. thinking how FlyOver as the share M&A projects. to any just how Any allocation, balancing I Okay, obviously changes potential spending is some and then of

Steve Moster

I you're right. think Well,

our GES’ So with up and capital go will we new ramp non-annual assets as as online rotation. XXXX into come

So us of several good for it up capital. sets years

businesses we allocation, record strong we at the we very when track in that investments have that we in Now a we've look our business have well the we obviously as look understand the as track at acquired. record and that made

So be business and dividend that will we there will feel it's obviously, approach repurchases a well. at obviously, a as appropriate, between be and when investments balanced our priority. But the looking in share

Operator

Thank you. instructions]. [Operator

Steve coming of next the from Sidoti is is our question Steve, open. O’Hara from Now line line & your Company.

Stephen O’Hara

Just a question.

there bottom-line up So is a than ratcheting terms GES deck XXXX. things like of guess I performance XXXX other in little given or it lower year-over-year kind that high XXXX. different resetting in the earned of incentives in? I watermark bit guess Is was factored maybe are things just the nothing based were in down in

Ellen Ingersoll

big were the is year-over-year set the operating last were categories so target achieved as No, you in which at, the targets zero in though, and incentives year. was we the third the fourth the see income, quarter plan why no XXXX look When the year-over-year of and quarter not incentive mostly revenue. incentives year last for margin of same the the

set targets is For targets the based now. GES for forecast on 'XX, so 'XX the right far those were the money we in have plan the and on that

Stephen O’Hara

Okay.

more in the lower is So right? of closely I looked guidance Is that's -- the guidance, terms pursuit. due and it, that that means -- that but haven't but at too -- to is it

Ellen Ingersoll

the is the is guidance the based Well, guidance difference in incentives. lower EBITDA performance and main

a revenue perspective, able overcome weren't So we overcome incentives to -- the to able rotation but were the delta. we the from

Stephen O’Hara

Okay.

Steve Moster

that. that the of obviously and grown we to one -- to negative is the impact was in have business kind rotation pleased the And about even XXXX going some offset and and of that differences plan we're to grow share anticipated knew beyond

and So XXXX in the major one between of differences business the that's XXXX.

Steve O’Hara

in not then money I Okay. a guys were or the effectively positive, prior pricing the management terms on I a you kind a Mountain and maybe the marketing or I'm pricing the past it just seems going -- or in mean, mean I that boost do took. I and updates the apparently there. team the guess quick me why maybe pricing -- the I to of left just was of you you mean of to able -- table kind it Lodges of it's give I'm And like here being just can wondering small Park -- what matter actions of there. the just properties them to bit little idea

just Just I'm about I dynamic? guess that wondering -- curious

Steve Moster

Sure.

at National expectations. Jasper attractions of anticipated when that we've terms believe properties. of perspective it's due very from Glacier RevPAR to our for during that's has market, we given success management the that that job. management revenue we not that centralized do to the projects looks own we properties to a do they going our taking exceeded We acquisition Park timing revenue of we upside is and last We our any several think our had the would Mountain over the been have a price. our In opportunity in anything years about do comfortable about like But And we've that and really all refresh all feeling team it's revenue and strong Park which were acquired management or in able of forward. the that an the the demand Lodges

we'll a do changes the is some So to that have we're that properties. some very we happy refresh the ahead, potentially or about we further where to given there XXXX, opportunity room in stand think and

started kind that we've a for think of on good we acquisition. trail So

Steve O’Hara

you’d to without and with to there refresh returns is a where properties you that refresh, pricing about Okay. maybe the can refresh And way et certain expect if even maybe think then any generate go cetera? or

Steve Moster

pretty finished peak right before an Steven just it's acquisition took We we season peak operating the the early Sure. of season. of cycle. the that in ownership

not what So had Royal are it opportunities we we're success we're evaluating is forward. I'm we untapped to there going Avenue to point of the you've refresh that to the in firsthand just the Mount at that think we're over properties. I does take saying and how reach that those believe potential still but would move and and time. these to I we've going the level Hotel. But of seen point refresh, fact And that Alcan advantage

Steve O’Hara

Okay. August kind you differential July I of But year say year know there table in any I I that market in year in And incorrect? what the a kind months. this think was and maybe and portfolio? in pricing, June. of more did And I’m around money the the that's was are maybe left mean terms the last on big of of

Steve Moster

They mention we pleased know year with our acquisition experienced But model. not it year-over-year. I that are the properties. and expectation And increase we're did beat around our the that outcome.

we'll year. management throughout use the so And revenue to continue full

Operator

[Operator as further this time. Instructions]. in you. the Thank of time. We this questions questions no at no There show queue are

Steve Moster

bye. look we Thanks you to with Simon. quarter. Viad. forward for thanks Good next in again and Alright, your speaking everybody questions And your interest

Operator

participation. you concludes Thank may now Thank you disconnect. today's your And for that conference. you. And

Pursuit Attractions and Hospitality (PRSU) 25 Oct 192019 Q3 Earnings call transcript