Viad Corp. 2021 Form 10-K — Investor Summary
Reporting period: Fiscal year ended December 31, 2021. The filing is by Viad Corp (NYSE: VVI); Pursuit Attractions & Hospitality is one of its two reportable segments, alongside GES.
Business context
Viad operates Pursuit, a portfolio of attractions, hotels, tours, and hospitality experiences in destinations including the Canadian Rockies, Alaska, Glacier National Park, Iceland, and Las Vegas; and GES, a live, hybrid, and digital events services business. Pursuit is highly seasonal, earning 82% of 2021 revenue in the second and third quarters.
Financial performance and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Total revenue | $507.3 million | $415.4 million |
| Net loss attributable to Viad | $(92.7) million | $(374.1) million |
| Segment operating loss (non-GAAP) | $(47.0) million | $(116.2) million |
| Diluted loss per common share | $(5.01) | $(18.64) |
| Net cash used in operating activities | $(37.9) million | $(80.2) million |
| Capital expenditures | $57.9 million | $53.6 million |
- Revenue rose 22.1% year over year but remained well below 2019’s $1.30 billion, reflecting the continuing effects of COVID-19 on travel and events.
- Pursuit revenue increased $110.2 million to $187.0 million; its segment operating result improved to $4.6 million income from a $42.3 million loss. Three attractions opened or were acquired in 2021 and generated $15.6 million of incremental revenue.
- GES revenue fell $18.3 million to $320.3 million, while its segment operating loss improved to $51.6 million from $73.9 million. Cost reductions and a $9.1 million Orlando warehouse-sale gain contributed to the improvement.
- The net loss narrowed principally because 2020 included $203.1 million of impairment charges and higher restructuring costs, as well as improved segment results. Viad recorded no impairment charges in 2021.
- At year-end, cash and cash equivalents were $61.6 million; cash, cash equivalents, and restricted cash totaled $64.3 million. Available liquidity was $149.0 million, including $87.4 million of unused revolving capacity.
- Total debt and finance obligations were $459.4 million, including $390.5 million of debt and $63.4 million of finance lease obligations. Long-term debt and finance obligations were $446.6 million. Interest expense increased to $28.4 million from $18.3 million.
Material changes and capital structure
- In July 2021, Viad refinanced its prior facility with a $400 million term loan and a $100 million revolver. The term loan matures in 2028; the revolver matures in 2026. The term loan’s weighted-average interest rate was 5.5% at year-end.
- The revolving facility requires minimum liquidity of $75 million through June 30, 2022; financial covenant testing begins September 30, 2022. The term loan has no financial covenants.
- Viad’s $135 million Series A convertible preferred investment from Crestview carries a 5.5% cumulative quarterly dividend and a $21.25 common-stock conversion price. Viad paid $7.7 million of preferred dividends in 2021 and said it intended to pay them in cash for the foreseeable future.
- Common dividends and open-market share repurchases remained suspended. The filing reports $75–$80 million of expected capital expenditures, including approximately $30 million for selected maintenance projects.
Outlook, risks, and unusual items
- Management said existing liquidity should fund operations and capital commitments for at least the next 12 months. It provided no specific revenue, earnings, or margin guidance in the supplied filing text.
- Management described recovery during 2021, but noted continuing uncertainty from COVID-19 and variants, travel restrictions, lower attendance at larger events, and cancellations late in the year. U.S. Pursuit visitation strengthened, while Canada and Iceland remained more constrained.
- Key risks include renewed travel or event restrictions, economic weakness and discretionary-spending declines, seasonal concentration, labor shortages and rising wages, union negotiations, show rotation and customer concentration at GES, project delays or cost overruns, foreign-exchange exposure, cybersecurity, and pension-plan funding obligations.
- The July 2020 Ice Explorer accident at the Athabasca Glacier caused three fatalities and multiple serious injuries. Viad said it was cooperating with regulators and believed its insurance coverage was sufficient, subject to customary deductibles.
- Other exposures include $101.8 million of maximum potential payments under guarantees for subsidiary leases and $2.2 million of recorded environmental remediation liabilities related to previously sold operations. The filing says unresolved legal liabilities are not ascertainable but are not expected, after reserves and insurance, to materially affect results.
- Viad reported $103.5 million of valuation allowance against $117.1 million of gross deferred tax assets. It also reported that goodwill of $112.1 million relates to Pursuit; no 2021 impairment was recorded, though future impairment remains possible if forecasts or assumptions deteriorate.
Most important facts to verify
- Whether Pursuit’s recovery and GES event volumes continued after year-end, and whether Omicron-related disruption persisted.
- Liquidity and covenant headroom, including the $75 million minimum-liquidity requirement and covenant tests beginning in September 2022.
- Debt-service burden, floating-rate exposure, and the cash cost and potential dilution associated with preferred dividends and conversion.
- Actual spending, timing, and expected returns for the planned FlyOver projects and other capital commitments.
- Developments in the Ice Explorer accident investigation and claims, and the adequacy of insurance and recorded reserves.
- The filing’s audited financial statements received an unqualified opinion, and the auditor and management reported effective internal control over financial reporting as of December 31, 2021.