Filing summary
Entity discrepancy: The supplied metadata names Pursuit Attractions & Hospitality, Inc., but the filing identifies the registrant as Viad Corp (CIK/entity name in the filing text). Verify that this is the intended filing before relying on the figures below.
Business context and reporting period
Viad Corp’s unaudited Form 10-Q covers the three months ended March 31, 2016, with comparisons to the three months ended March 31, 2015. Viad operates Marketing & Events (U.S. and International) and Travel & Recreation businesses. Results are seasonal: Travel & Recreation activity peaks in summer, while event revenue varies with show timing and rotation.
Financial results and liquidity
| Metric | Q1 2016 | Q1 2015 or prior balance |
|---|---|---|
| Revenue | $241.4 million | $264.4 million; down 8.7% |
| Loss from continuing operations | $7.0 million | $2.0 million |
| Net loss attributable to Viad | $7.0 million; $0.35 per diluted share | $2.1 million; $0.10 per diluted share |
| Adjusted EBITDA, a non-GAAP measure | $(0.6) million | $4.7 million |
| Operating cash flow | $17.0 million | $18.3 million |
| Capital expenditures | $7.3 million | $5.3 million |
| Cash and cash equivalents | $41.3 million | $56.5 million at December 31, 2015 |
| Debt and capital lease obligations | $162.7 million | $127.4 million at December 31, 2015 |
| Stockholders’ equity | $335.1 million | $335.3 million at December 31, 2015 |
Cash used in investing activities was $64.9 million, principally reflecting $57.8 million of net acquisition payments and higher capital spending. Financing activities provided $32.0 million, including $50.0 million of borrowings. The filing reports $118.7 million of remaining credit-facility capacity, including the effect of $1.3 million in letters of credit. Management said existing liquidity was expected to fund operations and capital commitments for at least the next 12 months.
Segment operating results weakened: Marketing & Events operating income fell to $0.3 million from $3.7 million; Travel & Recreation reported a $6.6 million operating loss versus $4.8 million. Consolidated operating loss was $8.2 million, compared with $3.9 million.
Material changes and notable items
- Revenue declined mainly from negative show rotation, timing of corporate-client spending and short-term bookings, a $4.0 million unfavorable foreign-exchange impact, and closure of the Banff Gondola for renovations. Base same-show revenue grew 5.3%.
- Viad acquired Maligne Lake Tours in January for approximately $15.0 million and CATC in March for $45.0 million, both subject to adjustments. The acquisitions expanded its Canadian Rockies and Alaska tourism offerings; preliminary purchase-price allocations were not final. Q1 results included $0.1 million revenue and $0.1 million operating loss from Maligne Lake Tours, and $0.05 million revenue and $0.6 million operating loss from CATC.
- The February credit-agreement amendment revised covenants, including a 3.50:1 maximum leverage ratio and 1.75:1 minimum fixed-charge coverage ratio. At quarter-end, reported ratios were 2.00:1 and 2.19:1, respectively, and Viad said it was in compliance.
- Q1 restructuring charges were $1.0 million, compared with $0.2 million. Corporate expense decreased 32%, partly because the prior-year period included shareholder-related, consulting, and transaction costs.
Outlook, risks, and contingencies
- For full-year 2016, management expected Marketing & Events revenue to rise by high-single digits from 2015, supported by approximately $50 million of positive show rotation, new business, and same-show growth. It anticipated foreign exchange headwinds of about $16 million to revenue and $1 million to segment operating income, and mid-single-digit U.S. base same-show revenue growth.
- Management expected Travel & Recreation revenue to increase 20%–25%, with the two acquisitions contributing an estimated $30–$32 million of revenue and $9–$11 million of Adjusted Segment EBITDA. It also cited $7–$9 million of expected revenue reduction from streamlining package-tour and transportation operations, approximately $3 million of FX-related revenue headwind, and about $1 million of revenue impact from the Banff Gondola renovation closure.
- Principal risks discussed include foreign-exchange and interest-rate exposure, discretionary tourism demand, event timing and customer spending, labor relations and possible work stoppages, underfunded multi-employer pension plans, self-insured claims, environmental matters, and acquisition integration. Viad did not hedge foreign-currency translation exposure and had no currency forward contracts outstanding at quarter-end.
- Recorded environmental remediation liabilities related to previously sold operations were $4.4 million. Guarantees for subsidiary leases had a maximum potential payment of $9.9 million. The filing says the ultimate amount of any additional multi-employer pension funding was not ascertainable; management did not expect disclosed litigation and environmental matters to materially affect results after provisions and insurance.
Important facts for investors to verify
- Confirm the registrant identity: the filing is for Viad Corp, not the company named in the request metadata.
- Review the acquisition purchase-price allocations, integration progress, and whether management’s revenue and Adjusted Segment EBITDA expectations were achieved.
- Track event rotation, same-show growth, tourism seasonality, the Banff Gondola reopening, and foreign-exchange impacts against the stated outlook.
- Monitor debt levels, covenant headroom, acquisition-related borrowing, and available credit capacity.
- Assess labor negotiations, multi-employer pension exposure, insurance and environmental liabilities, and the assumptions supporting deferred tax assets.