Viad Corp. (NYSE: VVI) — Form 10-Q summary
Filing identity: The supplied filing is for Viad Corp., not a standalone filing by Pursuit Attractions & Hospitality, Inc. Pursuit is one of Viad’s three reportable segments. Reporting period: three months ended March 31, 2023; figures are unaudited and in U.S. dollars unless stated otherwise.
Business context and results
Viad operates Pursuit, a travel attractions and hospitality business, and GES, comprising experiential marketing agency Spiro and GES Exhibitions. Management reported stronger international tourism and live-event activity, with little to no COVID-related disruption in the quarter. Results are seasonal: Pursuit earned 81% of its 2022 revenue in the second and third quarters.
| Metric | Q1 2023 | Q1 2022 |
|---|---|---|
| Revenue | $260.8 million | $177.4 million |
| Net loss attributable to Viad | $20.9 million | $29.0 million |
| Diluted loss per share | $1.10 | $1.53 |
| Segment operating income (loss), non-GAAP | $(5.5) million | $(22.8) million |
| Cash provided by operating activities | $10.1 million | $17.9 million |
| Capital expenditures | $11.4 million | $12.6 million |
Revenue rose 47%, while the net loss narrowed by $8.1 million. Segment operating performance improved mainly on higher revenue. GES generated $13.6 million of segment operating income versus a $1.6 million loss a year earlier; Pursuit’s segment operating loss narrowed to $19.1 million from $21.2 million. Consolidated costs of services and products exceeded revenue by approximately $5.5 million, before corporate costs, interest, restructuring, and other items.
Liquidity, debt, and capital
- Cash and cash equivalents were $50.8 million at March 31, down from $59.7 million at year-end. Available liquidity, including $89.1 million of undrawn revolver capacity, was $139.9 million.
- Total debt and finance obligations were $467.7 million, including $400.9 million of debt and $64.5 million of finance leases. Long-term debt and finance obligations were $456.9 million. Term Loan B carried a 9.9% rate at quarter-end.
- Net interest expense increased to $12.2 million from $5.9 million, primarily due to higher interest rates and lower capitalized interest. A new interest-rate cap covers $300 million of Term Loan B borrowings when one-month SOFR exceeds 5.0%.
- Viad reported compliance with its revolving-credit covenants: total net leverage ratio 2.83x versus a 4.50x limit for March 31, and interest coverage ratio 3.48x versus a 2.0x minimum. The term loan has no financial covenants.
- Management expects existing liquidity to cover operations and projected capital needs for at least 12 months. Planned capital expenditures for the next 12 months are approximately $75–$85 million, including about $45 million for select growth projects, such as FlyOver Chicago.
Changes, outlook, and risks
- Pursuit revenue increased 37% to $32.7 million, supported by recovering international visitation. Same-store attraction visitors rose 40%; same-store hospitality RevPAR increased 13%. Sky Lagoon visitation rose 74% and FlyOver Iceland visitation rose 47% year over year.
- GES revenue increased 49% to $228.1 million as live events returned and large events postponed in early 2022 resumed. Spiro reported seven new clients in the quarter; GES Exhibitions’ same-show U.S. exhibition revenue grew 26.4%.
- Operating cash flow fell $7.9 million, mainly because of less favorable working-capital changes, despite improved segment operating results. Cash use included $11.4 million of capital expenditures and $1.95 million of preferred-stock dividends.
- The filing gives no specific revenue or earnings guidance. Management cited inflation and higher interest rates as pressures whose future effects are uncertain, alongside travel disruption, seasonality, labor shortages and costs, union negotiations, show rotation, foreign-exchange movements, and project delays or cost overruns.
- A material weakness in internal control over financial reporting related to remeasurement of liabilities in nonfunctional currencies remained unremediated at quarter-end. Management said remediation was in process and that post-closing procedures supported fair presentation of the reported financial statements.
- Viad disclosed claims relating to a 2020 fatal Ice Explorer accident. In May 2023, after the reporting date, it resolved Canadian workplace-safety charges for payments of approximately $0.3 million; legal claims by victims and families continued. The company also reported $2.2 million of environmental remediation liabilities and up to $89.6 million of potential payments under subsidiary lease guarantees.
Most important facts for investors to verify
- Confirm the filing entity: this is Viad Corp.’s 10-Q, and Pursuit is a segment rather than the registrant named in the request metadata.
- Track whether GES revenue and segment profitability remain strong as event timing and show rotation change.
- Assess the impact of the 9.9% term-loan rate, interest-rate exposure, and the company’s progress against covenant limits.
- Monitor cash conversion, planned $75–$85 million capital spending, and seasonal liquidity needs.
- Check remediation of the disclosed material weakness and developments in the Ice Explorer claims, insurance coverage, and other contingencies.