Business context and reporting period
The filing is Viad Corp’s Form 10-K for the fiscal year ended December 31, 2022—not a standalone fourth-quarter report. Viad operates Pursuit, a travel attractions and hospitality business, alongside Spiro, an experiential marketing agency, and GES Exhibitions, a live-events services business. The filing issuer is Viad Corp; Pursuit Attractions & Hospitality is a business segment, not the registrant named on the filing cover.
Financial performance and liquidity
Amounts below are U.S. dollars. Revenue and cash flow figures are for the full year; balance-sheet figures are as of December 31.
| Metric | 2022 | 2021 |
|---|---|---|
| Total revenue | $1,127.3 million | $507.3 million |
| Net income (loss) attributable to Viad | $23.2 million | $(92.7) million |
| Diluted EPS attributable to common stockholders | $0.53 | $(5.01) |
| Segment operating income (loss), a non-GAAP measure | $68.9 million | $(47.0) million |
| Cash provided by (used in) operating activities | $73.4 million | $(37.9) million |
| Capital expenditures | $67.2 million | $57.9 million |
| Unrestricted cash | $59.7 million | $61.6 million |
| Total available liquidity, including revolver capacity | $146.4 million | $149.0 million |
Revenue rose 122% year over year as live events resumed and travel demand strengthened. Pursuit generated $299.3 million in revenue and $24.0 million in segment operating income; GES generated $828.0 million in revenue and $44.9 million in segment operating income. GES comprises Spiro ($277.6 million revenue; $23.1 million segment operating income) and GES Exhibitions ($557.9 million revenue; $21.8 million segment operating income). Pursuit revenue increased 60%; its Canadian attractions visitation was nearly 90% higher than in 2021. Pursuit reported RevPAR of $134.37, up 32.3% as reported, and occupancy of 68.1%.
Gross debt and finance obligations were approximately $481.8 million before unamortized debt issuance costs; the balance-sheet carrying amount was $469.9 million, including $64.7 million of finance lease obligations. The principal Term Loan B balance was $395.0 million, with a reported year-end interest rate of 9.4%. The $100 million revolving facility had $86.7 million of remaining capacity after letters of credit. Viad reported compliance with its revolving-credit covenants at year-end.
Material changes versus the prior comparable period
- GES revenue increased $507.7 million as live events returned and some shows postponed or canceled in 2021 took place in 2022. Pursuit revenue increased $112.3 million, reflecting stronger visitation and revenue from newer or acquired experiences.
- Net income attributable to Viad improved by $115.9 million, from a loss to income. The 2022 result included a $19.6 million gain on the ON Services asset sale; higher operating costs and interest expense partly offset the recovery.
- Operating cash flow improved by $111.3 million, chiefly due to improved segment results and working-capital changes. Investing cash outflow was $63.3 million, including $67.2 million of capital expenditures and $25.5 million for the Glacier Raft Company acquisition, partly offset by $28.9 million of ON Services sale proceeds.
- Interest expense increased 23.2% to $34.9 million, primarily reflecting higher interest rates. Foreign currency translation reduced comprehensive results, with a $26.8 million translation loss in 2022.
Outlook, risks, contingencies and unusual items
- Management said available liquidity is expected to fund operations and projected capital outlays for at least the next 12 months. Planned 2023 capital expenditures were approximately $75–$85 million, including about $40 million for growth projects such as FlyOver Chicago.
- Viad completed the sale of substantially all ON Services assets on December 15, 2022, for approximately $30 million, recognizing a $19.6 million gain. It acquired Glacier Raft Company in April 2022 for approximately $26.5 million in cash. The Forest Park Alpine hotel opened in August 2022.
- FlyOver Chicago was expected to open in 2024. FlyOver Canada Toronto was postponed because of permitting and related delays; its opening date was not clearly specified. A new mountain coaster at Golden Skybridge was expected to open in summer 2023.
- A material weakness in internal control over financial reporting remained unremediated at year-end. It concerned accounting for monetary liabilities denominated in nonfunctional currencies and related exchange-rate gains and losses. Viad corrected an error in its third-quarter 2022 financial statements through a Form 10-Q/A. Management said its year-end financial statements were fairly presented; the auditor issued an unqualified opinion on the financial statements but a qualified opinion on internal control.
- A 2020 Ice Explorer accident at Pursuit’s Glacier Adventure resulted in three fatalities and serious injuries. Viad received Canadian occupational health and safety charges in May 2022, is cooperating with regulators, and stated that reserves and insurance, subject to deductibles, should cover potential claims and fines. The filing does not quantify the ultimate exposure.
- Key risks include economic and travel downturns, event cancellations and show rotation, seasonality (81% of Pursuit revenue came in the second and third quarters), labor shortages and costs, union negotiations, interest-rate and foreign-exchange exposure, debt and covenant constraints, project delays or cost overruns, cybersecurity and privacy matters, and potential future goodwill impairment. Goodwill impairment testing found no impairment in 2022, but disclosed fair-value cushions of 17% for Glacier Park Collection and 19% for FlyOver.
- Subsequent to year-end, Viad entered an interest-rate cap covering $300 million of Term Loan B borrowings, effective January 31, 2023, and amended its credit facility to transition from LIBOR to SOFR. It also converted the Forest Park construction loan to a term loan with a fixed 6.5% rate.
Most important facts for investors to verify
- Review the 2022 Form 10-Q/A and remediation disclosures to assess the financial-statement error, the material weakness, and whether corrective controls are operating effectively.
- Reconcile the debt and finance-obligation measures, variable-rate exposure, covenant headroom, and the effects of the interest-rate cap and SOFR transition.
- Assess whether the post-pandemic rebound in GES and Pursuit is sustainable, accounting for event scheduling, travel demand, seasonality, labor and cost pressures, and foreign-exchange movements.
- Track the returns and spending on planned capital projects, particularly FlyOver Chicago, and the timing and permitting risks for FlyOver Canada Toronto.
- Monitor the Ice Explorer claims and regulatory proceedings, insurance coverage and deductibles, and the potential for future goodwill impairment at FlyOver and Glacier Park Collection.