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Viad Corp Announces Second Quarter Results

Viad Corp (NYSE:VVI) today announced second quarter 2011 net income of $4.5 million, or $0.22 per diluted share. Viad’s income before other items of $5.2 million, or $0.26 per diluted share, excludes restructuring charges of $740,000 after tax. This compares to the company’s prior guidance of income per share of $0.10 to $0.20 and 2010 second quarter income before other items of $0.17 per share.
  • Revenues of $238.7 million were up $20.4 million (9.3%) from 2010.
  • Segment operating income was $9.9 million as compared to $7.7 million in 2010 (up 27.7%).
  • Free cash flow was an outflow of $20.3 million compared to an inflow of $6.3 million in 2010.
  • Cash and cash equivalents were $107.3 million at June 30, 2011.
  • St. Mary Lodge & Resort was purchased on June 29 for $15.3 million in cash.
  • Debt was $4.2 million, with a debt-to-capital ratio of 1.0% at June 30, 2011.

Paul B. Dykstra, chairman, president and chief executive officer, said, “Our results for the second quarter reflect stronger than expected performance from our Marketing & Events Group. U.S. base same-show revenue growth was 5.8 percent, and exhibition and event industry fundamentals continue to improve with modest increases in net square footage. We continue to be successful in capturing additional spend from exhibitors while focusing on high-quality execution and customer service. Our Travel & Recreation Group posted results in line with our prior guidance. Viad’s performance during the first half of 2011 has been strong, providing a foundation for solid earnings growth in 2011.”
           

Second Quarter 2011 Business Group Highlights
 
Second Quarter June 30 Year-to-Date

($ in millions)
2011     2010     Change 2011     2010     Change
   
Revenues:
Marketing & Events Group:
U.S. $ 150.2 $ 144.5 $ 5.7 4.0 % $ 381.9 $ 313.9 $ 68.0 21.7 %
International 67.0 56.1 10.9 19.5 % 120.9 106.4 14.5 13.6 %
Intersegment eliminations   (2.4 )   (4.6 )   2.2   47.8 %   (3.7 )   (7.4 )   3.7   50.0 %
Total 214.7 195.9 18.8 9.6 % 499.1 412.9 86.2 20.9 %
Travel & Recreation Group   24.0     22.4     1.6   7.0 %   29.7     29.8     (0.1 ) -0.3 %
Total $ 238.7   $ 218.3   $ 20.4   9.3 % $ 528.8   $ 442.7   $ 86.1   19.5 %
 
Segment operating income (loss):
Marketing & Events Group:
U.S. $ 0.2 $ (2.3 ) $ 2.5 ** $ 18.1 $ (2.3 ) $ 20.5 **
International   6.7     6.5     0.1   1.8 %   10.4     9.2     1.3   13.8 %
Total 6.9 4.2 2.6 61.9 % 28.6 6.8 21.8 **
Travel & Recreation Group   3.0     3.5     (0.5 ) -13.8 %   (1.5 )   1.1     (2.6 ) **
Total $ 9.9   $ 7.7   $ 2.1   27.7 % $ 27.1   $ 7.9   $ 19.2   **
 
Operating margins:
Marketing & Events Group 3.2 % 2.2 % 100 bps 5.7 % 1.7 % 400 bps
Travel & Recreation Group 12.6 % 15.6 % (300 ) bps -4.9 % 3.7 % (860 ) bps
Total 4.1 % 3.5 % 60 bps 5.1 % 1.8 % 330 bps

 
** Change is greater than +/- 100 percent.
Note: Calculated amounts presented above (including totals and percentages) are calculated using dollars in thousands.
 

Viad’s Marketing & Events Group

For the second quarter of 2011, Marketing & Events Group’s results exceeded our prior guidance for operating income and were in line with our revenue guidance. Revenues and operating income increased $18.8 million and $2.6 million, respectively, compared to the 2010 quarter, driven primarily by the U.S. segment. Positive show rotation impacted total Group revenues by approximately $6 million.

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