Significantly heightened virus concerns
drive near-term event postponements and cancellations
First quarter 2020 guidance reduced, and
full year 2020 guidance withdrawn
Viad Corp (NYSE: VVI) today announced that as a result of the
current environment related to COVID-19, it has reduced first
quarter 2020 guidance and withdrawn full-year 2020 guidance.
Update Highlights
- In the first quarter of 2020, January and February performance
was in-line with expectations.
- The Company’s GES business is being impacted by near-term event
postponements and cancellations resulting from virus concerns,
which to date, do not extend past June.
- Management had previously guided for incremental revenue of
about $100 million at GES in 2020, largely resulting from three
major non-annual events:
- CONEXPO-CON/AGG, which took place March 10 through March 13 in
Las Vegas and exhibitor cancellations represented only 2.5% of the
total square footage of the event.
- IMTS and MINExpo, which are scheduled to take place during
September in Chicago and Las Vegas, respectively.
- The Company’s Pursuit segment is seasonally strongest in June
through September. To date, Viad has experienced about $1 million
in revenue cancellations at Pursuit. As the disruption in travel
and focus on social distancing continue, we expect more
cancellations closer to the date of travel.
- First quarter 2020 guidance has been reduced, based on known
impacts at GES, and full year 2020 guidance has been withdrawn due
to uncertainty regarding the future impact of recently heightened
public health concerns and related restrictions in response to the
COVID-19 pandemic.
Steve Moster, president and chief executive officer, commented,
“As a result of the unprecedented escalation of concerns over
COVID-19, we are experiencing event postponements and
cancellations, as well as reduced exhibitor participation, that are
impacting results in our GES business. Based on known event
postponements and cancellations to date, we expect our first
quarter 2020 results to be below the guidance we issued on February
6, 2020.”
Moster continued, "Thus far, we have not seen event
postponements or cancellations beyond the second quarter at GES,
nor have we experienced a meaningful level of cancelled bookings at
Pursuit. That said, the situation is changing rapidly and it is
challenging to predict how COVID-19 will impact the events industry
and the broader travel market for the remainder of fiscal year
2020. As a result, we are withdrawing our previous full year
guidance issued on February 6, 2020.”
Moster concluded, “In light of the current environment, we are
aggressively managing our variable costs based on demand, while
taking all prudent actions to control discretionary spending. Our
industries and our businesses have proven to be resilient following
prior periods of travel disruption and we expect a recovery to
normal levels of event business and leisure travel once fears
related to the novel coronavirus have subsided.”
2020 First Quarter Guidance as of March 16, 2020
We currently expect GES’ first quarter revenue to be in the
range of $275 million to $290 million, as compared to our prior
guidance of $335 million to $350 million, and 2019 first quarter
revenue of $274.9 million. We currently expect GES’ first quarter
adjusted segment operating income* to be in the range of $5 million
to $8 million, as compared to our prior guidance of $23 million to
$26 million, and 2019 first quarter adjusted segment operating
income* of $1.7 million. Based on known cancellations to-date at
Pursuit, we are reaffirming our prior guidance ranges for Pursuit’s
2020 seasonally slow first quarter.
Q1 2020 Guidance
as of March 16, 2020
Q1 2019
Low End
High End
$ in millions, except per share
data
Revenue:
GES
$
274.9
$
275
to
$
290
Pursuit
10.7
15
to
18
Adjusted Segment Operating Income
(Loss):
GES
$ 1.7*
$
5
to
$
8
Pursuit
(12.8)*
(18.5)
to
(16)
Loss per Share Before Other Items
$(0.51)*
$
(0.59)
to
$
(0.44)
* Refer to Table Two of Viad’s 2019 Fourth Quarter and Full Year
Earnings Press Release issued on February 6th, 2020, for a
discussion and reconciliation of this non-GAAP financial measure to
its most directly comparable GAAP financial measure.
About Viad
Viad (NYSE: VVI) generates revenue and shareholder value through
two businesses: GES and Pursuit. GES is a global, full-service live
events company offering a comprehensive range of services to the
world's leading brands and event organizers. Pursuit is a
collection of inspiring and unforgettable travel experiences in
Alaska, Montana, the Canadian Rockies, Vancouver, Reykjavik, Las
Vegas (expected opening in 2021), and Toronto (expected opening in
2022) that includes attractions, lodges and hotels, and sightseeing
tours that connect guests with iconic places. Our business strategy
focuses on providing superior experiential services to our
customers and sustainable returns on invested capital to our
shareholders. Viad is an S&P SmallCap 600 company. For more
information, visit www.viad.com.
Forward-Looking
Statements
This press release contains a number of forward-looking
statements. Words, and variations of words, such as “will,” “may,”
“expect,” “would,” “could,” “might,” “intend,” “plan,” “believe,”
“estimate,” “anticipate,” “deliver,” “seek,” “aim,” “potential,”
“target,” “outlook,” and similar expressions are intended to
identify our forward-looking statements. Similarly, statements that
describe our business strategy, outlook, objectives, plans,
intentions or goals also are forward-looking statements. These
forward-looking statements are not historical facts and are subject
to a host of risks and uncertainties, many of which are beyond our
control, which could cause actual results to differ materially from
those in the forward-looking statements.
Important factors that could cause actual results to differ
materially from those described in our forward-looking statements
include, but are not limited to, the following:
- our ability to successfully integrate and achieve established
financial and strategic goals from acquisitions;
- fluctuations in general economic conditions, including as a
result of the impact of COVID-19;
- our dependence on large exhibition event clients;
- the importance of key members of our account teams to our
business relationships;
- the competitive nature of the industries in which we
operate;
- travel industry disruptions;
- unanticipated delays and cost overruns of our capital projects,
and our ability to achieve established financial and strategic
goals of such projects;
- seasonality of our businesses;
- transportation disruptions and increases in transportation
costs;
- natural disasters and other catastrophic events;
- our multi-employer pension plan funding obligations;
- our exposure to labor cost increases and work stoppages related
to unionized employees;
- liabilities relating to prior and discontinued operations;
- adverse effects of show rotation on our periodic results and
operating margins;
- our exposure to currency exchange rate fluctuations;
- our exposure to cybersecurity attacks and threats;
- compliance with laws governing the storage, collection,
handling, and transfer of personal data and our exposure to legal
claims and fines for data breaches or improper handling of such
data;
- the effects of the United Kingdom’s exit from the European
Union; and
- changes affecting the LIBOR.
For a more complete discussion
of the risks and uncertainties that may affect our business or
financial results, please see Item 1A, “Risk Factors,” of our most
recent annual report on Form 10-K filed with the SEC. We disclaim
and do not undertake any obligation to update or revise any
forward-looking statement in this press release except as required
by applicable law or regulation.
Forward-Looking
Non-GAAP Measures
We have provided the following forward-looking non-GAAP
financial measures: Adjusted Segment EBITDA, Adjusted Segment
Operating Income and Income Before Other Items. We do not provide
quantitative reconciliations of these forward-looking non-GAAP
financial measures to their most directly comparable GAAP financial
measures because, due to variability and difficulty in developing
accurate projections and/or certain information not being
ascertainable or accessible, not all of the information necessary
to do so is available to us without unreasonable effort.
Consequently, any attempt to disclose such reconciliations would
imply a degree of precision that could be confusing or misleading
to investors. It is probable that our forward-looking non-GAAP
financial measures may be materially different from the
corresponding GAAP financial measures.
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version on businesswire.com: https://www.businesswire.com/news/home/20200316005239/en/
Carrie Long Investor Relations (602) 207-2681 ir@viad.com
Viad (NYSE:VVI)
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