Business Overview
Viad Corp (VVI) is a leading global provider of extraordinary experiences, including attractions, hospitality, exhibition services, and experiential marketing. The company's transformation over the past decade has positioned it as a premier destination and event management powerhouse, poised to capitalize on the resurgence of travel and live events.
Company History
Founded in 1926 as the Container Corporation of America, a manufacturer of paperboard and other packaging products, Viad has a rich history of evolving to meet the changing needs of its customers and the market. Over the years, the company expanded into various industries, including hospitality, travel services, and event management. In 2019, the company changed its name to Viad Corp to better reflect its focus on providing unique and memorable experiences for its customers. In the early 2000s, the company strategically pivoted away from its manufacturing roots, divesting its packaging businesses to focus on its growing exhibitions and hospitality segments. This shift laid the foundation for Viad's current structure, which is anchored by its three core divisions: Pursuit, Spiro, and GES Exhibitions.
Key Segments
Pursuit, Viad's hospitality and attractions segment, has been the driving force behind the company's growth in recent years. Through its Refresh, Build, Buy strategy, Pursuit has methodically expanded its portfolio of iconic experiences, including the Banff Jasper Collection, the Alaska Collection, the Glacier Park Collection, FlyOver, and Sky Lagoon. A key milestone in Viad's history was the acquisition of Brewster Transport Company in 1999, which expanded the company's presence in the Canadian Rockies and laid the foundation for its Pursuit business segment. This focus on enhancing and expanding Pursuit's unforgettable offerings has enabled the segment to achieve a remarkable 15% compound annual growth rate in revenue from 2015 to 2023.
The company's GES Exhibitions division, a global leader in exhibition and event services, has also demonstrated its resilience and adaptability. GES provides full-service event planning and production services to leading exhibition and conference organizers. It has successfully navigated the challenges posed by the COVID-19 pandemic, leveraging its operational expertise and strong client relationships to deliver double-digit revenue growth and margin expansion in 2024.
Viad's third segment, Spiro, is an experiential marketing agency that partners with leading brands around the world to manage and elevate their global experiential marketing activities.
Financials
Viad's financial performance in 2024 has been impressive, with the company reporting consolidated revenue of $1.11 billion and adjusted EBITDA of $163 million to $172 million for the full year. This represents a significant increase from the previous year's revenue of $1.24 billion and net income of $16.02 million as of December 31, 2023.
For the most recent quarter ended September 30, 2024, Viad reported revenue of $455.70 million, a 24.5% increase from $365.90 million in Q3 2023. Net income for the quarter stood at $48.62 million, with operating cash flow (OCF) of $110.37 million and free cash flow (FCF) of $95.44 million.
Segment Performance
Pursuit's performance in 2024 has been strong, despite the temporary disruption caused by the Jasper wildfires in the third quarter. Excluding the impact of Jasper, Pursuit's revenue grew approximately 13% year-over-year, driven by robust demand for its attractions and hospitality offerings. The segment's adjusted EBITDA margin for the year is expected to be nearly in line with 2023, despite the Jasper wildfire impact, highlighting the resilience of Pursuit's business model.
During the three months ended September 30, 2024, Pursuit revenue decreased 4.7% to $182.26 million, primarily due to a 5.3% decrease in hospitality revenue resulting from fewer room nights sold due to the Jasper wildfires. Pursuit segment operating income decreased 6.7% to $75.90 million. However, for the nine months ended September 30, 2024, Pursuit revenue increased 4.1% to $320.69 million, driven by an 8.5% increase in attractions revenue due to higher visitation and revenue per attraction visitor.
The Spiro segment showed strong growth, with revenue increasing 39.6% to $82.20 million during the three months ended September 30, 2024, primarily due to strong client spending on major non-annual shows. For the nine months ended September 30, 2024, Spiro revenue increased 21.5% to $242.59 million.
GES Exhibitions also demonstrated robust performance, with revenue increasing 59.5% to $194.81 million during the three months ended September 30, 2024, primarily due to an increase in revenue related to the timing of major non-annual shows and same-show revenue growth. For the nine months ended September 30, 2024, GES Exhibitions revenue increased 23.6% to $551.62 million.
Liquidity
The company's liquidity position remains robust, with total available liquidity of nearly $230 million as of the end of the third quarter, and a net leverage ratio of 1.7x. As of December 31, 2023, Viad reported cash and cash equivalents of $52.70 million, with an available credit line of $108.04 million under its $170 million Revolving Credit Facility. The company's debt-to-equity ratio stood at 4.22, with a current ratio of 1.01 and a quick ratio of 0.97.
Strategic Developments
One of the most significant developments for Viad in 2024 has been the pending sale of its GES business to Truelink Capital for $535 million. This transformative transaction will allow Viad to focus exclusively on its high-growth, high-margin Pursuit division, providing the necessary financial resources and operational flexibility to accelerate its Refresh, Build, Buy strategy. The transaction is expected to close by the end of 2024 and will establish Pursuit as a pure-play, high-growth and high-margin business.
Future Outlook
Looking ahead, Viad is well-positioned to capitalize on the continued recovery in leisure travel and the resurgence of live events. Pursuit's iconic destinations, combined with its focus on enhancing the guest experience, are expected to drive sustained growth in visitation and pricing power. GES, under Truelink's ownership, will have the flexibility and resources to invest in its service offerings and pursue strategic growth opportunities.
For the full year 2024, Viad has revised its guidance ranges upward. GES adjusted EBITDA is now expected to be $90 million to $95 million, up from the previous range of $85 million to $95 million. Pursuit adjusted EBITDA is now expected to be $87 million to $92 million, narrowing the previous range. The consolidated full year adjusted EBITDA guidance range is now $163 million to $172 million, up from $147 million in 2023.
Looking further ahead, Pursuit expects to deliver adjusted EBITDA greater than $100 million in 2025, after absorbing $12-13 million in standalone public company costs.
Viad operates primarily in the United States, Canada, the United Kingdom, Iceland, the Netherlands, the Middle East, and Germany, with the majority of its revenue coming from the United States.
The company's strategic transformation, coupled with its strong financial position, positions Viad as a compelling investment opportunity in the hospitality and experiential sectors. As Viad unlocks the value of its Pursuit division, shareholders can look forward to the company's continued evolution and the realization of its substantial growth potential.