VVI Viad Corp New

Q2 2014

Change

$ in millions, except per share data

Revenue

$  317.0

$  256.4

23.7%

Organic Revenue⁽¹⁾

307.5

256.4

19.9%

Segment Operating Income

$    36.3

$    14.1

**

Adjusted Segment Operating Income⁽¹⁾

36.6

14.1

**

Adjusted Segment EBITDA⁽¹⁾

45.7

21.2

**

Income from Continuing Operations

$   22.3

$     8.0

**

Income Before Other Items⁽¹⁾

23.7

9.0

**

Income from Continuing Operations per Diluted Share

$   1.11

$   0.39

**

Income Before Other Items per Diluted Share⁽¹⁾

1.18

0.45

**

Q2 2015

Q2 2014

Change

$ in millions

Revenue

$  286.6

$  226.6

26.5%

U.S. Organic Revenue⁽¹⁾

196.9

168.8

16.6%

International Organic Revenue⁽¹⁾

85.7

63.4

35.3%

Segment Operating Income

$    30.1

$      9.0

**

Adjusted Segment Operating Income⁽¹⁾

30.4

9.0

**

Adjusted Segment Operating Margin⁽¹⁾

10.6%

4.0%

660 bps

Adjusted Segment EBITDA⁽¹⁾

$   37.3

$   14.1

**

Adjusted Segment EBITDA Margin⁽¹⁾

13.0%

6.2%

680 bps

Key Performance Indicators:

     U.S. Base Same-Show Revenue Growth⁽²⁾

7.4%

     U.S. Show Rotation Revenue Change⁽³⁾

$(2) approx.

     International Show Rotation Revenue Change⁽³⁾

$15 approx.

Q2 2015

Q2 2014

Change

$ in millions

Revenue

$  30.5

$  29.8

2.2%

Organic Revenue⁽¹⁾

32.7

29.8

9.8%

Segment Operating Income

$    6.2

$   5.1

21.2%

Segment Operating Margin

20.4%

17.2%

320 bps

Adjusted Segment EBITDA⁽¹⁾

$    8.5

$  7.2

17.9%

Adjusted Segment EBITDA Margin⁽¹⁾

27.8%

24.1%

370 bps

Key Performance Indicators:

Same-Store RevPAR⁽²⁾

$80

$76

5.3%

Same-Store Room Nights Available⁽²⁾

56,261

55,350

1.6%

Same-Store Passengers⁽³⁾

394,789

365,798

7.9%

Same-Store Revenue per Passenger⁽³⁾

$34

$29

17.2%

M&E

T&R

$ in millions

Revenue

Comparable to 2014 ($944.5)

Comparable to 2014 ($120.5)

Adjusted Segment EBITDA⁽¹⁾

$53 to $55 (vs. $54.9 in 2014)

$35.5 to $37.5 (vs. $36.4 in 2014)

D&A

$28 to $29

$8 to $9

Adjusted Operating Income⁽¹⁾

$24.5 to $27 (vs. $32.5 in 2014)

$27 to $29 (vs. $28.1 in 2014)

Adjusted Operating Margin⁽¹⁾

2.6% to 2.9%

Comparable to 2014 (23.3%)

Capital Expenditures

$17 to $19

$16 to $18

Q1 Actual

Q2 Actual

Q3 Est.

Q4 Est.

FY Est.

Show Rotation Revenue (in millions)

$(40)

$14

$(50)

$5

$(70)

Viad Total

M&E

T&R

$ in millions, except per share amounts

Revenue

$   (40)

$   (27)

$   (13)

Adjusted Segment Operating Income⁽¹⁾

$     (5)

$     (1)

$     (4)

Income per Share Before Other Items⁽¹⁾

$(0.21)

2015 Guidance

Low End

High End

FX Impact⁽²⁾

$ in millions, except per share amounts

Revenue:

M&E

$226.7

$175.0

to

$185.0

$    (5)

T&R

73.1

68.0

to

73.0

(8)

Adjusted Segment Operating Income (Loss)⁽¹⁾:

M&E

$    2.4

$ (18.5)

to

$ (16.0)

$    0.5

T&R

30.6

29.5

to

31.5

(4.0)

Income per Share Before Other Items⁽¹⁾

$  1.11

$ 0.25

to

$ 0.35

$(0.12)

VIAD CORP AND SUBSIDIARIES

TABLE ONE - QUARTERLY RESULTS

(UNAUDITED)

Three months ended June 30,

Six months ended June 30,

(in thousands, except per share data)

2015

2014

$ Change

% Change

2015

2014

$ Change

% Change

Revenue:

Marketing & Events Group:

U.S.

$      208,749

$      168,839

$      39,910

23.6%

$      401,692

$      390,234

$      11,458

2.9%

International

85,723

63,379

22,344

35.3%

150,959

122,097

28,862

23.6%

Intersegment eliminations

(7,903)

(5,632)

(2,271)

-40.3%

(9,154)

(7,922)

(1,232)

-15.6%

Total Marketing & Events Group

286,569

226,586

59,983

26.5%

543,497

504,409

39,088

7.7%

Travel & Recreation Group

30,466

29,805

661

2.2%

37,934

37,623

311

0.8%

Total revenue

$      317,035

$      256,391

$      60,644

23.7%

$      581,431

$      542,032

$      39,399

7.3%

Segment operating income:

Marketing & Events Group:

U.S.

$        18,974

$          5,124

$      13,850

**

$        21,611

$        20,975

$            636

3.0%

International

11,109

3,896

7,213

**

12,156

6,215

5,941

95.6%

Total Marketing & Events Group

30,083

9,020

21,063

**

33,767

27,190

6,577

24.2%

Travel & Recreation Group

6,203

5,116

1,087

21.2%

1,394

307

1,087

**

Segment operating income

36,286

14,136

22,150

**

35,161

27,497

7,664

27.9%

Corporate activities (Note A)

(1,983)

(1,991)

8

0.4%

(4,793)

(4,030)

(763)

-18.9%

Restructuring charges (Note B)

(1,069)

(1,365)

296

21.7%

(1,285)

(1,576)

291

18.5%

Impairment charges (Note C)

-

(884)

884

**

-

(884)

884

**

Net interest expense

(660)

(255)

(405)

**

(1,748)

(488)

(1,260)

**

Income from continuing operations before

income taxes

32,574

9,641

22,933

**

27,335

20,519

6,816

33.2%

Income tax expense (Note D)

(10,372)

(1,796)

(8,576)

**

(7,105)

(3,493)

(3,612)

**

Income from continuing operations

22,202

7,845

14,357

**

20,230

17,026

3,204

18.8%

Income (loss) from discontinued operations (Note E)

78

(1,236)

1,314

**

(70)

14,002

(14,072)

**

Net income

22,280

6,609

15,671

**

20,160

31,028

(10,868)

-35.0%

Net (income) loss attributable to noncontrolling interest

109

133

(24)

-18.0%

173

(2,404)

2,577

**

Net income attributable to Viad

$        22,389

$          6,742

$      15,647

**

$        20,333

$        28,624

$      (8,291)

Amounts Attributable to Viad Common Stockholders:

Income from continuing operations

$        22,311

$          7,978

$      14,333

**

$        20,403

$        17,290

$        3,113

18.0%

Income (loss) from discontinued operations

78

(1,236)

1,314

**

(70)

11,334

(11,404)

**

Net income

$        22,389

$          6,742

$      15,647

**

$        20,333

$        28,624

$      (8,291)

-29.0%

Diluted income per common share:

Income from continuing operations

attributable to Viad common shareholders

$             1.11

$             0.39

$          0.72

**

$             1.02

$             0.85

$          0.17

20.0%

Income (loss) from discontinued operations

attributable to Viad common shareholders

0.01

(0.06)

0.07

**

(0.01)

0.56

(0.57)

**

Net income attributable to Viad common

shareholders

$             1.12

$             0.33

$          0.79

**

$             1.01

$             1.41

$        (0.40)

-28.4%

Basic income per common share:

Income from continuing operations

attributable to Viad common shareholders

$             1.11

$             0.39

$          0.72

**

$             1.02

$             0.85

$          0.17

20.0%

Income (loss) from discontinued operations

attributable to Viad common shareholders

0.01

(0.06)

0.07

**

(0.01)

0.56

(0.57)

**

Net income attributable to Viad common

shareholders (Note F)

$             1.12

$             0.33

$          0.79

**

$             1.01

$             1.41

$        (0.40)

-28.4%

Common shares treated as outstanding for

Income (loss) per share calculations:

Weighted-average outstanding common shares

19,778

19,869

(91)

-0.5%

19,757

19,909

(152)

-0.8%

Weighted-average outstanding and potentially

dilutive common shares

19,918

20,149

(231)

-1.1%

19,933

20,262

(329)

-1.6%

** Change is greater than +/- 100 percent

Note - Certain amounts above may not foot due to rounding.

VIAD CORP AND SUBSIDIARIES

TABLE ONE - NOTES TO QUARTERLY RESULTS

(UNAUDITED)

(A)

Corporate Activities -- The increase in corporate activities expense for the six months ended June 30, 2015 was primarily related to consulting and other transaction-related costs associated with acquisitions and costs related to a shareholder nomination and settlement agreement.

(B)

Restructuring Charges -- Restructuring charges for the three and six months ended June 30, 2015 primarily related to the elimination of certain positions and facility consolidations in the Marketing & Events Group, as well as the elimination of certain positions at the Corporate office and the Travel & Recreation Group. Restructuring charges for the three and six months ended June 30, 2014 primarily related to severance arrangements within the Marketing & Events International segment.

(C)

Impairment Charges -- During the three months ended June 30, 2014, Viad recorded impairment charges of $884,000 ($549,000 after-tax) related to the write-off of certain assets in the Marketing & Events International segment.

(D)

Income Taxes -- The six months ended June 30, 2015 included a $1.6 million non-cash tax benefit related to deferred taxes associated with certain foreign intangibles.  This resulted in a $0.08 per share non-recurring tax benefit. 

The relatively low effective tax rate for the three and six months ended June 30, 2014 was primarily due to the projected release of a portion of the valuation allowance related to foreign tax credit carryforwards and state NOL carryforwards and certain adjustments to deferred taxes.

(E)

Income (Loss) from Discontinued Operations -- On December 31, 2013, Glacier Park's concession contract with the Park Service to operate lodging, tour and transportation and other hospitality services for Glacier National Park expired. Upon completion of the contract term, Viad received cash payments in January 2014 totaling $25.0 million for the Company's possessory interest. This resulted in a pre-tax gain of $21.5 million and an after-tax gain of $14.3 million which was recorded as income from discontinued operations. The loss from discontinued operations for the three months ended June 30, 2014 related to the allocation of taxes to the possessory interest gain and additional reserves related to certain liabilities associated with previously sold operations.

(F)

Income per Common Share -- Following is a reconciliation of net income attributable to Viad to net income allocated to Viad common shareholders:

Three months ended June 30,

Six months ended June 30,

(in thousands, except per share data)

2015

2014

$ Change

% Change

2015

2014

$ Change

% Change

Net income attributable to Viad

$        22,389

$          6,742

$      15,647

**

$        20,333

$        28,624

$      (8,291)

-29.0%

Less: Allocation to nonvested shares

(321)

(124)

(197)

**

(304)

(546)

242

44.3%

Net income allocated to Viad common shareholders

$        22,068

$          6,618

$      15,450

**

$        20,029

$        28,078

$      (8,049)

-28.7%

Weighted-average outstanding common shares

19,778

19,869

(91)

-0.5%

19,757

19,909

(152)

-0.8%

Basic income per common share attributable to Viad common shareholders

$             1.12

$             0.33

$          0.79

**

$             1.01

$             1.41

$        (0.40)

-28.4%

** Change is greater than +/- 100 percent

Note - Certain amounts above may not foot due to rounding.

VIAD CORP AND SUBSIDIARIES

TABLE TWO - NON-GAAP MEASURES (NOTE A)

(UNAUDITED)

Three months ended June 30,

Six months ended June 30,

(in thousands)

2015

2014

$ Change

% Change

2015

2014

$ Change

% Change

Income before other items:

Income from continuing operations attributable to Viad

$        22,311

$          7,978

$      14,333

**

$        20,403

$        17,290

$          3,113

18.0%

Restructuring charges, net of tax

719

879

(160)

18.2%

852

986

(134)

13.6%

Acquisition-related costs and other non-recurring expenses, net of tax (B)

659

125

534

**

1,548

125

1,423

**

Impairment charges, net of tax

-

549

(549)

**

-

549

(549)

**

Favorable tax matters

-

(501)

501

**

(1,563)

(2,535)

972

-38.3%

Income before other items

$        23,689

$          9,030

$      14,659

**

$        21,240

$        16,415

$          4,825

29.4%

(per diluted share)

Income before other items:

Income from continuing operations attributable to Viad

$             1.11

$             0.39

$          0.72

**

$             1.02

$             0.85

$             0.17

20.0%

Restructuring charges, net of tax

0.04

0.04

-

0.0%

0.04

0.05

(0.01)

20.0%

Acquisition-related costs and other non-recurring expenses, net of tax (B)

0.03

0.01

0.02

**

0.08

0.01

0.07

**

Impairment charges, net of tax

-

0.03

(0.03)

**

-

0.03

(0.03)

**

Favorable tax matters

-

(0.02)

0.02

**

(0.08)

(0.13)

0.05

-38.5%

Income before other items

$             1.18

$             0.45

$          0.73

**

$             1.06

$             0.81

$             0.25

30.9%

(in thousands)

Adjusted EBITDA:

Net income attributable to Viad

$        22,389

$          6,742

$      15,647

**

$        20,333

$        28,624

$        (8,291)

-29.0%

(Income) loss from discontinued operations

(78)

1,236

(1,314)

**

70

(11,334)

11,404

**

Impairment charges

-

884

(884)

**

-

884

(884)

**

Interest expense

1,129

342

787

**

2,305

673

1,632

**

Income tax expense

10,417

1,826

8,591

**

7,225

3,607

3,618

**

Depreciation and amortization

9,045

7,053

1,992

-28.2%

17,637

13,779

3,858

-28.0%

Adjusted EBITDA

$        42,902

$        18,083

$      24,819

**

$        47,570

$        36,233

$        11,337

31.3%

Additional Prior Year Non-GAAP Measures:

2014

(per diluted share)

Q1

Q2

Q3

Q4

Full Year

Income (loss) before other items:

Income (loss) from continuing operations attributable to Viad

$             0.46

$             0.39

$          1.53

$        (0.37)

$             2.02

Restructuring charges, net of tax

-

0.04

0.01

-

0.05

Acquisition-related costs and other non-recurring expenses, net of tax (B)

-

0.01

0.07

0.16

0.24

Impairment charges, net of tax

-

0.03

-

-

0.03

Favorable tax matters

(0.10)

(0.02)

(0.50)

0.03

(0.59)

Income (loss) before other items

$             0.36

$             0.45

$          1.11

$        (0.18)

$             1.75

2014 Third Quarter

2014 Full Year

(in thousands)

M&E

T&R

Viad Total

M&E

T&R

Viad Total

Adjusted Segment Operating Income, EBITDA and EBITDA Margin:

Revenue

$      226,661

$        73,140

$   299,801

$      944,468

$      120,519

$  1,064,987

Segment operating income

2,366

30,647

33,013

31,739

28,127

59,866

Integration costs

59

-

59

782

-

782

Adjusted segment operating income

2,425

30,647

33,072

32,521

28,127

60,648

Segment depreciation

4,807

2,853

7,660

20,024

7,866

27,890

Segment amortization

104

86

190

2,353

366

2,719

Adjusted segment EBITDA

$          7,336

$        33,586

$      40,922

$        54,898

$        36,359

$        91,257

Adjusted segment EBITDA margin

3.2%

45.9%

13.6%

5.8%

30.2%

8.6%

** Change is greater than +/- 100 percent

Note - Certain amounts above may not foot due to rounding.

(A)

Income before other items, Adjusted EBITDA and free cash flow are supplemental to results presented under accounting principles generally accepted in the United States of America ("GAAP") and may not be comparable to similarly titled measures presented by other companies. These non-GAAP measures are used by management to facilitate period-to-period comparisons and analysis of Viad's operating performance and liquidity. Management believes these non-GAAP measures are useful to investors in trending, analyzing and benchmarking the performance and value of Viad's business. These non-GAAP measures should be considered in addition to, but not as a substitute for, other similar measures reported in accordance with GAAP.

Forward−Looking Non−GAAP Financial Measures
The Company has also provided the following forward-looking non-GAAP financial measures: Adjusted Segment EBITDA (formerly referred to as "Segment EBITDA") Adjusted Segment EBITDA Margin, Adjusted Segment Operating Income, Adjusted Segment Operating Margin and Income Before Other Items.  The Company does not provide reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures because, due to variability and difficulty in making accurate forecasts and projections and/or certain information not being ascertainable or accessible, not all of the information necessary for quantitative reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures are available to the Company without unreasonable efforts.  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 the forward-looking non-GAAP financial measures provided without the directly comparable GAAP financial measures may be materially different from the corresponding non-GAAP financial measures.

(B)

Acquisition-related costs and other non-recurring expenses include: acquisition integration costs (included in segment operating income); acquisition transaction-related costs (included in corporate activities expense), costs related to a shareholder nomination and settlement agreement (included in corporate activities expense) and CEO transition costs (included in Q4 2014 corporate activities expense).

VIAD CORP AND SUBSIDIARIES

TABLE TWO - NON-GAAP MEASURES

(UNAUDITED)