Viad Receives IRS Approval for Spin-off of Travelers Express

Viad's proposed spin-off of its payment services division has been approved by the Internal Revenue Service, putting it one step closer to being primarily a convention services company.

The Phoenix-based Viad, parent of GES Exposition Services and Exhibitgroup/Giltspur, plans to separate Travelers Express from the rest of the business by the second quarter. Viad must obtain banking and credit arrangements and secure approval from the board of directors before the spin-off can be finalized.

Executives say that spinning off the payment services division will enable the company to better focus on its convention and event services businesses. GES and Exhibitgroup are expected to do more cross-selling and offer more integrated services for corporate events.

Once a highly diversified company, Viad has had more than 2,400 subsidiaries during its 70-year history.

GES and Exhibitgroup together finished 2003 with $717.3 million in revenue, down 8.8 percent from 2002 revenue of $786.2 million. But due to restructuring efforts, the businesses, which comprise Viad's convention and events services division, still managed to generate $44.9 million in operating income, up 19.3 percent from the previous year's $37.6 million.

Although Viad anticipates lower convention and event services revenue in the first quarter, for the entire year revenue and profits are forecast to rise. The company expects negative show rotation during the first quarter to cause a rate of decline in the "mid-to-high single digits." Revenue is projected to increase "slightly" for the entire year, while operating income should register a "high-single-digit to low-double-digit" rate gain.