Exhibitgroup/Giltspur, GES Report Third-Quarter Loss
By Margo McCall -- Tradeshow Week, 11/3/2003
Struggling against still-sluggish tradeshow activity, GES Exposition Services and Exhibitgroup/Giltspur together reported a third-quarter loss, driven by a nearly 23-percent revenue decline.
GES and Exhibitgroup/Giltspur, which make up Viad's convention and event services division, posted a $1.1-million operating loss on revenue of $132.4 million, compared with $2.2 million in operating income on revenue of $171.6 million in the third quarter of 2002. The division generated $25.2 million in operating income on nearly $224 million of revenue during the second quarter of 2003.
Viad President and CEO Robert Bohannon told analysts during the Phoenix-based company's conference call that he forecasts a better 2004, although convention and event services revenue will remain under pressure. "We just have to wait and see what corporate marketing budgets will look like next year," he said.
Big third-quarter events for GES included Cosmoprof North America, MAGIC! Marketplace and the World Shoe Assn. Show. Paul Dykstra, GES president and CEO, said the company is working to enhance services and deliver new products while at the same time reduce costs.
"Despite a tough environment, GES is strong and getting stronger," he said, adding that some sectors — such as health care, security and construction — are performing well, while others — technology, for instance — continue to lag.
Dykstra said show rotation also played a role in the quarter's earnings.
Exhibitgroup/Giltspur CEO Kim Fracalossi said her organization continues to be hampered by exhibitor spending cutbacks. Furthermore, she said, customer spending is becoming increasingly difficult to predict. "Visibility has shrunk from maybe a good three months down to one month," she said. "Until you get a signed order, you can have somebody who thinks they're going to spend the money and then it gets yanked at the last minute."
GES and Exhibitgroup/Giltspur expect revenue shortfalls in the "low double digits" during the final three months of this year. But through continued cost-cutting, they hope to break even.
When asked by an analyst whether there's a limit to that approach, Fracalossi said, "There are always additional opportunities for cost-cutting."
