Fracalossi Resigns From Exhibitgroup

Exhibitgroup/Giltspur President and CEO Kim Fracalossi steered Viad's exhibit design subsidiary through nearly four years of tough times. Now, just as things appear to be turning around, she's leaving to pursue other interests.

Fracalossi announced her resignation just one day before Paul Dykstra, former president and CEO of fellow Viad subsidiary GES Exposition Services, took over the top management slot at Viad.

Fracalossi will serve as a consultant until her replacement is found. In the meantime, the E/G senior management team will report to Dykstra.

Viad Chairman Robert Bohannon, who ceded the CEO position to Dykstra April 1, lauded Fracalossi for her cost-cutting abilities.

"When Kim assumed the role of president and CEO of Exhibitgroup in June 2002, she was charged with leading a major business restructuring effort. Kim has done a terrific job of rationalizing the cost structure and improving the processes of Exhibitgroup to transform it into a much stronger and more efficient organization," he said in a statement.

Fracalossi has said that when she took over, E/G possessed a decentralized organization that had grown through acquisition and had a high cost structure. Under her tenure, manufacturing facilities were cut from 15 to four, information technology systems reduced from seven to one and 15 processes replaced with one standard process. Over the years, Fracalossi also put a new sales organization in place.

The cost-cutting enabled her to periodically wring some income from the operation during a time when exhibitors weren't placing booth construction orders and the norm was "irrational pricing," as termed by Fracalossi, who has been with Viad since 1998. Revenue declines were common for E/G during her tenure.

The cost cuts forced Viad to take a $66.1 million restructuring charge in the third quarter of 2001, a $20.5 million charge in the fourth quarter of 2002 and an $80.4 million charge in the third quarter of 2004.

Dykstra, who has worked for Viad since 1984, also credited Fracalossi for her efforts in repositioning E/G. "The company now has an efficient infrastructure, great processes and a strong management team," Dykstra said in a statement. "I look forward to working more closely with the Exhibitgroup team to ensure a smooth and successful transition to new leadership and to ensure that we reach our potential."

E/G wasn't the only exhibit design firm that suffered during the recent downturn. Several competitors closed doors, laid off staff or filed for bankruptcy protection. At the recent EXHIBITOR show, however, there were signs that the long downturn is over. The show broke records in every metric.

Just a month ago, Fracalossi reported that E/G generated higher revenue and operating income in 2005. She also noted that higher-margin new-construction orders were on the upswing, comprising 30 percent of the company's business in the fourth quarter of last year, up from the 23 percent expected.

The division in 2005 also managed to generate $511,000 in profit, up from a $9.6 million loss in 2004.

E/G, based outside Chicago, is the smaller of Viad's two convention industry divisions, generating $184.3 million revenue in 2005, a 3.5 percent improvement over the previous year. The Las Vegas-based GES, meanwhile, produced $568 million in revenue, up 5.2 percent over the previous year.

Industry observers have long speculated that the two subsidiaries would merge. Although GES' primary business is general service contracting, it also offers exhibit design services. In fact, exhibit design was the main focus of the GES booth at this year's EXHIBITOR.

During her career, Fracalossi has also worked as a partner at Harrell/Wright Management Consultants in Newport Beach, Calif.; as director of corporate development for Dial; and in strategic development at Marriott Intl. She holds an MBA and a degree in mechanical engineering.

She was appointed vice president of strategic planning and investor relations of Viad in May 1999 and promoted to CFO in 2000.