Second Quarter Delivers for GES

Firm credits profits to same-show increases and exhibitor services

Revenue and operating income were both up for GES Exposition Services in the second quarter, while Viad sister company Exhibitgroup/Giltspur continued to see declines in revenue tempered by improved operating income.

The Las Vegas-based GES saw a revenue increase of 12.6 percent over the same period a year ago, from $150.4 million to $169.3 million. Operating income was $18.4 million, up 13.7 percent from $16.1 million in the second quarter of 2005.

Kevin Rabbitt, GES president and CEO, credited the firm's improved results primarily to growth in discretionary spending on the part of exhibitors, driven by its products and services group, strong same-show growth (for shows that occur in the same city and quarter every year) and customer service.

"Revenue and operating income were in line with our prior guidance," he said. "We're excited about where we stand."

Additionally, Rabbitt said, "the strength of our people and the great customer service they deliver to our clients" is a primary driver of the firm's growth.

GES-contracted shows during the second quarter included the annual Natl. Assn. of Broadcasters in Las Vegas and Natl. Restaurant Assn. Restaurant Hotel-Motel Showin Chicago. The firm also was the general service contractor for the triennial NPE: the Intl. Plastics Showcase (also in Chicago) and the American Library Assn. Annual Conference & Exhibition in June, the largest post-Hurricane Katrina show in New Orleans.

Rabbitt noted that during the second quarter GES signed $151 million of future bookings, including a four-year contract for the Chicago Auto Show.

Viad revenue in the second quarter increased 4.6 percent to $237.4 million, "driven primarily by strong growth at GES," said Viad President and CEO Paul Dykstra. The firm's second-quarter operating income increased 15.7 percent to $25.8 million.

In its report, Viad announced its intent to repurchase an additional 1 million shares of the firm's common stock. That's on top of the 1 million shares repurchased during the first half of 2006.

E/G reported second-quarter revenue of $46.9 million, down 19.9 percent from $58.5 million in the same 2005 quarter. Operating income was $2.7 million, up 34.9 percent from $2 million in the year-ago quarter.

E/G attributed the revenue decline primarily to the absence of the biennial Intl. Paris Air Show in the 2006 second quarter. However, the Farnborough Intl. Airshow that took place July 17–23, is expected to help E/G's third quarter.

Because of E/G's lower revenues, Dykstra said, "the Exhibitgroup team is working hard to drive more costs out of the business to maximize operating profits, while they aggressively pursue profitable revenue opportunities."

For the third quarter, GES expects revenue to be in the range of $140 million to $150 million, as compared to $119.6 million in the 2005 third quarter, Rabbitt said. Operating income for the period is expected to be in the range of $7 million to $9 million, as compared to $1.5 million in the 2005 period.

Looking ahead, Rabbitt said, "we remain optimistic about our outlook for 2006. Our efforts to drive incremental productivity improvements and probable revenue growth are paying off."

Viad's revenue for the third quarter is expected to increase at a double-digit rate from the 2005 amount of $191.1 million. Operating income is expected to be in the range of $22.5 million to $26 million, compared to $16.4 million in the year-ago quarter.