Viad Reports Strong Q1 Earnings
By Staff -- Tradeshow Week, 5/7/2007
Viad Corp. announced positive revenue and operating income in the first quarter of 2007, but warned investors and analysts to exercise caution over the rest of the year because of the impact of show rotation.
In the first quarter, Viad Corp. reported $283.7 million in revenue, up 21 percent from the year-ago quarter when it reported $233.8 million. Operating income rose 42 percent, from $17.7 million a year ago to $25.1 million last quarter.
GES Exposition Services, the largest of Viad's three divisions, reported revenue of $244.9 million, up from $194.1 million in the year-ago quarter. GES' operating income was $32.2 million, compared with $22.4 million a year ago.
Revenue remained steady while operating losses increased some at the still-struggling Exhibitgroup/Giltspur. The exhibit design and construction subsidiary reported revenue of $34.3 million in the third quarter, down just slightly from $34.7 million a year ago. It had an operating income loss of $4.7 million, compared to $3.0 million a year ago.
"(Intl.) CES got the year off to a good start," said GES CEO Kevin Rabbit before noting, "Our schedule is generally front end-loaded."
The impact of show rotation, in which tradeshows that take place in the same quarter one year do not do so in other years, was minimal at best in the first quarter. However, GES expects show rotation to negatively impact it over the entire year to the tune of $33 million. (Viad's 2007 forecast is for a single-digit increase in revenue from $623.1 million in 2006.)
Major shows serviced by GES that took place in 2006 but will not in 2007 are the biennial Intl. Manufacturing Technology Show and Intl. Woodworking Machinery & Furniture Supply Fair – U.S.A. The triennial NPE – The Intl. Plastic Showcase will not take place again until 2009.
On the other hand, show rotation is expected to have a positive impact of $45 million in 2008 because of the return of the triennial CONEXPO-CON/AGG and the quadrennial MINExpo Intl. Natl. Mining Assn., among others.
Meanwhile, Rabbit said, the impact of show rotation was relatively minimal in 2006.
"It makes quarter-to-quarter comparisons extremely challenging," he said, "but we had anticipated that."
Melville Exhibition and Event Services, the U.K.-based service contractor that GES recently acquired, contributed $23.6 million in first-quarter revenue, despite the fact the sale didn't close until Feb. 1. The forecast is for Melville to generate $80 million to $90 million in revenue in this fiscal year.
Also in the first quarter, Viad spent $10.5 million on stock buybacks. Viad's stock price closed April 27 at $40.96 after starting the year at $41.74. Its 52-week low was $28.65 on July 17, 2006; its 52-week high, $42.76 on Jan. 16.
