UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to____________
Commission file number: 001-11015
Viad Corp
(Exact name of registrant as specified in its charter)
Delaware
36-1169950
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
7000 East 1st Avenue
Scottsdale, Arizona
85251-4304
(Address of principal executive offices)
(Zip Code)
(602) 207-1000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $1.50 Par Value
VVI
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 5, 2024, there were 21,201,906 shares of Common Stock ($1.50 par value) outstanding.
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statements
1
Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023
2
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2024 and 2023
3
Condensed Consolidated Statements of Stockholders’ Equity and Mezzanine Equity for the Three Months Ended March 31, June 30, and September 30, 2024 and 2023
4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023
6
Notes to Condensed Consolidated Financial Statements
7
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
30
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
39
Item 4.
Controls and Procedures
40
PART II - OTHER INFORMATION
Legal Proceedings
41
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
42
Item 5.
Other Information
Item 6.
Exhibits
43
SIGNATURES
44
In this report, for periods presented, “we,” “us,” “our,” “the Company,” and “Viad Corp” refer to Viad Corp and its subsidiaries.
Item 1. Financial Statements
VIAD CORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30,
December 31,
(in thousands, except share data)
2024
2023
Assets
Current assets
Cash and cash equivalents
$
64,552
52,704
Accounts receivable, net of allowances of $3,661 and $2,901, respectively
168,635
128,019
Inventories
11,246
10,153
Current contract costs
28,909
20,202
Prepaid insurance
6,303
2,925
Other current assets
29,944
21,774
Total current assets
309,589
235,777
Property and equipment, net
588,864
592,891
Other investments and assets
20,352
17,047
Operating lease right-of-use assets
100,404
109,774
Deferred income taxes
2,304
1,930
Goodwill
121,905
123,906
Other intangible assets, net
52,410
55,997
Total Assets
1,195,828
1,137,322
Liabilities, Mezzanine Equity, and Stockholders’ Equity
Current liabilities
Accounts payable
120,355
77,405
Contract liabilities
67,721
52,980
Accrued compensation
40,249
31,309
Operating lease obligations
17,807
17,334
Other current liabilities
53,213
42,397
Current portion of debt and finance obligations
8,314
8,371
Total current liabilities
307,659
229,796
Long-term debt and finance obligations
381,887
444,304
Pension and postretirement benefits
15,859
16,457
Long-term operating lease obligations
96,502
106,109
Other deferred items and liabilities
67,265
70,711
Total liabilities
869,172
867,377
Commitments and contingencies
Convertible Series A Preferred Stock, $0.01 par value, 180,000 shares authorized, 135,000 shares issued and outstanding
132,591
Redeemable noncontrolling interest
4,382
4,733
Stockholders’ equity
Viad Corp stockholders’ equity:
Common stock, $1.50 par value, 200,000,000 shares authorized, 24,934,981 shares issued and outstanding
37,402
Additional capital
572,219
568,230
Accumulated deficit
(280,017
)
(326,084
Accumulated other comprehensive loss
(46,551
(40,394
Common stock in treasury, at cost, 3,745,837 and 3,948,316 shares, respectively
(186,288
(195,721
Total Viad stockholders’ equity
96,765
43,433
Non-redeemable noncontrolling interest
92,918
89,188
Total stockholders’ equity
189,683
132,621
Total Liabilities, Mezzanine Equity, and Stockholders’ Equity
Refer to Notes to Condensed Consolidated Financial Statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended
Nine Months Ended
(in thousands, except per share data)
Revenue:
Services
375,236
285,119
912,126
765,598
Products
80,468
80,780
195,613
181,403
Total revenue
455,704
365,899
1,107,739
947,001
Costs and expenses:
Costs of services
298,081
222,794
798,666
681,409
Costs of products
65,075
67,063
171,529
161,602
Corporate activities
7,757
3,579
17,612
10,255
Gain on sale of ON Services
—
204
Interest expense, net
11,428
12,476
35,858
37,081
Other expense, net
407
554
1,287
1,533
Restructuring charges (recoveries)
383
480
(326
1,125
Impairment charges
6,110
Total costs and expenses
389,241
306,946
1,030,736
893,209
Income from continuing operations before income taxes
66,463
58,953
77,003
53,792
Income tax expense
10,509
9,173
17,247
13,623
Income from continuing operations
55,954
49,780
59,756
40,169
Income (loss) from discontinued operations
(90
(654
743
(855
Net income
55,864
49,126
60,499
39,314
Net income attributable to non-redeemable noncontrolling interest
(7,178
(7,716
(8,062
(8,221
Net (income) loss attributable to redeemable noncontrolling interest
(71
(139
372
270
Net income attributable to Viad
48,615
41,271
52,809
31,363
Diluted income per common share:
Continuing operations attributable to Viad common stockholders
1.65
1.44
1.64
0.96
Discontinued operations attributable to Viad common stockholders
(0.03
0.03
(0.04
Net income attributable to Viad common stockholders
1.41
1.67
0.92
Weighted-average outstanding and potentially dilutive common shares
21,615
21,174
21,517
21,025
Basic income per common share:
1.68
1.46
0.97
0.04
1.43
1.69
0.93
Weighted-average outstanding common shares
21,166
20,885
21,107
20,825
Amounts attributable to Viad
48,705
41,925
52,066
32,218
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Other comprehensive income (loss):
Unrealized foreign currency translation adjustments
4,314
(7,840
(6,567
110
Change in fair value of interest rate cap
(157
(122
277
316
Change in net actuarial loss, net of tax (1)
(50
60
106
48
Change in prior service cost, net of tax (1)
9
17
27
56
Comprehensive income
59,980
41,241
54,342
39,844
Non-redeemable noncontrolling interest:
Comprehensive income attributable to non-redeemable noncontrolling interest
971
(1,513
(1,181
287
Redeemable noncontrolling interest:
Comprehensive (income) loss attributable to redeemable noncontrolling interest
Comprehensive income attributable to Viad
53,702
31,873
45,471
32,180
(1)The tax effect on other comprehensive income (loss) is not significant.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY
Mezzanine Equity
CommonStock
AdditionalCapital
AccumulatedDeficit
Accumulated Other Comprehensive Income (Loss)
CommonStock inTreasury
TotalViadEquity
Non-Redeemable Non-ControllingInterest
TotalStockholders’Equity
Redeemable Non-ControllingInterest
Convertible Series A Preferred Stock
Balance, December 31, 2023
Net loss
(25,117
(923
(26,040
(203
Dividends on convertible preferred stock
(1,950
Capital contributions from noncontrolling interest
149
218
Employee benefit plans
(5,387
5,358
(29
Share-based compensation - equity awards
3,107
Unrealized foreign currency translation adjustment
(7,502
(1,570
(9,072
(107
Amortization of net actuarial loss, net of tax
85
Amortization of prior service cost, net of tax
19
Other, net
(17
Balance, March 31, 2024
565,933
(353,151
(47,574
(190,363
12,247
86,844
99,091
4,423
Net income (loss)
29,311
1,807
31,118
(240
Distributions to noncontrolling interest
(3,300
216
(515
1,737
1,222
3,679
(3,379
(582
(3,961
16
71
(1
684
(893
(209
Balance, June 30, 2024
569,781
(326,683
(50,667
(188,626
41,207
84,769
125,976
4,199
7,178
55,793
(1,227
2,338
1,111
3,713
5,285
112
(48
(47
Balance, September 30, 2024
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY (Continued)
Balance, December 31, 2022
570,271
(334,301
(47,185
(211,657
14,530
82,310
96,840
4,956
(20,869
(398
(21,267
(123
(800
Payment of payroll taxes on stock-based compensation through shares withheld
(204
(4,677
5,468
791
3,064
1,195
565
1,760
142
(45
35
5
Balance, March 31, 2023
568,661
(357,120
(46,800
(206,391
(4,248
82,477
78,229
4,975
10,961
903
11,864
(286
Capital distributions to noncontrolling interest
(1,126
1,238
(4
(1,773
2,628
855
2,830
6,755
1,235
7,990
38
33
15
(2
13
Balance, June 30, 2023
569,733
(348,109
(38,770
(203,769
16,487
83,489
99,976
4,727
7,716
48,987
139
(966
2,058
1,092
2,722
(9,353
(58
12
Balance, September 30, 2023
571,501
(308,787
(46,655
(201,711
51,750
89,692
141,442
4,808
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
42,961
37,707
17,331
(Income) loss from discontinued operations
(743
Restructuring (recoveries) charges
Gains on dispositions of property and other assets
(102
(99
Share-based compensation expense
10,500
8,647
Other non-cash items, net
5,347
Change in operating assets and liabilities:
Receivables
(39,967
(12,528
(1,169
130
(8,177
(19,849
46,620
9,904
Restructuring liabilities
(934
(1,001
7,509
2,126
14,172
38,425
Income taxes payable
854
1,285
Other assets and liabilities, net
(27,389
7,013
Net cash provided by operating activities
133,096
116,554
Cash flows from investing activities
Capital expenditures
(52,787
(54,739
Proceeds from insurance
3,823
Cash paid for acquisitions, net
(41
Proceeds from the sale of ON Services
1,168
Proceeds from dispositions of property and other assets
121
108
Net cash used in investing activities
(48,843
(53,504
Cash flows from financing activities
Proceeds from borrowings
374,282
49,044
Payments on debt and finance obligations
(439,163
(54,235
Dividends paid on preferred stock
(5,850
Distributions to noncontrolling interest, net of contributions from noncontrolling interest
(3,151
Payments of debt issuance costs
(773
(226
Payment of payroll taxes on stock-based compensation through shares withheld or repurchased
(1,133
(508
Other financing activities
(201
Net cash used in financing activities
(75,989
(12,901
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
279
(348
Net change in cash, cash equivalents, and restricted cash
8,543
49,801
Cash, cash equivalents, and restricted cash, beginning of year
59,029
64,564
Cash, cash equivalents, and restricted cash, end of period
67,572
114,365
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Overview and Basis of Presentation
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information required by GAAP or United States Securities and Exchange Commission (“SEC”) rules and regulations for complete financial statements. These financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 1, 2024 (“2023 Form 10-K”).
The condensed consolidated financial statements include the accounts of Viad and its subsidiaries. We have eliminated all significant intercompany account balances and transactions in consolidation.
Nature of Business
We are a leading provider of extraordinary experiences, including hospitality and leisure activities, experiential marketing, and live events.
We operate through three reportable segments: Pursuit, Spiro, and GES Exhibitions. Spiro and GES Exhibitions are both live event businesses and are referred to collectively as “GES.”
Pursuit
Pursuit is a collection of inspiring and unforgettable travel experiences that includes recreational attractions, hotels and lodges, food and beverage, retail, sightseeing, and ground transportation services. Pursuit comprises the Banff Jasper Collection, the Alaska Collection, the Glacier Park Collection, FlyOver, and Sky Lagoon.
Spiro
Spiro is an experiential marketing agency that partners with leading brands around the world to manage and elevate their global experiential marketing activities.
GES Exhibitions
GES Exhibitions is a global exhibition services company that partners with leading exhibition and conference organizers as a full-service provider of strategic and logistics solutions to manage the complexity of their shows.
Impact of Recent Accounting Pronouncements
The following table provides a brief description of recent accounting pronouncements:
Standard
Description
Date of adoption
Effect on the financial statements
Standards Not Yet Adopted
Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures
Amendment expands the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.
1/1/2025
This new guidance will expand our footnote disclosures within the scope of this new standard with no impacts to our consolidated financial statements.
Standards Recently Adopted
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
Amendment expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.
1/1/2024
This new guidance will expand our footnote disclosures within the scope of this new standard with no impacts to our consolidated financial statements. The required disclosures are effective for annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025.
Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with United States GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Estimates and assumptions are used in accounting for, among other things: impairment testing of recorded goodwill and intangible assets and long-lived assets; allowance for uncollectible accounts receivable; sales reserve allowances; provisions for income taxes, including uncertain tax positions; valuation allowances related to deferred tax assets; liabilities for losses related to self-insured liability claims; liabilities for losses related to environmental remediation obligations; sublease income associated with restructuring liabilities; pension and postretirement benefit costs and obligations; share-based compensation costs; the discount rates used to value lease obligations; the redemption value of redeemable noncontrolling interests; and the allocation of purchase price of acquired businesses. These estimates and assumptions may change as a result of the impact of global economic conditions, global inflationary pressures, and volatility in foreign exchange rates. Actual results could differ from these and other estimates.
Cash, Cash Equivalents, and Restricted Cash
Cash equivalents are highly-liquid investments with remaining maturities when purchased of three months or less. Cash and cash equivalents consist of cash and bank demand deposits. Restricted cash represents collateral required for surety bonds, bank guarantees, letters of credit, and corporate credit cards.
Cash, cash equivalents, and restricted cash balances presented in the Condensed Consolidated Statements of Cash Flows consist of the following:
Restricted cash included in other current assets
3,020
6,325
Cash, cash equivalents, and restricted cash shown in the statement of cash flows
Revenue Recognition
Revenue is measured based on a specified amount of consideration in a contract with a customer, net of commissions paid to customers and amounts collected on behalf of third parties. We recognize revenue when a performance obligation is satisfied by transferring control of a product or delivering the service to a customer.
Pursuit’s service revenue is derived through its admissions, accommodations, and transportation services. Product revenue is derived through food and beverage and retail sales. Revenue is recognized at the time services are performed or upon delivery of the product. Pursuit’s service revenue is recognized over time as the customer simultaneously receives and consumes the benefits, and product revenue is recognized at a point in time.
GES’ service revenue is primarily derived through its comprehensive range of marketing, event production, and other related services to event organizers and corporate brand marketers. GES’ service revenue is earned over time over the duration of the live event, which generally lasts one to three days. Revenue for goods and services provided for which we do not have control of the goods or services before that good or service is transferred to a customer is recorded on a net basis to reflect only the fees received for arranging these services. GES’ product revenue is derived from the build of exhibits, environments, and graphics and is recognized at a point in time upon delivery of the product.
8
Noncontrolling Interests – Non-redeemable and Redeemable
Non-redeemable noncontrolling interest represents the portion of equity in a subsidiary that is not attributable, directly or indirectly, to us. We report non-redeemable noncontrolling interest within stockholders’ equity in the Condensed Consolidated Balance Sheets. The amount of consolidated net income or loss attributable to Viad and the non-redeemable noncontrolling interest is presented in the Condensed Consolidated Statements of Operations.
We consider noncontrolling interests with redemption features that are not solely within our control to be redeemable noncontrolling interests. Our redeemable noncontrolling interest relates to our 56.4% equity ownership interest in Esja Attractions ehf. (“Esja”), which owns the FlyOver Iceland attraction. The Esja shareholders agreement contains a put option that gives the minority Esja shareholders the right to sell (or “put”) their Esja shares to us based on a calculated formula within a predefined term. This redeemable noncontrolling interest is considered mezzanine equity and we report it between liabilities and stockholders’ equity in the Condensed Consolidated Balance Sheets. The amount of the net income or loss attributable to redeemable noncontrolling interests is recorded in the Condensed Consolidated Statements of Operations and the accretion of the redemption value is recorded as an adjustment to accumulated deficit and is included in our income (loss) per common share. Refer to Note 22 – Noncontrolling Interests – Redeemable and Non-redeemable for additional information.
Convertible Preferred Stock
We record shares of convertible preferred stock based on proceeds received net of costs on the date of issuance. Dividends paid-in-kind increase the redemption value of the preferred stock. Redeemable preferred stock (including preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as mezzanine equity and is reported between liabilities and stockholders’ equity in the Condensed Consolidated Balance Sheets.
Leases
We recognize a right-of-use (“ROU”) asset and lease liability on the Condensed Consolidated Balance Sheets and classify leases as either finance or operating leases. The classification of the lease determines whether we recognize the lease expense on an effective interest method basis (finance lease) or on a straight-line basis (operating lease) over the lease term. In determining whether an agreement contains a lease, we consider if we have a right to control the use of the underlying asset during the lease term in exchange for an obligation to make lease payments arising from the lease. We recognize ROU assets and lease liabilities at commencement date, which is when the underlying asset is available for use to a lessee, based on the present value of lease payments over the lease term.
Our operating and finance leases are primarily facility, equipment, and land leases. Our facility leases comprise mainly manufacturing facilities, sales and design facilities, offices, storage and/or warehouses, and truck marshaling yards for our GES business. These facility leases have lease terms ranging up to 34 years. Our equipment leases comprise mainly vehicles, hardware, and office equipment, each with various lease terms. Our land leases comprise mainly leases in Canada and Iceland on which our Pursuit hotels or attractions are located and have lease terms ranging up to 46 years.
If a lease contains a renewal option that is reasonably certain to be exercised, then the lease term includes the optional periods in measuring a ROU asset and lease liability. We evaluate the reasonably certain threshold at lease commencement, and it is typically met if we identify substantial economic incentives or termination penalties. We do not include variable leases and variable non-lease components in the calculation of the ROU asset and corresponding lease liability. For facility leases, variable lease costs include the costs of common area maintenance, taxes, and insurance for which we pay our lessors an estimate that is adjusted to actual expense on a quarterly or annual basis depending on the underlying contract terms. We expense these variable lease payments as incurred. Our lease agreements do not contain any significant residual value guarantees or restrictive covenants.
Substantially all of our lease agreements do not specify an implicit borrowing rate, and as such, we utilize an incremental borrowing rate based on lease term and country in order to calculate the present value of our future lease payments. The incremental borrowing rate represents a risk-adjusted rate on a collateralized basis and is the expected rate at which we would borrow funds to satisfy the scheduled lease liability payment streams commensurate with the lease term and the country.
We are also a lessor to third party tenants who either lease certain portions of facilities that we own or sublease certain portions of facilities that we lease. We record lease income from owned facilities as rental income and we record sublease income from leased facilities as an offset to lease expense in the Condensed Consolidated Statements of Operations. We classify all of our leases for which we are the lessor as operating leases.
Insurance Recoveries
Receipts from insurance up to the amount of the recognized losses are considered recoveries and are accounted for when they are probable of receipt. Anticipated proceeds in excess of the recognized loss are considered a contingency gain. A contingency gain for
anticipated insurance proceeds in excess of losses already recognized is not recognized until all contingencies relating to the insurance claim have been resolved.
On July 22, 2024, Jasper National Park was closed and evacuated due to wildfire activity, and a wildfire entered the Jasper townsite on July 24, 2024. Pursuit’s hotels and attractions in and near the Jasper townsite were not reached by the wildfire and remain intact except for the Maligne Canyon Wilderness Kitchen (“Wilderness Kitchen”), a restaurant and retail operation located about three miles outside the town of Jasper. In addition to the loss of the Wilderness Kitchen, food and beverage inventories at our properties throughout the region were spoiled and written off. We also incurred other costs related to restoration efforts.
During the three months ended September 30, 2024, we recorded an asset impairment charge of $3.8 million against the net book value of the Wilderness Kitchen. This loss is covered by our property insurance and accordingly, we recorded an offsetting impairment recovery of $3.8 million. We also recorded an impairment charge of $0.6 million against intangible assets (trademark and favorable lease) of the Wilderness Kitchen. We incurred costs at our other properties affected by the Jasper wildfires of $7.8 million, which are deemed probable of recovery through our insurance.
During the three months ended September 30, 2024, we received $4.7 million in insurance proceeds as a partial settlement, of which $3.8 million was allocated to the charge for the Wilderness Kitchen and $0.9 million was allocated against the insurance receivable for costs incurred. As of September 30, 2024, the remaining balance in the insurance receivable of $6.9 million represents costs that are deemed probable of recovery. We include the insurance receivable in “Other current assets” in the Condensed Consolidated Balance Sheets.
Note 2. Revenue and Related Contract Costs and Contract Liabilities
Pursuit’s performance obligations are short-term in nature. They include the provision of a hotel room, an attraction admission, a chartered or ticketed bus or van ride, and/or the sale of food, beverage, or retail products. We recognize revenue when the service has been provided or the product has been delivered. When we extend credit, payment terms are generally within 30 days and contain no significant financing components.
GES’ performance obligations consist of services or product(s) outlined in a contract. While we often sign multi-year contracts for recurring events, the obligations for each occurrence are well defined and conclude upon the occurrence of each event. The obligations are typically the provision of services and/or sale of a product in connection with a live event. Revenue for goods and services provided for which we do not have control of the goods or services before that good or service is transferred to a customer is recorded on a net basis to reflect only the fees received for arranging these services. We recognize revenue for services generally at the close of the live event. We recognize revenue for products either upon delivery to the customer’s location, upon delivery to an event that we are serving, or when we have the right to invoice. In circumstances where a customer cancels a contract, we generally have the right to bill the customer for costs incurred to date. Payment terms are generally within 30-60 days and contain no significant financing components.
Contract Liabilities
Pursuit and GES typically receive customer deposits prior to transferring the related product or service to the customer. We record these deposits as a contract liability, which are recognized as revenue upon satisfaction of the related contract performance obligation(s). GES also provides customer rebates and volume discounts to certain event organizers that we recognize as a reduction of revenue. We include customer deposits in “Contract liabilities” and “Other deferred items and liabilities” in the Condensed Consolidated Balance Sheets.
Changes to contract liabilities are as follows:
Balance at December 31, 2023
53,322
Cash additions
266,582
Revenue recognized
(252,230
Foreign exchange translation adjustment
693
Balance at September 30, 2024
68,367
Contract Costs
GES capitalizes certain incremental costs incurred in obtaining and fulfilling contracts. Capitalized costs principally relate to direct costs of materials and services incurred in fulfilling services of future live events, and also include up-front incentives and commissions incurred upon contract signing. We expense costs associated with preliminary contract activities (i.e. proposal activities) as incurred. Capitalized contract costs are expensed upon the transfer of the related goods or services and are included in “Costs of services” or “Costs of products” in the Condensed Consolidated Statement of Operations as applicable. We include the deferred incremental costs
10
of obtaining and fulfilling contracts in “Current contract costs” and “Other investments and assets” in the Condensed Consolidated Balance Sheets.
Changes to contract costs are as follows:
21,974
Additions
76,206
Expenses
(65,989
629
32,820
As of September 30, 2024, capitalized contract costs consisted of $2.6 million to obtain contracts and $30.2 million to fulfill contracts. We did not recognize an impairment loss with respect to capitalized contract costs during the three and nine months ended September 30, 2024 or 2023.
Disaggregation of Revenue
The following tables disaggregate Pursuit and GES revenue by major service and product lines, timing of revenue recognition, and markets served:
Services:
Ticket revenue
75,330
71,741
136,842
122,545
Rooms revenue
42,020
48,674
74,202
78,370
Transportation
4,990
6,010
10,183
11,644
Other
10,648
8,994
16,795
13,694
Total services revenue
132,988
135,419
238,022
226,253
Products:
Food and beverage
26,135
28,394
47,703
47,897
Retail operations
23,134
23,127
34,964
33,927
Total products revenue
49,269
51,521
82,667
81,824
182,257
186,940
320,689
308,077
Timing of revenue recognition:
Services transferred over time
Products transferred at a point in time
Markets:
Banff Jasper Collection
80,700
96,503
152,502
161,022
Alaska Collection
29,238
26,846
43,897
40,000
Glacier Park Collection
46,408
42,806
63,152
57,991
FlyOver
12,426
9,675
27,148
22,550
Sky Lagoon
13,485
11,110
33,990
26,514
11
GES
Service lines:
82,205
58,887
242,585
199,617
194,806
122,115
551,623
446,146
Intersegment eliminations
(3,564
(2,043
(7,158
(6,839
273,447
178,959
787,050
638,924
242,248
149,700
674,104
539,345
Products transferred over time (1)
15,137
13,518
48,108
42,497
16,062
15,741
64,838
57,082
Geographical markets:
North America
237,484
148,569
647,465
506,816
EMEA
52,406
42,325
182,542
154,506
(16,443
(11,935
(42,957
(22,398
Note 3. Share-Based Compensation
We grant share-based compensation awards to our officers, directors, and certain key employees pursuant to the 2017 Viad Corp Omnibus Incentive Plan, as amended (the “2017 Plan”). The 2017 Plan has a 10-year term and provides for the following types of awards: (a) incentive and non-qualified stock options; (b) restricted stock awards and restricted stock units; (c) performance units or performance shares; (d) stock appreciation rights; (e) cash-based awards; and (f) certain other stock-based awards. As of September 30, 2024, there were 568,648 shares available for future grant under the 2017 Plan.
The following table summarizes share-based compensation expense:
Performance-based restricted stock units
1,476
845
3,879
2,486
Restricted stock awards and restricted stock units
2,129
1,540
6,154
4,864
Stock options
109
350
467
1,297
Share-based compensation expense before income tax
3,714
2,735
Income tax benefit (1)
(87
(34
(237
(100
Share-based compensation expense, net of income tax
3,627
2,701
10,263
8,547
Note 4. Inventories
We state inventories, which consist primarily of exhibit design and construction materials and supplies, as well as retail inventory, at the lower of cost (first-in, first-out and specific identification methods) or net realizable value.
The components of inventories consisted of the following:
Raw materials
349
681
Finished goods
10,897
9,472
Note 5. Other Current Assets
Other current assets consisted of the following:
Insurance receivable (1)
6,877
Prepaid software maintenance
5,692
4,905
Prepaid project deposit
3,623
3,699
Restricted cash
Prepaid vendor payments
2,937
2,403
Prepaid taxes
2,270
881
Income tax receivable
670
Prepaid other
3,027
1,567
2,488
1,324
(1) During the three months ended September 30, 2024, we recorded an asset impairment charge of $3.8 million against the net book value of the Wilderness Kitchen. This loss is covered by our property insurance and accordingly, we recorded an offsetting impairment recovery of $3.8 million. We incurred costs at our other properties affected by the Jasper wildfires of $7.8 million, which are deemed probable of recovery. During the three months ended September 30, 2024, we received $4.7 million in insurance proceeds as a partial settlement, of which $3.8 million was allocated to the Wilderness Kitchen and $0.9 million was allocated against the insurance receivable for costs incurred. As of September 30, 2024, the remaining balance in the insurance receivable of $6.9 million represents costs that are deemed probable of recovery. Refer to Note 1 – Overview and Basis of Presentation - Insurance Recoveries for additional information.
Note 6. Property and Equipment, Net
Property and equipment consisted of the following:
Land and land interests
31,843
31,184
Buildings and leasehold improvements
466,920
445,074
Equipment and other
462,644
455,070
Gross property and equipment
961,407
931,328
Accumulated depreciation
(426,873
(395,557
Property and equipment, net (excluding finance leases)
534,534
535,771
Finance lease ROU assets, net
54,330
57,120
Depreciation expense was $12.9 million during the three months ended September 30, 2024 and $36.9 million during the nine months ended September 30, 2024. Depreciation expense was $10.1 million during the three months ended September 30, 2023 and $31.0 million during the nine months ended September 30, 2023.
Capitalized interest was zero during the three months ended September 30, 2024 and $0.7 million during the nine months ended September 30, 2024. Capitalized interest was $0.6 million during the three months ended September 30, 2023 and $1.3 million during the nine months ended September 30, 2023, which was primarily related to the development of Pursuit’s FlyOver Chicago attraction.
On July 2, 2019, we executed a facility lease with the intent of building a new FlyOver attraction, FlyOver Canada Toronto. Effective August 6, 2024, this facility lease was terminated. During the three months ended September 30, 2024, we recorded an asset impairment charge of $5.5 million related to site-specific engineering plans developed for this attraction.
On July 24, 2024, Pursuit’s Wilderness Kitchen was lost to the Jasper wildfires. During the three months ended September 30, 2024, we recorded an asset impairment charge of $3.8 million against the net book value of the Wilderness Kitchen. This loss is covered by our property insurance and accordingly, we recorded an offsetting impairment recovery of $3.8 million. Refer to Note 1 – Overview and Basis of Presentation - Insurance Recoveries for additional information.
Note 7. Other Investments and Assets
Other investments and assets consisted of the following:
Self-insured excess liability receivable
7,776
Other mutual funds
5,327
4,271
Contract costs
3,911
1,772
3,338
3,228
Note 8. Goodwill and Other Intangible Assets, Net
The changes in the carrying amount of goodwill are as follows:
Foreign currency translation adjustments
(2,001
Goodwill is tested for impairment at the reporting unit level on an annual basis as of October 31, and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. We use a discounted expected future cash flow methodology (income approach) to estimate the fair value of our reporting units for purposes of goodwill impairment testing. We do not believe there have been any significant changes to the outlook for the future years or to the risk profile of our reporting units that would indicate that goodwill impairment testing should have been performed as of September 30, 2024.
Other intangible assets consisted of the following:
September 30, 2024
December 31, 2023
Useful Life(Years)
GrossCarryingValue
AccumulatedAmortization
NetCarryingValue
Intangible assets subject to amortization:
Customer contracts and relationships
8.9
33,162
(29,487
3,675
34,701
(29,950
4,751
Operating contracts and licenses
32.8
40,314
(5,535
34,779
40,324
(4,692
35,632
In-place lease
32.0
14,450
(2,104
12,346
14,754
(1,842
12,912
Tradenames
2.9
4,004
(2,961
1,043
5,667
(4,121
1,546
1.2
(8
787
(200
587
Total amortized intangible assets
91,939
(40,095
51,844
96,233
(40,805
55,428
Indefinite-lived intangible assets:
Business licenses
566
569
92,505
96,802
Intangible asset amortization expense (excluding amortization expense of ROU assets) was $1.0 million during the three months ended September 30, 2024 and $2.8 million during the nine months ended September 30, 2024. Intangible asset amortization expense was $1.3 million during the three months ended September 30, 2023 and $3.6 million during the nine months ended September 30, 2023.
On July 24, 2024, Pursuit’s Wilderness Kitchen was lost to the Jasper wildfires. During the three months ended September 30, 2024, we recorded an impairment charge of $0.6 million against intangible assets (trademark and favorable lease) of the Wilderness Kitchen. Refer to Note 1 – Overview and Basis of Presentation - Insurance Recoveries for additional information.
14
At September 30, 2024, the estimated future amortization expense related to intangible assets subject to amortization is as follows:
Year ending December 31,
Remainder of 2024
801
2025
2,328
2026
2,295
2027
1,898
2028
1,875
Thereafter
42,647
Total
Note 9. Other Current Liabilities
Other current liabilities consisted of the following:
Continuing operations:
Accrued sales and use taxes and personal property taxes
9,351
3,958
Accrued concession fees
8,162
3,970
Foreign income taxes payable
7,797
8,558
Accrued employee benefit costs
5,357
4,835
Self-insured liability
5,224
4,531
Commissions payable
4,283
3,799
Accrued professional fees
1,921
1,208
Accommodation service deposits
1,482
2,681
Current portion of pension and postretirement liabilities
1,046
1,396
7,297
6,315
Total continuing operations
51,920
41,251
Discontinued operations:
268
Environmental remediation liabilities
25
1,000
Total discontinued operations
1,293
1,146
Total other current liabilities
Note 10. Other Deferred Items and Liabilities
Other deferred items and liabilities consisted of the following:
Foreign deferred tax liability
28,547
28,234
Multi-employer pension plan withdrawal liability
12,964
13,341
7,113
7,407
Self-insured excess liability
6,363
5,627
Accrued restructuring
748
2,666
1,372
1,958
64,883
67,009
1,098
2,140
1,284
1,562
2,382
3,702
Total other deferred items and liabilities
Note 11. Debt and Finance Obligations
The components of debt and finance obligations consisted of the following:
(in thousands, except interest rates)
Debt:
2021 Credit Facility - Term Loan B9.1% interest rate at September 30, 2024 and 10.5% at December 31, 2023, due through 2028 (1)
318,000
321,000
2021 Credit Facility - Revolving Credit Facility - Viad Corp borrowings8.5% interest rate at December 31, 2023, due through 2026 (1)
57,000
Jasper Term Loan6.5% interest rate at September 30, 2024 and December 31, 2023, due through 2028 (1)
12,376
12,655
Jasper Revolving Credit Facility9.5% weighted-average interest rate at December 31, 2023, due through 2028 (1)
FlyOver Iceland Credit Facility9.0% interest rate at September 30, 2024 and 8.9% at December 31, 2023, due through 2029 (1)
3,902
4,049
FlyOver Iceland Term Loans12.3% weighted-average interest rate at September 30, 2024 and 13.8% at December 31, 2023, due through 2024 (1)
475
Less unamortized debt issuance costs
(8,001
(9,453
Total debt
326,288
388,746
Finance obligations:
Finance lease obligations (2)9.2% weighted-average interest rate at September 30, 2024 and December 31, 2023, due through 2067
63,197
63,929
Financing arrangements
716
Total debt and finance obligations (3)(4)
390,201
452,675
Current portion
(8,314
(8,371
2021 Credit Facility
Effective July 30, 2021, we entered into a $500 million credit facility (the “2021 Credit Facility”). The 2021 Credit Facility provided for a $400 million term loan (“Term Loan B”) and a $100 million revolving credit facility (“Revolving Credit Facility”). The proceeds of the Term Loan B, net of $14.8 million in related fees, were used to repay the $327 million outstanding balance under our prior $450 million revolving credit facility and to provide for financial flexibility to fund future acquisitions and growth initiatives and for general corporate purposes.
On October 6, 2023, we entered into the Third Amendment to the 2021 Credit Facility, which among other things, increased the principal amount of the Revolving Credit Facility by $70 million, bringing the total amount of revolving capacity to $170 million, and added Brewster Inc., an Alberta corporation and a wholly-owned subsidiary of the Company, as a co-borrower. In connection with the amendment, we prepaid $70 million of the outstanding balance on our existing Term Loan B using $60 million from the Revolving Credit Facility, which has a lower credit spread as discussed below, and $10 million of cash from the Company’s balance sheet.
LIBOR Transition Amendment
On February 6, 2023, we entered into the LIBOR Transition Amendment to the 2021 Credit Facility to replace the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”) for U.S. dollar borrowings on our Term Loan B and Revolving Credit Facility. In accordance with the LIBOR replacement provisions outlined in the 2021 Credit Facility, additional credit spread adjustments apply to SOFR ranging from 0.11448% (for a one-month duration) up to 0.71513% (for a 12-month duration). As discussed below under “Term Loan B”, those additional credit spread adjustments were eliminated for our Term Loan B borrowings with the Fourth Amendment to the 2021 Credit Facility (as discussed below), but remain in place for borrowings under our Revolving Credit Facility.
CDOR Transition Amendment
On June 28, 2024, we entered into the Canadian Benchmark Replacement Conforming Changes Amendment (“CDOR Transition Amendment”) to the 2021 Credit Facility to replace the Canadian Dollar Offered Rate (“CDOR”) with the Canadian Overnight Repo Rate Average (“CORRA”) for Canadian dollar borrowings on our revolver. Additional credit spread adjustments apply to CORRA ranging from 0.29547% (for a one-month duration) up to 0.32138% (for a three-month duration).
Term Loan B
The Term Loan B has a maturity date of July 30, 2028, is subject to quarterly amortization of principal of $1.0 million, and carries no financial covenants. Interest rates are based on SOFR plus a credit spread, with a SOFR floor of 0.50%. On April 26, 2024, we entered into the Fourth Amendment to the 2021 Credit Facility, which among other things, (i) reduced the SOFR credit spread from 5.00% to 4.25% on the Term Loan B and (ii) set the additional credit spread adjustments to 0% on the Term Loan B.
As discussed in Note 12 – Derivative, we entered into an interest rate cap agreement that manages our exposure to interest rate increases on $300 million of borrowings under the 2021 Credit Facility or other SOFR-based borrowings and provides us with the right to receive payment if the one-month SOFR exceeds 5.0% (“Strike Rate”).
Revolving Credit Facility
The Revolving Credit Facility has a maturity date of July 30, 2026 and carries financial covenants. On March 23, 2022, we entered into the First Amendment to the 2021 Credit Facility and on March 28, 2023, we entered into the Second Amendment to the 2021 Credit Facility. These amendments modified the financial covenants to the following:
As of September 30, 2024, our total net leverage ratio was 1.65 to 1.00, the interest coverage ratio was 4.13 to 1.00, and we were in compliance with all covenants under the Revolving Credit Facility.
Interest rates for U.S. dollar borrowings on our Revolving Credit Facility are based on SOFR (plus additional credit spread adjustments as detailed above under “LIBOR Transition Amendment”). We also have the option to borrow U.S. funds based on the “Base Rate”, which for any day is the highest of the Fed Funds Rate plus 0.50%, Bank of America’s publicly announced “prime rate,” and SOFR plus 1.00%.
Interest rates for Canadian dollar borrowings on our Revolving Credit Facility are based on CORRA (plus additional credit spread adjustments as detailed above under “CDOR Transition Amendment”). We also have the option to borrow Canadian funds based on the “Canadian Prime Rate”, which for any day is the higher of the per annum rate of interest designated by Bank of America (acting through its Canada branch) from time to time as its prime rate for commercial loans made by it in Canada in Canadian dollars, and the CORRA Rate for a one-month Interest Period as of such day, plus 1.00%.
Credit spreads for borrowings on our Revolving Credit Facility are based on Viad’s total net leverage ratio and range from 2.50% to 3.50% for SOFR and CORRA borrowings and from 1.50% to 2.50% for Base Rate and Canadian Prime Rate borrowings. Additionally, a 1.00% floor applies to the Base Rate and a 0% floor applies to the Canadian Prime Rate.
The Revolving Credit Facility includes an undrawn fee ranging from 0.30% to 0.50% that is based on Viad’s total net leverage ratio.
As of September 30, 2024, capacity remaining under the Revolving Credit Facility was $164.3 million, reflecting $170 million total facility size, less $5.7 million in outstanding letters of credit.
In addition to U.S. dollar borrowings and Canadian dollar borrowings, we may also borrow funds on the Revolving Credit Facility in Pound Sterling based on the Sterling Overnight Index Average and Euros based on the Euro Interbank Offered Rate (“EURIBOR”), plus applicable credit spreads. No such borrowings had been made as of September 30, 2024.
Jasper Credit Facility
Effective May 16, 2023, Pursuit entered into a $27.0 million Canadian dollar (approximately $20.0 million U.S. dollars) credit facility (the “Jasper Credit Facility”). The Jasper Credit Facility provides for a $17.0 million Canadian dollar term loan (“Jasper Term Loan”) and a $10.0 million Canadian dollar revolving credit facility (“Jasper Revolving Credit Facility”). The Jasper Credit Facility matures on January 31, 2028.
The Jasper Revolving Credit Facility carries financial covenants as follows:
As of September 30, 2024, both the pre-compensation and post-compensation fixed-charge coverage ratios were 2.25 to 1.00, and Pursuit was in compliance with all covenants under the Jasper Credit Facility.
Jasper Term Loan
The proceeds of the Jasper Term Loan reflect the outstanding balance under Pursuit’s prior Forest Park construction loan facility at the time it was converted to the Jasper Term Loan of $16.8 million Canadian dollars. The Jasper Term Loan bears interest at a 6.5% fixed rate.
Jasper Revolving Credit Facility
The proceeds of the Jasper Revolving Credit Facility are used to fund capital improvements. As of September 30, 2024, capacity remaining under the Jasper Revolving Credit Facility was $10.0 million Canadian dollars (approximately $7.4 million U.S. dollars). The Jasper Revolving Credit Facility bears interest at the Canadian Prime Rate plus 2.25%.
FlyOver Iceland Credit Facility
Effective February 15, 2019, FlyOver Iceland ehf., (“FlyOver Iceland”) a wholly-owned subsidiary of Esja, entered into a credit agreement with a €5.0 million (approximately $5.6 million U.S. dollars) credit facility (the “FlyOver Iceland Credit Facility”) with an original maturity date of March 1, 2022. The loan proceeds were used to complete the development of the FlyOver Iceland attraction. The loan bears interest at the three month EURIBOR plus 5.5%.
FlyOver Iceland entered into an addendum effective December 1, 2021 wherein the principal payments were deferred for twelve months beginning December 1, 2021, with equal quarterly principal payments due beginning December 1, 2022 and the maturity date was extended to September 1, 2027.
On February 27, 2024, FlyOver Iceland reached an agreement to amend and extend the FlyOver Iceland Credit Facility, wherein the principal payments are deferred for six months beginning March 1, 2024, with equal quarterly principal payments due beginning September 1, 2024 and a maturity date of September 1, 2029. The amended terms also include a modification of the financial covenants and an adjustment of the interest rate to three month EURIBOR plus 5.5%, decreasing to 4.9% once FlyOver Iceland’s leverage ratio is below 4.00 to 1.00.
FlyOver Iceland Term Loans
During 2020, FlyOver Iceland entered into three term loans totaling ISK 90.0 million (approximately $0.7 million U.S. dollars) (the “FlyOver Iceland Term Loans”). The first term loan for ISK 10.0 million was entered into effective October 15, 2020 and matured on April 1, 2023. It bore interest on a seven-day term deposit rate at the Central Bank of Iceland. The second term loan for ISK 30.0 million was entered into effective October 15, 2020 and matured and was repaid in full on October 1, 2024. It bore interest on a seven-day term deposit at the Central Bank of Iceland plus 3.07%. The third term loan for ISK 50.0 million was entered into effective December 29, 2020 with an original maturity date of February 1, 2023, which was extended to February 1, 2024 by way of a subsequent amendment, and bore interest at one-month Reykjavik InterBank Offered Rate (“REIBOR”) plus 4.99%. On February 27, 2024, FlyOver Iceland reached an agreement with its lender to refinance the ISK 50.0 million loan with a new ISK 50.0 million term loan, which was repaid on August 1, 2024.
Financing Arrangements
We entered into insurance premium financing arrangements with two financial intermediaries in order to finance certain of our insurance premium payments. The financing arrangements are payable within the next 12 months and bear a weighted average interest rate of 7.6%.
Changes to our financing arrangements are as follows:
18
13,062
Payments
(12,253
Foreign currency translation adjustment
(93
Note 12. Derivative
Interest Rate Cap
On January 4, 2023, we entered into an interest rate cap agreement with an effective date of January 31, 2023. The interest rate cap manages our exposure to interest rate increases on $300 million in SOFR-based borrowings under our 2021 Credit Facility and provides us with the right to receive payment if the one-month SOFR exceeds the Strike Rate. Beginning on February 28, 2023, we pay a fixed monthly deferred premium based on an annual rate of 0.3335% for the interest rate cap, which matures on January 31, 2025. During the three and nine months ended September 30, 2024, we received gross proceeds from the interest rate cap of $0.3 million and $0.8 million, respectively, as one-month SOFR exceeded the Strike Rate.
We designated the interest rate cap as a cash flow hedge designed to hedge the variability of the SOFR-based interest payments on our 2021 Credit Facility. The interest rate cap is recorded in the Condensed Consolidated Balance Sheets at fair value. The fair value is determined using widely accepted valuation techniques and reflects the contractual terms of the interest rate cap including the price of the cap and the period to maturity. While there are no quoted prices in active markets, our calculation uses observable market-based inputs, including interest rate curves. The interest rate cap is classified as Level 2 within the fair value hierarchy. Refer to Note 13 – Fair Value Measurements for the related fair value disclosures.
The fair value of the interest rate cap is as follows:
Classification
Derivatives designated as hedging instruments
Interest rate cap - short-term
337
443
Interest rate cap - long-term
45
Total derivatives designated as hedging instruments
488
Changes in the fair value of the interest rate cap are recorded in “Accumulated other comprehensive income (loss)” (“AOCI”). Amounts accumulated in AOCI are reclassified to “Interest expense, net” in the Condensed Consolidated Statements of Operations when the hedged item affects earnings. We reclassified to interest expense, net, approximately $0.3 million during the three months ended September 30, 2024 and approximately $0.9 million during the nine months ended September 30, 2024, and $0.4 million remained in unrealized losses in AOCI as of September 30, 2024. We estimate that $0.1 million will be reclassified to earnings within the next 12 months.
Note 13. Fair Value Measurements
The fair value of an asset or liability is defined as the price that would be received by selling an asset or paying to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value guidance requires an entity to maximize the use of quoted prices and other observable inputs and minimize the use of unobservable inputs when measuring fair value, and also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value.
The fair value of assets and liabilities measured at fair value on a recurring basis are as follows:
Fair Value Measurements at Reporting Date Using
Quoted Pricesin ActiveMarkets(Level 1)
SignificantOtherObservableInputs(Level 2)
SignificantUnobservableInputs(Level 3)
Assets:
Other mutual funds (1)
Total assets at fair value on a recurring basis
Liabilities:
Interest rate cap (2)
Total liabilities at fair value on a recurring basis
The carrying values of cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term nature of these instruments. Refer to Note 11 – Debt and Finance Obligations for the estimated fair value of debt obligations.
Note 14. Income Per Share
The components of basic and diluted income per share are as follows:
Less: Allocation to participating securities
(11,187
(9,522
(11,282
(6,194
Convertible preferred stock dividends
Net income allocated to Viad common stockholders (basic)
35,478
29,799
35,677
19,319
Add: Allocation to participating securities
177
98
165
Net income allocated to Viad common stockholders (diluted)
35,655
29,897
35,842
19,363
Basic weighted-average outstanding common shares
Additional dilutive shares related to share-based compensation
449
289
410
200
Diluted weighted-average outstanding shares
Income per share:
Basic income attributable to Viad common stockholders
Diluted income attributable to Viad common stockholders
Diluted income per common share is calculated using the more dilutive of the two-class method or if-converted method. The two-class method uses net income available to common stockholders and assumes conversion of all potential shares other than the participating securities. The if-converted method uses net income available to common stockholders and assumes conversion of all potential shares
20
including the participating securities. Dilutive potential common shares include outstanding stock options, unvested restricted share units and convertible preferred stock. We apply the two-class method in calculating income per common share as unvested share-based payment awards that contain nonforfeitable rights to dividends and convertible preferred stock are considered participating securities. Accordingly, such securities are included in the earnings allocation in calculating income per share. The adjustment to the carrying value of the redeemable noncontrolling interest is reflected in income per common share.
We excluded the following weighted-average potential common shares from the calculations of diluted net income per common share during the applicable periods because their inclusion would have been anti-dilutive:
Unvested restricted share-based awards
Unvested performance share-based awards
152
159
119
125
138
Note 15. Common and Preferred Stock
On August 5, 2020, we entered into an investment agreement with funds managed by private equity firm Crestview Partners (the “Investment Agreement”), relating to the issuance of 135,000 shares of newly issued Convertible Series A Preferred Stock, par value $0.01 per share (the “Convertible Preferred Stock”), for an aggregate purchase price of $135 million or $1,000 per share. The $135 million issuance was offset in part by $9.2 million of expenses related to the capital raise. We have classified the Convertible Preferred Stock as mezzanine equity in the Condensed Consolidated Balance Sheet due to the existence of certain change in control provisions that are not solely within our control.
The Convertible Series A Preferred Stock carries a 5.5% cumulative quarterly dividend, which is payable in cash or in-kind at Viad’s option and is convertible at the option of the holders into shares of our common stock at a conversion price of $21.25 per share. Dividends paid-in-kind increase the redemption value of the preferred stock. The redemption value of the preferred stock was $141.8 million as of September 30, 2024 and December 31, 2023. Upon the occurrence of a change in control event, the holders have a right to require Viad to repurchase such preferred stock. During the nine months ended September 30, 2024, $5.9 million of dividends were declared, all of which were paid in cash. We intend to pay preferred stock dividends in cash for the foreseeable future.
Holders of the Convertible Series A Preferred Stock are entitled to vote with holders of Viad’s common stock on an as-converted basis.
Common Stock Repurchases
Our Board of Directors previously authorized us to repurchase shares of our common stock from time to time at prevailing market prices. In March 2020, our Board of Directors suspended our share repurchase program. As of September 30, 2024, 546,283 shares remain available for repurchase under all prior authorizations. Additionally, we repurchase shares related to tax withholding requirements on vested restricted stock awards. Refer to Note 3 – Share-Based Compensation.
Note 16. Accumulated Other Comprehensive Income (Loss)
Changes in AOCI by component are as follows:
CumulativeForeign Currency Translation Adjustments
Unrecognized Net Actuarial Loss and Prior Service Credit, Net
Unrealized Gain (Loss) on Interest Rate Cap
AccumulatedOtherComprehensiveIncome (Loss)
(35,340
(4,403
(651
Other comprehensive income (loss) before reclassifications
151
(6,416
Amounts reclassified from AOCI, net of tax
133
126
259
Net other comprehensive income (loss)
(6,157
(41,907
(4,270
(374
21
Balance at December 31, 2022
(42,983
(4,202
Other comprehensive income before reclassifications
556
666
104
(136
Net other comprehensive income
530
Balance at September 30, 2023
(42,873
(4,098
Amounts reclassified from AOCI that relate to our defined benefit pension and postretirement plans include the amortization of prior service costs and actuarial net losses recognized during each period presented. We recorded these costs as components of net periodic cost for each period presented. Refer to Note 18 – Pension and Postretirement Benefits for additional information.
Note 17. Income Taxes
The effective tax rate was 15.8% for the three months ended September 30, 2024 and 22.4% for the nine months ended September 30, 2024. The effective tax rate was 15.6% for the three months ended September 30, 2023 and 25.3% for the nine months ended September 30, 2023.
The income tax provision was computed based on our estimated annualized effective tax rate and the full-year forecasted income or loss plus the tax impact of unusual, infrequent, or nonrecurring significant items during the period. The amount and change of pre-tax income and loss recognized between jurisdictions impacted the reported effective tax rate for the nine months ended September 30, 2024 as we do not recognize a tax benefit primarily on losses in the United States where we have a valuation allowance, while recognizing tax expense in Canada, Netherlands, the Middle East, the United Kingdom, and Iceland. We included in the annualized effective rate a $1.1 million benefit for the release of the valuation allowance recorded on the United Kingdom’s tax loss carryforwards as the United Kingdom’s forecasted income will fully utilize these carryforward losses for the year. During the three months ended September 30, 2024, we released the valuation allowance of $0.5 million recorded on deferred tax assets with certain separate states. We also recorded a $0.5 million expense during the first quarter of 2024 to record estimated withholding taxes associated with repatriating all of Sky Lagoon’s earnings back to the United States and a valuation allowance against the tax credit generated from this withholding tax.
The effective tax rate for the nine months ended September 30, 2023 was further impacted by the release of a valuation allowance of $2.1 million during the first quarter of 2023 on deferred tax assets associated with certain separate state filings, which more than offset taxes due in jurisdictions without a valuation allowance.
We paid net cash for income taxes of $4.5 million during the three months ended September 30, 2024 and $17.4 million during the nine months ended September 30, 2024 of which $10.1 million was paid to Canadian taxing authorities, $3.2 million to the Netherlands, and $1.5 million to the United Kingdom. We paid net cash for income taxes of $3.3 million during the three months ended September 30, 2023 and $16.0 million during the nine months ended September 30, 2023, of which $5.8 million was paid to Canadian tax authorities.
Note 18. Pension and Postretirement Benefits
The components of net periodic benefit cost of our pension and postretirement benefit plans for the three months ended September 30, 2024 and 2023 consist of the following:
Domestic Plans
Pension Plans
Postretirement Benefit Plans
Foreign Pension Plans
Service cost
51
Interest cost
206
212
78
74
84
94
Expected return on plan assets
(7
(15
(83
Amortization of prior service credit
(9
(13
Recognized net actuarial loss (gain)
91
77
(145
(62
32
Net periodic benefit cost
281
261
(42
86
Settlement cost
Total expenses
22
The components of net periodic benefit cost of our pension and postretirement benefit plans for the nine months ended September 30, 2024 and 2023 consist of the following:
132
608
634
260
254
(121
(95
(250
(259
249
219
(221
(150
95
102
707
729
114
211
251
252
We expect to contribute $0.8 million to our funded pension plans, $0.8 million to our unfunded pension plans, and $0.7 million to our postretirement benefit plans in 2024. During the nine months ended September 30, 2024, we contributed $0.6 million to our funded pension plans, $0.6 million to our unfunded pension plans, and $0.4 million to our postretirement benefit plans.
Note 19. Restructuring (Recoveries) Charges
As part of our efforts to drive efficiencies and simplify our business operations, we took certain restructuring actions designed to simplify and transform GES for greater profitability. These initiatives resulted in restructuring charges related to the elimination of certain positions and continuing to reduce our facility footprint at GES.
Changes to the restructuring liability by major restructuring activity are as follows:
Other Restructurings
Severance &EmployeeBenefits
Facilities
1,634
1,378
3,012
Restructuring (recoveries) charges (1)
(670
343
Cash payments
(624
(476
(1,100
Adjustment to liability
37
340
1,283
1,623
(1) During the second quarter of 2024, we reversed a prior year accrual of $1.5 million related to a certain multi-employer pension fund.
As of September 30, 2024, $0.7 million of liabilities related to facilities will remain unpaid by the end of 2024. The liabilities related to facilities primarily include dilapidations and non-lease expenses that will be paid over the remaining lease terms. Refer to Note 23 – Segment Information for information regarding restructuring charges by segment.
23
Note 20. Leases and Other
The balance sheet presentation of our operating and finance leases is as follows:
Classification on the Condensed Consolidated Balance Sheet
Operating lease ROU assets
Total lease ROU assets
154,734
166,894
Current:
Finance lease obligations
2,530
2,742
Noncurrent:
60,667
61,187
Total lease liabilities
177,506
187,372
The components of lease expense consisted of the following:
Finance lease cost:
Amortization of ROU assets
1,022
3,238
3,196
Interest on lease liabilities
1,423
1,430
4,267
Operating lease cost
6,875
6,753
20,562
19,546
Short-term lease cost
1,464
1,431
3,103
2,816
Variable lease cost
1,086
1,220
3,622
Total lease cost, net
11,870
11,926
34,808
33,783
Other information related to operating and finance leases are as follows:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
7,029
6,862
21,424
20,183
Operating cash flows from finance leases
1,609
1,512
4,776
4,564
Financing cash flows from finance leases
687
2,308
2,415
ROU assets obtained in exchange for lease obligations:
Operating leases
1,545
5,803
5,173
23,390
Finance leases (1)
273
433
1,515
796
Weighted-average remaining lease term (years):
7.22
7.64
Finance leases
33.10
33.47
Weighted-average discount rate:
7.94
%
7.88
9.19
9.17
24
As of September 30, 2024, the estimated future minimum lease payments under non-cancellable leases, excluding variable leases and variable non-lease components, are as follows:
Operating Leases
Finance Leases
5,943
2,371
27,440
7,924
35,364
25,687
7,229
32,916
21,896
6,749
28,645
15,937
6,347
22,284
57,064
174,774
231,838
Total future lease payments
153,967
205,394
359,361
Less: Amount representing interest
(39,658
(142,197
(181,855
Present value of minimum lease payments
114,309
(17,807
(2,530
(20,337
Long-term portion
157,169
As of September 30, 2024, the estimated future minimum rental income under non-cancellable leases, which includes rental income from facilities that we own, are as follows:
827
1,957
1,678
972
799
2,081
Total minimum rents
Note 21. Litigation, Claims, Contingencies, and Other
We are plaintiffs or defendants in various actions, proceedings, and pending claims, some of which involve, or may involve, compensatory, punitive, or other damages. Litigation is subject to many uncertainties and it is possible that some of the legal actions, proceedings, or claims could be decided against us. Although the amount of liability as of September 30, 2024 with respect to unresolved legal matters is not ascertainable, we believe that any resulting liability, after taking into consideration amounts already provided for and insurance coverage, will not have a material effect on our business, financial position, or results of operations.
On July 18, 2020, an off-road Ice Explorer operated by our Pursuit business was involved in an accident while enroute to the Athabasca Glacier, resulting in three fatalities and multiple other serious injuries. We immediately reported the accident to our relevant insurance carriers, who have supported our investigation and subsequent claims relating to the accident. In May 2023, we resolved charges from the Canadian office of Occupational Health and Safety in relation to this accident, resulting in fines and related payments in an aggregate amount of $0.5 million Canadian dollars (approximately $0.3 million U.S. dollars). We continue to manage our legal defense of various claims from the victims and their families. In addition, we believe that our reserves and, subject to customary deductibles, our insurance coverage is sufficient to cover potential claims related to this accident.
We are subject to various United States federal, state, and foreign laws and regulations governing the prevention of pollution and the protection of the environment in the jurisdictions in which we have or had operations. If we fail to comply with these environmental laws and regulations, civil and criminal penalties could be imposed, and we could become subject to regulatory enforcement actions in the form of injunctions and cease and desist orders. As is the case with many companies, we also face exposure to actual or potential claims and lawsuits involving environmental matters relating to our past operations. As of September 30, 2024, we had recorded environmental remediation liabilities of $1.1 million related to previously sold operations. Although we are a party to certain environmental disputes, we believe that any resulting liabilities, after taking into consideration amounts already provided for and insurance coverage, will not have a material effect on our financial position or results of operations.
As of September 30, 2024, on behalf of our subsidiaries, we had certain obligations under guarantees to third parties. These guarantees are not subject to liability recognition in the condensed consolidated financial statements and relate to leased facilities and equipment leases entered into by our subsidiary operations. We would generally be required to make payments to the respective third parties under these guarantees in the event that the related subsidiary could not meet its own payment obligations. The maximum potential amount of future payments that we would be required to make under all guarantees existing as of September 30, 2024 would be approximately $75.4 million. These guarantees relate to our leased equipment and facilities through December 2038. There are no recourse provisions
that would enable us to recover from third parties any payments made under the guarantees. Furthermore, there are no collateral or similar arrangements pursuant to which we could recover payments.
A significant number of our employees are unionized and we are a party to approximately 100 collective bargaining agreements, with approximately one-third requiring renegotiation each year. If we are unable to reach an agreement with a union during the collective bargaining process, the union may call for a strike or work stoppage, which may, under certain circumstances, adversely impact our business and results of operations. We believe that relations with our employees are satisfactory and that collective bargaining agreements expiring in 2024 will be renegotiated in the ordinary course of business. Although our labor relations are currently stable, disruptions could occur, with the possibility of an adverse impact on the operating results of GES.
We are self-insured up to certain limits for workers’ compensation and general liabilities, which includes automobile, product general liability, and client property loss claims. The aggregate amount of insurance liabilities (up to our retention limits), and including our estimated incurred but not yet reported claims, related to our continuing operations was $12.2 million as of September 30, 2024, which includes $7.3 million related to workers’ compensation liabilities, and $4.9 million related to general liability claims. We have also retained and provided for certain workers’ compensation insurance liabilities in conjunction with previously sold businesses of $1.6 million as of September 30, 2024. We are also self-insured for certain employee health benefits and the estimated employee health benefit claims incurred but not yet reported was $1.4 million as of September 30, 2024. Provisions for losses for claims incurred, including actuarially derived estimated claims incurred but not yet reported, are made based on our historical experience, claims frequency, and other factors. A change in the assumptions used could result in an adjustment to recorded liabilities. We have purchased insurance for amounts in excess of the self-insured levels, which generally range from $0.2 million to $0.5 million on a per claim basis. We do not maintain a self-insured retention pool fund as claims are paid from current cash resources at the time of settlement. Our net cash payments in connection with these insurance liabilities were $1.1 million for the three months ended September 30, 2024, $4.0 million for the nine months ended September 30, 2024, $1.2 million for the three months ended September 30, 2023, and $3.4 million for the nine months ended September 30, 2023.
In addition, as of September 30, 2024, we have recorded insurance liabilities of $7.8 million related to continuing operations, which represents the amount for which we remain the primary obligor after self-insured insurance limits, without taking into consideration the above-referenced insurance coverage. Of this total, $6.6 million is related to workers’ compensation liabilities and $1.2 million is related to general/auto liability claims, which is recorded in “Other deferred items and liabilities” in the Condensed Consolidated Balance Sheets with a corresponding receivable in “Other investments and assets.”
Note 22. Noncontrolling Interests – Redeemable and Non-redeemable
On November 3, 2017, we acquired the controlling interest (54.5% of the common stock) in Esja, a private corporation in Reykjavik, Iceland. Subsequent to additional capital contributions, our equity ownership has increased to 56.4% as of September 30, 2024. Through Esja and its wholly-owned subsidiary, we operate the FlyOver Iceland attraction.
The minority Esja shareholders have the right to sell (or “put”) their Esja shares to us based on a multiple of 5.0x EBITDA as calculated on the trailing 12 months from the most recently completed quarter before the put option exercise. The put option is only exercisable after August 2022 (the “Reference Date”), and in the event the FlyOver Iceland attraction has earned a minimum of €3.25 million in unadjusted EBITDA during the most recent fiscal year and during the trailing 12-month period prior to exercise (the “Put Option Condition”). The put option is exercisable during a period of 12 months following the Reference Date (the “Option Period”) if the Put Option Condition has been met. If the Put Option Condition has not been met during the first Option Period, the Reference Date will be extended for an additional 12 months up to three times. If the Put Option Condition is met during any of the Option Periods, yet the shares are not exercised prior to the end of the 12-month Option Period, the put option will expire. If the FlyOver Iceland attraction has not achieved the Put Option Condition by December 31, 2024, the put option expires. As of September 30, 2024, the FlyOver Iceland attraction has not achieved the Put Option Condition and we do not anticipate the Put Option Condition to be achieved prior to expiration.
The noncontrolling interest’s carrying value is determined by the fair value of the noncontrolling interest as of the acquisition date and the noncontrolling interest’s share of the subsequent net income or loss. This value is benchmarked against the redemption value of the sellers’ put option. The carrying value is adjusted to the redemption value, provided that it does not fall below the initial carrying value, as determined by the purchase price allocation. We have made a policy election to reflect any changes caused by such an adjustment to retained earnings (accumulated deficit), rather than to current earnings (loss).
26
Changes in the redeemable noncontrolling interest are as follows:
Net loss attributable to redeemable noncontrolling interest
(372
Non-redeemable noncontrolling interest represents the portion of equity in a subsidiary that is not attributable, directly or indirectly, to us. Our non-redeemable noncontrolling interest relates to the equity ownership interest that we do not own.
Changes in the non-redeemable noncontrolling interest are as follows:
Glacier Park Inc.
Brewster (1)
18,159
59,108
11,921
2,727
1,696
3,639
8,062
Contributions (distributions) from/to non-controlling interests, net
(5
(1,192
20,881
59,761
12,276
Equity ownership interest that we do not own
49
Note 23. Segment Information
An operating segment is defined as a component of an enterprise that engages in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. Our CODM is our Chief Executive Officer.
We measure the profit and performance of our operations on the basis of segment operating income (loss), which excludes restructuring charges (recoveries), impairment charges, and certain other corporate expenses that are not allocated to the reportable segments. Intersegment sales are eliminated in consolidation and intersegment transfers are not significant. Corporate activities include expenses not allocated to operations.
Our reportable segments, with reconciliations to consolidated totals, are as follows:
GES:
GES intersegment eliminations
Total GES
Segment operating income (loss):
75,903
81,375
64,710
72,074
6,918
179
28,436
11,632
9,714
(5,529
44,353
20,235
16,632
(5,350
72,789
31,867
92,535
76,025
137,499
103,941
Corporate eliminations (1)
(7,757
(3,579
(17,612
(10,255
(11,428
(12,476
(35,858
(37,081
(407
(554
(1,287
(1,533
Restructuring (charges) recoveries:
(192
(329
(155
(519
(331
(54
(125
846
(585
Corporate
Impairment charges:
(6,110
28
Additional information of our reportable segments is as follows:
Nine Months Ended September 30,
Depreciation:
10,067
7,708
28,632
24,121
572
527
1,641
1,627
2,175
1,830
6,540
5,148
97
57
12,855
10,083
36,910
30,953
Amortization:
1,169
1,356
3,493
3,811
76
69
230
194
744
920
2,749
1,989
2,345
6,051
6,754
Capital expenditures:
9,717
18,945
40,547
44,260
1,345
892
2,285
2,157
3,760
2,703
9,843
8,301
103
14,925
22,546
52,787
54,739
We do not report total assets by segment because this is not a metric used to allocate resources or evaluate segment performance by our CODM.
Note 24. Subsequent Events
Sale of GES Business
On October 20, 2024, we entered into a definitive agreement to sell our GES business to Truelink Capital for $535 million. The purchase price is subject to customary adjustments for cash, indebtedness, working capital and transaction expenses, and will be paid in cash. Of the total cash consideration, $25 million will be deferred for one year following the transaction closing date and is contingent only on the passage of time. The transaction is expected to close by the end of 2024, subject to regulatory approvals and customary closing conditions. This transaction did not meet the held-for-sale classification criteria as of September 30, 2024, as the agreement had not been finalized on that date nor had the requisite approvals from our Board of Directors authorizing management to commit to the sale, but our GES business is expected to be reflected as discontinued operations beginning in the fourth quarter of 2024.
Jasper Wildfires Insurance Proceeds
Subsequent to September 30, 2024, Pursuit received additional partial settlement payments of approximately $1.5 million from the insurance company related to the Jasper wildfires. We are currently working with our insurance carriers to determine the extent of potential recoveries from our policies. Assessment of the full value of the loss is ongoing.
Acquisition of Eddie’s Café & Mercantile
On November 6, 2024, Pursuit expanded its collection of accommodation and hospitality experiences within Glacier National Park with the acquisition of Eddie’s Café & Mercantile for $15.9 million. Eddie’s Café & Mercantile offers a combination of food and beverage, retail, and six newly constructed overnight accommodation units and is located adjacent to Pursuit’s existing 48 room Apgar Village Lodge.
29
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words, and variations of words, such as “aim,” “anticipate,” “believe,” “could,” “deliver,” “estimate,” “expect,” “intend,” “may,” “might,” “outlook,” “plan,” “potential,” “seek,” “target,” “will,” and similar expressions are intended to identify our forward-looking statements. Such forward-looking statements include those that address activities, events or developments that Viad or its management believes or anticipates may occur in the future, including all statements regarding the expected timing of the closing of the GES transaction, the use of proceeds of the transaction, potential benefits of the transaction, expectations concerning Pursuit’s opportunities and performance as a standalone public company, and the expected Chief Executive Officer transition in connection with the closing of the GES transaction. Similarly, statements that describe our go-forward business strategy, objectives, plans, intentions, or goals also are forward-looking statements. These forward-looking statements are not historical facts and are subject to a host of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those in the forward-looking statements.
Important factors that could cause actual results to differ materially from those described in our forward-looking statements include, but are not limited to, the following:
For a more complete discussion of the risks and uncertainties that may affect our business or financial results, refer to Item 1A – Risk Factors of our 2023 Form 10-K. We disclaim and do not undertake any obligation to update or revise any forward-looking statement except as required by applicable law or regulation.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our 2023 Form 10-K and the condensed consolidated financial statements and related notes included in this Form 10-Q. The MD&A is intended to assist in understanding our financial condition and results of operations.
Overview
We are a leading provider of extraordinary experiences, including hospitality and leisure activities, experiential marketing, and live events. We operate through three reportable segments: Pursuit, Spiro, and GES Exhibitions. Spiro and GES Exhibitions are both live event businesses, and are referred to collectively as “GES.”
Recent Developments
On October 20, 2024, we entered into a definitive agreement to sell our GES business to Truelink Capital for $535 million. The purchase price is subject to customary adjustments for cash, indebtedness, working capital and transaction expenses, and will be paid in cash. Of the total cash consideration, $25 million will be deferred for one year following the transaction closing date and is contingent only on the passage of time. The transaction is expected to close by the end of 2024, subject to regulatory approvals and customary closing conditions.
Jasper Wildfires
On July 22, 2024, Jasper National Park was closed and evacuated due to wildfire activity, and a wildfire entered the Jasper townsite on July 24, 2024. All of Pursuit’s hotels and attractions in and near the Jasper townsite, as well as our Pyramid Lake Lodge, Miette Mountain Cabins, and Maligne Lake Cruise were not reached by the wildfire and remain intact except for Pursuit’s Wilderness Kitchen, a restaurant and retail operation located about three miles outside the town of Jasper. The town of Jasper re-opened to residents and local businesses on August 16, 2024. All of Pursuit’s hotels in Jasper are open with the exception of Pyramid Lake Lodge, which sustained superficial damage to areas of the roof and to the exterior facade.
Pursuit’s Columbia Icefield Glacier Adventure and Skywalk re-opened on August 9, 2024. Maligne Lake Road re-opened on October 12, 2024, after the peak summer season. Due to this road closure, the Maligne Lake Cruises did not reopen during the remainder of the 2024 season.
During the three months ended September 30, 2024, we received $4.7 million in insurance proceeds as a partial settlement. During October 2024, we received additional partial settlement payments of approximately $1.5 million. We are currently working with our insurance carriers to determine the extent of potential recoveries from our policies. Assessment of the full value of the loss is ongoing.
Jasper SkyTram
On June 26, 2024, we entered into an agreement to acquire the Jasper SkyTram attraction in Jasper National Park. All conditions precedent to the closing of the Jasper SkyTram acquisition have yet to be satisfied and have been delayed to an unknown extent by the Jasper wildfires as noted above.
Seasonality
Pursuit’s peak activity occurs during the summer months. During 2023, 79% of Pursuit’s revenue was earned in the second and third quarters.
GES’ live event activity can vary significantly from quarter to quarter and year to year depending on the frequency and timing of shows. Some shows are not held annually and some shift between quarters.
Results of Operations
Financial Highlights
% Change
24.5%
17.0
17.8%
68.4
Diluted income per common share from continuing operations attributable to Viad common stockholders
14.6%
70.8
31
Three months ended September 30, 2024 compared with the three months ended September 30, 2023
Nine months ended September 30, 2024 compared with the nine months ended September 30, 2023
Analysis of Revenue and Operating Results by Reportable Segment
The following table presents a comparison of Pursuit’s reported revenue and segment operating income for the three and nine months ended September 30, 2024 and 2023:
Revenue (1):
Pursuit:
Attractions
97,222
95,820
1.5
176,623
162,850
8.5
Hospitality
79,059
84,345
(6.3
)%
131,186
131,984
(0.6
5,002
5,560
(10.0
10,311
10,974
(6.0
974
1,215
(19.8
2,569
2,269
13.2
Total Pursuit
(2.5
4.1
Segment operating income:
(6.7
(10.2
Pursuit revenue decreased $4.7 million driven primarily by a decrease in hospitality revenue of $5.3 million due to a 13.6% decrease in revenue per available room as a result of fewer room nights sold due to the Jasper wildfires, offset in part by an increase in attractions revenue of $1.4 million due to higher revenue per attraction visitor of 4.2%. FlyOver Chicago opened on March 1, 2024 and contributed revenue of $3.3 million during the three months ended September 30, 2024.
Pursuit segment operating income decreased $5.5 million from the prior year period primarily due to decreased revenue as a result of the Jasper wildfires, higher depreciation expense of $2.4 million, as well as an increase in operating costs to support higher business volume during the three months ended September 30, 2024.
Pursuit revenue increased $12.6 million driven primarily by an increase in attractions revenue of $13.8 million due to a 4.6% increase in the number of visitors as well as higher revenue per attraction visitor of 3.6%. Our Sky Lagoon attraction in Iceland had particularly strong demand with increased revenue of $7.5 million. FlyOver Chicago contributed revenue of $6.4 million during its first seven months of operations commencing on March 1, 2024.
Pursuit segment operating income decreased $7.4 million from the prior year period primarily due to the Jasper wildfires and higher depreciation expense of $4.5 million, an increase in operating costs to support higher business volume during the nine months ended September 30, 2024, as well as start-up costs to open the FlyOver Chicago attraction, offset in part by an increase in revenue.
Performance Measures
We use the following key business metrics to evaluate the performance of Pursuit’s attractions business:
We use the following key business metrics, common in the hospitality industry, to evaluate Pursuit’s hospitality business:
The following table provides Pursuit’s key performance indicators:
September 30, 2023
As Reported
New Experiences(1)
Same-Store(2)
AsReported
FX Impact(3)
Attractions Key Performance Indicators:
Number of visitors
1,624,384
122,918
1,152,300
1,668,203
1,127,575
(2.6
2.2
Ticket revenue (in thousands)
3,144
58,543
1,230
50,465
5.0
16.0
Effective ticket price
46.37
25.58
50.81
43.01
44.76
7.8
13.5
Attractions revenue (in thousands)
3,290
75,340
1,631
65,973
14.2
Revenue per attraction visitor
59.85
26.77
65.38
57.44
58.51
4.2
11.7
Hospitality Key Performance Indicators:
Room nights available
202,162
125,434
202,356
125,700
(0.1
(0.2
Rooms revenue (in thousands)
33,271
452
30,673
(13.7
RevPAR
207.85
265.25
240.54
244.02
(13.6
8.7
Occupancy
70.4
87.1
89.6
87.4
(19.2
(0.3
ADR
295.42
304.46
268.49
279.08
10.0
9.1
Hospitality revenue (in thousands)
69,195
585
63,295
9.3
3,130,570
260,180
2,521,224
2,991,656
2,451,028
4.6
5,952
117,246
1,555
100,945
16.1
43.71
22.88
46.50
40.96
41.18
6.7
12.9
6,396
151,635
2,087
132,547
14.4
56.42
24.58
60.14
54.43
54.08
3.6
11.2
483,700
406,972
481,121
404,465
0.5
0.6
65,453
726
60,094
(5.3
153.41
160.83
162.89
148.58
(5.8
8.2
67.0
71.5
75.0
71.6
(8.0
229.08
224.96
217.09
207.49
5.5
8.4
121,322
944
110,575
9.7
Attractions. The decrease in number of attractions visitors during the three months ended September 30, 2024 was primarily driven by decreased visitation at the Maligne Lake Cruise, Glacier Adventure, and the Columbia Icefield Skywalk attractions, which were temporarily closed during the peak 2024 season as a result of the Jasper wildfires. The increase in the number of attraction visitors during the nine months ended September 30, 2024 was primarily driven by higher visitation at FlyOver Chicago, which opened on March 1, 2024, and Sky Lagoon in Iceland. The increase in same-store effective ticket price during the three and nine months ended September 30, 2024 was driven primarily by revenue management efforts.
During the three months ended September 30, 2024, attractions ticket revenue on a same-store basis increased $8.1 million on a 2.2% increase in visitors and a 13.5% increase in effective ticket price. During the nine months ended September 30, 2024, attractions ticket revenue on a same-store basis increased $16.3 million on a 2.9% increase in visitors and a 12.9% increase in effective ticket price.
Hospitality. The decrease in RevPAR during the three and nine months ended September 30, 2024 was primarily driven by a decrease in rooms revenue as a result of the Jasper wildfires, offset in part by an increase in ADR.
During the three and nine months ended September 30, 2024, rooms revenue on a same-store basis increased 8.5% and 8.9%, respectively.
Refer to “–Recent Developments” above for additional information on the Jasper wildfires.
34
The following table presents a comparison of GES’ reported revenue and segment operating income during the three and nine months ended September 30, 2024 and 2023:
39.6
21.5
59.5
23.6
(74.4
(4.7
52.8
23.2
**
**Change is greater than +/- 100%.
Spiro revenue increased $23.3 million primarily due to strong client spending on major non-annual shows, which contributed $34 million of incremental revenue during the quarter, offset in part by the timing of shows.
GES Exhibitions revenue increased $72.7 million primarily due to an increase of approximately $71 million related to the timing of major non-annual shows and same-show revenue growth of $1.2 million, or 3.2%.
Spiro segment operating income increased $6.7 million primarily due to higher revenue.
GES Exhibitions segment operating income increased $15.2 million primarily due to higher revenue.
Spiro revenue increased $43.0 million primarily due to strong spending from existing and new clients obtained during 2024 and an increase of approximately $18 million due to the timing of major non-annual shows.
GES Exhibitions revenue increased $105.5 million primarily due to larger show sizes, including same-show revenue growth of 2.6% and an increase of approximately $72 million due to the timing of major non-annual shows.
Spiro segment operating income increased $16.8 million primarily due to higher revenue.
GES Exhibitions segment operating income increased $24.1 million, primarily due to higher revenue.
Other Expenses
71.7
(100.0
(8.4
(3.3
(26.5
(16.0
(20.2
14.6
26.6
86.2
** Change is greater than +/- 100%.
Corporate Activities – The increase in corporate activities is primarily due to transaction-related costs including consulting, accounting, legal, and other costs incurred related to the pending sale of the GES business of approximately $4.3 million during the three months ended September 30, 2024 and $6.7 million during the nine months ended September 30, 2024. Refer to Note 24 – Subsequent Events of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for additional information.
Impairment Charges – On July 2, 2019, we executed a facility lease with the intent of building a new FlyOver attraction, FlyOver Canada Toronto. Effective August 6, 2024, this facility lease was terminated. During the three months ended September 30, 2024, we recorded an asset impairment charge of $5.5 million related to site-specific engineering plans developed for this attraction.
Additionally, during July 2024, a wildfire entered Jasper National Park and Pursuit’s Wilderness Kitchen was lost to the wildfire. During the three months ended September 30, 2024, we recorded an asset impairment charge of $3.8 million against the net book value of the Wilderness Kitchen. This loss is covered by our property insurance and accordingly, we recorded an offsetting impairment recovery of $3.8 million. We also recorded an impairment charge of $0.6 million against intangible assets (trademark and favorable lease) of the Wilderness Kitchen. See –Recent Developments - Jasper Wildfires above for additional information.
Income Tax Expense – The effective tax rate was 15.8% for the three months ended September 30, 2024, 15.6% for the three months ended September 30, 2023, 22.4% for the nine months ended September 30, 2024, and 25.3% for nine months ended September 30, 2023. The effective tax rates differed from the 21% federal rate as we do not recognize a tax benefit primarily on losses in the United States where we have a valuation allowance. During the three months ended September 30, 2024, we released a valuation allowance of $0.5 million recorded on deferred tax assets with certain separate states. During the nine months ended September 30, 2024, we also recorded a $1.1 million benefit for the release of the valuation allowance recorded on the United Kingdom’s tax loss carryforwards, offset by a $0.5 million expense during the first quarter of 2024 to record estimated withholding taxes associated with repatriating Sky Lagoon’s earnings and a valuation allowance against the tax credit generated from this withholding tax.
Liquidity and Capital Resources
We believe that our existing sources of liquidity will be sufficient to fund operations and projected capital outlays for at least the next 12 months and the longer term.
When assessing our current sources of liquidity, we include the following:
Unrestricted cash and cash equivalents (1)
Available capacity on Revolving Credit Facility (2)
164,288
108,040
Total available liquidity
228,840
160,744
36
Cash provided by operating activities, supplemented by our revolving credit facility and existing cash and cash equivalents, is our primary source of liquidity for funding our business requirements. During the nine months ended September 30, 2024, net cash provided by operating activities was $133.1 million.
Our short-term and long-term funding requirements include debt obligations, maintenance capital expenditures, working capital requirements, and potential acquisitions and strategic investments as we focus on scaling Pursuit with investments in high-return unforgettable, inspiring experiences through its Refresh, Build, Buy growth strategy. Our projected capital outlays can be adjusted for changes in the operating environment.
Debt Obligations
Effective July 30, 2021, we entered into the 2021 Credit Facility. The 2021 Credit Facility provided for a $400 million Term Loan B, with a maturity date of July 30, 2028, and a $100 million Revolving Credit Facility, with a maturity date of July 30, 2026. The proceeds of the Term Loan B, net of $14.8 million in related fees, were used to repay the $327 million outstanding balance under our prior $450 million revolving credit facility and to provide for financial flexibility to fund future acquisitions and growth initiatives and for general corporate purposes. On January 4, 2023, we entered into an interest rate cap agreement with an effective date of January 31, 2023. The interest rate cap manages our exposure to interest rate increases on $300 million in borrowings under the 2021 Credit Facility or other SOFR-based borrowings. Refer to Note 12 – Derivative of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for additional information.
The Revolving Credit Facility carries financial covenants. As of September 30, 2024, we were in compliance with all covenants under the Revolving Credit Facility.
On March 28, 2023, we entered into the Second Amendment to the 2021 Credit Facility, which modified the interest coverage financial covenant. On October 6, 2023, we entered into the Third Amendment to the 2021 Credit Facility, which among other things, increased the principal amount of the Revolving Credit Facility by $70 million, bringing the total amount of revolving capacity to $170 million. In connection with the Third Amendment, we prepaid $70 million of the outstanding balance on our existing Term Loan B using $60 million from the Revolving Credit Facility and $10 million of cash from the Company’s balance sheet. The current credit spread on our Revolving Credit Facility is 2.00% lower than the credit spread on the Term Loan B, which was 5.00% for SOFR borrowings through April 25, 2024. On April 26, 2024, we entered into the Fourth Amendment to the 2021 Credit Facility, which among other things, (i) reduced the SOFR credit spread from 5.00% to 4.25% on the Term Loan B, (ii) set the additional credit spread adjustments to 0% on the Term Loan B and (iii) reset the 1% prepayment premium on any repricings of the Term Loan B for six months.
On June 28, 2024, we entered into the CDOR Transition Amendment to the 2021 Credit Facility to replace the CDOR with the CORRA for Canadian Dollar borrowings on our revolver. Additional credit spread adjustments apply to CORRA ranging from 0.29547% (for a one-month duration) up to 0.32138% for a three-month duration).
For additional information about our debt and finance obligations, refer to Note 11 – Debt and Finance Obligations of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q), all of which is incorporated by reference herein.
Capital Expenditures
As of September 30, 2024, we have planned capital expenditures of approximately $70 million to $80 million for the next 12 months, including approximately $30 million to $40 million on select growth projects. We intend to continue making selective investments to advance Pursuit’s Refresh, Build, Buy growth strategy while maintaining a solid liquidity position.
Other Obligations
We have additional obligations as part of our ordinary course of business, beyond those committed for debt obligations and capital expenditures. Refer to Note 20 – Leases and Other and Note 18 – Pension and Postretirement Benefits of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for further information. The expected timing of payments of our obligations is estimated based on current information. Timing of payments and actual amounts paid may be different, depending on changes to agreed-upon amounts for certain obligations.
Upon closing of the GES transaction, Pursuit will have a strong balance sheet to execute on its growth strategy. Cash proceeds from the transaction will be used to retire Viad’s 2021 Credit Facility, which comprises a Term Loan B (with $318 million outstanding, bearing interest at SOFR + 425 basis points) and a $170 million Revolving Credit Facility (of which zero was drawn as of September 30, 2024), and to accelerate Pursuit’s growth through its Refresh, Build, Buy growth strategy.
Cash Flows
Operating Activities
Changes in operating assets and liabilities, net
(8,481
25,505
Net cash provided by operating activities increased $16.5 million primarily due to higher segment operating income, offset in part by outflows due to changes in working capital. We recorded impairment charges of $6.1 million of which $5.5 million was related to the facility lease termination of FlyOver Canada Toronto and $0.6 million was related to intangible assets of Pursuit’s Wilderness Kitchen, which was lost in the Jasper wildfires.
Investing Activities
Net cash used in investing activities decreased $4.7 million primarily due to insurance proceeds received of $3.8 million for the Jasper wildfires.
Financing Activities
Net cash used in financing activities increased $63.1 million was primarily due to net debt payments of $64.9 million during the nine months ended September 30, 2024 compared $5.2 million during the nine months ended September 30, 2023.
Share Repurchases
Our Board of Directors previously authorized us to repurchase shares of our common stock from time to time at prevailing market prices. As of September 30, 2024, 546,283 shares remained available for repurchase under all prior authorizations. In March 2020, our Board of Directors suspended our share repurchase program. The Board of Directors’ authorization does not have an expiration date.
Additionally, we repurchased shares related to tax withholding requirements on vested restricted share-based awards.
Critical Accounting Estimates
Refer to Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2023 Form 10-K for a discussion of our critical accounting estimates.
Refer to Note 1 – Overview and Basis of Presentation of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for additional information.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our market risk exposure relates to fluctuations in interest rates and foreign exchange rates. Foreign exchange risk is the risk that fluctuating exchange rates will adversely affect our financial condition or results of operations. The foreign exchange risk is composed of both potential losses from the translation of foreign currency financial information and the remeasurement of foreign currency transactions. Interest rate risk is the risk that changing interest rates will adversely affect our financial position or results of operations.
Our foreign operations are primarily in Canada, the United Kingdom, Iceland, the Netherlands, the Middle East, and Germany. The functional currency of our foreign subsidiaries is their local currency. Accordingly, for purposes of consolidation, we translate the assets and liabilities of our foreign subsidiaries into U.S. dollars at the foreign exchange rates in effect at the balance sheet date. The unrealized gains or losses resulting from the translation of these foreign denominated assets and liabilities are included as a component of AOCI in the Condensed Consolidated Balance Sheets. As a result, significant fluctuations in foreign exchange rates relative to the U.S. dollar may result in material changes to our net equity position reported in the Condensed Consolidated Balance Sheets. We do not currently hedge our equity risk arising from the translation of foreign denominated assets and liabilities. We recorded cumulative unrealized foreign currency translation losses in stockholders’ equity of $41.9 million as of September 30, 2024 and $35.3 million as of December 31, 2023. We recorded an unrealized foreign currency translation loss in other comprehensive income (loss) of $6.6 million during the nine months ended September 30, 2024 and an unrealized foreign currency translation gain of $0.1 million during the nine months ended September 30, 2023.
For purposes of consolidation, revenue, costs and expenses, gains, and losses related to our foreign operations are translated into U.S. dollars at the average foreign exchange rates for the period. As a result, our consolidated results of operations are exposed to fluctuations in foreign exchange rates as revenue and segment operating income (loss) of our foreign operations, when translated, may vary from period to period, even when the functional currency amounts have not changed. Such fluctuations may adversely impact overall expected profitability and historical period-to-period comparisons. We do not currently hedge our net earnings exposure arising from the translation of our foreign revenue and segment operating income (loss).
We are exposed to foreign exchange transaction risk, as our foreign subsidiaries have certain loans and leases denominated in currencies other than the functional currency of the respective subsidiary. As of September 30, 2024, we had long-term contractual liabilities that were denominated in nonfunctional currencies of $46.7 million. As foreign exchange rates fluctuate, these liabilities are remeasured, and the corresponding adjustment is recorded in the Condensed Consolidated Statements of Operations. As of September 30, 2024 and December 31, 2023, we did not have any outstanding foreign currency forward contracts.
On January 4, 2023, we entered into an interest rate cap agreement with an effective date of January 31, 2023 to hedge cash flows on $300 million of our SOFR-based borrowings under the 2021 Credit Facility. Refer to Note 12 – Derivative of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for further information.
We are exposed to short-term and long-term interest rate risk on certain of our debt obligations.
Item 4. Controls and Procedures
We have established disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure. Management, together with our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. Based on this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2024.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter ended September 30, 2024.
Item 1. Legal Proceedings
Refer to Note 21 – Litigation, Claims, Contingencies, and Other of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for information regarding legal proceedings in which we are involved, which information is incorporated by reference herein.
Item 1A. Risk Factors
Other than the following risk factor set forth below, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A – Risk Factors of our 2023 Form 10-K.
We may not complete the sale of our GES business in the timeframe or on the terms we anticipate and, even if we do, we may not be able to realize the full strategic, financial, operational and other benefits that are expected to result from the transaction. On October 20, 2024, we entered into a definitive agreement to sell our GES business to Truelink Capital for $535 million (the “GES Sale”), subject to customary adjustments for cash, indebtedness, working capital and transaction expenses. The completion of the GES Sale and our receipt of the anticipated proceeds therefrom are subject to a number of risks and uncertainties, including: the satisfaction of closing conditions, including the parties obtaining the necessary regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals), and the occurrence of any event, change or other circumstance that could give rise to the termination of the sale agreement. These and other factors could impair our ability to complete the GES Sale in the timeframe and on the terms that we anticipate (or at all), which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Even if the GES Sale is completed, we may not be able to realize the full strategic, financial, operational and other benefits that are expected to result from the transaction, including the deployment of proceeds from the GES Sale to fund the growth of Pursuit as a standalone company through strategic pipeline investments. Our ability to realize the benefits of the GES Sale may be impacted by a number of factors, including, but not limited to: (i) the anticipated tax treatment of the transaction may not be obtained; (ii) the potential impact of unforeseen liabilities, future capital expenditures, revenues, costs, expenses, earnings, economic performance, indebtedness, financial condition and losses on the future prospects, business and management strategies for the management, expansion and growth of the Company after the consummation of the transaction; (iii) potential litigation relating to the transaction that could be instituted against the Company or its directors; (iv) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; (v) any negative effects of the announcement, pendency or consummation of the transaction on the market price of our common stock and on our operating results; (vi) risks associated with third party contracts containing consent and/or other provisions that may be triggered by the transaction; (vii) the risk that disruptions from the transaction will harm our business, including current plans and operations or by diverting management’s attention from the Company’s ongoing business operations; and (viii) our ability to retain and hire key personnel and uncertainties arising from leadership changes. In addition, such benefits may be delayed or less significant than anticipated. We cannot predict with certainty when the benefits expected from the GES Sale will occur or the extent to which they will be achieved, or when they will be achieved, if at all. A failure to realize these and other anticipated benefits of the GES Sale or effectively utilize the proceeds from the GES Sale could have a material adverse impact our business, financial condition and results of operations.
Natural disasters, weather conditions, accidents, and other catastrophic events could negatively affect our business. The occurrence of catastrophic events ranging from natural disasters (such as hurricanes, fires, floods, volcanoes, and earthquakes), acts of war or terrorism, accidents involving our travel offerings or experiences, the effects of climate change, including any impact of global warming, or the prospect of these events could disrupt our business. Changes in climates may increase the frequency and intensity of adverse weather patterns and make certain destinations less desirable.
Such catastrophic events have had, and could in the future have, an adverse impact on Pursuit, which is heavily dependent on the ability and willingness of its guests to travel and/or visit our attractions. Pursuit guests tend to delay or postpone vacations if natural conditions differ from those that typically prevail at competing lodges, resorts, and attractions, and catastrophic events and heightened travel security measures instituted in response to such events could impede the guests’ ability to travel, and interrupt our business operations, including damaging our properties. For example, on July 22, 2024, Jasper National Park was closed and evacuated due to wildfire activity, and a wildfire entered the Jasper townsite on July 24, 2024. All of Pursuit’s hotels and attractions in and near the Jasper townsite, as well as our Pyramid Lake Lodge, Miette Mountain Cabins, and Maligne Lake Cruise were not reached by the wildfire and remain intact except for Pursuit’s Maligne Canyon Wilderness Kitchen, a restaurant and retail operation located about three miles outside the town of Jasper. We are currently working with our insurance carriers to determine the extent of potential recoveries from our policies. Assessment of the full value of the loss is ongoing. This incident had a negative effect on visitation to our lodging properties in Jasper National Park as well as the Maligne Lake Cruise and the Columbia Icefield attractions (including the Glacier Adventure and Columbia Icefield Skywalk) during the peak 2024 tourist season in Jasper National Park and, depending on the pace and success of recovery and
restoration efforts, the incident could continue to have a negative effect on visitation to these properties in 2025. Also, the accident on July 18, 2020, at Pursuit’s Glacier Adventure attraction, which involved one of our off-road Ice Explorers and resulted in three fatalities and other serious injuries, may have a negative impact on our reputation and traveler willingness to visit that attraction in the future.
Such catastrophic events could also have a negative impact on GES, causing a cancellation or relocation of exhibitions and other events held in public venues or disrupt the services we provide to our customers at convention centers, exhibition halls, hotels, and other public venues. Such events could also have a negative impact on GES’ production facilities, preventing us from timely completing exhibit fabrication and other projects for customers. In addition, unfavorable media attention, or negative publicity, in the wake of any catastrophic event or accident could damage our reputation or reduce the demand for our services. If the conditions arising from such events persist or worsen, they could materially and adversely affect our results of operations and financial condition.
In addition to other information set forth in this report, careful consideration should be given to the factors discussed in Part I, Item 1A – Risk Factors and Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2023 Form 10-K, which could materially affect our business, financial condition, or future results.
Item 2. Unregistered Sales of Equity Securities AND Use of Proceeds
The following table summarizes the total number of shares of our common stock that were repurchased during the three months ended September 30, 2024 pursuant to publicly announced plans or programs, as well as certain previously owned shares of common stock that were surrendered by employees, former employees, and non-employee directors for tax withholding requirements on vested share-based awards.
ISSUER PURCHASES OF EQUITY SECURITIES
Period
Total Number ofShares Purchased
Average PricePaidPer Share
Total Number ofSharesPurchased as Part ofPubliclyAnnounced Plans orPrograms
Maximum Numberof SharesThat May Yet BePurchasedUnder the Plansor Programs
July 1, 2024 - July 31, 2024
546,283
August 1, 2024 - August 31, 2024
September 1, 2024 - September 30, 2024
Pursuant to previously announced authorizations, our Board of Directors has authorized us to repurchase shares of our common stock from time to time at prevailing market prices. In March 2020, our Board of Directors suspended future common stock dividend payments and our share repurchase program for the foreseeable future. The Board of Directors’ authorization does not have an expiration date.
Item 5. OTHER INFORMATION
Securities Trading Plans of Directors and Executive Officers
During the three months ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
Item 6. Exhibits
Incorporated by Reference
Exhibit
Number
Exhibit Description
Form
Ending
Filing Date
2.1
Equity Purchase Agreement, dated as of October 20, 2024, by and among Viad Corp and TL Voltron Purchaser, LLC.
8-K
10/21/2024
3.1
Restated Certificate of Incorporation of Viad Corp, as amended through July 1, 2004 (SEC File No. 001-11015; SEC Film No. 04961107).
10-Q
6/30/2004
3.A
8/9/2004
3.2
Bylaws of Viad Corp, as amended through December 5, 2013.
12/9/2013
10.1
+
Offer Letter, dated as of October 20, 2024, between Viad and David Barry.
10.2
Amended and Restated Severance Agreement (No Change in Control) by and between Viad Corp and David Barry, dated as of October 20, 2024.
10.3
Form of Incentive Bonus Agreement.
31.1
*
Certification of Chief Executive Officer of Viad Corp pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Chief Financial Officer of Viad Corp pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
Certifications of Chief Executive Officer and Chief Financial Officer of Viad Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema with embedded Linkbase Documents.
Cover Page formatted as Inline XBRL and contained in Exhibit 101
Filed herewith.
Furnished herewith.
Management contract or compensation plan or arrangement.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
(Registrant)
November 7, 2024
By:
/s/ Leslie S. Striedel
(Date)
Leslie S. Striedel
Chief Accounting Officer and Duly Authorized Officer