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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 March 31, 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

 

img215946309_0.jpg 

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 May 1, 2024, there were 21,128,161 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 March 31, 2024 and December 31, 2023

1

 

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023

2

 

Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2024 and 2023

3

 

Condensed Consolidated Statements of Stockholders’ Equity and Mezzanine Equity for the Three Months Ended March 31, 2024 and 2023

4

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 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

29

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

36

Item 4.

Controls and Procedures

37

PART II - OTHER INFORMATION

Item 1.

Legal Proceedings

38

Item 1A.

Risk Factors

38

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

38

Item 5.

Other Information

38

Item 6.

Exhibits

39

 

 

 

SIGNATURES

40

 

In this report, for periods presented, “we,” “us,” “our,” “the Company,” and “Viad Corp” refer to Viad Corp and its subsidiaries.

 

 

 

 


 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VIAD CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

March 31,

 

 

December 31,

 

(in thousands, except share data)

 

2024

 

 

2023

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

48,799

 

 

$

52,704

 

Accounts receivable, net of allowances of $2,880 and $2,901, respectively

 

 

151,105

 

 

 

128,019

 

Inventories

 

 

10,454

 

 

 

10,153

 

Current contract costs

 

 

35,398

 

 

 

20,202

 

Prepaid insurance

 

 

13,918

 

 

 

2,925

 

Other current assets

 

 

23,846

 

 

 

21,774

 

Total current assets

 

 

283,520

 

 

 

235,777

 

Property and equipment, net

 

 

593,703

 

 

 

592,891

 

Other investments and assets

 

 

18,079

 

 

 

17,047

 

Operating lease right-of-use assets

 

 

107,546

 

 

 

109,774

 

Deferred income taxes

 

 

1,668

 

 

 

1,930

 

Goodwill

 

 

121,654

 

 

 

123,906

 

Other intangible assets, net

 

 

54,130

 

 

 

55,997

 

Total Assets

 

$

1,180,300

 

 

$

1,137,322

 

Liabilities, Mezzanine Equity, and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

100,180

 

 

$

77,405

 

Contract liabilities

 

 

82,248

 

 

 

52,980

 

Accrued compensation

 

 

20,385

 

 

 

31,309

 

Operating lease obligations

 

 

17,762

 

 

 

17,334

 

Other current liabilities

 

 

54,570

 

 

 

42,397

 

Current portion of debt and finance obligations

 

 

17,126

 

 

 

8,371

 

Total current liabilities

 

 

292,271

 

 

 

229,796

 

Long-term debt and finance obligations

 

 

462,490

 

 

 

444,304

 

Pension and postretirement benefits

 

 

16,233

 

 

 

16,457

 

Long-term operating lease obligations

 

 

103,855

 

 

 

106,109

 

Other deferred items and liabilities

 

 

69,346

 

 

 

70,711

 

Total liabilities

 

 

944,195

 

 

 

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

 

 

 

132,591

 

Redeemable noncontrolling interest

 

 

4,423

 

 

 

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

 

 

 

37,402

 

Additional capital

 

 

565,933

 

 

 

568,230

 

Accumulated deficit

 

 

(353,151

)

 

 

(326,084

)

Accumulated other comprehensive loss

 

 

(47,574

)

 

 

(40,394

)

Common stock in treasury, at cost, 3,826,971 and 3,948,316 shares, respectively

 

 

(190,363

)

 

 

(195,721

)

Total Viad stockholders’ equity

 

 

12,247

 

 

 

43,433

 

Non-redeemable noncontrolling interest

 

 

86,844

 

 

 

89,188

 

Total stockholders’ equity

 

 

99,091

 

 

 

132,621

 

Total Liabilities, Mezzanine Equity, and Stockholders’ Equity

 

$

1,180,300

 

 

$

1,137,322

 

 

Refer to Notes to Condensed Consolidated Financial Statements.

1


 

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands, except per share data)

 

2024

 

 

2023

 

Revenue:

 

 

 

 

 

 

Services

 

$

226,930

 

 

$

218,140

 

Products

 

 

46,567

 

 

 

42,651

 

Total revenue

 

 

273,497

 

 

 

260,791

 

Costs and expenses:

 

 

 

 

 

 

Costs of services

 

 

237,306

 

 

 

226,203

 

Costs of products

 

 

44,648

 

 

 

40,100

 

Corporate activities

 

 

4,433

 

 

 

3,165

 

Interest expense, net

 

 

11,845

 

 

 

12,249

 

Other expense, net

 

 

438

 

 

 

531

 

Restructuring charges

 

 

116

 

 

 

453

 

Total costs and expenses

 

 

298,786

 

 

 

282,701

 

Loss from continuing operations before income taxes

 

 

(25,289

)

 

 

(21,910

)

Income tax expense (benefit)

 

 

887

 

 

 

(578

)

Loss from continuing operations

 

 

(26,176

)

 

 

(21,332

)

Loss from discontinued operations

 

 

(67

)

 

 

(58

)

Net loss

 

 

(26,243

)

 

 

(21,390

)

Net loss attributable to non-redeemable noncontrolling
   interest

 

 

923

 

 

 

398

 

Net loss attributable to redeemable noncontrolling interest

 

 

203

 

 

 

123

 

Net loss attributable to Viad

 

$

(25,117

)

 

$

(20,869

)

Diluted loss per common share:

 

 

 

 

 

 

Continuing operations attributable to Viad common stockholders

 

$

(1.29

)

 

$

(1.10

)

Discontinued operations attributable to Viad common stockholders

 

 

 

 

 

 

Net loss attributable to Viad common stockholders

 

$

(1.29

)

 

$

(1.10

)

Weighted-average outstanding and potentially dilutive common
   shares

 

 

21,029

 

 

 

20,751

 

Basic loss per common share:

 

 

 

 

 

 

Continuing operations attributable to Viad common stockholders

 

$

(1.29

)

 

$

(1.10

)

Discontinued operations attributable to Viad common stockholders

 

 

 

 

 

 

Net loss attributable to Viad common stockholders

 

$

(1.29

)

 

$

(1.10

)

Weighted-average outstanding common shares

 

 

21,029

 

 

 

20,751

 

Amounts attributable to Viad

 

 

 

 

 

 

Loss from continuing operations

 

$

(25,050

)

 

$

(20,811

)

Loss from discontinued operations

 

 

(67

)

 

 

(58

)

Net loss attributable to Viad

 

$

(25,117

)

 

$

(20,869

)

 

Refer to Notes to Condensed Consolidated Financial Statements.

2


 

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Net loss

 

$

(26,243

)

 

$

(21,390

)

Other comprehensive income (loss):

 

 

 

 

 

 

Unrealized foreign currency translation adjustments

 

 

(7,502

)

 

 

1,195

 

Change in fair value of interest rate cap

 

 

218

 

 

 

(800

)

Change in net actuarial loss, net of tax (1)

 

 

85

 

 

 

(45

)

Change in prior service cost, net of tax (1)

 

 

19

 

 

 

35

 

Comprehensive loss

 

 

(33,423

)

 

 

(21,005

)

Non-redeemable noncontrolling interest:

 

 

 

 

 

 

Comprehensive loss attributable to non-redeemable noncontrolling interest

 

 

923

 

 

 

398

 

Unrealized foreign currency translation adjustments

 

 

(1,570

)

 

 

565

 

Redeemable noncontrolling interest:

 

 

 

 

 

 

Comprehensive loss attributable to redeemable noncontrolling interest

 

 

203

 

 

 

123

 

Comprehensive loss attributable to Viad

 

$

(33,867

)

 

$

(19,919

)

 

(1) The tax effect on other comprehensive income (loss) is not significant.

Refer to Notes to Condensed Consolidated Financial Statements.

3


 

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mezzanine Equity

 

(in thousands)

 

Common
Stock

 

 

Additional
Capital

 

 

Accumulated
Deficit

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Common
Stock in
Treasury

 

 

Total
Viad
Equity

 

 

Non-Redeemable
 Non-Controlling
Interest

 

 

Total
Stockholders’
Equity

 

 

 

Redeemable
Non-Controlling
Interest

 

 

Convertible
 Series A
Preferred
 Stock

 

Balance, December 31, 2023

 

$

37,402

 

 

$

568,230

 

 

$

(326,084

)

 

$

(40,394

)

$

(195,721

)

$

43,433

 

$

89,188

 

$

132,621

 

 

 

$

4,733

 

 

$

132,591

 

Net loss

 

 

 

 

 

 

 

 

(25,117

)

 

 

 

 

 

 

 

 

(25,117

)

 

 

(923

)

 

 

(26,040

)

 

 

 

(203

)

 

 

 

Dividends on convertible preferred stock

 

 

 

 

 

 

 

 

(1,950

)

 

 

 

 

 

 

 

 

(1,950

)

 

 

 

 

 

(1,950

)

 

 

 

 

 

 

 

Capital contributions from noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

149

 

 

 

149

 

 

 

 

 

 

 

 

Change in fair value of interest rate cap

 

 

 

 

 

 

 

 

 

 

 

218

 

 

 

 

 

 

218

 

 

 

 

 

 

218

 

 

 

 

 

 

 

 

Employee benefit plans

 

 

 

 

 

(5,387

)

 

 

 

 

 

 

 

 

5,358

 

 

 

(29

)

 

 

 

 

 

(29

)

 

 

 

 

 

 

 

Share-based compensation - equity awards

 

 

 

 

 

3,107

 

 

 

 

 

 

 

 

 

 

 

 

3,107

 

 

 

 

 

 

3,107

 

 

 

 

 

 

 

 

Unrealized foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

(7,502

)

 

 

 

 

 

(7,502

)

 

 

(1,570

)

 

 

(9,072

)

 

 

 

(107

)

 

 

 

Amortization of net actuarial loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

85

 

 

 

 

 

 

85

 

 

 

 

 

 

85

 

 

 

 

 

 

 

 

Amortization of prior service cost, net of tax

 

 

 

 

 

 

 

 

 

 

 

19

 

 

 

 

 

 

19

 

 

 

 

 

 

19

 

 

 

 

 

 

 

 

Other, net

 

 

 

 

 

(17

)

 

 

 

 

 

 

 

 

 

 

 

(17

)

 

 

 

 

 

(17

)

 

 

 

 

 

 

 

Balance, March 31, 2024

 

$

37,402

 

 

$

565,933

 

 

$

(353,151

)

 

$

(47,574

)

 

$

(190,363

)

 

$

12,247

 

 

$

86,844

 

 

$

99,091

 

 

 

$

4,423

 

 

$

132,591

 

Refer to Notes to Condensed Consolidated Financial Statements.

 

4


 

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY (Continued)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mezzanine Equity

 

(in thousands)

 

Common
Stock

 

 

Additional
Capital

 

 

Accumulated
Deficit

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

 

Common
Stock in
Treasury

 

 

Total
Viad
Equity

 

 

Non-Redeemable
 Non-Controlling
Interest

 

 

Total
Stockholders’
Equity

 

 

 

Redeemable
Non-Controlling
Interest

 

 

Convertible
 Series A
Preferred
 Stock

 

Balance, December 31, 2022

 

$

37,402

 

 

$

570,271

 

 

$

(334,301

)

 

$

(47,185

)

$

(211,657

)

$

14,530

 

$

82,310

 

$

96,840

 

 

 

$

4,956

 

 

$

132,591

 

Net loss

 

 

 

 

 

 

 

 

(20,869

)

 

 

 

 

 

 

 

 

(20,869

)

 

 

(398

)

 

 

(21,267

)

 

 

 

(123

)

 

 

 

Dividends on convertible preferred stock

 

 

 

 

 

 

 

 

(1,950

)

 

 

 

 

 

 

 

 

(1,950

)

 

 

 

 

 

(1,950

)

 

 

 

 

 

 

 

Change in fair value of interest rate cap

 

 

 

 

 

 

 

 

 

 

 

(800

)

 

 

 

 

 

(800

)

 

 

 

 

 

(800

)

 

 

 

 

 

 

 

Payment of payroll taxes on stock-based compensation through shares withheld

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(204

)

 

 

(204

)

 

 

 

 

 

(204

)

 

 

 

 

 

 

 

Employee benefit plans

 

 

 

 

 

(4,677

)

 

 

 

 

 

 

 

 

5,468

 

 

 

791

 

 

 

 

 

 

791

 

 

 

 

 

 

 

 

Share-based compensation - equity awards

 

 

 

 

 

3,064

 

 

 

 

 

 

 

 

 

 

 

 

3,064

 

 

 

 

 

 

3,064

 

 

 

 

 

 

 

 

Unrealized foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

1,195

 

 

 

 

 

 

1,195

 

 

 

565

 

 

 

1,760

 

 

 

 

142

 

 

 

 

Amortization of net actuarial loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

(45

)

 

 

 

 

 

(45

)

 

 

 

 

 

(45

)

 

 

 

 

 

 

 

Amortization of prior service cost, net of tax

 

 

 

 

 

 

 

 

 

 

 

35

 

 

 

 

 

 

35

 

 

 

 

 

 

35

 

 

 

 

 

 

 

 

Other, net

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

2

 

 

 

5

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

Balance, March 31, 2023

 

$

37,402

 

 

$

568,661

 

 

$

(357,120

)

 

$

(46,800

)

 

$

(206,391

)

 

$

(4,248

)

 

$

82,477

 

 

$

78,229

 

 

 

$

4,975

 

 

$

132,591

 

Refer to Notes to Condensed Consolidated Financial Statements.

5


 

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(26,243

)

 

$

(21,390

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

13,320

 

 

 

12,475

 

Deferred income taxes

 

 

799

 

 

 

(2,304

)

Loss from discontinued operations

 

 

67

 

 

 

58

 

Restructuring charges

 

 

116

 

 

 

453

 

Gains on dispositions of property and other assets

 

 

(5

)

 

 

(58

)

Share-based compensation expense

 

 

3,107

 

 

 

3,065

 

Other non-cash items, net

 

 

2,927

 

 

 

1,331

 

Change in operating assets and liabilities:

 

 

 

 

 

 

Receivables

 

 

(23,190

)

 

 

(10,726

)

Inventories

 

 

(411

)

 

 

(868

)

Current contract costs

 

 

(15,323

)

 

 

(6,995

)

Accounts payable

 

 

23,904

 

 

 

20,621

 

Restructuring liabilities

 

 

(184

)

 

 

(513

)

Accrued compensation

 

 

(10,994

)

 

 

(6,485

)

Contract liabilities

 

 

29,625

 

 

 

16,957

 

Income taxes payable

 

 

(7,154

)

 

 

(5,735

)

Other assets and liabilities, net

 

 

2,096

 

 

 

10,183

 

Net cash provided by (used in) operating activities

 

 

(7,543

)

 

 

10,069

 

Cash flows from investing activities

 

 

 

 

 

 

Capital expenditures

 

 

(20,721

)

 

 

(11,384

)

Cash paid for acquisitions, net

 

 

 

 

 

(41

)

Proceeds from dispositions of property and other assets

 

 

5

 

 

 

66

 

Net cash used in investing activities

 

 

(20,716

)

 

 

(11,359

)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from borrowings

 

 

154,243

 

 

 

1,819

 

Payments on debt and finance obligations

 

 

(127,964

)

 

 

(5,749

)

Dividends paid on preferred stock

 

 

 

 

 

(1,950

)

Contributions from noncontrolling interest

 

 

149

 

 

 

 

Payments of debt issuance costs

 

 

(51

)

 

 

(200

)

Payment of payroll taxes on stock-based compensation through shares withheld or repurchased

 

 

(996

)

 

 

(412

)

Net cash provided by (used in) financing activities

 

 

25,381

 

 

 

(6,492

)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

 

 

(950

)

 

 

404

 

Net change in cash, cash equivalents, and restricted cash

 

 

(3,828

)

 

 

(7,378

)

Cash, cash equivalents, and restricted cash, beginning of year

 

 

59,029

 

 

 

64,564

 

Cash, cash equivalents, and restricted cash, end of period

 

$

55,201

 

 

$

57,186

 

 

Refer to Notes to Condensed Consolidated Financial Statements.

6


 

VIAD CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

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.

 

7


 

 

Standard

 

Description

 

Date of adoption

 

Effect on the 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:

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Cash and cash equivalents

 

$

48,799

 

 

$

52,704

 

Restricted cash included in other current assets

 

 

6,402

 

 

 

6,325

 

Cash, cash equivalents, and restricted cash shown in the statement of cash flows

 

$

55,201

 

 

$

59,029

 

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 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.

9


 

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:

 

(in thousands)

 

 

 

Balance at December 31, 2023

 

$

53,322

 

Cash additions

 

 

75,131

 

Revenue recognized

 

 

(45,381

)

Foreign exchange translation adjustment

 

 

(305

)

Balance at March 31, 2024

 

$

82,767

 

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” as applicable. We include the deferred incremental costs 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:

 

(in thousands)

 

 

 

Balance at December 31, 2023

 

$

21,974

 

Additions

 

 

29,217

 

Expenses

 

 

(13,527

)

Foreign exchange translation adjustment

 

 

(61

)

Balance at March 31, 2024

 

$

37,603

 

As of March 31, 2024, capitalized contract costs consisted of $2.5 million to obtain contracts and $35.1 million to fulfill contracts. We did not recognize an impairment loss with respect to capitalized contract costs during the three months ended March 31, 2024 or 2023.

10


 

Disaggregation of Revenue

The following tables disaggregate Pursuit and GES revenue by major service and product lines, timing of revenue recognition, and markets served:

Pursuit

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Services:

 

 

 

 

 

 

Ticket revenue

 

$

17,805

 

 

$

14,261

 

Rooms revenue

 

 

7,604

 

 

 

7,590

 

Transportation

 

 

1,855

 

 

 

1,945

 

Other

 

 

1,720

 

 

 

1,367

 

Total services revenue

 

 

28,984

 

 

 

25,163

 

Products:

 

 

 

 

 

 

Food and beverage

 

 

6,522

 

 

 

5,875

 

Retail operations

 

 

1,725

 

 

 

1,625

 

Total products revenue

 

 

8,247

 

 

 

7,500

 

Total revenue

 

$

37,231

 

 

$

32,663

 

 

 

 

 

 

 

 

Timing of revenue recognition:

 

 

 

 

 

 

Services transferred over time

 

$

28,984

 

 

$

25,163

 

Products transferred at a point in time

 

 

8,247

 

 

 

7,500

 

Total revenue

 

$

37,231

 

 

$

32,663

 

 

 

 

 

 

 

 

Markets:

 

 

 

 

 

 

Banff Jasper Collection

 

$

18,106

 

 

$

17,614

 

Alaska Collection

 

 

613

 

 

 

453

 

Glacier Park Collection

 

 

1,433

 

 

 

1,455

 

FlyOver

 

 

6,189

 

 

 

5,855

 

Sky Lagoon

 

 

10,890

 

 

 

7,286

 

Total revenue

 

$

37,231

 

 

$

32,663

 

GES

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Service lines:

 

 

 

 

 

 

Spiro

 

$

61,248

 

 

$

60,362

 

GES Exhibitions

 

 

175,840

 

 

 

169,497

 

Intersegment eliminations

 

 

(822

)

 

 

(1,731

)

Total revenue

 

$

236,266

 

 

$

228,128

 

 

 

 

 

 

 

Timing of revenue recognition:

 

 

 

 

 

 

Services transferred over time

 

$

197,946

 

 

$

192,977

 

Products transferred over time(1)

 

 

14,423

 

 

 

12,941

 

Products transferred at a point in time

 

 

23,897

 

 

 

22,210

 

Total revenue

 

$

236,266

 

 

$

228,128

 

 

 

 

 

 

 

Geographical markets:

 

 

 

 

 

 

North America

 

$

181,187

 

 

$

180,839

 

EMEA

 

 

58,961

 

 

 

49,537

 

Intersegment eliminations

 

 

(3,882

)

 

 

(2,248

)

Total revenue

 

$

236,266

 

 

$

228,128

 

 

11


 

 

(1)
GES’ graphics product revenue is earned over time over the duration of an event as it is considered a part of the single performance obligation satisfied over time.

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 March 31, 2024, there were 576,680 shares available for future grant under the 2017 Plan.

The following table summarizes share-based compensation expense:

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Performance-based restricted stock units

 

$

942

 

 

$

822

 

Restricted stock awards and restricted stock units

 

 

1,915

 

 

 

1,643

 

Stock options

 

 

250

 

 

 

600

 

Share-based compensation expense before income tax

 

 

3,107

 

 

 

3,065

 

Income tax benefit(1)

 

 

(76

)

 

 

(22

)

Share-based compensation expense, net of income tax

 

$

3,031

 

 

$

3,043

 

(1)
The income tax benefit amount for all periods primarily reflects the tax benefit associated with our Canadian-based employees.

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:

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Raw materials

 

$

519

 

 

$

681

 

Finished goods

 

 

9,935

 

 

 

9,472

 

Inventories

 

$

10,454

 

 

$

10,153

 

 

Note 5. Other Current Assets

Other current assets consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Restricted cash

 

$

6,402

 

 

$

6,325

 

Prepaid software maintenance

 

 

4,517

 

 

 

4,905

 

Prepaid project deposit

 

 

3,619

 

 

 

3,699

 

Prepaid vendor payments

 

 

3,361

 

 

 

2,403

 

Prepaid taxes

 

 

959

 

 

 

881

 

Income tax receivable

 

 

670

 

 

 

670

 

Prepaid other

 

 

2,039

 

 

 

1,567

 

Other

 

 

2,279

 

 

 

1,324

 

Other current assets

 

$

23,846

 

 

$

21,774

 

 

12


 

Note 6. Property and Equipment, Net

Property and equipment consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Land and land interests

 

$

31,010

 

 

$

31,184

 

Buildings and leasehold improvements

 

 

438,932

 

 

 

445,074

 

Equipment and other

 

 

471,918

 

 

 

455,070

 

Gross property and equipment

 

 

941,860

 

 

 

931,328

 

Accumulated depreciation

 

 

(403,834

)

 

 

(395,557

)

Property and equipment, net (excluding finance leases)

 

 

538,026

 

 

 

535,771

 

Finance lease ROU assets, net

 

 

55,677

 

 

 

57,120

 

Property and equipment, net

 

$

593,703

 

 

$

592,891

 

 

Depreciation expense was $11.3 million during the three months ended March 31, 2024 and $10.3 million during the three months ended March 31, 2023.

Capitalized interest was $0.7 million during the three months ended March 31, 2024 and $0.3 million during the three months ended March 31, 2023, which was primarily related to the development of Pursuit’s FlyOver Chicago attraction.

Note 7. Other Investments and Assets

Other investments and assets consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Self-insured liability receivable

 

$

7,776

 

 

$

7,776

 

Other mutual funds

 

 

4,980

 

 

 

4,271

 

Contract costs

 

 

2,205

 

 

 

1,772

 

Other

 

 

3,118

 

 

 

3,228

 

Other investments and assets

 

$

18,079

 

 

$

17,047

 

 

Note 8. Goodwill and Other Intangible Assets, Net

The changes in the carrying amount of goodwill are as follows:

 

(in thousands)

 

 

 

Balance at December 31, 2023

 

$

123,906

 

Foreign currency translation adjustments

 

 

(2,252

)

Balance at March 31, 2024

 

$

121,654

 

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 be performed as of March 31, 2024.

13


 

Other intangible assets consisted of the following:

 

 

 

 

 

March 31, 2024

 

 

December 31, 2023

 

(in thousands)

 

Useful Life
(Years)

 

Gross
Carrying
Value

 

 

Accumulated
Amortization

 

 

Net
Carrying
Value

 

 

Gross
Carrying
Value

 

 

Accumulated
Amortization

 

 

Net
Carrying
Value

 

Intangible assets subject to amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer contracts and relationships

 

8.4

 

$

33,159

 

 

$

(28,683

)

 

$

4,476

 

 

$

34,701

 

 

$

(29,950

)

 

$

4,751

 

Operating contracts and licenses

 

33.1

 

 

39,437

 

 

 

(4,784

)

 

 

34,653

 

 

 

40,324

 

 

 

(4,692

)

 

 

35,632

 

In-place lease

 

32.5

 

 

14,436

 

 

 

(1,946

)

 

 

12,490

 

 

 

14,754

 

 

 

(1,842

)

 

 

12,912

 

Tradenames

 

3.2

 

 

5,552

 

 

 

(4,170

)

 

 

1,382

 

 

 

5,667

 

 

 

(4,121

)

 

 

1,546

 

Other

 

3.9

 

 

770

 

 

 

(207

)

 

 

563

 

 

 

787

 

 

 

(200

)

 

 

587

 

Total amortized intangible assets

 

 

 

 

93,354

 

 

 

(39,790

)

 

 

53,564

 

 

 

96,233

 

 

 

(40,805

)

 

 

55,428

 

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business licenses

 

 

 

 

566

 

 

 

 

 

 

566

 

 

 

569

 

 

 

 

 

 

569

 

Other intangible assets, net

 

 

 

$

93,920

 

 

$

(39,790

)

 

$

54,130

 

 

$

96,802

 

 

$

(40,805

)

 

$

55,997

 

 

Intangible asset amortization expense (excluding amortization expense of ROU assets) was $0.9 million during the three months ended March 31, 2024 and $1.1 million during the three months ended March 31, 2023.

At March 31, 2024, the estimated future amortization expense related to intangible assets subject to amortization is as follows:

 

(in thousands)

 

 

 

Year ending December 31,

 

 

 

Remainder of 2024

 

$

2,811

 

2025

 

 

2,351

 

2026

 

 

2,317

 

2027

 

 

1,921

 

2028

 

 

1,889

 

Thereafter

 

 

42,275

 

Total

 

$

53,564

 

 

Note 9. Other Current Liabilities

Other current liabilities consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Continuing operations:

 

 

 

 

 

 

Commissions payable

 

$

9,985

 

 

$

3,799

 

Accrued sales and use taxes and personal property taxes

 

 

8,124

 

 

 

3,958

 

Accrued concession fees

 

 

6,562

 

 

 

3,970

 

Accrued employee benefit costs

 

 

5,710

 

 

 

4,835

 

Self-insured liability

 

 

6,589

 

 

 

4,531

 

Accommodation service deposits

 

 

3,121

 

 

 

2,681

 

Dividends payable on preferred stock

 

 

1,950

 

 

 

 

Accrued professional fees

 

 

1,771

 

 

 

1,208

 

Current portion of pension and postretirement liabilities

 

 

1,046

 

 

 

1,396

 

Foreign income taxes payable

 

 

820

 

 

 

8,558

 

Other

 

 

7,648

 

 

 

6,315

 

Total continuing operations

 

 

53,326

 

 

 

41,251

 

Discontinued operations:

 

 

 

 

 

 

Self-insured liability

 

 

219

 

 

 

121

 

Environmental remediation liabilities

 

 

25

 

 

 

25

 

Other

 

 

1,000

 

 

 

1,000

 

Total discontinued operations

 

 

1,244

 

 

 

1,146

 

Total other current liabilities

 

$

54,570

 

 

$

42,397

 

 

14


 

Note 10. Other Deferred Items and Liabilities

Other deferred items and liabilities consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Continuing operations:

 

 

 

 

 

 

Foreign deferred tax liability

 

$

27,546

 

 

$

28,234

 

Multi-employer pension plan withdrawal liability

 

 

13,217

 

 

 

13,341

 

Self-insured excess liability

 

 

7,776

 

 

 

7,776

 

Accrued compensation

 

 

5,981

 

 

 

5,627

 

Self-insured liability

 

 

5,977

 

 

 

7,407

 

Accrued restructuring

 

 

2,623

 

 

 

2,666

 

Other

 

 

2,590

 

 

 

1,958

 

Total continuing operations

 

 

65,710

 

 

 

67,009

 

Discontinued operations:

 

 

 

 

 

 

Environmental remediation liabilities

 

 

2,120

 

 

 

2,140

 

Self-insured liability

 

 

1,516

 

 

 

1,562

 

Total discontinued operations

 

 

3,636

 

 

 

3,702

 

Total other deferred items and liabilities

 

$

69,346

 

 

$

70,711

 

 

Note 11. Debt and Finance Obligations

The components of debt and finance obligations consisted of the following:

 

 

 

March 31,

 

 

December 31,

 

(in thousands, except interest rates)

 

2024

 

 

2023

 

Debt:

 

 

 

 

 

 

2021 Credit Facility - Term Loan B
10.4% interest rate at March 31, 2024 and 10.5% at December 31, 2023, due through 2028(1)

 

$

320,000

 

 

$

321,000

 

2021 Credit Facility - Revolving Credit Facility - Viad Corp borrowings
8.4% interest rate at March 31, 2024, and 8.5% at December 31, 2023, due through 2026(1)

 

 

58,500

 

 

 

57,000

 

2021 Credit Facility - Revolving Credit Facility - Brewster, Inc. borrowings
8.3% interest rate at March 31, 2024, due through 2026(1)

 

 

17,358

 

 

 

 

Jasper Term Loan
6.5% interest rate at March 31, 2024 and December 31, 2023, due through 2028(1)

 

 

12,382

 

 

 

12,655

 

Jasper Revolving Credit Facility
9.5% weighted-average interest rate at March 31, 2024 and December 31, 2023, due through 2028(1)

 

 

2,954

 

 

 

3,020

 

FlyOver Iceland Credit Facility
8.9% interest rate at March 31, 2024 and December 31, 2023, due through 2029(1)

 

 

3,940

 

 

 

4,049

 

FlyOver Iceland Term Loans
13.7% weighted-average interest rate at March 31, 2024 and 13.8% at December 31, 2023, due through 2024(1)

 

 

435

 

 

 

475

 

Less unamortized debt issuance costs

 

 

(8,765

)

 

 

(9,453

)

Total debt

 

 

406,804

 

 

 

388,746

 

Finance obligations:

 

 

 

 

 

 

Finance lease obligations
9.2% weighted-average interest rate at March 31, 2024 and December 31, 2023, due through 2067

 

 

63,603

 

 

 

63,929

 

Financing arrangements

 

 

9,209

 

 

 

 

Total debt and finance obligations (2)(3)

 

 

479,616

 

 

 

452,675

 

Current portion

 

 

(17,126

)

 

 

(8,371

)

Long-term debt and finance obligations

 

$

462,490

 

 

$

444,304

 

 

15


 

(1)
Represents the weighted-average interest rate in effect as of the end of the respective periods, including any applicable margin. The interest rates do not include amortization of debt issuance costs, commitment fees, or any expense or income related to the Interest Rate Cap as discussed in Note 12 Derivative.
(2)
The estimated fair value of total debt and finance leases was $382.8 million as of March 31, 2024 and $349.8 million as of December 31, 2023. The fair value of debt was estimated by discounting the future cash flows using rates currently available for debt of similar terms and maturity, which is a Level 2 measurement. Refer to Note 13 – Fair Value Measurements for additional information.
(3)
Cash paid for interest on debt was $12.1 million during the three months ended March 31, 2024 and $11.4 million during the three months ended March 31, 2023.

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 and $10 million of cash from the Company’s balance sheet. The credit spread on the Term Loan B is 5.00% for Secured Overnight Financing Rate (“SOFR”) borrowings, which is 200 basis points higher than the current credit spread on our Revolving Credit Facility. On April 26, 2024, we entered into the Fourth Amendment to the 2021 Credit Agreement, which among other things, (i) reduced the applicable rate on the Term Loan B by 0.75%, to SOFR + 4.25%, (ii) set the 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. See Note 24 Subsequent Event for additional information.

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 SOFR. 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).

Term Loan B

The Term Loan B has a maturity date of July 30, 2028 and is subject to quarterly amortization of principal of $1.0 million. Interest rates are based on SOFR (plus additional credit spread adjustments as detailed above under “LIBOR Transition Amendment”) plus a 5.00% credit spread, with a SOFR floor of 0.50%. The Term Loan B carries no financial covenants.

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. In addition to borrowing based on one, three, six, or twelve month SOFR tenors (plus additional credit spread adjustments as detailed above under “LIBOR Transition Amendment”), we also have the option to borrow based on the “Base Rate”, which for any day is a fluctuating rate equal to the highest of the Fed Funds Rate plus 0.50%, Bank of America’s publicly announced “prime rate”, and SOFR plus 1.00%. Credit spreads for SOFR and Base Rate borrowings are based on Viad’s total net leverage ratio and range from 2.50% to 3.50% for SOFR borrowings and from 1.50% to 3.50% for Base Rate borrowings. Additionally, a 1.00% floor applies to the Base 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.

The Revolving Credit Facility 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. The amendments modified the financial covenants to the following:

Maintain a total net leverage ratio of not greater than 4.00 to 1.00; and
Maintain an interest coverage ratio of not less than 2.00 to 1.00.

16


 

As of March 31, 2024, our total net leverage ratio was 2.69 to 1.00, the interest coverage ratio was 3.30 to 1.00, and we were in compliance with all covenants under the Revolving Credit Facility.

In addition to U.S. dollar borrowings, we may borrow funds on the Revolving Credit Facility in Canadian Dollars based on the Canadian Dollar Offered Rate, 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 March 31, 2024.

As of March 31, 2024, capacity remaining under the Revolving Credit Facility was $88.4 million, reflecting $170 million total facility size, less $75.9 million outstanding balance from Viad and Brewster, Inc. and $5.7 million in outstanding letters of credit.

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:

Maintain a pre-compensation fixed-charge coverage ratio of not less than 1.30 to 1.00; and
Maintain a post-compensation fixed-charge coverage ratio of not less than 1.10 to 1.00.

As of March 31, 2024, both the pre-compensation and post-compensation fixed-charge coverage ratios were 4.02 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 March 31, 2024, capacity remaining under the Jasper Revolving Credit Facility was $6.0 million Canadian dollars (approximately $4.4 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 4.9%.

FlyOver Iceland entered into an addendum effective December 1, 2021 wherein the principal payments were deferred for twelve months beginning December 1, 2021, with the first payment due 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 with a maturity date of October 1, 2024 and bears 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 bears 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 that matures on August 1, 2024.

17


 

The Icelandic State Treasury guarantees supplemental loans provided by credit institutions to companies impacted by the COVID-19 pandemic. Accordingly, the Icelandic State Treasury guaranteed the repayment of up to 85% of the principal and interest on the ISK 10.0 million and ISK 30.0 million term loans and 70% of the principal amount on the ISK 50.0 million term loan. Loan proceeds were used to fund FlyOver Iceland operations.

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 5.8%.

Changes to our financing arrangements are as follows:

(in thousands)

 

 

 

Balance at December 31, 2023

 

$

 

Additions

 

 

13,062

 

Payments

 

 

(3,777

)

Foreign currency translation adjustment

 

 

(76

)

Balance at March 31, 2024

 

$

9,209

 

 

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 months ended March 31, 2024, we received gross proceeds from the interest rate cap of $0.3 million 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:

 

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

Classification

 

2024

 

 

2023

 

Derivatives designated as hedging instruments

 

 

 

 

 

 

 

 

Interest rate cap - short-term

 

Other current liabilities

 

$

338

 

 

$

443

 

Interest rate cap - long-term

 

Other deferred items and liabilities

 

 

 

 

 

45

 

Total derivatives designated as hedging instruments

 

 

 

$

338

 

 

$

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. During the three months ended March 31, 2024, approximately $0.3 million was reclassified to interest expense, net, and $0.4 million remained in unrealized losses in AOCI as of March 31, 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.

18


 

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

 

(in thousands)

 

March 31, 2024

 

 

Quoted Prices
in Active
Markets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Other mutual funds (1)

 

$

4,980

 

 

$

4,980

 

 

$

 

 

$

 

Total assets at fair value on a recurring basis

 

$

4,980

 

 

 

4,980

 

 

$

 

 

$

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate cap (2)

 

$

338

 

 

$

 

 

$

338

 

 

$

 

Total liabilities at fair value on a recurring basis

 

$

338

 

 

$

 

 

$

338

 

 

$

 

 

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using

 

(in thousands)

 

December 31, 2023

 

 

Quoted Prices
in Active
Markets
(Level 1)

 

 

Significant
Other
Observable
Inputs
(Level 2)

 

 

Significant
Unobservable
Inputs
(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Other mutual funds (1)

 

$

4,271

 

 

$

4,271

 

 

$

 

 

$

 

Total assets at fair value on a recurring basis

 

$

4,271

 

 

$

4,271

 

 

$

 

 

$

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate cap (2)

 

$

488

 

 

$

 

 

$

488

 

 

$

 

Total liabilities at fair value on a recurring basis

 

$

488

 

 

$

 

 

$

488

 

 

$

 

 

(1)
We include other mutual funds in “Other investments and assets” in the Condensed Consolidated Balance Sheets.
(2)
Refer to Note 12 - Derivative.

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. Loss Per Share

The components of basic and diluted loss per share are as follows:

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands, except per share data)

 

2024

 

 

2023

 

Net loss attributable to Viad

 

$

(25,117

)

 

$

(20,869

)

Less: Allocation to participating securities

 

 

 

 

 

 

Convertible preferred stock dividends(1)

 

 

(1,950

)

 

 

(1,950

)

Net loss allocated to Viad common stockholders (basic)

 

$

(27,067

)

 

$

(22,819

)

Add: Allocation to participating securities

 

 

 

 

 

 

Net loss allocated to Viad common stockholders (diluted)

 

$

(27,067

)

 

$

(22,819

)

 

 

 

 

 

 

 

Basic weighted-average outstanding common shares

 

 

21,029

 

 

 

20,751

 

Additional dilutive shares related to share-based compensation

 

 

 

 

 

 

Diluted weighted-average outstanding shares

 

 

21,029

 

 

 

20,751

 

Loss per share:

 

 

 

 

 

 

Basic loss attributable to Viad common stockholders

 

$

(1.29

)

 

$

(1.10

)

Diluted loss attributable to Viad common stockholders (2)

 

$

(1.29

)

 

$

(1.10

)

 

19


 

 

(1) The convertible preferred stock dividend payable as of March 31, 2024, was paid in cash on April 1, 2024.

(2) Diluted loss per share amount cannot exceed basic loss per share.

Diluted income (loss) 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 (loss) available to common stockholders and assumes conversion of all potential shares other than the participating securities. The if-converted method uses net income (loss) available to common stockholders and assumes conversion of all potential shares 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 (loss) 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 (loss) per share. The adjustment to the carrying value of the redeemable noncontrolling interest is reflected in income (loss) per common share.

We excluded the following weighted-average potential common shares from the calculations of diluted net loss per common share during the applicable periods because their inclusion would have been anti-dilutive:

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

2023

 

Convertible preferred stock

 

 

6,674

 

 

6,674

 

Unvested restricted share-based awards

 

 

281

 

 

225

 

Unvested performance share-based awards

 

 

179

 

 

101

 

Stock options

 

 

164

 

 

378

 

 

Note 15. Common and Preferred Stock

Convertible Series A 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 March 31, 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 three months ended March 31, 2024, $2.0 million of dividends were declared, all of which were paid in cash on April 1, 2024. 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 March 31, 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.

20


 

Note 16. Accumulated Other Comprehensive Income (Loss)

 

Changes in AOCI by component are as follows:

 

(in thousands)

 

Cumulative
Foreign Currency Translation Adjustments

 

 

Unrecognized Net Actuarial Loss and Prior Service Credit, Net

 

 

Unrealized Gain (Loss) on Interest Rate Cap

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

Balance at December 31, 2023

 

$

(35,340

)

 

$

(4,403

)

 

$

(651

)

 

$

(40,394

)

Other comprehensive income before reclassifications

 

 

(7,502

)

 

 

 

 

 

150

 

 

 

(7,352

)

Amounts reclassified from AOCI, net of tax

 

 

 

 

 

104

 

 

 

68

 

 

 

172

 

Net other comprehensive income

 

 

(7,502

)

 

 

104

 

 

 

218

 

 

 

(7,180

)

Balance at March 31, 2024

 

$

(42,842

)

 

$

(4,299

)

 

$

(433

)

 

$

(47,574

)

 

(in thousands)

 

Cumulative
Foreign Currency Translation Adjustments

 

 

Unrecognized Net Actuarial Loss and Prior Service Credit, Net

 

 

Unrealized Loss on Interest Rate Cap

 

 

Accumulated
Other
Comprehensive
Income (Loss)

 

Balance at December 31, 2022

 

$

(42,983

)

 

$

(4,202

)

 

$

 

 

$

(47,185

)

Other comprehensive income (loss) before reclassifications

 

 

1,195

 

 

 

 

 

 

(800

)

 

 

395

 

Amounts reclassified from AOCI, net of tax

 

 

 

 

 

(10

)

 

 

 

 

 

(10

)

Net other comprehensive income (loss)

 

 

1,195

 

 

 

(10

)

 

 

(800

)

 

 

385

 

Balance at March 31, 2023

 

$

(41,788

)

 

$

(4,212

)

 

$

(800

)

 

$

(46,800

)

 

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 a negative 3.5% for the three months ended March 31, 2024 and 2.6% for the three months ended March 31, 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 three months ended March 31, 2024 as we do not recognize a tax benefit on losses in the United States and other European countries 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. We also recorded a $0.5 million expense 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.

During the three months March 31, 2023, we released a valuation allowance of $2.1 million that was recorded on deferred tax assets associated with certain separate states, which more than offset taxes due in jurisdictions without a valuation allowance.

We paid net cash for income taxes of $7.8 million during the three months ended March 31, 2024, of which $6.2 million was paid to Canadian taxing authorities and $1.2 million to the Netherlands. We paid net cash for income taxes of $8.0 million during the three months ended March 31, 2023 of which $7.3 million was paid to Canadian taxing authorities.

21


 

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 March 31, 2024 and 2023 consist of the following:

 

 

 

Domestic Plans

 

 

 

 

 

 

 

 

 

Pension Plans

 

 

Postretirement Benefit Plans

 

 

Foreign Pension Plans

 

(in thousands)

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Service cost

 

$

 

 

$

 

 

$

6

 

 

$

6

 

 

$

51

 

 

$

44

 

Interest cost

 

 

201

 

 

 

211

 

 

 

91

 

 

 

93

 

 

 

85

 

 

 

92

 

Expected return on plan assets

 

 

(57

)

 

 

(40

)

 

 

 

 

 

 

 

 

(84

)

 

 

(86

)

Amortization of prior service credit

 

 

(10

)

 

 

(8

)

 

 

19

 

 

 

29

 

 

 

 

 

 

 

Recognized net actuarial (gain) loss

 

 

79

 

 

 

71

 

 

 

(38

)

 

 

(44

)

 

 

32

 

 

 

33

 

Net periodic benefit cost

 

$

213

 

 

$

234

 

 

$

78

 

 

$

84

 

 

$

84

 

 

$

83

 

Settlement cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total expenses

 

$

213

 

 

$

234

 

 

$

78

 

 

$

84

 

 

$

84

 

 

$

83

 

 

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 three months ended March 31, 2024, we contributed $0.1 million to our funded pension plans, $0.2 million to our unfunded pension plans, and $0.1 million to our postretirement benefit plans.

Note 19. Restructuring Charges

GES

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.

Other Restructurings

We recorded restructuring charges in connection with certain reorganization activities within Pursuit. These charges primarily consist of severance and related benefits due to headcount reductions.

Changes to the restructuring liability by major restructuring activity are as follows:

 

 

 

GES

 

 

Other Restructurings

 

 

 

 

(in thousands)

 

Severance &
Employee
Benefits

 

 

Facilities

 

 

Severance &
Employee
Benefits

 

 

Total

 

Balance at December 31, 2023

 

$

1,634

 

 

$

1,378

 

 

$

 

 

$

3,012

 

Restructuring charges

 

 

103

 

 

 

13

 

 

 

 

 

 

116

 

Cash payments

 

 

(200

)

 

 

(34

)

 

 

 

 

 

(234

)

Adjustment to liability

 

 

 

 

 

(7

)

 

 

 

 

 

(7

)

Balance at March 31, 2024

 

$

1,537

 

 

$

1,350

 

 

$

 

 

$

2,887

 

 

As of March 31, 2024, $1.5 million of the liabilities related to severance and employee benefits and $1.1 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.

 

22


 

Note 20. Leases and Other

The balance sheet presentation of our operating and finance leases is as follows:

 

 

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

Classification on the Condensed Consolidated Balance Sheet

 

2024

 

 

2023

 

Assets:

 

 

 

 

 

 

 

 

Operating lease ROU assets

 

Operating lease ROU assets

 

$

107,546

 

 

$

109,774

 

Finance lease ROU assets

 

Property and equipment, net

 

 

55,677

 

 

 

57,120

 

Total lease ROU assets

 

 

 

$

163,223

 

 

$

166,894

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

Current:

 

 

 

 

 

 

 

 

Operating lease obligations

 

Operating lease obligations

 

$

17,762

 

 

$

17,334

 

Finance lease obligations

 

Current portion of debt and finance obligations

 

 

2,755

 

 

 

2,742

 

Noncurrent:

 

 

 

 

 

 

 

 

Operating lease obligations

 

Long-term operating lease obligations

 

 

103,855

 

 

 

106,109

 

Finance lease obligations

 

Long-term debt and finance obligations

 

 

60,848

 

 

 

61,187

 

Total lease liabilities

 

 

 

$

185,220

 

 

$

187,372

 

 

The components of lease expense consisted of the following:

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Finance lease cost:

 

 

 

 

 

 

Amortization of ROU assets

 

$

1,113

 

 

$

1,056

 

Interest on lease liabilities

 

 

1,436

 

 

 

1,410

 

Operating lease cost

 

 

6,863

 

 

 

6,207

 

Short-term lease cost

 

 

643

 

 

 

435

 

Variable lease cost

 

 

1,240

 

 

 

1,228

 

Total lease cost, net

 

$

11,295

 

 

$

10,336

 

 

Other information related to operating and finance leases are as follows:

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

6,761

 

 

$

6,652

 

Operating cash flows from finance leases

 

$

1,566

 

 

$

1,517

 

Financing cash flows from finance leases

 

$

818

 

 

$

605

 

ROU assets obtained in exchange for lease obligations:

 

 

 

 

 

 

Operating leases

 

$

3,245

 

 

$

3,016

 

Finance leases(1)

 

$

742

 

 

$

(13

)

 

(1)
Includes terminations of equipment finance leases during 2023.

 

 

 

March 31,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Weighted-average remaining lease term (years):

 

 

 

 

 

 

Operating leases

 

 

7.48

 

 

 

7.64

 

Finance leases

 

 

33.35

 

 

 

33.47

 

Weighted-average discount rate:

 

 

 

 

 

 

Operating leases

 

 

7.92

%

 

 

7.88

%

Finance leases

 

 

9.18

%

 

 

9.17

%

 

23


 

As of March 31, 2024, the estimated future minimum lease payments under non-cancellable leases, excluding variable leases and variable non-lease components, are as follows:

 

(in thousands)

 

Operating Leases

 

 

Finance Leases

 

 

Total

 

Remainder of 2024

 

$

19,744

 

 

$

6,371

 

 

$

26,115

 

2025

 

 

26,026

 

 

 

7,678

 

 

 

33,704

 

2026

 

 

25,021

 

 

 

6,980

 

 

 

32,001

 

2027

 

 

21,421

 

 

 

6,557

 

 

 

27,978

 

2028

 

 

15,606

 

 

 

6,223

 

 

 

21,829

 

Thereafter

 

 

56,591

 

 

 

174,615

 

 

 

231,206

 

Total future lease payments

 

 

164,409

 

 

 

208,424

 

 

 

372,833

 

Less: Amount representing interest

 

 

(42,792

)

 

 

(144,821

)

 

 

(187,613

)

Present value of minimum lease payments

 

 

121,617

 

 

 

63,603

 

 

 

185,220

 

Current portion

 

 

(17,762

)

 

 

(2,755

)

 

 

(20,517

)

Long-term portion

 

$

103,855

 

 

$

60,848

 

 

$

164,703

 

 

As of March 31, 2024, the estimated future minimum rental income under non-cancellable leases, which includes rental income from facilities that we own, are as follows:

 

(in thousands)

 

 

 

Remainder of 2024

 

$

1,820

 

2025

 

 

1,831

 

2026

 

 

1,581

 

2027

 

 

938

 

2028

 

 

764

 

Thereafter

 

 

2,075

 

Total minimum rents

 

$

9,009

 

Lease Not Yet Commenced

As of March 31, 2024, we had executed a facility lease for which we did not have control of the underlying assets. Accordingly, we did not record the lease liability and ROU asset on our Condensed Consolidated Balance Sheets. This lease is for a new FlyOver attraction, FlyOver Canada Toronto. The lease commencement date was originally planned for 2023, however, it has been postponed due to permitting and other related delays. Upon commencement date, it will have a lease term of 20 years.

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 March 31, 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 March 31, 2024, we had recorded environmental remediation liabilities of $2.1 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.

24


 

As of March 31, 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 March 31, 2024 would be approximately $83.2 million. These guarantees relate to our leased equipment and facilities through January 2044. 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 limit) related to our continuing operations was $11.1 million as of March 31, 2024, which includes $6.3 million related to workers’ compensation liabilities, and $4.8 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 $1.7 million as of March 31, 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 March 31, 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 March 31, 2024 and $1.5 million for the three months ended March 31, 2023.

In addition, as of March 31, 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

Redeemable noncontrolling interest

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 increased to 56.4% as of March 31, 2024. Through Esja and its wholly-owned subsidiary, we are operating 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 March 31, 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).

25


 

Changes in the redeemable noncontrolling interest are as follows:

 

(in thousands)

 

 

 

Balance at December 31, 2023

 

$

4,733

 

Net loss attributable to redeemable noncontrolling interest

 

 

(203

)

Foreign currency translation adjustment

 

 

(107

)

Balance at March 31, 2024

 

$

4,423

 

Non-redeemable noncontrolling interest

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:

 

(in thousands)

Glacier Park Inc.

 

 

Brewster (1)

 

 

Sky Lagoon

 

 

Total

 

Balance at December 31, 2023

$

18,159

 

 

$

59,108

 

 

$

11,921

 

 

$

89,188

 

Net income (loss) attributable to non-redeemable noncontrolling interest

 

(871

)

 

 

(768

)

 

 

716

 

 

 

(923

)

Contributions from non-controlling interests

 

 

 

 

149

 

 

 

 

 

 

149

 

Foreign currency translation adjustments

 

(10

)

 

 

(1,272

)

 

 

(288

)

 

 

(1,570

)

Balance at March 31, 2024

$

17,278

 

 

$

57,217

 

 

$

12,349

 

 

$

86,844

 

Equity ownership interest that we do not own

 

20

%

 

 

40

%

 

 

49

%

 

 

 

 

(1)
Includes Mountain Park Lodges and the Golden Skybridge at Brewster, part of the Banff Jasper Collection.

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, 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.

26


 

Our reportable segments, with reconciliations to consolidated totals, are as follows:

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Revenue:

 

 

 

 

 

 

Pursuit

 

$

37,231

 

 

$

32,663

 

GES:

 

 

 

 

 

 

Spiro

 

 

61,248

 

 

 

60,362

 

GES Exhibitions

 

 

175,840

 

 

 

169,497

 

GES intersegment eliminations

 

 

(822

)

 

 

(1,731

)

Total GES

 

 

236,266

 

 

 

228,128

 

Total revenue

 

$

273,497

 

 

$

260,791

 

 

 

 

 

 

 

 

Segment operating income (loss):

 

 

 

 

 

 

Pursuit

 

$

(23,831

)

 

$

(19,112

)

GES:

 

 

 

 

 

 

Spiro

 

 

4,001

 

 

 

3,174

 

GES Exhibitions

 

 

11,357

 

 

 

10,410

 

Total GES

 

 

15,358

 

 

 

13,584

 

Segment operating loss

 

 

(8,473

)

 

 

(5,528

)

Corporate eliminations (1)

 

 

16

 

 

 

16

 

Corporate activities

 

 

(4,433

)

 

 

(3,165

)

Interest expense, net

 

 

(11,845

)

 

 

(12,249

)

Other expense, net

 

 

(438

)

 

 

(531

)

Restructuring charges:

 

 

 

 

 

 

Pursuit

 

 

 

 

 

(7

)

Spiro

 

 

(42

)

 

 

(137

)

GES Exhibitions

 

 

(74

)

 

 

(309

)

Loss from continuing operations before income taxes

 

$

(25,289

)

 

$

(21,910

)

 

(1)
Corporate eliminations represent the elimination of depreciation expense recorded by Pursuit associated with previously eliminated intercompany profit realized by GES for renovations to Pursuit’s Banff Gondola.

Additional information of our reportable segments is as follows:

 

 

Three Months Ended March 31,

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Depreciation:

 

 

 

 

 

 

Pursuit

 

$

8,623

 

 

$

8,134

 

Spiro

 

 

561

 

 

 

500

 

GES Exhibitions

 

 

2,121

 

 

 

1,678

 

Corporate

 

 

27

 

 

 

20

 

 

 

$

11,332

 

 

$

10,332

 

Amortization:

 

 

 

 

 

 

Pursuit

 

$

1,113

 

 

$

1,161

 

Spiro

 

 

78

 

 

 

63

 

GES Exhibitions

 

 

797

 

 

 

919

 

 

 

$

1,988

 

 

$

2,143

 

Capital expenditures:

 

 

 

 

 

 

Pursuit

 

$

16,387

 

 

$

7,727

 

Spiro

 

 

380

 

 

 

647

 

GES Exhibitions

 

 

3,951

 

 

 

3,008

 

Corporate and other

 

 

3

 

 

 

2

 

 

 

$

20,721

 

 

$

11,384

 

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.

27


 

Note 24. Subsequent Event

On April 26, 2024, we entered into the fourth amendment to the 2021 Credit Agreement, which among other things, (i) reduced the applicable rate on the Term Loan B by 0.75%, to SOFR + 4.25%, (ii) set the 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.

Other than the foregoing, the material terms of the 2021 Credit Agreement remain unchanged.

 

28


 

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. Similarly, statements that describe our business strategy, outlook, objectives, plans, initiatives, 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:

general economic uncertainty in key global markets and a worsening of global economic conditions;
travel industry disruptions;
the impact of our overall level of indebtedness, as well as our financial covenants, on our operational and financial flexibility;
seasonality of our businesses;
unanticipated delays and cost overruns of our capital projects, and our ability to achieve established financial and strategic goals for such projects;
the importance of key members of our account teams to our business relationships;
our ability to manage our business and continue our growth if we lose any of our key personnel;
the competitive nature of the industries in which we operate;
our dependence on large exhibition event clients;
adverse effects of show rotation on our periodic results and operating margins;
transportation disruptions and increases in transportation costs;
natural disasters, weather conditions, accidents, and other catastrophic events;
our exposure to labor cost increases and work stoppages related to unionized employees;
our multi-employer pension plan funding obligations;
our ability to successfully integrate and achieve established financial and strategic goals from acquisitions;
our exposure to cybersecurity attacks and threats;
our exposure to currency exchange rate fluctuations;
liabilities relating to prior and discontinued operations;
sufficiency and cost of insurance coverage; and
compliance with laws governing the storage, collection, handling, and transfer of personal data and our exposure to legal claims and fines for data breaches or improper handling of such data.

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.”

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.

29


 

Results of Operations

Financial Highlights

 

 

 

Three Months Ended

 

 

 

 

 

 

March 31,

 

 

 

 

(in thousands, except per share data)

 

2024

 

 

2023

 

 

%
Change

 

Total revenue

 

$

273,497

 

 

$

260,791

 

 

 

4.9

%

Net loss attributable to Viad

 

$

(25,117

)

 

$

(20,869

)

 

 

(20.4

)%

Segment operating loss(1)

 

$

(8,473

)

 

$

(5,528

)

 

 

(53.3

)%

Diluted loss per common share from continuing operations attributable to Viad common stockholders

 

$

(1.29

)

 

$

(1.10

)

 

 

(17.3

)%

 

 

(1)
Refer to Note 23 Segment Information of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for a reconciliation of the non-GAAP financial measure, segment operating income (loss), to the most directly comparable GAAP measure.

Three months ended March 31, 2024 compared with the three months ended March 31, 2023

Total revenue increased $12.7 million during the three months ended March 31, 2024 due to increased revenue at GES of $8.1 million and increased revenue at Pursuit of $4.6 million.
Net loss attributable to Viad increased $4.2 million during the three months ended March 31, 2024, primarily reflecting a higher segment operating loss at Pursuit and higher income tax expense of $1.5 million.
Segment operating loss increased $2.9 million during the three months ended March 31, 2024, primarily due to a $4.7 million higher segment operating loss at Pursuit, offset in part by $1.8 million higher segment operating income at GES.

Analysis of Revenue and Operating Results by Reportable Segment

Pursuit

The following table presents a comparison of Pursuit’s reported revenue and segment operating loss for the three months ended March 31, 2024 and 2023:

 

 

 

Three Months Ended

 

 

 

 

 

 

March 31,

 

 

 

 

(in thousands)

 

2024

 

 

2023

 

 

%
Change

 

Revenue(1):

 

 

 

 

 

 

 

 

 

Pursuit:

 

 

 

 

 

 

 

 

 

Attractions

 

$

22,980

 

 

$

19,004

 

 

 

20.9

%

Hospitality

 

 

11,580

 

 

 

11,203

 

 

 

3.4

%

Transportation

 

 

1,928

 

 

 

1,973

 

 

 

(2.3

)%

Other

 

 

743

 

 

 

483

 

 

 

53.8

%

Total Pursuit

 

$

37,231

 

 

$

32,663

 

 

 

14.0

%

 

 

 

 

 

 

 

 

 

 

Segment operating loss(2):

 

 

 

 

 

 

 

 

 

Total Pursuit

 

$

(23,831

)

 

$

(19,112

)

 

 

(24.7

)%

 

(1)
Revenue by line of business does not agree to Note 2 – Revenue and Related Contract Costs and Contract Liabilities of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) as the amounts in the above table include product revenue from food and beverage and retail operations within each line of business.
(2)
Refer to Note 23 Segment Information of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for a reconciliation of the non-GAAP financial measure, segment operating income (loss), to the most directly comparable GAAP measure.

30


 

Three months ended March 31, 2024 compared with the three months ended March 31, 2023

Pursuit revenue increased $4.6 million driven primarily by an increase in attractions revenue of $4.0 million due to a 10.4% increase in the number of visitors at our year-round attractions as well as higher revenue per attraction visitor of 9.5%. Our Sky Lagoon attraction in Iceland had particularly strong demand with increased revenue of $3.6 million. FlyOver Chicago opened on March 1, 2024 and contributed revenue of $0.8 million.

Pursuit segment operating loss increased $4.7 million from the prior year period primarily due an increase in operating costs to support higher business volume during the three months ended March 31, 2024, as well as start-up costs to open the new FlyOver Chicago attraction, offset in part by the increase in revenue.

Performance Measures

We use the following key business metrics to evaluate the performance of Pursuit’s attractions business:

Number of visitors. The number of visitors allows us to assess the volume of tickets sold at each attraction during the period.
Revenue per attraction visitor. Revenue per attraction visitor is calculated as total attractions revenue divided by the total number of visitors at all Pursuit attractions during the period. Total attractions revenue includes ticket sales and ancillary revenue generated by attractions, such as food and beverage and retail revenue. Total attractions revenue per visitor measures the total spend per visitor that attraction properties are able to capture, which is important to the profitability of the attractions business.
Effective ticket price. Effective ticket price is calculated as revenue from the sale of attraction tickets divided by the total number of visitors at all comparable Pursuit attractions during the period.

We use the following key business metrics, common in the hospitality industry, to evaluate Pursuit’s hospitality business:

Revenue per Available Room (“RevPAR”). RevPAR is calculated as total rooms revenue divided by the total number of room nights available for all comparable Pursuit hospitality properties during the period. Total rooms revenue does not include non-rooms revenue, which consists of ancillary revenue generated by hospitality properties, such as food and beverage and retail revenue. RevPAR measures the period-over-period change in rooms revenue per available room for comparable hospitality properties. RevPAR is affected by average daily rate and occupancy, which have different implications on profitability.
Average Daily Rate (“ADR”). ADR is calculated as total rooms revenue divided by the total number of room nights sold for all comparable Pursuit hospitality properties during the period. ADR is used to assess the pricing levels that the hospitality properties are able to realize. Increases in ADR lead to increases in rooms revenue with no substantial effect on variable costs, therefore having a greater impact on margins than increases in occupancy.
Occupancy. Occupancy is calculated as the total number of room nights sold divided by the total number of room nights available for all comparable Pursuit hospitality properties during the period. Occupancy measures the utilization of the available capacity at the hospitality properties. Increases in occupancy result in increases in rooms revenue and additional variable operating costs (including housekeeping services, utilities, and room amenity costs), as well as increases in ancillary non-rooms revenue (including food and beverage and retail revenue).

The following table provides Pursuit’s key performance indicators:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

March 31, 2024

 

 

March 31, 2023

 

 

% Change

 

 

 

As
Reported

 

 

New Experiences(1)

 

 

Same-Store(2)

 

 

As
Reported

 

 

New Experiences(1)

 

 

FX Impact(3)

 

 

Same-Store(2)

 

 

As
Reported

 

 

Same-Store(2)

 

Attractions Key Performance Indicators:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of visitors

 

 

451,808

 

 

 

35,660

 

 

 

416,148

 

 

 

409,136

 

 

 

 

 

 

 

 

 

409,136

 

 

 

10.4

%

 

 

1.7

%

Ticket revenue (in thousands)

 

$

17,805

 

 

$

667

 

 

$

17,137

 

 

$

14,261

 

 

$

 

 

$

(253

)

 

$

14,514

 

 

 

24.9

%

 

 

18.1

%

Effective ticket price

 

$

39.41

 

 

$

18.72

 

 

$

41.18

 

 

$

34.86

 

 

$

 

 

$

 

 

$

35.47

 

 

 

13.1

%

 

 

16.1

%

Attractions revenue (in thousands)

 

$

22,980

 

 

$

761

 

 

$

22,219

 

 

$

19,004

 

 

$

 

 

$

(323

)

 

$

19,328

 

 

 

20.9

%

 

 

15.0

%

Revenue per attraction visitor

 

$

50.86

 

 

$

21.35

 

 

$

53.39

 

 

$

46.45

 

 

$

 

 

$

 

 

$

47.24

 

 

 

9.5

%

 

 

13.0

%

Hospitality Key Performance Indicators:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Room nights available

 

 

117,310

 

 

 

 

 

 

117,310

 

 

 

115,421

 

 

 

 

 

 

 

 

 

115,421

 

 

 

1.6

%

 

 

1.6

%

Rooms revenue (in thousands)

 

$

7,604

 

 

$

 

 

$

7,604

 

 

$

7,590

 

 

$

 

 

$

(20

)

 

$

7,610

 

 

 

0.2

%

 

 

(0.1

)%

RevPAR

 

$

64.82

 

 

$

 

 

$

64.82

 

 

$

65.76

 

 

$

 

 

$

 

 

$

65.94

 

 

 

(1.4

)%

 

 

(1.7

)%

Occupancy

 

 

57.7

%

 

 

 

 

 

57.7

%

 

 

59.5

%

 

 

 

 

 

 

 

 

59.5

%

 

 

(1.8

)%

 

 

(1.8

)%

ADR

 

$

112.40

 

 

$

 

 

$

112.40

 

 

$

110.48

 

 

$

 

 

$

 

 

$

110.78

 

 

 

1.7

%

 

 

1.5

%

Hospitality revenue (in thousands)

 

$

11,580

 

 

$

 

 

$

11,580

 

 

$

11,203

 

 

$

 

 

$

(27

)

 

$

11,230

 

 

 

3.4

%

 

 

3.1

%

 

(1)
New experiences include FlyOver Chicago (opened March 1, 2024).
(2)
Same-Store metrics include only attractions and lodging properties that Pursuit operated at full capacity, considering seasonal closures, for the entirety of both periods presented. For experiences located outside the United States, financial metric comparisons to the prior year are expressed on a constant U.S. dollar basis.

31


 

(3)
Foreign exchange rate variance effects (or “FX Impact”) represents the adjustments necessary to express prior financial metrics on a constant U.S. dollar basis, using the current year quarterly average exchange rates for previous periods to eliminate the impact of changes in exchange rates for same-store Pursuit experiences located outside of the United States.

Attractions. The increase in number of attractions visitors during the three months ended March 31, 2024 was primarily driven by higher visitation to Sky Lagoon in Iceland and the opening of FlyOver Chicago on March 1, 2024. The increase in same-store effective ticket price during the three months ended March 31, 2024 was driven primarily by revenue management efforts.

Attractions ticket revenue on a same-store basis increased $2.6 million on a 1.7% increase in visitors and a 16.1% increase in effective ticket price during the three months ended March 31, 2024.

Hospitality. The decrease in RevPAR during the three months ended March 31, 2024 was primarily driven by lower occupancy due to unfavorable weather and ski conditions in Jasper that impacted destination demand for that region, offset in part by an increase in ADR.

During the three months ended March 31, 2024, rooms revenue on a same-store basis remained flat despite unfavorable weather.

GES

The following table presents a comparison of GES’ reported revenue and segment operating income during the three months ended March 31, 2024 and 2023:

 

 

Three Months Ended

 

 

 

 

 

 

March 31,

 

 

 

 

(in thousands)

 

2024

 

 

2023

 

 

%
Change

 

Revenue:

 

 

 

 

 

 

 

 

 

GES:

 

 

 

 

 

 

 

 

 

Spiro

 

$

61,248

 

 

$

60,362

 

 

 

1.5

%

GES Exhibitions

 

 

175,840

 

 

 

169,497

 

 

 

3.7

%

Intersegment eliminations

 

 

(822

)

 

 

(1,731

)

 

 

52.5

%

Total GES

 

$

236,266

 

 

$

228,128

 

 

 

3.6

%

Segment operating income (1):

 

 

 

 

 

 

 

 

 

GES:

 

 

 

 

 

 

 

 

 

Spiro

 

$

4,001

 

 

$

3,174

 

 

 

26.1

%

GES Exhibitions

 

 

11,357

 

 

 

10,410

 

 

 

9.1

%

Total GES

 

$

15,358

 

 

$

13,584

 

 

 

13.1

%

 

(1)
Refer to Note 23 Segment Information of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for a reconciliation of the non-GAAP financial measure, segment operating income (loss), to the most directly comparable GAAP measure.

Three months ended March 31, 2024 compared with the three months ended March 31, 2023

Spiro revenue increased $0.9 million primarily due to strong spending from existing and new clients obtained during 2024, offset in part by a reduction of approximately $3 million due to the timing of major non-annual shows.

GES Exhibitions revenue increased $6.3 million, primarily due to larger show sizes, including same-show revenue growth of 6.1%, offset in part by a reduction of approximately $1 million due to the timing of major non-annual shows.

Spiro segment operating income increased $0.8 million primarily due to higher revenue.

GES Exhibitions segment operating income increased $0.9 million, primarily due to higher revenue.

32


 

Other Expenses

 

 

 

Three Months Ended

 

 

 

 

 

 

March 31,

 

 

 

 

(in thousands)

 

2024

 

 

2023

 

 

% Change

 

Corporate activities

 

$

4,433

 

 

$

3,165

 

 

 

40.1

%

Interest expense, net

 

$

11,845

 

 

$

12,249

 

 

 

(3.3

)%

Other expense, net

 

$

438

 

 

$

531

 

 

 

(17.5

)%

Restructuring charges

 

$

116

 

 

$

453

 

 

 

(74.4

)%

Income tax expense (benefit)

 

$

887

 

 

$

(578

)

 

**

 

Loss from discontinued operations

 

$

(67

)

 

$

(58

)

 

 

(15.5

)%

 

** Change is greater than +/- 100%.

Corporate Activities – The increase in corporate activities is primarily due to increased consulting costs.

Income Tax Expense – The effective tax rate was a negative 3.5% for the three months ended March 31, 2024 and a positive 2.6% for three months ended March 31, 2023. The effective rates differed from the 21% federal rate as we do not recognize a tax benefit on losses in the United States and other European countries where we have a valuation allowance. For the three months ended March 31, 2024, we also recorded a $1.1 million benefit for the release of the valuation allowance recorded on the UK tax loss carryforwards, offset by a $0.5 million expense to record estimated withholding taxes associated with the repatriation of Sky Lagoon earnings and a valuation allowance against the tax credit generated from this withholding tax. During the three months March 31, 2023, we released a valuation allowance of $2.1 million that was recorded on deferred tax assets associated with certain separate states, which more than offset taxes due in jurisdictions without a valuation allowance.

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:

 

 

March 31,

 

 

December 31,

 

(in thousands)

 

2024

 

 

2023

 

Unrestricted cash and cash equivalents(1)

 

$

48,799

 

 

$

52,704

 

Available capacity on Revolving Credit Facility(2)

 

 

88,432

 

 

 

108,040

 

Total available liquidity

 

$

137,231

 

 

$

160,744

 

 

(1)
As of March 31, 2024, we held $47.6 million of our cash and cash equivalents outside of the United States.
(2)
As of March 31, 2024, the available capacity includes our total Revolving Credit Facility size of $170 million less $75.9 million of outstanding borrowings and $5.7 million in outstanding letters of credit issued under the Revolving Credit Facility. As of December 31, 2023, the available capacity includes our total Revolving Credit Facility size of $170 million less $57.0 million of outstanding borrowings and $5.0 million in outstanding letters of credit issued under the Revolving Credit Facility.

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 three months ended March 31, 2024, net cash used in operating activities was $7.5 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

33


 

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 March 31, 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 Agreement, which among other things, (i) reduced the applicable rate on the Term Loan B by 0.75%, to SOFR + 4.25%, (ii) set the 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. Refer to Note 25 – Subsequent Event of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for additional information.

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 March 31, 2024, we have planned capital expenditures of approximately $60 million to $70 million for the next 12 months, including approximately $20 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.

Cash Flows

Operating Activities

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Net loss

 

$

(26,243

)

 

$

(21,390

)

Depreciation and amortization

 

 

13,320

 

 

 

12,475

 

Deferred income taxes

 

 

799

 

 

 

(2,304

)

Loss from discontinued operations

 

 

67

 

 

 

58

 

Restructuring charges

 

 

116

 

 

 

453

 

Gains on dispositions of property and other assets

 

 

(5

)

 

 

(58

)

Share-based compensation expense

 

 

3,107

 

 

 

3,065

 

Other non-cash items, net

 

 

2,927

 

 

 

1,331

 

Changes in operating assets and liabilities

 

 

(1,631

)

 

 

16,439

 

Net cash provided by (used in) operating activities

 

$

(7,543

)

 

$

10,069

 

Net cash provided by (used in) operating activities decreased $17.6 million primarily due to outflows due to changes in working capital and a higher segment operating loss at Pursuit.

34


 

Investing Activities

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Capital expenditures

 

$

(20,721

)

 

$

(11,384

)

Cash paid for acquisitions, net

 

 

 

 

 

(41

)

Proceeds from dispositions of property and other assets

 

 

5

 

 

 

66

 

Net cash used in investing activities

 

$

(20,716

)

 

$

(11,359

)

Net cash used in investing activities increased $9.4 million primarily due to an increase in capital expenditures in 2024.

Financing Activities

 

 

 

Three Months Ended

 

 

 

March 31,

 

(in thousands)

 

2024

 

 

2023

 

Proceeds from borrowings

 

$

154,243

 

 

$

1,819

 

Payments on debt and finance obligations

 

 

(127,964

)

 

 

(5,749

)

Dividends paid on preferred stock

 

 

 

 

 

(1,950

)

Contributions from noncontrolling interest

 

 

149

 

 

 

 

Payments of debt issuance costs

 

 

(51

)

 

 

(200

)

Payment of payroll taxes on stock-based compensation through shares withheld or repurchased

 

 

(996

)

 

 

(412

)

Net cash provided by (used in) financing activities

 

$

25,381

 

 

$

(6,492

)

The change in net cash (used in) provided by financing activities of $31.9 million was primarily due to net debt borrowings of $26.3 million during the three months ended March 31, 2024 compared to net debt payments of $3.9 million during the three months ended March 31, 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 March 31, 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.

Impact of Recent Accounting Pronouncements

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.

Non-GAAP Measure

In addition to disclosing financial results that are determined in accordance with GAAP, we also disclose segment operating income (loss) as a non-GAAP financial measure. Our use of segment operating income (loss) is supplemental to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. As not all companies use identical calculations, segment operating income (loss) may not be comparable to similarly titled measures used by other companies. We believe that our use of segment operating income (loss) provides useful information to investors regarding our results of operations for trending, analyzing, and benchmarking our performance and the value of our business.

“Segment operating income (loss)” is “net income (loss) attributable to Viad” before income (loss) from discontinued operations, corporate activities, net interest expense, income taxes, restructuring charges, impairment charges, and certain other corporate expenses and charges that are not allocated to the reportable segments, and the reduction for income (loss) attributable to noncontrolling interests. Segment operating income (loss) is used to measure the profit and performance of our operating segments to facilitate period-to-period comparisons. Refer to Note 23 – Segment Information of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of

35


 

this Form 10-Q) for a reconciliation of segment operating income (loss) to income (loss) from continuing operations before income taxes.

We believe segment operating income (loss) is a useful operating metric as it eliminates potential variations arising from taxes, debt service costs, impairment charges, restructuring charges, the reduction of income (loss) attributable to non-controlling interests, and the effects of discontinued operations, resulting in an additional measure considered to be indicative of our ongoing operations and segment performance. Although we use segment operating income (loss) to assess the performance of our business, the use of this measure is limited because this measure does not consider material costs, expenses, and other items necessary to operate, or resulting from, our business. As segment operating income (loss) does not consider these items, net income (loss) attributable to Viad should be considered as an important measure of financial performance because it provides a more complete measure of our performance.

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 $42.8 million as of March 31, 2024 and $35.3 million as of December 31, 2023. We recorded an unrealized foreign currency translation loss in other comprehensive loss of $7.5 million during the three months ended March 31, 2024 and an unrealized foreign currency translation gain of $1.2 million during the three months ended March 31, 2023.

For purposes of consolidation, revenue, 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 March 31, 2024, we had long-term contractual liabilities that were denominated in nonfunctional currencies of $46.8 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 March 31, 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.

36


 

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 March 31, 2024. Based on this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, 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 three months ended March 31, 2024.

37


 

PART II - OTHER INFORMATION

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

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 March 31, 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 of
Shares Purchased

 

 

Average Price
Paid
Per Share

 

 

Total Number of
Shares
Purchased
as Part of
Publicly
Announced Plans or
Programs

 

 

Maximum Number
of Shares
That May Yet Be
Purchased
Under the Plans
or Programs

 

January 1, 2024 - January 31, 2024

 

 

 

 

$

 

 

 

 

 

 

546,283

 

February 1, 2024 - February 29, 2024

 

 

 

 

$

 

 

 

 

 

 

546,283

 

March 1, 2024 - March 31, 2024

 

 

 

 

$

 

 

 

 

 

 

546,283

 

Total

 

 

 

 

$

 

 

 

 

 

 

546,283

 

 

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 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 March 31, 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.

38


 

Item 6. Exhibits

 

Incorporated by Reference

Exhibit

Number

Exhibit Description

Form

Period

Ending

Exhibit

Filing Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

8-K

 

 

 

3

 

12/9/2013

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.1

 

 

 

Fourth Amendment, dated April 26, 2024, to the Credit Agreement, dated as of July 30, 2021, among Viad Corp, Bank of America, N.A., and the lenders and letter of credit issuers party thereto from time to time.

 

 

 

 

8-K

 

 

 

 

 

 

10.1

 

 

 

 

4/29/2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.2

 

* +

 

Form of Performance Stock Unit Agreement pursuant to the 2017 Viad Corp Omnibus Incentive Plan.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101.SCH

 

****

 

Inline XBRL Taxonomy Extension Schema Document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101.CAL

 

****

 

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101.LAB

 

****

 

Inline XBRL Taxonomy Extension Label Linkbase Document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101.PRE

 

****

 

Inline XBRL Taxonomy Extension Presentation Linkbase Document

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101.DEF

 

****

 

Inline XBRL Taxonomy Extension Definition Linkbase Document.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

104

***

Cover Page Interactive Data File

 

 

 

 

 

 

 

 

 

*

 

Filed herewith.

**

 

Furnished herewith.

***

 

The Inline XBRL Instance Document and Cover Page Interactive Data File do not appear in the Interactive Data File because their XBRL tags are embedded within the Inline XBRL document.

****

 

Submitted electronically herewith.

+

 

Management contract or compensation plan or arrangement.

 

 

39


 

SIGNATURES

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.

 

 

 

 

VIAD CORP

 

 

 

(Registrant)

 

 

 

 

 

 

May 3, 2024

 

 

By:

 

/s/ Leslie S. Striedel

(Date)

 

 

 

 

Leslie S. Striedel

 

 

 

 

 

Chief Accounting Officer and Duly Authorized Officer

 

 

 

 

 

 

 

40