Viad Corp (NYSE:VVI) Q2 2017 Earnings Conference Call - Final Transcript

Jul 27, 2017 • 05:00 pm ET

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Viad Corp (NYSE:VVI) Q2 2017 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Welcome to the Viad Corp Second Quarter Earnings Conference Call. At this time, all participants will be in a listen-only mode. We will have a question-and-answer session towards the end. [Operator Instructions]. This call is being recorded. If you have any objections, you may disconnect.

At this point, I'd like to introduce Ms. Carrie Long. And ma'am you may now begin.

Executive
Carrie Long

Thank you, and good afternoon and thank you for all of us for joining us on Viad's 2017 second quarter earnings conference call. During the call, you'll be hearing from Steve Moster, Viad's President and CEO and Ellen Ingersoll, our Chief Financial Officer. Certain statements made during the call which are not historical facts, may constitute forward-looking statements. Information concerning business and other risk factors that could cause actual results to materially differ from those in the forward-looking statements can be found in Viad's Annual and Quarterly Reports filed with the filed with the SEC.

We'll be referring to certain non-GAAP measures during the call today and important disclosures regarding these measures can be found in the table two of the earnings press release, which is available on our website at www.viad.com.

With that, I'll introduce Steve Moster.

Executive
Steve Moster

Thank you for joining us on today's call. Viad delivered strong second quarter results with better than expected growth at both business units. Our consolidated revenue increased 12.3% year-over-year and our income per share before other items grew 17.3%, surpassing the high end of our prior guidance range by $0.23. We continue to see strength in key metrics like same-store growth at GES and visitation and RevPAR growth at Pursuit.

GES delivered stronger than expected revenue growth of about 12%, with its adjusted segment EBITDA margin expanding to 12.5%. GES's adjusted operating income came in about $3.5 million better than our prior guidance, reflecting broad based strength across the business. Our base same share revenue in the US grew about by a larger than expected 7.5%.

We also saw better than expected growth from our major non-annual events, with positive show rotation of about $14 million in revenue versus our expectation of about $10 million. Revenue from short-term bookings remained strong, and we continue to see new business wins internationally. We're benefiting from healthy industry fundamentals, and our actions to position GES as the preferred global full service provider for live events.

Our acquisition of ON Services is tracking in line with expectations. The integration is going well and our investment thesis in this leading audio-visual service provider is proving to be sound. As we have commented in the past, this acquisition gives us important scale in the $2 billion US audio-visual event production market and provides both revenue synergies from cross-selling and cost synergies from in-sourcing AV equipment that would otherwise need to be sub-hired from a third-party. During the second quarter, we successfully completed our largest in-sourcing event to-date, the American Neurological Association's annual meeting. Our in-house AV team had serviced this complex event prior to the acquisition of ON