Viad Corp. (NYSE: VVI) reported Q1 EPS of ($0.42), $0.14 better than the analyst estimate of ($0.56). Revenue for the quarter came in at $306.01 million versus the consensus estimate of $298.15 million.

Highlights

• First quarter 2020 preliminary results were stronger than 2019 first quarter results due to positive show rotation at GES, partially offset by the impact of COVID-19
• March 31, 2020 cash of $130.5 million, debt of $440.6 million, and leverage ratio of 3.13x
• Significant actions taken to address the impact of COVID-19 and preserve liquidity

COVID-19 Business Impacts

Steve Moster, president and chief executive officer, commented, “The COVID-19 pandemic is having a material impact on our operations and financial performance, with live event and tourism activities largely shut down. As select areas of the global economy have begun to re-open, primarily at the discretion of local authorities, we are beginning to restart our business with enhanced health and safety protocols in place. On May 7th, we re-opened FlyOver Iceland, and we plan to begin re-opening other Pursuit experiences in June as restrictions are eased. However, exhibition and event activity has yet to resume.”

Moster continued, “Given the evolving, uncertain nature of COVID-19, it is impossible to predict how the pandemic will continue to impact the events industry and the broader travel market. Accordingly, we are unable to provide financial guidance at this time.”

Moster concluded, “I am very proud of how our team has responded to these unprecedented circumstances. We acted swiftly to protect the health and safety of our employees, clients, guests, and communities to help limit the spread of the virus, while also making difficult decisions to shutter operations and reduce staffing levels, amongst other actions to reduce costs. Our industries and our businesses have endured prior periods of disruption and we are determined to take the appropriate steps to help ensure we are able to weather this turbulent time.”

First Quarter 2020 Preliminary Results

Moster further commented, “Through the end of February, both GES and Pursuit were on pace for a strong first quarter. In early March, as a result of COVID-19 concerns, we began to see event postponements and cancellations at GES, as well as some cancelled bookings at Pursuit. This quickly escalated into the shut-down of event activity and tourism as government mandated closures and stay-at-home orders went more broadly into effect around the world.”

“Our focus will continue to be on cash flow as we manage through this challenging and uncertain time. As demand halted, we essentially placed our businesses into a state of hibernation to preserve cash. At Pursuit, we have begun to thoughtfully re-open our attractions and hotels as governmental restrictions are being lifted and new reservations are once again coming in. For GES, we are cautiously optimistic that, as governments lift restrictions, events in certain geographies will start to take place again during the third quarter and we stand ready to reactivate areas of that business when it makes sense to do so. I want to thank our teams for everything they are doing to support our businesses during this unprecedented time,” stated Moster.

“Based on the very difficult, yet necessary actions we have taken to reduce costs and preserve cash, and as we continue to collect accounts receivable, we anticipate that our cash outflow during the second quarter will approximate $40 million. This leaves us ample liquidity to withstand the near-term impacts of COVID-19. Additionally, we are in productive discussions with our lender group for longer-term covenant relief, as we evaluate options to help ensure we have adequate liquidity for the future,” said Moster.

For earnings history and earnings-related data on Viad Corp. (VVI) click here.