# Pursuit Attractions & Hospitality, Inc.: Form 10-Q for the period ended Sep 30, 2024

- Company: [Pursuit Attractions & Hospitality, Inc.](/companies/prsu.md) (CIK 884219)
- Form: 10-Q
- Filed: 2024-11-07
- Accepted by EDGAR: Nov 7, 2024, 22:14 ET
- Period: 2024-09-30
- Accession: 0000950170-24-123522
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/884219/000095017024123522/vvi-20240930.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/884219/000095017024123522/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-09-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-07-01 to 2024-09-30 | $455.7m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Revenue | 9 months, 2024-01-01 to 2024-09-30 | $1.11bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Operating income | 3 months, 2024-07-01 to 2024-09-30 | $92.5m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2024-01-01 to 2024-09-30 | $137.5m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-07-01 to 2024-09-30 | $11.4m | us-gaap:InterestExpense |
| Interest expense | 9 months, 2024-01-01 to 2024-09-30 | $35.9m | us-gaap:InterestExpense |
| Income tax | 3 months, 2024-07-01 to 2024-09-30 | $10.5m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2024-01-01 to 2024-09-30 | $17.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-07-01 to 2024-09-30 | $48.6m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2024-01-01 to 2024-09-30 | $52.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-07-01 to 2024-09-30 | $1.65 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 9 months, 2024-01-01 to 2024-09-30 | $1.67 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-07-01 to 2024-09-30 | $1.68 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 9 months, 2024-01-01 to 2024-09-30 | $1.69 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-07-01 to 2024-09-30 | 21,615,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2024-01-01 to 2024-09-30 | 21,517,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2024-01-01 to 2024-09-30 | $133.1m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-07-01 to 2024-09-30 | $14.9m | us-gaap:PaymentsToAcquireProductiveAssets |
| Capital expenditure | 9 months, 2024-01-01 to 2024-09-30 | $52.8m | us-gaap:PaymentsToAcquireProductiveAssets |
| Cash and equivalents | at 2024-09-30 | $64.6m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-09-30 | $309.6m | us-gaap:AssetsCurrent |
| Total assets | at 2024-09-30 | $1.20bn | us-gaap:Assets |
| Current liabilities | at 2024-09-30 | $307.7m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-09-30 | $869.2m | us-gaap:Liabilities |
| Long-term debt | at 2024-09-30 | $326.3m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2024-09-30 | $96.8m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 38,083 characters.

### Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words, and variations of words, such as “aim,” “anticipate,” “believe,” “could,” “deliver,” “estimate,” “expect,” “intend,” “may,” “might,” “outlook,” “plan,” “potential,” “seek,” “target,” “will,” and similar expressions are intended to identify our forward-looking statements. Such forward-looking statements include those that address activities, events or developments that Viad or its management believes or anticipates may occur in the future, including all statements regarding the expected timing of the closing of the GES transaction, the use of proceeds of the transaction, potential benefits of the transaction, expectations concerning Pursuit’s opportunities and performance as a standalone public company, and the expected Chief Executive Officer transition in connection with the closing of the GES transaction. Similarly, statements that describe our go-forward business strategy, objectives, plans, intentions, or goals also are forward-looking statements. These forward-looking statements are not historical facts and are subject to a host of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those in the forward-looking statements.

Important factors that could cause actual results to differ materially from those described in our forward-looking statements include, but are not limited to, the following:

- the pending sale of our GES business may not be completed in the timeframe or on the terms we anticipate (or at all);
- we may not realize the full strategic, financial, operational and other benefits that are expected to result from the pending sale of our GES business;
- 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.”

### Recent Developments

#### Sale of GES Business

On October 20, 2024, we entered into a definitive agreement to sell our GES business to Truelink Capital for $535 million. The purchase price is subject to customary adjustments for cash, indebtedness, working capital and transaction expenses, and will be paid in cash. Of the total cash consideration, $25 million will be deferred for one year following the transaction closing date and is contingent only on the passage of time. The transaction is expected to close by the end of 2024, subject to regulatory approvals and customary closing conditions.

#### Jasper Wildfires

On July 22, 2024, Jasper National Park was closed and evacuated due to wildfire activity, and a wildfire entered the Jasper townsite on July 24, 2024. All of Pursuit’s hotels and attractions in and near the Jasper townsite, as well as our Pyramid Lake Lodge, Miette Mountain Cabins, and Maligne Lake Cruise were not reached by the wildfire and remain intact except for Pursuit’s Wilderness Kitchen, a restaurant and retail operation located about three miles outside the town of Jasper. The town of Jasper re-opened to residents and local businesses on August 16, 2024. All of Pursuit’s hotels in Jasper are open with the exception of Pyramid Lake Lodge, which sustained superficial damage to areas of the roof and to the exterior facade.

Pursuit’s Columbia Icefield Glacier Adventure and Skywalk re-opened on August 9, 2024. Maligne Lake Road re-opened on October 12, 2024, after the peak summer season. Due to this road closure, the Maligne Lake Cruises did not reopen during the remainder of the 2024 season.

During the three months ended September 30, 2024, we received $4.7 million in insurance proceeds as a partial settlement. During October 2024, we received additional partial settlement payments of approximately $1.5 million. We are currently working with our insurance carriers to determine the extent of potential recoveries from our policies. Assessment of the full value of the loss is ongoing.

#### Jasper SkyTram

On June 26, 2024, we entered into an agreement to acquire the Jasper SkyTram attraction in Jasper National Park. All conditions precedent to the closing of the Jasper SkyTram acquisition have yet to be satisfied and have been delayed to an unknown extent by the Jasper wildfires as noted above.

### Seasonality

Pursuit’s peak activity occurs during the summer months. During 2023, 79% of Pursuit’s revenue was earned in the second and third quarters.

GES’ live event activity can vary significantly from quarter to quarter and year to year depending on the frequency and timing of shows. Some shows are not held annually and some shift between quarters.

### Results of Operations

### Financial Highlights

*(in thousands, except per share data)*

|  | Three Months Ended September 30, 2024 | 2023 | % Change | Nine Months Ended September 30, 2024 | 2023 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Total revenue | $455,704 | $365,899 | 24.5% | $1,107,739 | $947,001 | 17.0% |
| Net income attributable to Viad | $48,615 | $41,271 | 17.8% | $52,809 | $31,363 | 68.4% |
| Diluted income per common share from continuing operations attributable to Viad common stockholders | $1.65 | $1.44 | 14.6% | $1.64 | $0.96 | 70.8% |

31

### Three months ended September 30, 2024 compared with the three months ended September 30, 2023

- **Total revenue** increased $89.8 million during the three months ended September 30, 2024 due to increased revenue at GES of $94.5 million, offset in part by decreased revenue at Pursuit of $4.7 million.
- **Net income attributable to Viad** increased $7.3 million during the three months ended September 30, 2024, primarily reflecting higher segment operating income at GES of $22.0 million, offset in part by: (i) impairment charges of $6.1 million of which $5.5 million was related to the facility lease termination of FlyOver Canada Toronto and $0.6 million was related to intangible assets of Pursuit’s Wilderness Kitchen, which was lost in the Jasper wildfires, (ii) lower segment operating income at Pursuit of $5.5 million, and (iii) higher corporate activities of $4.2 million, primarily due to transaction-related costs including consulting, accounting, and legal costs incurred related to the pending sale of the GES business.

### Nine months ended September 30, 2024 compared with the nine months ended September 30, 2023

- **Total revenue** increased $160.7 million during the nine months ended September 30, 2024 due to increased revenue at GES of $148.1 million and increased revenue at Pursuit of $12.6 million.
- **Net income attributable to Viad** increased $21.4 million during the nine months ended September 30, 2024, primarily reflecting higher segment operating income at GES of $40.9 million, offset in part by: (i) lower segment operating income at Pursuit of $7.4 million, (ii) higher corporate activities of $7.4 million primarily due to transaction-related costs including consulting, accounting, and legal costs incurred related to the pending sale of the GES business, and (iii) impairment charges of $6.1 million as discussed above.

### Analysis of Revenue and Operating Results by Reportable Segment

### Pursuit

The following table presents a comparison of Pursuit’s reported revenue and segment operating income for the three and nine months ended September 30, 2024 and 2023:

*(in thousands)*

| Revenue (1): Pursuit: | Three Months Ended September 30, 2024 | 2023 | % Change | Nine Months Ended September 30, 2024 | 2023 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Attractions | $97,222 | $95,820 | 1.5% | $176,623 | $162,850 | 8.5% |
| Hospitality | 79,059 | 84,345 | (6.3)% | 131,186 | 131,984 | (0.6)% |
| Transportation | 5,002 | 5,560 | (10.0)% | 10,311 | 10,974 | (6.0)% |
| Other | 974 | 1,215 | (19.8)% | 2,569 | 2,269 | 13.2% |
| Total Pursuit | $182,257 | $186,940 | (2.5)% | $320,689 | $308,077 | 4.1% |
| **Segment operating income:** |  |  |  |  |  |  |
| Total Pursuit | $75,903 | $81,375 | (6.7)% | $64,710 | $72,074 | (10.2)% |

(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.

### Three months ended September 30, 2024 compared with the three months ended September 30, 2023

**Pursuit revenue** decreased $4.7 million driven primarily by a decrease in hospitality revenue of $5.3 million due to a 13.6% decrease in revenue per available room as a result of fewer room nights sold due to the Jasper wildfires, offset in part by an increase in attractions revenue of $1.4 million due to higher revenue per attraction visitor of 4.2%. FlyOver Chicago opened on March 1, 2024 and contributed revenue of $3.3 million during the three months ended September 30, 2024.

**Pursuit segment operating income** decreased $5.5 million from the prior year period primarily due to decreased revenue as a result of the Jasper wildfires, higher depreciation expense of $2.4 million, as well as an increase in operating costs to support higher business volume during the three months ended September 30, 2024.

### Nine months ended September 30, 2024 compared with the nine months ended September 30, 2023

**Pursuit revenue** increased $12.6 million driven primarily by an increase in attractions revenue of $13.8 million due to a 4.6% increase in the number of visitors as well as higher revenue per attraction visitor of 3.6%. Our Sky Lagoon attraction in Iceland had particularly strong demand with increased revenue of $7.5 million. FlyOver Chicago contributed revenue of $6.4 million during its first seven months of operations commencing on March 1, 2024.

**Pursuit segment operating income** decreased $7.4 million from the prior year period primarily due to the Jasper wildfires and higher depreciation expense of $4.5 million, an increase in operating costs to support higher business volume during the nine months ended September 30, 2024, as well as start-up costs to open the FlyOver Chicago attraction, offset in part by an increase in revenue.

### Performance Measures

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

- **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:

| Attractions Key Performance Indicators: | Three Months Ended September 30, 2024 As Reported | New Experiences(1) | Same-Store(2) | Three Months Ended September 30, 2023 As Reported | New Experiences(1) | FX Impact(3) | Same-Store(2) | % Change As Reported | Same-Store(2) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Number of visitors | 1,624,384 | 122,918 | 1,152,300 | 1,668,203 | — | — | 1,127,575 | (2.6)% | 2.2% |
| Ticket revenue (in thousands) | $75,330 | $3,144 | $58,543 | $71,741 | $— | $1,230 | $50,465 | 5.0% | 16.0% |
| Effective ticket price | $46.37 | $25.58 | $50.81 | $43.01 | $— | $— | $44.76 | 7.8% | 13.5% |
| Attractions revenue (in thousands) | $97,222 | $3,290 | $75,340 | $95,820 | $— | $1,631 | $65,973 | 1.5% | 14.2% |
| Revenue per attraction visitor | $59.85 | $26.77 | $65.38 | $57.44 | $— | $— | $58.51 | 4.2% | 11.7% |
| **Hospitality Key Performance Indicators:** |  |  |  |  |  |  |  |  |  |
| Room nights available | 202,162 | — | 125,434 | 202,356 | — | — | 125,700 | (0.1)% | (0.2)% |
| Rooms revenue (in thousands) | $42,020 | $— | $33,271 | $48,674 | $— | $452 | $30,673 | (13.7)% | 8.5% |
| RevPAR | $207.85 | $— | $265.25 | $240.54 | $— | $— | $244.02 | (13.6)% | 8.7% |
| Occupancy | 70.4% | — | 87.1% | 89.6% | — | — | 87.4% | (19.2)% | (0.3)% |
| ADR | $295.42 | $— | $304.46 | $268.49 | $— | $— | $279.08 | 10.0% | 9.1% |
| Hospitality revenue (in thousands) | $79,059 | $— | $69,195 | $84,345 | $— | $585 | $63,295 | (6.3)% | 9.3% |

33

| Attractions Key Performance Indicators: | Nine Months Ended September 30, 2024 As Reported | New Experiences(1) | Same-Store(2) | Nine Months Ended September 30, 2023 As Reported | New Experiences(1) | FX Impact(3) | Same-Store(2) | % Change As Reported | Same-Store(2) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Number of visitors | 3,130,570 | 260,180 | 2,521,224 | 2,991,656 | — | — | 2,451,028 | 4.6% | 2.9% |
| Ticket revenue (in thousands) | $136,842 | $5,952 | $117,246 | $122,545 | $— | $1,555 | $100,945 | 11.7% | 16.1% |
| Effective ticket price | $43.71 | $22.88 | $46.50 | $40.96 | $— | $— | $41.18 | 6.7% | 12.9% |
| Attractions revenue (in thousands) | $176,623 | $6,396 | $151,635 | $162,850 | $— | $2,087 | $132,547 | 8.5% | 14.4% |
| Revenue per attraction visitor | $56.42 | $24.58 | $60.14 | $54.43 | $— | $— | $54.08 | 3.6% | 11.2% |
| **Hospitality Key Performance Indicators:** |  |  |  |  |  |  |  |  |  |
| Room nights available | 483,700 | — | 406,972 | 481,121 | — | — | 404,465 | 0.5% | 0.6% |
| Rooms revenue (in thousands) | $74,202 | $— | $65,453 | $78,370 | $— | $726 | $60,094 | (5.3)% | 8.9% |
| RevPAR | $153.41 | $— | $160.83 | $162.89 | $— | $— | $148.58 | (5.8)% | 8.2% |
| Occupancy | 67.0% | — | 71.5% | 75.0% | — | — | 71.6% | (8.0)% | (0.1)% |
| ADR | $229.08 | $— | $224.96 | $217.09 | $— | $— | $207.49 | 5.5% | 8.4% |
| Hospitality revenue (in thousands) | $131,186 | $— | $121,322 | $131,984 | $— | $944 | $110,575 | (0.6)% | 9.7% |

(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. Attractions and lodging properties that were temporarily closed due the Jasper wildfire are excluded. For experiences located outside the United States, financial metric comparisons to the prior year are expressed on a constant U.S. dollar basis. The individual amounts do not sum across to the same-store metrics.

(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 decrease in number of attractions visitors during the three months ended September 30, 2024 was primarily driven by decreased visitation at the Maligne Lake Cruise, Glacier Adventure, and the Columbia Icefield Skywalk attractions, which were temporarily closed during the peak 2024 season as a result of the Jasper wildfires. The increase in the number of attraction visitors during the nine months ended September 30, 2024 was primarily driven by higher visitation at FlyOver Chicago, which opened on March 1, 2024, and Sky Lagoon in Iceland. The increase in same-store effective ticket price during the three and nine months ended September 30, 2024 was driven primarily by revenue management efforts.

During the three months ended September 30, 2024, attractions ticket revenue on a same-store basis increased $8.1 million on a 2.2% increase in visitors and a 13.5% increase in effective ticket price. During the nine months ended September 30, 2024, attractions ticket revenue on a same-store basis increased $16.3 million on a 2.9% increase in visitors and a 12.9% increase in effective ticket price.

**Hospitality**. The decrease in RevPAR during the three and nine months ended September 30, 2024 was primarily driven by a decrease in rooms revenue as a result of the Jasper wildfires, offset in part by an increase in ADR.

During the three and nine months ended September 30, 2024, rooms revenue on a same-store basis increased 8.5% and 8.9%, respectively.

Refer to “–*Recent Developments”* above for additional information on the Jasper wildfires.

### GES

The following table presents a comparison of GES’ reported revenue and segment operating income during the three and nine months ended September 30, 2024 and 2023:

*(in thousands)*

| Revenue: GES: | Three Months Ended September 30, 2024 | 2023 | % Change | Nine Months Ended September 30, 2024 | 2023 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Spiro | $82,205 | $58,887 | 39.6% | $242,585 | $199,617 | 21.5% |
| GES Exhibitions | 194,806 | 122,115 | 59.5% | 551,623 | 446,146 | 23.6% |
| Intersegment eliminations | (3,564) | (2,043) | (74.4)% | (7,158) | (6,839) | (4.7)% |
| Total GES | $273,447 | $178,959 | 52.8% | $787,050 | $638,924 | 23.2% |
| **Segment operating income (loss):** |  |  |  |  |  |  |
| GES: |  |  |  |  |  |  |
| Spiro | $6,918 | $179 | \*\* | $28,436 | $11,632 | \*\* |
| GES Exhibitions | 9,714 | (5,529) | \*\* | 44,353 | 20,235 | \*\* |
| Total GES | $16,632 | $(5,350) | \*\* | $72,789 | $31,867 | \*\* |

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

### Three months ended September 30, 2024 compared with the three months ended September 30, 2023

**Spiro revenue** increased $23.3 million primarily due to strong client spending on major non-annual shows, which contributed $34 million of incremental revenue during the quarter, offset in part by the timing of shows.

**GES Exhibitions revenue** increased $72.7 million primarily due to an increase of approximately $71 million related to the timing of major non-annual shows and same-show revenue growth of $1.2 million, or 3.2%.

**Spiro segment operating income** increased $6.7 million primarily due to higher revenue.

**GES Exhibitions segment operating income** increased $15.2 million primarily due to higher revenue.

### Nine months ended September 30, 2024 compared with the nine months ended September 30, 2023

**Spiro revenue** increased $43.0 million primarily due to strong spending from existing and new clients obtained during 2024 and an increase of approximately $18 million due to the timing of major non-annual shows.

**GES Exhibitions revenue** increased $105.5 million primarily due to larger show sizes, including same-show revenue growth of 2.6% and an increase of approximately $72 million due to the timing of major non-annual shows.

**Spiro segment operating income** increased $16.8 million primarily due to higher revenue.

**GES Exhibitions segment operating income** increased $24.1 million, primarily due to higher revenue.

### Other Expenses

*(in thousands)*

|  | Three Months Ended September 30, 2024 | 2023 | % Change | Nine Months Ended September 30, 2024 | 2023 | % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Corporate activities | $7,757 | $3,579 | \*\* | $17,612 | $10,255 | 71.7% |
| Gain on sale of ON Services | $— | $— | \*\* | $— | $204 | (100.0)% |
| Interest expense, net | $11,428 | $12,476 | (8.4)% | $35,858 | $37,081 | (3.3)% |
| Other expense, net | $407 | $554 | (26.5)% | $1,287 | $1,533 | (16.0)% |
| Restructuring charges (recoveries) | $383 | $480 | (20.2)% | $(326) | $1,125 | \*\* |
| Impairment charges | $6,110 | $— | \*\* | $6,110 | $— | \*\* |
| Income tax expense | $10,509 | $9,173 | 14.6% | $17,247 | $13,623 | 26.6% |
| Income (loss) from discontinued operations | $(90) | $(654) | 86.2% | $743 | $(855) | \*\* |

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

**Corporate Activities –** The increase in corporate activities is primarily due to transaction-related costs including consulting, accounting, legal, and other costs incurred related to the pending sale of the GES business of approximately $4.3 million during the three months ended September 30, 2024 and $6.7 million during the nine months ended September 30, 2024. Refer to Note 24 – *Subsequent Events* of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for additional information.

**Impairment Charges –** On July 2, 2019, we executed a facility lease with the intent of building a new FlyOver attraction, FlyOver Canada Toronto. Effective August 6, 2024, this facility lease was terminated. During the three months ended September 30, 2024, we recorded an asset impairment charge of $5.5 million related to site-specific engineering plans developed for this attraction.

Additionally, during July 2024, a wildfire entered Jasper National Park and Pursuit’s Wilderness Kitchen was lost to the wildfire. During the three months ended September 30, 2024, we recorded an asset impairment charge of $3.8 million against the net book value of the Wilderness Kitchen. This loss is covered by our property insurance and accordingly, we recorded an offsetting impairment recovery of $3.8 million. We also recorded an impairment charge of $0.6 million against intangible assets (trademark and favorable lease) of the Wilderness Kitchen. See –*Recent Developments - Jasper Wildfires* above for additional information.

**Income Tax Expense –** The effective tax rate was 15.8% for the three months ended September 30, 2024, 15.6% for the three months ended September 30, 2023, 22.4% for the nine months ended September 30, 2024, and 25.3% for nine months ended September 30, 2023. The effective tax rates differed from the 21% federal rate as we do not recognize a tax benefit primarily on losses in the United States where we have a valuation allowance. During the three months ended September 30, 2024, we released a valuation allowance of $0.5 million recorded on deferred tax assets with certain separate states. During the nine months ended September 30, 2024, we also recorded a $1.1 million benefit for the release of the valuation allowance recorded on the United Kingdom’s tax loss carryforwards, offset by a $0.5 million expense during the first quarter of 2024 to record estimated withholding taxes associated with repatriating Sky Lagoon’s earnings and a valuation allowance against the tax credit generated from this withholding tax.

The effective tax rate for the nine months ended September 30, 2023 was further impacted by the release of a valuation allowance of $2.1 million during the first quarter of 2023 on deferred tax assets associated with certain separate state filings, which more than offset taxes due in jurisdictions without a valuation allowance.

### 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:

*(in thousands)*

|  | September 30, 2024 | December 31, 2023 |
| --- | ---: | ---: |
| Unrestricted cash and cash equivalents (1) | $64,552 | $52,704 |
| Available capacity on Revolving Credit Facility (2) | 164,288 | 108,040 |
| **Total available liquidity** | $228,840 | $160,744 |

(1) As of September 30, 2024, we held $54.6 million of our cash and cash equivalents outside of the United States.

(2) As of September 30, 2024, the available capacity includes our total Revolving Credit Facility size of $170 million less $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 nine months ended September 30, 2024, net cash provided by operating activities was $133.1 million.

Our short-term and long-term funding requirements include debt obligations, maintenance capital expenditures, working capital requirements, and potential acquisitions and strategic investments as we focus on scaling Pursuit with investments in high-return unforgettable, inspiring experiences through its Refresh, Build, Buy growth strategy. Our projected capital outlays can be adjusted for changes in the operating environment.

### Debt Obligations

Effective July 30, 2021, we entered into the 2021 Credit Facility. The 2021 Credit Facility provided for a $400 million Term Loan B, with a maturity date of July 30, 2028, and a $100 million Revolving Credit Facility, with a maturity date of July 30, 2026. The proceeds of the Term Loan B, net of $14.8 million in related fees, were used to repay the $327 million outstanding balance under our prior $450 million revolving credit facility and to provide for financial flexibility to fund future acquisitions and growth initiatives and for general corporate purposes. On January 4, 2023, we entered into an interest rate cap agreement with an effective date of January 31, 2023. The interest rate cap manages our exposure to interest rate increases on $300 million in borrowings under the 2021 Credit Facility or other SOFR-based borrowings. Refer to Note 12 – *Derivative* of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for additional information.

The Revolving Credit Facility carries financial covenants. As of September 30, 2024, we were in compliance with all covenants under the Revolving Credit Facility.

On March 28, 2023, we entered into the Second Amendment to the 2021 Credit Facility, which modified the interest coverage financial covenant. On October 6, 2023, we entered into the Third Amendment to the 2021 Credit Facility, which among other things, increased the principal amount of the Revolving Credit Facility by $70 million, bringing the total amount of revolving capacity to $170 million. In connection with the Third Amendment, we prepaid $70 million of the outstanding balance on our existing Term Loan B using $60 million from the Revolving Credit Facility and $10 million of cash from the Company’s balance sheet. The current credit spread on our Revolving Credit Facility is 2.00% lower than the credit spread on the Term Loan B, which was 5.00% for SOFR borrowings through April 25, 2024. On April 26, 2024, we entered into the Fourth Amendment to the 2021 Credit Facility, which among other things, (i) reduced the SOFR credit spread from 5.00% to 4.25% on the Term Loan B, (ii) set the additional credit spread adjustments to 0% on the Term Loan B and (iii) reset the 1% prepayment premium on any repricings of the Term Loan B for six months.

On June 28, 2024, we entered into the CDOR Transition Amendment to the 2021 Credit Facility to replace the CDOR with the CORRA for Canadian Dollar borrowings on our revolver. Additional credit spread adjustments apply to CORRA ranging from 0.29547% (for a one-month duration) up to 0.32138% for a three-month duration).

For additional information about our debt and finance obligations, refer to Note 11 – *Debt and Finance Obligations* of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q), all of which is incorporated by reference herein.

### Capital Expenditures

As of September 30, 2024, we have planned capital expenditures of approximately $70 million to $80 million for the next 12 months, including approximately $30 million to $40 million on select growth projects. We intend to continue making selective investments to advance Pursuit’s Refresh, Build, Buy growth strategy while maintaining a solid liquidity position.

### Other Obligations

We have additional obligations as part of our ordinary course of business, beyond those committed for debt obligations and capital expenditures. Refer to Note 20 – *Leases and Other* and Note 18 – *Pension and Postretirement Benefits* of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for further information. The expected timing of payments of our obligations is estimated based on current information. Timing of payments and actual amounts paid may be different, depending on changes to agreed-upon amounts for certain obligations.

### Sale of GES Business

On October 20, 2024, we entered into a definitive agreement to sell our GES business to Truelink Capital for $535 million. The purchase price is subject to customary adjustments for cash, indebtedness, working capital and transaction expenses, and will be paid in cash. Of the total cash consideration, $25 million will be deferred for one year following the transaction closing date and is contingent only on the passage of time. The transaction is expected to close by the end of 2024, subject to regulatory approvals and customary closing conditions.

Upon closing of the GES transaction, Pursuit will have a strong balance sheet to execute on its growth strategy. Cash proceeds from the transaction will be used to retire Viad’s 2021 Credit Facility, which comprises a Term Loan B (with $318 million outstanding, bearing interest at SOFR + 425 basis points) and a $170 million Revolving Credit Facility (of which zero was drawn as of September 30, 2024), and to accelerate Pursuit’s growth through its Refresh, Build, Buy growth strategy.

### Cash Flows

### Operating Activities

*(in thousands)*

|  | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Net income | $60,499 | $39,314 |
| Depreciation and amortization | 42,961 | 37,707 |
| Deferred income taxes | 17,331 | (923) |
| (Income) loss from discontinued operations | (743) | 855 |
| Restructuring (recoveries) charges | (326) | 1,125 |
| Impairment charges | 6,110 | — |
| Gains on dispositions of property and other assets | (102) | (99) |
| Share-based compensation expense | 10,500 | 8,647 |
| Other non-cash items, net | 5,347 | 4,423 |
| Changes in operating assets and liabilities, net | (8,481) | 25,505 |
| **Net cash provided by operating activities** | $133,096 | $116,554 |

Net cash provided by operating activities increased $16.5 million primarily due to higher segment operating income, offset in part by outflows due to changes in working capital. We recorded impairment charges of $6.1 million of which $5.5 million was related to the facility lease termination of FlyOver Canada Toronto and $0.6 million was related to intangible assets of Pursuit’s Wilderness Kitchen, which was lost in the Jasper wildfires.

### Investing Activities

*(in thousands)*

|  | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Capital expenditures | $(52,787) | $(54,739) |
| Proceeds from insurance | 3,823 | — |
| Cash paid for acquisitions, net | — | (41) |
| Proceeds from the sale of ON Services | — | 1,168 |
| Proceeds from dispositions of property and other assets | 121 | 108 |
| **Net cash used in investing activities** | $(48,843) | $(53,504) |

Net cash used in investing activities decreased $4.7 million primarily due to insurance proceeds received of $3.8 million for the Jasper wildfires.

### Financing Activities

*(in thousands)*

|  | Nine Months Ended September 30, 2024 | 2023 |
| --- | ---: | ---: |
| Proceeds from borrowings | $374,282 | $49,044 |
| Payments on debt and finance obligations | (439,163) | (54,235) |
| Dividends paid on preferred stock | (5,850) | (5,850) |
| Distributions to noncontrolling interest, net of contributions from noncontrolling interest | (3,151) | (1,126) |
| Payments of debt issuance costs | (773) | (226) |
| Payment of payroll taxes on stock-based compensation through shares withheld or repurchased | (1,133) | (508) |
| Other financing activities | (201) | — |
| **Net cash used in financing activities** | $(75,989) | $(12,901) |

Net cash used in financing activities increased $63.1 million was primarily due to net debt payments of $64.9 million during the nine months ended September 30, 2024 compared $5.2 million during the nine months ended September 30, 2023.

### Share Repurchases

Our Board of Directors previously authorized us to repurchase shares of our common stock from time to time at prevailing market prices. As of September 30, 2024, 546,283 shares remained available for repurchase under all prior authorizations. In March 2020, our Board of Directors suspended our share repurchase program. The Board of Directors’ authorization does not have an expiration date.

Additionally, we repurchased shares related to tax withholding requirements on vested restricted share-based awards.

### Critical Accounting Estimates

Refer to Part II, Item 7 – *Management’s Discussion and Analysis of Financial Condition and Results of Operations* of our 2023 Form 10-K for a discussion of our critical accounting estimates.

### 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.

## Market risk

As filed, 3,750 characters.

Our market risk exposure relates to fluctuations in interest rates and foreign exchange rates. Foreign exchange risk is the risk that fluctuating exchange rates will adversely affect our financial condition or results of operations. The foreign exchange risk is composed of both potential losses from the translation of foreign currency financial information and the remeasurement of foreign currency transactions. Interest rate risk is the risk that changing interest rates will adversely affect our financial position or results of operations.

Our foreign operations are primarily in Canada, the United Kingdom, Iceland, the Netherlands, the Middle East, and Germany. The functional currency of our foreign subsidiaries is their local currency. Accordingly, for purposes of consolidation, we translate the assets and liabilities of our foreign subsidiaries into U.S. dollars at the foreign exchange rates in effect at the balance sheet date. The unrealized gains or losses resulting from the translation of these foreign denominated assets and liabilities are included as a component of AOCI in the Condensed Consolidated Balance Sheets. As a result, significant fluctuations in foreign exchange rates relative to the U.S. dollar may result in material changes to our net equity position reported in the Condensed Consolidated Balance Sheets. We do not currently hedge our equity risk arising from the translation of foreign denominated assets and liabilities. We recorded cumulative unrealized foreign currency translation losses in stockholders’ equity of $41.9 million as of September 30, 2024 and $35.3 million as of December 31, 2023. We recorded an unrealized foreign currency translation loss in other comprehensive income (loss) of $6.6 million during the nine months ended September 30, 2024 and an unrealized foreign currency translation gain of $0.1 million during the nine months ended September 30, 2023.

For purposes of consolidation, revenue, costs and expenses, gains, and losses related to our foreign operations are translated into U.S. dollars at the average foreign exchange rates for the period. As a result, our consolidated results of operations are exposed to fluctuations in foreign exchange rates as revenue and segment operating income (loss) of our foreign operations, when translated, may vary from period to period, even when the functional currency amounts have not changed. Such fluctuations may adversely impact overall expected profitability and historical period-to-period comparisons. We do not currently hedge our net earnings exposure arising from the translation of our foreign revenue and segment operating income (loss).

We are exposed to foreign exchange transaction risk, as our foreign subsidiaries have certain loans and leases denominated in currencies other than the functional currency of the respective subsidiary. As of September 30, 2024, we had long-term contractual liabilities that were denominated in nonfunctional currencies of $46.7 million. As foreign exchange rates fluctuate, these liabilities are remeasured, and the corresponding adjustment is recorded in the Condensed Consolidated Statements of Operations. As of September 30, 2024 and December 31, 2023, we did not have any outstanding foreign currency forward contracts.

On January 4, 2023, we entered into an interest rate cap agreement with an effective date of January 31, 2023 to hedge cash flows on $300 million of our SOFR-based borrowings under the 2021 Credit Facility. Refer to Note 12 – *Derivative* of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for further information.

We are exposed to short-term and long-term interest rate risk on certain of our debt obligations.

## Controls and procedures

As filed, 1,142 characters.

We have established disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure. Management, together with our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. Based on this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2024.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter ended September 30, 2024.

## Risk factors

As filed, 7,483 characters.

Other than the following risk factor set forth below, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A – *Risk Factors* of our 2023 Form 10-K.

***We may not complete the sale of our GES business in the timeframe or on the terms we anticipate and, even if we do, we may not be able to realize the full strategic, financial, operational and other benefits that are expected to result from the transaction.*** On October 20, 2024, we entered into a definitive agreement to sell our GES business to Truelink Capital for $535 million (the “GES Sale”), subject to customary adjustments for cash, indebtedness, working capital and transaction expenses. The completion of the GES Sale and our receipt of the anticipated proceeds therefrom are subject to a number of risks and uncertainties, including: the satisfaction of closing conditions, including the parties obtaining the necessary regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals), and the occurrence of any event, change or other circumstance that could give rise to the termination of the sale agreement. These and other factors could impair our ability to complete the GES Sale in the timeframe and on the terms that we anticipate (or at all), which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Even if the GES Sale is completed, we may not be able to realize the full strategic, financial, operational and other benefits that are expected to result from the transaction, including the deployment of proceeds from the GES Sale to fund the growth of Pursuit as a standalone company through strategic pipeline investments. Our ability to realize the benefits of the GES Sale may be impacted by a number of factors, including, but not limited to: (i) the anticipated tax treatment of the transaction may not be obtained; (ii) the potential impact of unforeseen liabilities, future capital expenditures, revenues, costs, expenses, earnings, economic performance, indebtedness, financial condition and losses on the future prospects, business and management strategies for the management, expansion and growth of the Company after the consummation of the transaction; (iii) potential litigation relating to the transaction that could be instituted against the Company or its directors; (iv) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; (v) any negative effects of the announcement, pendency or consummation of the transaction on the market price of our common stock and on our operating results; (vi) risks associated with third party contracts containing consent and/or other provisions that may be triggered by the transaction; (vii) the risk that disruptions from the transaction will harm our business, including current plans and operations or by diverting management’s attention from the Company’s ongoing business operations; and (viii) our ability to retain and hire key personnel and uncertainties arising from leadership changes. In addition, such benefits may be delayed or less significant than anticipated. We cannot predict with certainty when the benefits expected from the GES Sale will occur or the extent to which they will be achieved, or when they will be achieved, if at all. A failure to realize these and other anticipated benefits of the GES Sale or effectively utilize the proceeds from the GES Sale could have a material adverse impact our business, financial condition and results of operations.

***Natural disasters, weather conditions, accidents, and other catastrophic events could negatively affect our business.*** The occurrence of catastrophic events ranging from natural disasters (such as hurricanes, fires, floods, volcanoes, and earthquakes), acts of war or terrorism, accidents involving our travel offerings or experiences, the effects of climate change, including any impact of global warming, or the prospect of these events could disrupt our business. Changes in climates may increase the frequency and intensity of adverse weather patterns and make certain destinations less desirable.

Such catastrophic events have had, and could in the future have, an adverse impact on Pursuit, which is heavily dependent on the ability and willingness of its guests to travel and/or visit our attractions. Pursuit guests tend to delay or postpone vacations if natural conditions differ from those that typically prevail at competing lodges, resorts, and attractions, and catastrophic events and heightened travel security measures instituted in response to such events could impede the guests’ ability to travel, and interrupt our business operations, including damaging our properties. For example, on July 22, 2024, Jasper National Park was closed and evacuated due to wildfire activity, and a wildfire entered the Jasper townsite on July 24, 2024. All of Pursuit’s hotels and attractions in and near the Jasper townsite, as well as our Pyramid Lake Lodge, Miette Mountain Cabins, and Maligne Lake Cruise were not reached by the wildfire and remain intact except for Pursuit’s Maligne Canyon Wilderness Kitchen, a restaurant and retail operation located about three miles outside the town of Jasper. We are currently working with our insurance carriers to determine the extent of potential recoveries from our policies. Assessment of the full value of the loss is ongoing. This incident had a negative effect on visitation to our lodging properties in Jasper National Park as well as the Maligne Lake Cruise and the Columbia Icefield attractions (including the Glacier Adventure and Columbia Icefield Skywalk) during the peak 2024 tourist season in Jasper National Park and, depending on the pace and success of recovery and restoration efforts, the incident could continue to have a negative effect on visitation to these properties in 2025. Also, the accident on July 18, 2020, at Pursuit’s Glacier Adventure attraction, which involved one of our off-road Ice Explorers and resulted in three fatalities and other serious injuries, may have a negative impact on our reputation and traveler willingness to visit that attraction in the future.

Such catastrophic events could also have a negative impact on GES, causing a cancellation or relocation of exhibitions and other events held in public venues or disrupt the services we provide to our customers at convention centers, exhibition halls, hotels, and other public venues. Such events could also have a negative impact on GES’ production facilities, preventing us from timely completing exhibit fabrication and other projects for customers. In addition, unfavorable media attention, or negative publicity, in the wake of any catastrophic event or accident could damage our reputation or reduce the demand for our services. If the conditions arising from such events persist or worsen, they could materially and adversely affect our results of operations and financial condition.

In addition to other information set forth in this report, careful consideration should be given to the factors discussed in Part I, Item 1A – *Risk Factors* and Part II, Item 7 – *Management’s Discussion and Analysis of Financial Condition and Results of Operations* of our 2023 Form 10-K, which could materially affect our business, financial condition, or future results.

Filed Nov 7, 2024.
Source: SEC EDGAR, the filing index for accession 0000950170-24-123522. Last ingested by Listed: Oct 24, 2026, 14:58 ET. No prices; not investment advice.