Q4 2020 Viad Corp Earnings Call

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Good day, ladies and gentlemen, and welcome to the V At Corp, fourth quarter 2020 earnings call.

This time, all participants are in a listen only mode.

<unk> will conduct a question and answer session and instructions will follow at that time.

If anyone should require assistance during the conference. Please press Star then zero on your Touchtone telephone.

I would not like to turn the conference over to your host Ms. Carrie long executive director of Finance and Investor Relations. Please go ahead ma'am.

Good afternoon.

Thank you for joining us for Gilead, 'twenty 'twenty fourth quarter and full year earnings conference call during.

During the call you'll hear from Steve Moster, our president and CEO and president of Ges.

David Barry our president of pursuit, 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 our annual quarterly and other current reports filed with the SEC.

During the call, we'll be referring to certain non-GAAP measures, including loss our income before other items and adjusted segment EBITDA.

Important disclosures regarding these measures, including reconciliations to net income or loss attributable to the yard can be found in table two of our earnings press release, which is available on our website at www dot.

Dot com with that I'd like to turn the call over to Steve.

Thank you Carrie and good afternoon, everyone. Thank you for joining us on today's call I Hope you are all staying safe and healthy.

On this afternoon's call, we'll discuss our business performance during the 2024th quarter and full year provide some insight into the gradual recovery of our industries and review our liquidity position.

David will provide business updates for pursuit shortly and after I will share business updates for Ges, Ellen who will cover liquidity in financial results towards the end of the call.

Before I turn the call over to David I'd like to thank our employees, who have worked incredibly hard during this challenging year.

We are proud of our team's performance and I appreciate their dedication to our businesses guests and clients.

For this upcoming year of recovery I'm confident that the strength drive creativity and flexibility of our team will once again help us succeed.

I'd like to turn the call over to David to discuss what's happening across pursuit David.

Thanks, Steve three really important words for pursuit resilience continuity and growth. So I want to start with a heartfelt. Thank you to all of our pursuit team members, our guests and our business partners around the world all of whom who have played a critical role in helping us navigate for many challenges of this past year against all odds we were successful in <unk>.

Levering another season of iconic unforgettable and inspiring experiences.

While maintaining a keen eye on our safety promise so long.

Let me begin the discussion of our business performance and outlook by covering our results from the fourth quarter of 2020.

As a reminder, as always a contrast from our EBITDA positive performance across all geographies in Q3, our last quarter for years, a seasonally slow quarter for pursuit as most of our operations in Alaska in Montana close for winter.

Dan from Jasper, we continue to see solid demand from the regional and local markets as international borders remain closed and visitation to Western Canada from long haul international markets with extremely limited.

We're particularly pleased with our lodging business and Jasper and during the fourth quarter to seven properties delivered nearly 27000 room nights and saw year over year increase in average daily rates multiple properties.

In aggregate the properties delivered positive fourth quarter EBITDA to being sold out status on many nights during the holidays and surpassing our expectations for the period.

And we've seen that positive trend continued through January.

We continue to welcome guests to the Banff gondola.

Number two ranked Mount Royal Hotel, the Hell can Avenue hotel and for the New farm in fire restaurants, which remains as the number two restaurants on tripadvisor.

Only through our own number one sky bistro.

Switching gears for flyover attraction flyover, Canada in Vancouver for New Halloween current comparable relaunched in October was met with positive guest reviews, driving a 50% increase from our internal forecast for October visitation and increased net promoter score 16 points from the prior month.

In Iceland that operating team proved once again, the resiliency and responsiveness working tirelessly to maximize operating hours and manage ride capacities in the face of constantly evolving restrictions from local health officials all the while remaining focused on an outstanding guest experience.

In sum, while our business results were far from what we originally envisioned we're proud of the resiliency of our business model and believe more than ever and the power of iconic experiences.

It was around the world growth could be occasion to whether the worst of the pandemic and supporting each other through these challenging times.

We're leveraging our food and beverage operations to deliver nearly 20000 community meals for the personal sacrifices made by many team members through temporary wage reductions.

<unk> did what was needed and more to manage through the challenges and prepare the organization for restart and continue our growth journey.

We're optimistic that the worst is behind us so let's take a few minutes to talk about what we're seeing in the year ahead.

We expect that while the world interest towards normalcy will continue to serve are largely local and regional demographics through the first half of 2021.

As we await the reopening of international borders.

That said, we firmly believe that pent up demand for travel and for pursuit experiences is very real.

Now more than ever we remain confident that as soon as our guests can move freely for demand for a safe destinations and experiences will return to pre pandemic levels sooner rather than later.

The iconic nature of pursuits experiences will put us at the forefront of the travel recovery.

Our view on pursuits recovery is encouraged by the fact that our locations.

Whether we're talking about Western Canada, Montana, or Alaska are all considered safe destination.

In Iceland, the government continues to make strides towards completing vaccinations and we're optimistic that this coupled with the acceleration of vaccines in the U K lends itself to a potentially stronger summer tourism season in Iceland once borders are open.

We look forward into 'twenty, one starting in Montana, we are encouraged by how the third quarter of 'twenty. One is pacing ahead relative to the same period and 19 reminder, Montana is primarily a drive market destination that is less reliant on long haul visitation and we're positioned very well for the coming season, we're seeing strength in rate growth for our cabins and RV site products.

Both of which are trending 10% to 15% ahead of the same period last year.

Now to Alaska, we expect a more gradual return to pre pandemic business volume as visitors are more relying on inbound air and cruise ship volume for Alaska.

Alaska is a true bucket list destination and it will benefit from pent up consumer demand for travel in the longer term.

We are disappointed to learn this week of the Canadian government ban on cruise ships over 100 passengers from its waters for the 'twenty, one season, which will have some impact on business in Alaska. However, we are seeing solid third quarter pacing at several of our Alaska based hotels and attractions.

In Banff and Jasper the province of Alberta has seen a steady decline in Covid cases, and we expect an easing of the restrictions put in place in December.

Earlier, I mentioned, the strength of the hotel business in Jasper and the fourth quarter and we're very pleased with how that has continued into the first quarter of the new year.

And I will stress it is still very early days in our sample size is small, but we remain enthusiastic about how we're trending for the first quarter of 'twenty one as recent weekend occupancies have eclipsed 90%.

In Vancouver, and compliance with provincial health restrictions, we closed flyover, Canada temporarily back in early December we remain closed through the government restrictions, but look forward to this short term closure orders coming to our net will.

We will be open soon and have a fantastic content calendar lined up for the 'twenty one year.

Back over to Iceland flyover, Iceland remains near the top of Tripadvisor is lift.

Things to do in Reykjavik and continues to deliver outstanding guest reviews.

When I start opens its borders to international guests.

Our attraction is well positioned for success.

Not unlike last year, our holiday period saw a significant volume of gift tickets sold the vast majority of which will be redeemed through the balance of the year.

And while it may feel like much of the world has been on pause we had pursued have been hard at work continuing our exciting growth journey. So let me give you an update on our two world class attractions, we're opening in 2021.

Starting first in Iceland, we're thrilled to be delivering sky lagoon in the second quarter recently featured in content as travelers Sky Lagoon is one of the largest tourism projects in Iceland history for you.

Turning to geothermal spa with a 260 foot infinity edge overlooking the Atlantic Ocean all within minutes of downtown Reykjavik.

As bond wellness related activities or an entity popular for locals and visitors alike. We think this experience is going to be a game changer in terms of Iceland based attractions.

Now back to the states. We're on track to open flyover Las Vegas in the second half of the year with an ideal location on Las Vegas Boulevard across the street from the park MGM in the T Mobile arena for <unk>.

Bringing the amazing story of the American West Vegas, filming is nearly complete and I can promise that the experience will be spectacular.

Also think that as a destination in Las Vegas will be one of the first places to benefit from pent up demand.

And we intend to capitalize on that timing with the opening of flyover Las Vegas in early fall of 2021.

In closing we're proud of the decisions, we've made and the actions we've taken to manage through an unprecedented 2020.

Just like to reiterate our thanks to the team members guests and partners around the world, who helped to make it happen.

Fight any short term impacts from pandemic related issues our outlook on the future is bright.

As we said for you last quarter at pursuit, we believe the collective memories is more important than collecting things and the power of iconic places will continue to benefit from perennial demand and we're poised and ready to go Steve back to you.

Thanks, David now switching over to Ges first and foremost I'd like to say, thank you to our GTS team members clients and partners for their commitment and support during this unprecedented here.

Our industry has been tested like never before and our team has risen to the challenge to drive structural changes that are freed up capital reduced our fixed costs and position Ges to flex up when revenue returns with a more variable cost structure and improve margin.

And a year that we would normally be bustling to service over 4000 global events, we were presented with an opportunity to accelerate some important strategic goals growth in our corporate business and margin improvement within our exhibition business.

Gaining share within the higher margin corporate client segment of the market has been a key part of our growth strategy at Ges.

The pandemic has created disruption in this highly fragmented market and open doors to new prospects as corporate clients search for stronger providers.

As an established and trusted partner in this space, we continue to expand our corporate client roster with the addition of new corporate clients like Boomy Adele company Tena, most tenex genomics Tetra Pak AAM General Hartz Mountain why LOE in the London stock exchange.

While many of our corporate clients are transitioned to fully virtual events for the first half of 2021, we are actively working with our clients on hybrid and face to face events that are scheduled to produce in the second half of this year.

On the exhibition side, we've used the temporary halt in the face to face event production to transform our largest business into a leaner more nimble competitor in the marketplace.

Through facility Rationalizations, we have reduced our annual fixed cost by about $10 million and we've scaled back our semi variable cost by about 70% in response to the current revenue environment.

This reduction largely came from reduced wages, which we expect to begin scaling back up gradually and on a more variable basis during 2021.

I'll elaborate a bit more on this in a moment, but first let me address some more permanent fixed cost reduction that we've achieved.

By expanding the range of our major warehouses to service existing markets, we were able to eliminate several high cost facilities.

In total we exited 21 leased facilities across our warehouse and office network during 2020, and we sold our San Diego area production warehouse.

These locations will now be serviced by other Ges network facilities.

Last month, we completed a sale leaseback transaction for our final Ges owned.

<unk> located in the Orlando market and received about $14 million in cash proceeds.

As additional leases come to their end.

At our other facilities, we will compare the value of our physical presence in those markets to the cost and potentially find additional opportunities to improve our cost structure.

Additionally, we've outsourced capital intensive services, which has enabled us to make further reduction to our facility footprint in the third quarter, we closed our U K based audio visual service business and will instead utilized third parties to support the AZ needs of our clients from the U K market.

In the fourth quarter, we entered into an agreement with a third party to outsource the management cleaning and storage of Io carpeting that we use at events.

This enables us to shrink our warehouse space that was previously dedicated to running in house carpet depots.

As we prepare for the gradual return of face to face events, we want to be able to scale, our labor cost up in a more variable manner based on demand for our services to accomplish that we partnered with a third party staffing agency epic personnel partners to rollout an industrywide flex talent pool program.

Through this program, we can offer flexible temporary work opportunities for experienced exhibition professionals starting in key locations where shows are expected to occur.

Thousands of experienced and talented tradeshow personnel lost employment due to the pandemic and with this program Ges along with other leading industry suppliers can offer a broader opportunity for flexible employment.

We will now be able to flex up and down our operations and client service employees around event activity as our returns and carefully manage our costs.

In terms of the revenue landscape, it's encouraging to see certain markets open and smaller scale events taking place.

And while the distribution of the vaccine has boosted confidence the exhibition scheduled for 2021 is still evolving as organisers attempt to gauge when it will be possible to safely hold face to face events.

The schedule is shifting to be more back half weighted this year with the potential of some improvement in the second quarter.

For the first quarter. There are some smaller events that are set to occur including fashion shows in Dallas and Orlando that said, we expect our revenue during the first quarter will remain near minimal levels due to the ongoing restrictions and concerns related to COVID-19.

For the second quarter, we could see some revenue improvement, but expect it will remain limited many events have already postponed or canceled given the level of uncertainty with the pandemic, while others are still navigating to determining how or if they can safely producing event.

The second half of the year is more promising reflecting organizers greater level of confidence that events will be able to occur. We are cautiously optimistic that bookings for the third and fourth quarter will continue to solidify with ongoing vaccination.

And given the pent up demand that we're seeing for face to face events. It is possible that the back half of this year could see a greater number of events in a typical year, although perhaps a smaller size than pre pandemic levels.

As we prepare for the recovery of our industry, we are maintaining our strong relationships with exhibition and corporate clients as we support them in new ways virtually and through some hybrid events.

Ges remains a global leader in exhibitions and a trusted experiential partner for the world's top brands.

For me this temporary period of hibernation, our ability to capture new business wins is a testament to the talent of our team and the superior experiential services that we provide.

In person event activity is restored ges will be ready to turn back on with more flexible cost structure and lower breakeven point due to the permanent changes that we've implemented.

I'm excited about the future for Ges as a stronger and more profitable business that will once again generate strong cash conversion for our shareholders now I will turn the call over to Ellen to discuss our liquidity and financial results in more detail Ellen.

Thanks, Steve as we look back on 2020, I'm extremely proud of what our team was able to accomplish during an unprecedented test here.

We took swift actions as the COVID-19, pandemic began developing and affecting our businesses Ges was impacted by face to face event cancellations and postponements and pursuit temporarily closed its properties in mid March through most of the second quarter of 2020, as well as experienced lower visitation data.

Continued border closures and other travel restrictions.

Our immediate focus is geographically reduce costs preserve cash and secure additional capital to strengthen our liquidity position and amend our credit facility to provide financial flexibility.

We had to make difficult, but necessary decisions to implement furloughs layoffs mandatory unpaid time off and salary reductions for all employees across the company.

All discretionary spending was eliminated.

We reduced maintenance capital expenditures for essential levels, while crossing spending on most growth projects.

We raised approximately $47 million from cash proceeds from the disposition of certain assets, including $25 million in may related to the cash surrender value for life insurance policies from.

$17 million from July from Lasalle, the Ges warehouse that we vacated in connection with our facility downsizing efforts.

In early August we announced that we secured a $180 million investment from the private equity firm Crestview partners, which made an initial investment of $135 million in newly issued perpetual convertible preferred stock with a delayed draw commitment of up to an additional $45 million.

So as these critical actions to bolster our financial position and protected our teacher with total available liquidity at the end of the year of approximately $260 million, including cash and revolver capacity and a delayed draw commitment from Crestview partners.

We ended the year with debt of $296 4 million, primarily on our revolving credit facility and cash of $39 5 million.

Our revolver debt matures in October 2023, and the longer term amendment that we secured in early August provides us with financial Covenant relief until the third quarter of 2022.

As a reminder, during the covenant waiver period, we are required to maintain minimum liquidity of $100 million.

As of December 31, 2020.

For 2021st quarter was a challenging quarter for our businesses as the pandemic continues to impact our industry's cutting eliminated that activity for ges and hindering visitation during an already seasonally slow quarter for pursuit.

At Ges, we realized revenue of $18 7 million as we supported our clients primarily with virtual and hybrid accounts during the pandemic.

This was down approximately 93% from the 2019 fourth quarter.

Largely as a result of the face to face event cancellations and postponements.

Can you suggested cagny, EBITDA, which excluded a noncash restructuring related inventory write off of $5 $3 million to transform the carpet depot to an outsourcing model.

With negative $22 $8 million.

At pursuit.

And just smaller year over year revenue decline of approximately 58%.

We were able to drive visitors from our local and regional markets for international travel remains restricted.

For seats fourth quarter revenue was $9 2 million.

And adjusted segment EBITDA was negative $7 4 million.

And net loss attributable to day AD was $50 5 million for the quarter.

And our net loss before other items was $42 8 million, which excludes restructuring related charges and traction startup costs and other nonrecurring expenses as applicable.

We continue to keep a sharp focus on maintaining a strong liquidity position during the fourth quarter.

Yes, making additional progress transforming its cost structure and pursue managing its costs closely.

In total our liquidity position decreased by approximately $50 million during the quarter, which included funding for prestige New Flyer for Las Vegas attraction and is scheduled to open in the third quarter.

We eliminate our operating cash outflow to approximately $38 million for the quarter.

Which is about $13 million per month.

Our capital expenditures totaled approximately $13 5 million and were mainly at pursuit for the flyover Las Vegas attraction.

Although we are not issuing financial guidance at this time I'd like to briefly comment on our liquidity and financial outlook.

We expect the 2021 first quarter, we'll continue to see minimal revenue from tes in a seasonally slow for pursuit with ongoing travel restrictions.

With that backdrop, we expect our operating cash burn to approximate 45% to $59 for the quarter.

We expect to spend about $15 million from capital projects, primarily on the continued development of pursuit flyover Las Vegas attraction.

Which will mostly be offset by proceeds of approximately $14 million received during January 2021 from the sale other ges warehouse located in the Orlando area.

With our total available liquidity at year end net approximately $260 million in the first quarter estimated outflows, we expect our pro forma liquidity position at the end of the 2021 first quarter to be approximately $210 million or more.

We believe that this position will provide sufficient financial flexibility and strength to endure the remaining pandemic impacts from making select growth investments at pursuit.

We expect that our cash burn will slow as we move through the second quarter for.

Pursuit will begin to enter its busier tourism season, and opened up new Sky lagoon attraction in Iceland with.

With continued rollout of Covid vaccines, we could see more pandemic related restrictions lift.

But even if we assume there is no improvement relative to what we are currently experiencing we expect sufficient liquidity above our bank required $100 million minimum level.

Moving into the third quarter, we expect to pursue will once again be cash flow positive and likely with a larger inflows in last year's third quarter with two new world class attractions online.

Additionally, our current level of contracted events at Ges, which includes the previously rescheduled for my next pound suggests that we could also see positive cash flow from Ges returned during the third quarter.

Of course, this largely depends on improvements in the pandemic landscape.

Without a doubt visibility remains challenging in this environment.

But the last year strengthen our team and we're ready to respond to shifting restrictions and pent up demand as we move through this year.

We are fortunate to have a solid liquidity position with the ability to selectively invest in compelling growth opportunities have pursued.

Including approximately $20 million typically flyover Las Vegas.

And minimal startup capital to complete skylake in for their plans for 2021 opening.

And we continue to evaluate other growth opportunities that align with prestige refresh build buy strategy that we can pursue when it makes sense from a liquidity perspective.

And with that I'll turn the call back over to Steve for some concluding remarks.

Thanks Ellen.

This year has clearly been extremely challenging for our industry businesses and employees.

That could quickly early in the year to make difficult decisions for the company to ensure that we could withstand the pandemic. Our leadership team remains focused on navigating the company through these unchartered waters to ensure that we make it safely for sure.

Although we are not on the other side of this trying environment, yet I can see light at the end of the tunnel and the bright future that we have ahead of us.

Uplifted by the progress made by <unk>.

The vaccinations and I'm hopeful that with increased distribution safety can be stored and restrictions can be lifted.

Our businesses are well positioned to persevere and recover as they have with previous downturns.

Pursuits iconic assets in World class hospitality services create inspiring and unforgettable experiences that cannot be replicated.

We believe that there will be pent up demand to travel and share remarkable experiences in the picture destination that pursuit is located in <unk>.

<unk> live face to face events provide a powerful and cost effective way to drive business growth from transacting business to building brand loyalty.

We believe that virtual events cannot replace the rich connections created through in person interactions and Ges can create the most meaningful experiences for marketers organizers and attendee.

We are eager to get back to building on the exciting growth success that we had prior to COVID-19, and are confident that our long term strategies for our businesses post pandemic will lead to strong shareholder value creation as proven over the past five years we.

We will continue to drive growth through reinvesting in high return <unk>.

Fresh build by projects at pursuit as well as improved profitability through a more flexible cost structure and emphasis on higher margin services at Ges.

We remain committed to delivering extraordinary experiences to our guests and our clients and to create long term value for our shareholders. Thank.

Thank you again to our hardworking and dedicated employees, who make all of this possible and thank you to our shareholders for your continued support and beyond and with that we'll open up the call for questions.

Thank you at this time I would like to inform everyone in order to ask a question you May press as Paul one on your telephone keypad again debt as the star one to ask a question.

We have your first question from Tyler <unk> from Janney. Your line is open.

Thank you good.

Good afternoon.

So two questions.

For me and I wanted to start on GDS, if I can.

Here in fee for commentary on that business for 2021, especially the second half for the year quite positive. So just wondering if you could tease that out a little bit more discuss.

What might be on the books right now for the second half for the year I know there were some bigger shows that were rescheduled for the second half of the year.

What's your confidence level in terms of some of those happening and then any other details you could provide just on the outlook for the third and the fourth quarter of 2021, and I think would be helpful.

Sure. Thanks, Tom good.

Good question so obviously.

We're seeing some postponements and cancellations.

The first half of the year, but the back half of the year has remained relatively consistent in some of those postponements were pushed into Q3 Q4.

No.

And one of them that I mentioned during my comments was mine Expo, which was pushed from 2020 into 2021.

So we feel pretty good about the number of events that we've had in the back half of the year.

Yes.

We do believe that there'll be a little bit smaller in nature in terms of their size and their relative from a number of shows we think is credit.

<unk>.

Slightly higher than what we've had in previous years in the back half of the year.

Okay, that's great that's great.

Good to hear and then in terms of the cost structure. Obviously, you guys have made a lot of progress you've made a lot of changes there.

Yes.

The flow through look like out of the gate at some of these events start to ramp back up and then ultimately.

Once things normalize what sort of margin.

Are you targeting in that business.

Yes.

Really pleased with the level of work that we've done in terms of the transformation.

Yes.

Typically the acquisition business.

I believe that.

We will have a lower breakeven point.

And in terms of total revenue I believe that.

Overall the business can reach.

Target that we've put out past that.

It will be more profitable than where we were a kind of a steady state.

Okay.

<unk>.

But what we see how that revenue rates back over time.

Okay.

Okay. Okay. That's very helpful. And then this is switch gears to pursue an income David I. Appreciate all the commentary that you gave I wanted to ask a little bit more specifically about summer 2021 bookings what the pace looks like right now and I'm also just interested.

Are you seeing does this mostly locals that are making some of these reservations from are you expecting.

Travel trade long haul international reservations in places like bands are you doing much marketing from the summer of 2021 or is most of what you have on the books more organic demand if you will.

Yes, let me answer that I'll try to follow the series of questions. So one we're happy to take any ones reservation that they would like to make it doesn't matter where they are from.

But we're seeing view into the future and I'll kind of go bye bye area I'm not going to give specific guidance on the pacing other than we're quite encouraged by what we see in Montana and its just very very very encouraging to see it.

Demand for our RV and Kevin product is very strong and so that's pacing ahead.

Without going into specifics across the whole geographies I can tell you specifically for that category, where probably 500000 ahead and revenue pace compared to this time last year. So the other is Alaska, many folks had to postpone their trip last summer and they're encouraged they're planning their trip.

Yes.

A large percentage of our population of folks that visit Alaska in their view theyre going to be through their vaccine programs by that point they are ready to travel.

The call center teams across pursuit or doing a phenomenal job because you can imagine Mr and Mrs. Smith are calling and they've moved their trip three times, but they're excited to come this summer that said that requires net borders.

Open and travel within the U S domestically will be fine, but the border between Canada and the U S. It would be helpful for it to open.

Iceland accelerates its vaccination program and the same with the UK, that's a natural travel corridor.

So we're cautiously optimistic there so a lot of wood to chop yet in terms of getting borders open and seeing that return to travel, particularly for 'twenty, two though it's exciting to see that energy because the focus and attention on the 22 year.

Again, we are quite encouraged by that as well and remember we're contracting with travel training to two years out three years out depending on the market.

Okay, and then from a marketing spend and trying to ramp up bookings.

Maggie maybe you want off from one of them, where you can pull the borders reopened to really step on the gas for better or maybe perhaps because there's so much pent up demand, perhaps you don't need to spend as much as you might otherwise would have to try to drive some of the bookings.

Yes, we're trying to be surgical to be honest in the sense that so right now we have a super productive campaign working for Alaska, which again travel from the lower 48, Alaska those planes will fly even if not all of the crew ship sale.

Planes will fly so we're encouraged by that and we're quite encouraged by Jasper and Jasper is a really interesting.

And a great acquisition for Us when we acquired day Mountain Park Lodge approved.

<unk>.

You don't have that controlling interest so the Jasper has been a real producer and we're seeing strong response to regional campaigns.

There as well so we're trying to be surgical and we're trying to follow the rhythm and pay attention to booking patterns and a variety of other things to keep interest and momentum moving well.

Web site visitation is strong consumer inquiries are strong call centers again doing a great job responding to guests that are working on planning for this summer. So many people have spent so much time at home.

They are ready to do something in the summer and Theyre excited about doing it.

Okay great.

A question probably for Ellen I think on the.

For the operating cash outflow for 30.

$38 million in the fourth quarter. The original guidance from 45 to 50 could you talk a little bit more about the Gulf War bear on the operating cash flow.

Yes, the operating cash flow was a bit lower it gets you a favorable working capital.

And we saw that we keep bringing in financing or.

Probably I think in line, which is why the cash.

Q1 net quantified.

He came in Iraq.

For Q4.

Okay.

GAAP how quickly.

Okay great.

Then just a last question here.

We talk about fixed income.

Seemingly every quarter, but just wondering if you could provide.

An update on M&A and then do you have any thoughts on what's out there what the pipeline looks like what the opportunities might be any change in the environment over the past couple of months as well any thoughts around those topics would be for would be helpful.

Yes, I think the.

Cause disruption in both of our industries.

That creates opportunity for us.

For the M&A pipeline perspective.

We've talked about before that.

The focus is continuing to scale pursuit and focus on our refresh build buy strategy, that's worked well for us over the years.

And we think that theres opportunities debt.

That will come our way over time, and so we're committed to that and we're balancing liquidity plus our ability to invest in our future.

And so we're encouraged by what we see.

That's total I think there Robert.

Okay very good that's a good place with Bob. Thank you very much for the detail I appreciate it.

Thanks.

We have your next question from Kartik Mehta from Northcoast Research Your line is open.

Thank you.

Steve I wanted to ask for 'twenty 'twenty one.

Mine Expo for Ya.

Dissipating any other show rotations positive or negative.

Good question projects there.

In 2020, we had for three non annual events that were scheduled to take place.

Fortunately Con Expo is able to take place in the early part of 2020.

The other two events mine Expo in Ics did not take place.

Mine Expo did postponed until this year same timeframe.

And.

Because of its for patients decided to cancel this or that.

And just hold our 2022, so there are smaller.

Pieces that rotates, but those are the three large ones.

Where they fall out for 'twenty one.

Yes.

What's the normalized revenue you would have anticipated from mine Expo I know here. The show is going to be a little bit smaller and you don't at this point, probably hard to tell what attendance and everything will be like but in a normal year, what mine Expo in terms of revenue generation.

Yes for us if we don't get into individual show economics right for for a bunch of reasons, but.

It's one of our.

Three largest non annual events, we talked about in 2020 that those three large annual eventually drive a $100 million of incremental revenue.

I would argue that mine Expo is one of the smaller of the three.

And so that gives you some.

Some guidance in terms of the scale of it.

And then just on the pursuit side, obviously, you talked a little bit on the Ges side in terms of margin to other companies positioned once the red.

For the return but on pursuit.

Have you been able to make some changes could you see pursued also follow a similar pattern for.

Margins could be better than they happened in the past or just the type of business pursued is that's not necessarily possible.

Well I think you look at it as anything is possible that the effort and energy that you put into them and we benefited from strong margin performance across pursued a net will rebuild itself our business returns and we get through this year.

Short term sort of pandemic effect, we do view the 'twenty two 'twenty three 'twenty for that we have a strong return to traditional margin levels.

We're encouraged by that and expect that the business.

The World is poised for an economic recovery and certainly for pursuit business is poised for a strong recovery. So we're enthusiastic about day.

Alright. Thank.

Thank you very much appreciate it.

Thanks for.

We have your next question from Barry Haimes from Sage asset management. Your line is open.

Thanks, so much for taking my question.

First one is.

On Capex.

John I think you gave the number for the first quarter, but if we look at 2021 full year could you tell us.

How much capex to finish the two projects.

And then worked for maintenance Capex number would be sort of just a feel for our full year Capex, let's first question. Thanks.

Sure the capital from flyover Las Vegas is about 29.

For 2000, Taiwan, Scott again minimal.

Paul the Capex is playing in to that line.

John.

Oh maintenance capex for that and Kevin.

Any guidance on net debt.

Okay.

That will be a typical percentage of revenue, which purpose statement and 47% and.

Personnel.

The first is from normally our revenue on those two right.

That's correct. That's correct and then proceed we will have other growth projects throughout the year as well from a capex perspective.

Okay.

Okay, Great that's very helpful and then.

Ges question.

You guys talked about how the second half is looking okay. So far.

But as we progressed through the year.

When do people actually have to make the decision how far in advance so sorry for kind of show lined up for July or August September October.

How far advanced as the call generally made on the part of the client.

Their decision really it does vary by client, but I think you're safe to assume within two to three months for that event, taking place they need to make a decision.

That's when the exhibitors will start spending money towards out of that and typically they want to make.

Make sure that that doesn't happen.

That top line to take place.

So would you say, it's about two to three months before the event takes place.

Okay, Great. That's helpful and then one other question.

Normally.

In terms of what percent of the exhibitors and what percentage of the attendees come from international versus domestic it do you have any sort of rough metric.

<unk> for that yes.

Yes, Barry can give you a for optics and again it varies by the marketplace for the industry that they're serving.

But it tends to be kind of 10% to 15%. Some will go significantly higher some are significantly lower and much more regional.

The 10% to 15% is.

Fair estimate for breast market.

Got it great and my last question is.

<unk>.

The issue of Kim.

The Canadians opening the border.

For the U S.

Hey, Kevin any indication as to what the criteria are.

As the COVID-19.

Or is it a total wildcard in terms of.

What they might decide when.

I think what's interesting Barry its a good question. So both governments the U S government the Canadian government work together I mean, we're massive trading partners between both countries.

Significant exchange of goods back and forth in transportation and so on so important to get the borders open at the same time I think everyone is being is it 10 or as they possibly can on the acceleration of vaccines.

We expect that North America will open first and I think that will be.

It'd be very helpful for us in the short term because obviously.

Obviously people will be traveling within the North American sphere, so lots of discussion going on I think we're well informed as to the progress and I think everyone's working to get things open as fast as they can safely.

Great. Thanks, very much for the input and lots of good luck I mean here.

Thanks, Greg Thank.

Thank you.

No.

We have for your next question from Steve O'hara from Sidoti and company. Your line is open.

Hi, Thanks for taking the question.

Thank you.

Hi.

Yes, maybe starting with Ges.

No.

I guess just on the channel.

Evolving structure.

Moving to more variable.

Cost structure can you just talk about.

Maybe the offset to that.

Down the road is there.

Our limit to if margins would've been ex under the old system, maybe there were the lowest net now it's kind of a.

P. Kevin obviously.

Maybe.

Not that.

That relevant right now, but I'm, just kind of wondering what the potential offsets for that change.

Yes, that's a good question.

What we've seen or what we're planning on that.

Yes.

Bob.

A pretty substantial margin improvement as revenue comes back.

We were fortunate.

Earlier, this week to be able to test it out.

An event in Orlando, where.

For some of the things I've mentioned in the past you had around outsourcing certain high cost services.

We were able to outsource those on this particular front, we're also able to implement for flexible labor.

That we've talked about.

And for some other automated processes that we've developed during the pandemic very happy with how they rolled out in the margin that we were able to see on that particular event. So it is encouraging as we go forward.

That.

The debt.

<unk> has taken place as we see something that's come back. So we're encouraged by it I don't think there is.

Downside is us being smart about what work, we do and work work we outsourced.

Okay.

And then just maybe on the overall landscape.

For that business, how you see that.

Evolving.

I mean.

Are you becoming.

Is it becoming more regional.

Where.

You've kind of kind of.

Maybe you and the bigger competitors have to kind of pick geographies and thats kind of the way it'll be for a while until.

Return or is it.

Because of the variable aspect you are still able to kind of.

Perfect.

Bid on things, even if youre not as strong in one region or other.

Yes.

We've talked about this before.

We will be able to serve the same market that we have in the past we made serviced them differently differently operationally, we'll do different things.

This doesn't really.

<unk>, Capex and where we can what geographies. We can compete so we're excited about it.

Got it.

Nothing will change from a geography perspective.

Okay. Okay.

And then maybe just as a follow.

Question can you just remind me what the.

Cash burn was in <unk> in terms of.

What you had and if you have a.

Much more solid pursuit potentially in them.

Maybe even GDS, if my Exco does happen.

How quickly do you get the sense that that happens is.

Is it kind of that two to three months window that you were talking about before.

Paul I'll, let Alan talk a little bit about.

Cash flow Q3, 2020 versus 'twenty 'twenty, one but.

In terms of.

Mine Expo occurring this isn't a assets only held every 40 years.

A major component of the buying process.

As companies look at it.

Some of the.

Mining equipment that is for sale for you of that so.

We have theres been strong participation.

Strong interest from the exhibitors EBIT in 2020 for only via that so.

So we think that.

There's a lot of interest in the event taking place.

Yes.

We believe that day, it will be ready for that to happen. This fall.

If you think about.

Yes for the Q.

Free cash burn was about $15 million.

And then on the guidance for Q3 that we're expecting for positive cash flow Q3, So we haven't given.

<unk> given guidance on a look back more of our.

Okay.

Alright, Thank you very much.

Thanks, Steve.

I am showing no further questions at this time I would now like to turn the conference back to Mr. Steve Moster, President and CEO, Sir Please continue.

Thanks Alexander.

Appreciate everybody's time and interest in the us and we look forward to talking to you at the end of next quarter.

Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Okay.

Okay.

Joe.

John.

Okay.

Sure.

Okay.