Q1 2022 Viad Corp Earnings Call

For a law.

Pursuit performed in line with our expectations and delivered record first quarter revenue driven by stronger demand for both our same store and new year round experiences.

Our net loss attributable to be at and our consolidated adjusted EBITDA, both improved by about $14 million.

Versus the 2021 first quarter.

We are pleased with our first quarter performance and encouraged by the continued recovery of our industry.

As shown on page eight of the presentation, we realized record first quarter revenue of $23 8 million at pursuit.

This represents an increase of $14 million from the 2021 first quarter and also far surpass the revenue amount generated in the pre pandemic 2019 first quarter.

Pursue same store revenue increased by $8 9 million from the 2021 first quarter, primarily due to stronger visitation at our Canadian experiences from let's say travel restrictions as well as our efforts to refresh our existing experiences and maximize revenue.

Our new Sky lagoon in flyover Las Vegas experiences that we opened during 2021 collectively contributed an incremental $5 $1 million of revenue during the quarter.

Pursuits overall, adjusted EBITDA was negative $11 5 million for the seasonally slow first quarter and increased as expected compared to the prior year.

Same store adjusted EBITDA loss increased by $2 1 million, primarily due to a $2 $8 million benefit received in 2021 from the Canadian government's emergency wage subsidy program. Additionally.

Additionally, we are building up our team to ensure that we are at the optimal staffing levels to deliver extraordinary experiences to our guests during a busier year.

The net adjusted EBITDA contribution for new experiences, which also includes the seasonally closed Goldman skybridge attraction was not meaningful during the seasonally slow first quarter as they continue to ramp up.

As we move into our peak summer season pursuits, EBITDA returned to positive and our EBITDA margin will improve as long haul international visitation returns and volume increases to our high margin attraction.

Now moving to page nine I'll review Ges's first quarter performance Ges realized total revenue of $153 6 million during the first quarter, which increased $134 4 million compared to the 2021 first quarter due to increased face to face live event activity and the return of large.

Scale events that were canceled or postponed into the first half of 2021.

The first two months of the quarter were challenged by the impact of the COVID-19 on Prime Varian, However activity accelerated in March and reached approximately 75% of the amount generated in the month of March 2019.

Ges adjusted EBITDA of $2 7 million improved by approximately $16 9 million versus the 2021 first quarter.

As a reminder, during the first quarter of 2021, we sold Ges's Orlando facility.

When adjusting to remove the $9 1 million gain that we recognized on that sale our year over year improvement in adjusted EBITDA at Ges was $26 million, which represents approximately 19% at the year over year revenue increase.

The strong flow through reflects the cost structure improvements that we've implemented during the past two years.

In connection with the reorganization of our operations to support the launch and growth expired, which Steve mentioned and we will discuss in more detail later in the call. We defined two new reportable segments within Ges Spiro and Ges exhibition.

Spyros first quarter revenue increased $30 8 million with an increase in adjusted EBITDA of $6 3 million as compared to the 2021 first quarter.

Ges exhibitions first quarter revenue increased $104 7 million with an increase in adjusted EBITDA of $10 7 million as compared to the 2021 first quarter.

Excluding the $9 $1 million facility gain I just discussed the year over year improvement in Ges Ges.

Ges exhibitions adjusted EBITDA was $19 8 million. These improvements primarily reflect the redemption of in person activity as well as the benefit of the cost structure reductions we've implemented.

Now turning to page 10, we ended the first quarter with total liquidity of approximately $145 million.

So $58 million in cash and cash equivalents and $87 million of capacity available on our revolving credit facility.

Our cash flow from operations during the quarter was an inflow of approximately $18 million, which was better than our prior guidance, primarily due to the faster than expected rebound of event activity at Ges. Our team did an excellent job closely managing our costs and working capital and maximizing our cash generation wherever.

Hospital during the quarter.

Our capital expenditures totaled about $13 million for the quarter our investments during the quarter were mainly at pursuit and included growth Capex for the Forest Park Hotel, our new 88 room hotel in Jasper that is expected to open in late June .

During the quarter, we paid cash dividends of approximately $2 million on our convertible preferred equity and made debt payments totaling $3 8 million.

Now moving to page 11 at March 31, our debt totaled approximately $474 million, including $398 million on our term loan b.

Financing lease obligations of approximately $66 million and approximately $9 million and other debt.

As we announced in March we amended the financial covenants applicable to our <unk>.

<unk> million dollars revolving credit facility to provide us with additional flexibility to the first quarter of 2023.

The revolver was Undrawn at March 31, 2022, however in early April we borrowed $15 million to help fund the cash acquisition of Glacier Raft company for a total purchase price of $26 5 million and David will comment more on that acquisition shortly.

We're in an excellent position to continue our growth journey with a strong liquidity financial flexibility and improving industry demand.

We are focused on investing in our exciting high return refresh build buy growth strategy at pursuit, including the Glacier <unk> company acquisition and the New Forest Park hotel build as well as the longer term build projects to expand our flyover attraction platform.

As our financial performance continues to recover we will have more capacity to invest and grow we will prioritize investments that are counter seasonal.

Or offer 12 months of profitability and are immediately accretive to our EBITDA.

We are actively evaluating high margin growth opportunities and have a strong pipeline of unforgettable inspiring experiences in iconic locations around the world.

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

David.

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Thanks Al and thank you all for joining us as Alan mentioned in her remarks, we're very pleased to report record 2022 first quarter revenue of pursuit.

Britain indicator for us it confirms our view the pent up demand for pursuits experiences is real and that we're well positioned for a strong peak operating season.

And these figures are referenced on page 13 of our presentation.

I'll talk more about the year ahead in a moment, but let me first share some details of a record first quarter revenue results, which can be summarized into three key areas of strength as we noted on page 14.

First is exceptional performance that two of pursuits, Marquis year round attractions in North America, the Banff gondola and fly over Canada in Vancouver BC.

Last quarter I shared with you some details of better exciting new night rice experience at the dance gondola and the positive impact it had in the fourth quarter. We're pleased to report that their success continued into Q1 and helped to drive our strong results.

For the first quarter Vance gondola welcomed over 74 guests visit up 32% from pre pandemic 2019.

Relative to 2019 effective ticket price increased 8% attraction revenue increase for a 2% and food and beverage in retail yields increased 24, and 16% respectively.

Knight rises a superb example of how programming and creating an experienced within an experienced can drive strong visitation and per cap spend.

Flavor, Canada rebounded strongly after being closed the first half of 21 and this rebound continued into Q1 of 22.

We welcomed over 75000 guests in the quarter and while this like 2019 and surpassed R 2022 expectations.

The next growth driver of our quarterly performance with a very strong guest demand for room nights that are year round lodging properties in Banff and Jasper National parks and in Whitefish, Montana.

In Banff room revenue increased to 147% year over year on a 90% increase in occupied rooms, and a 30% increase in average daily rate.

Our investment in the hotel F&B experience continues to pay dividend as food and beverage revenue per occupied room increased 29% year over year.

And Jasper you'll recall that last year, we reported very strong 2021 Q1 results from our collection of seven hotels.

Jafar continues to grow as this year, we're pleased to report a 20% year over year increase in room revenue, which is driven by a 14% increase in occupied rooms, and a 5% increase in average daily rates.

And in Montana.

Our only year round lodging property gross mountain Lodge, we saw strong performance with room revenue up 38% versus the pre pandemic 2019 first quarter and that was driven by through a 30% increase in occupied rooms, and a 7% increase in average daily rates.

So the third and probably most important driver of our early season success is the economic and guest experienced benefit from our continued investment in high margin year round attractions.

The two most notable being sky lagoon in Reykjavik, Iceland and flavor Las Vegas, located on Las Vegas Boulevard.

We're very pleased with how these investments are performing as guest awareness build guest feedback scores on Google and Tripadvisor remain high and visitation recovers in both Las Vegas and Iceland during.

During the first quarter Sky Lagoon and flavor Las Vegas contributed over 106000 guests visit representing 37%.

Pursuits total attraction visits for the quarter.

So we have an exciting view of the quarters ahead. So let me share our view on pacing for the balance of the fiscal year.

All leading indicators for pursuit are very positive on.

On page 15 of our presentation, you'll see that advance reservations for lodging properties are strong and pasting continues to exceed expectations <unk>.

Starting in band rooms rooms revenue is pacing well up 178% from the same time in 2021, an average daily rates are up 26%.

Candidates borders are wide open in pursuit is prepared to welcome international guests to the wonders of the Canadian Rockies.

We typically at this time of year see a lot of occupancy compression and that continues during the peak season in this market, which allows us to wrap.

Wrap up ADR and so with the border now open we expect this year will be no exception.

And Jasper we saw strong demand from local and regional guests in the prior year and its borders have now reopened.

We're anticipating another exceptional year of demand in one of Canada's most iconic national parks.

Rooms revenue pacing up 83% from 2021, an average daily rates are up 16% year over year.

Also I'm pleased to report that progress continues at great speed on the construction of our new 88 room property in Jasper The Forest Park Hotel.

We are on track to open in June of 2022.

In Montana, we're confident that the strong start we've experience will continue through the peak summer season.

Rooms revenue is pacing, 8% ahead of 2021, and we expect a record year and the Glacier Park collection.

Finally in Alaska, we continue to see strong year over year pacing on the heels of a successful 2021 year.

Room revenue is 3% ahead on strong right growth from prior.

These results exclude the Denali backcountry launched which is impacted short term by the park Service's decision to close that didn't know like Park road for repairs to this summer.

The Denali backcountry Lodge, which is located near the very end of the Denali Park Road deep inside Denali National Park will be open for the 22 season. Despite the road closure as we've converted the summer program to apply an experience.

With fewer overall visitors traveling on that and only park road in 2022. This unique situation creates a magical an intimate opportunity to see wildlife and this iconic setting so if you've been putting off that Alaska trip. This is the year to come and visit.

Alright, let's switch gears to our attractions business, we anticipate approximately 2.3 million visitors at our iconic locations attractions, including our latest additions Glacier rock company and West Glacier Montana.

Excluding Sky Lagoon, which opened in April 2021, and the Glacier rats company, which we recently acquired anticipated visitation across our iconic location attractions represents more than a 61% year over year increase from 21.

Sky Lagoon is poised to deliver a very healthy results in its first full year of operation and we anticipate that the attraction will capture a significant share of the roughly $1.5 million anticipated international guest arrivals to Iceland This year.

Guess have consistently given sky lagoon exceptional ratings and this strong level of guest satisfaction is firmly established the attraction is one of the premier things to do when visiting Iceland.

And finally, we're thrilled to welcome our newest attraction to pursue the glacier wrap company in West Glacier Montana.

We expect to add approximately 50000 annual attraction visits to pursue through this acquisition.

We completed our acquisition in early April and are already welcoming guests for a busy summer season.

The Glacier rafting company was founded in 1976 and is ideally located near the West entrance to Glacier National Park and is one of Montana's Premier rafting and guided fly fishing experiences on the Flathead River.

The acquisition also included the purchase of the company's lodging business, consisting of twenty-three cabins and lodging properties that are ideal destinations for families and weddings alike, and they're very complimentary to our existing base of lodging food and beverage in retail experiences in and around West Glacier.

We anticipate the glacier Ralph company will contribute between nine and $10 million of incremental revenue in 2022.

Alright, so let's spend a minute talking about our flyover attractions platform we.

Date, the total visitation to our flying right experiences in Vancouver, Reykjavik in Las Vegas will welcome more than 1.1 million guests in 2022.

Excluding fly over Las Vegas, which opened in September 21 anticipated Flyer visitation is expected to increase 116% year over year, driven by a compelling lineup of accelerating and content the reopening of the Canadian border and the return of long haul hesitation to Iceland.

Flavoured Las Vegas is steadily gained momentum since opening and with the ratings of $4 five out of five stars on Google and Tripadvisor. We're encouraged by recent trends in guest visitation as we entered peak tourism season in Las Vegas.

Earlier this year, we announced plans for fly over Chicago located on the iconic Navy Pier downtown Chicago and I'm pleased to report the planning and design is progressing and we're on track for a spring 2024 opening planning and permitting efforts remain underway for our fifth flyover location fly over Canada, Toronto located at the heart of it.

In the heart of downtown Toronto near the base of the C N tower and the entrance to the Rogers Center.

So before turning it back to Steve I'd like to touch on a few important areas in which we remain very focus for the year ahead and share with you. How we're actively working to mitigate some of the risks that you're all hearing about in the news.

First we view staffing and retention is the single most important factor to a successful 2022 operating results.

We began recruiting efforts much earlier this year and have been innovative and leveraging a multitude of new platforms and talent pools in order to adequately staffed or anticipated guest demand.

We review our hiring metrics, both daily and weekly at the senior team level and I can say with confidence that I'm optimistic with where we sit at this stage in the cycle.

And obviously success in hiring doesn't mean, much if you're not equally as successful and retention.

So we are heavily focused on team member engagement and in a good place as evidenced by our recent companywide survey results.

We will survey seasonal and year round colleagues four times throughout the year as we work to drive industry, leading team member engagement results.

It's essential that we listened to what our team members are saying that their experience and what they believe pursuit needs to do to be an employer of choice and best company to work for.

One item of particular importance to both our guests and our team members as our focus on sustainability diversity and inclusion and we're very pleased to release, our 2021 promised the police report on Earth Day. This report summarizes our initiatives in these critical areas and can be viewed it pursue collection dot com.

We've also taken several other actions based on team member feedback ranging from adjustments to starting wage rates annual wage increases implementation of other noncompensation related benefits in order to provide an outstanding experience for team members, who choose to work with us whether that's for a summer or for a career.

And as we navigate the season ahead, we're also keeping a kenai in an acute focused on margin. It's a key priority for our senior leaders in operating teams around the world.

Given some of the wage rate pressures I, just mentioned coupled with inflationary pressures on everything from fuel to Costa. Good you might assume that will be going backwards in terms of profit margin, we're not going to let that often and in fact, we anticipate the total adjusted EBITDA margin expansion to be north of 500 basis points here over a year from 2021.

We indicated to shareholders in our February earnings call that we would meet or exceed our 2019 EBITDA results.

Exceeding our 2019, EBITDA result, which today looks very probable will make 2022, the most successful year in pursuit history.

This forward momentum combined with the return of international visitation patterns and our strong focus on margin expansion bodes well for our future.

First as global travel markets reopen and international gas visitation return, we anticipate strong margin recovery as the pursuit business is built a scale with guest volume and that's particularly at our high margin attractions.

Certainly margins were impacted about 20, and 21 with the pandemic border closures and a guest mix. It was largely comprised of local and regional get.

This year, we anticipate much stronger demand from across North America, the UK in Western Europe from both our tour and travel and.

And consumer direct segments, which will contribute meaningfully to margin expansion over the prior year.

As we anticipate that visitation from Asia, and China in particular will remain somewhat muted. This year. We expect continued margin expansion in the years ahead of guest demand from these markets also returns the.

The second level, we used to mitigate inflationary risk is price and we're confident that the quality of our experiences the strength of our guests feedback scores and our continued focus on revenue maximization and dynamic pricing.

Allow us to take prices select areas, which obviously it goes a long way in mitigating inflationary cost pressures.

This is something we work on every single day always ensuring that the guest value proposition is intact, but also looking to ensure that we're priced appropriately not only at attractions in hotel rooms, but also throughout food and beverage in retail outlets around the world.

In closing, we're very excited with the strength of our Q1 results and where we sit with team member engagement and get satisfaction as we head into our peak operating season.

We anticipate gas demand to be high are encouraged by pacing data and are confident that we've taken the appropriate actions to staff sufficiently and retain talent.

We have a strong focus on team member engagement and will mitigate inflationary pressures as they come.

So I'll finish with a final point I am so incredibly proud of our operating in support services team. They have grit they have determination and it's all combined with a passion for delivering authentic hospitality around the world.

And we look forward to doing just that to delivering iconic unforgettable and inspiring experiences in the year ahead.

Steve back to you.

Thanks, David now I'd like to spend some time talking about G. S. As first quarter performance starting on page 21 of the presentation.

As Alan mentioned earlier G. S delivered much stronger results for the first quarter than we had previously anticipated due to a quicker than expected rebound in north American tradeshows, coupled with our proven lower cost structure.

So it's 2020, we think communicating to key themes to you regarding G s's business.

First is the transformation of G S into lines of business that focus on our specific customer segments, most notably show organize your customers for our G. S exhibition business, which accounted for 70 per cent of our 2019 G. S revenue in corporate market, our customers for our brand experience business, which accounted for.

For 30% of our 29th Th, Yes revenue.

Second key theme is the actions we talked to reduce our cost structure, primarily within G. S exhibition business in the U S, which is our largest trade show market.

Today's call dive deeper into the trends, we're seeing each of the two lines of business and illustrate how our actions to focus on key customer segments and reduce costs a benefit of the business let.

Let me start with our largest line of business G S exhibitions.

The quarter started with significant uncertainty as on the caller cases, where spiting in North America and Europe .

As a result G S exhibitions experienced near term cancellations and postponement of certain trade shows and we are scheduled to occur in the quarter. Despite.

Despite the cancellations and other headwinds caused by supply chain challenges Gis exhibitions performed well in the first quarter and delivered $111.8 million in revenue at $2 million in EBITDA with a significant acceleration of activity during March.

The primary drivers of our performance or a faster than expected recovery and the size and scale of trade shows and the improved cost structure in our exhibition business.

As shown on page 22 of the presentation, we have experienced steady growth over the past three quarters and the size of events taking place in.

In Q3, 2021 G. S U S trade shows where approximately 46% of their prior pre pandemic of current size on the same show basis.

This you ask the same show metric compares trade shows that occurred in the same city for both occurrences and represented between 30 and 50 per cent of the total exhibition revenue during each of the last three quarters.

In Q4, 2021 that same show comparison jumped to 67% and in Q1 2022 increased again to 73 per cent.

We are seeing variability and show performance Ah some trade shows and industries recover faster than others, but we're encouraged by the overall trend.

Particularly pleased to see several trade shows in the first quarter exceed their prior prepaid that'd make a current size.

Most notable <unk> an exhibition focused on next generation supply chain technology and equipment experience strong attendance at exhibit her participation across more than 400000 square feet in Atlanta, Georgia World Congress Center. This year's trade show was the largest in the history of murder.

In addition, one of our largest trade shows in 2022 is the international manufacturing technology show or I M. T S, which takes place every other year, but did not occur in 2022 and stomach.

I M. T. S 2022 will occur in the third quarter, and bringing together the creators builders sellers and drivers of manufacturing technology to connect and be inspired.

This year's trade show has already sold approximately 80% of the square footage of I M. T. S 2018, which was the largest in history.

Now turning to page twenty-three of the presentations.

You will see that in addition to the higher than expected revenue Gis exhibitions benefited from the transformative action we took during the pandemic.

Happy to report that she yes exhibitions had a closed through an incremental revenue of approximately 19% from Q1 2021 to Q1 2022, excluding one time gains in the first quarter of 2021.

Hi flow through to EBITDA, an incremental revenue as a result of lowering our fixed cost outsource outsourcing certain services and variabilizing our labor costs.

I want to thank our teams for all the hard work over the past two years to create our lower cost model or work. However is not finished.

We will continue to find opportunities to simplify the business and reduce our cost structure to drive greater profitability.

This work is particularly important in the current environment as we continue to see headwinds in the form of higher transportation costs supply chain challenges for the availability of specialty equipment as well as higher labor costs.

The date or teams I've found creative solutions to minimize our need for transportation services, and where possible have negotiated price increases or other financial concessions to offset a portion of our increased costs.

Looking forward at G. S exhibitions I'm confident the Tradeshow schedule is returning to normal without additional cancellations due to external factors. In addition, based on the same show trend we're seeing in North American trade shows we are optimistic that the revenue recovery trajectory will continue and the remainder of 2022.

Now, let me switch gears and discuss brand experiences in more detail.

Over the past year reposition brand experiences portion of G. S to focus exclusively on corporate brand marketers and their evolving marketing needs.

As I mentioned on past calls, we hire just sell Mak, an experienced marketing agency builder to lead brand experiences.

During the first quarter, we created a unique identity Spiro for our brand experiences business.

We introduced the spyware brand to the market in order to accelerate our growth and the large and fragmented experiential marketing industry by serving the changing needs of today's brand marketers across a broad spectrum of capabilities.

[noise] Spyros, a natural evolution of a strong client partnerships, we felt with leading brands around the world through our brand experience in business.

In addition to a new brand, Jeff and his team began the important work of building out spiroid unique culture, and adding new capability to the chain.

Spyware benefits from already having significant scale and a strong client roster in 2019 Spiro previously known as Brian experiences was approximately 30% of total Ges revenue.

As shown on page 24 of our presentation Spiro already works with all of the top 10 pharmaceutical company nine of the top 10 aerospace and defense companies six of the top 10 machinery and industrial companies and eight of the top 10 technology companies.

This was the perfect time to launch the spiral brand.

Pandemic caused a shift in how corporate brands engage with their audiences in today's market brand marketers must reach their audience and build their community.

Making seamless connections across the physical virtual digital and hybrid marketing channels.

<unk> was created to leverage our long history of exceptional creativity and flawless execution in the in person live event area and expand our capabilities to help our corporate clients connect with their customers across the entire spectrum of experiential marketing channels.

A great example, spyros work is the John Deere spring training of that for authorized dealers that we executed during the quarter.

Dear has it been a client of ours for the past five years and we have managed their exhibit program at some of the largest trade shows in North America.

The focus of John Deere Spring training is to provide information to dealers on new equipment features in competition comparisons.

During the planning of spring training on the Crown case, it spiked and John Deere had the pivotal virtual events.

With our new capabilities and place our spirit team was ready for the challenge.

Thyroid developed the event from start to finish including content development Creative design script, writing virtual platform development production and technical management.

The event drew an online crowd of over 1200 authorized dealers from around the world.

Spyros, new experiential marketing capability and services represent an exciting and growth opportunity for beat up.

As shown on page 25 addressable market for experiential marketing in 2021 was valued at $95 billion across <unk> events.

Consumer events and consumer event sponsorship.

New capabilities and services will enable spyros growth by selling horizontally across our existing base of clients like John Deere and winning new corporate clients. As an example, <unk> new business in the quarter with J P. Morgan burning associated cloudy taka and many other new clients.

During the quarter Spiro delivered $42.8 million of revenue at approximately 700000, and EBITDA as corporate experiential marketing spend continued to recover.

Like the G. S exhibition business spyware benefit from the recovery of marketing budgets compared to their pre pandemic spending levels.

Through conversations with our clients regarding 2022 budget, we believe that our large corporate market. Our customers are planning on spending approximately 80% of their 2019 budget.

We also expect corporate marketing budgets to continue to increase as corporate travel policy restrictions are lifted an event attendance recovers as pandemic concerns E at our core geography.

In closing I'm pleased with his performance in the first quarter and very encouraged by the growth trends, we're seeing for the exhibition activity corporate marketing budget.

I'm also excited about the future potential for continued top line growth Spiro and margin expansion of Gis exhibition.

I'd like to once again, thank the entire G. S team across exhibitions in tomorrow for their tremendous efforts and meeting the escalating business needs as activity ramps up while delivering extraordinary experience on behalf of our clients and.

And now I'd like to turn the call over to Ellen to discuss our financial outlook in more detail Ellen.

<unk> based on a stronger than expected first quarter performance and deposit of transfer seeing cross our business I'm pleased to say that we are raising our full year expectations.

We are encouraged by the acceleration of business activity in our industry and optimistic that the trend will continue and get the balance of the year.

Yes, it had been bookings indicate that interesting event activity will continue to improve and perceived advance bookings points you have very strong peak season.

<unk>.

As shown on page 27, we expect per se. It's adjusted EBITDA for the 2022 full year to be approximately $80 million to $90 million and for the second quarter to be approximately 17 to 21 $90.

We believe the appreciates EBITDA will be at or above 2019, pre pandemic levels driven by continued Saint <unk> relative to 2021.

The addition of new experiences.

Our three new attractions that we opened in 2021 will have a full season of operations. This year and we will also benefit from the editions as I recently acquired Glacier Raft company and the opening at the Forest Park account ahead of this peak summer season.

Our outlook to appreciate it seems that our use same store experiences while once again post revenue above pre pandemic levels on continued strength and domestic things your travel.

And that our Canadian teamster experiences will see significant but not full recovery relative to 2019.

It is our expectation that long haul leisure travel more fully return in 2023, which will help driving <unk> our high margin attractions.

We expect precedes EBITDA margin of 2020 table remains lower than pre pandemic levels until long haul internationally as your travel fully recovers.

Long haul international visitors helped drive strong visitation at our high marching attractions and disclosure significantly increase with volume.

It's international travel beaches more normal levels of hesitation, we expect pursuits margin will once again returned nurse at 30%.

As David mentioned earlier, while <unk> is certainly not immune to the wage rate and other inflationary pressures that are being felt across all companies.

We expect a set that impacted our revenue management efforts to drive rate increases while also maintaining our high gas satisfaction levels.

Now turning to Ges on page 28.

We expect adjusted EBITDA fifth of 2022 full year to be approximately $25 million to $35 million and for the second quarter to be approximately $8 million to $12 million.

We had previously guided for above breakeven full year EBITDA from T. Yes, and based on the stronger than expected performance of our first quarter events and current expectations for the balance of this year.

We feel comfortable introducing a full year range for Kate yes that is significantly better than breakeven.

Our assumptions underpinning the full year range remain a bit cautious given the dynamic operating environment that we continue to navigate.

We're assuming that exhibition same show revenue will generally remain at or better than 75% a pre pandemic levels.

We believe that experience a marketing budgets for our nature spiral clients will be approximately 80 per cent of pre pandemic levels.

Live in person event schedules are behaving in a normal cadence.

It looks solid for the balance of the year.

She asked as well positioned for success with a strong backlog of contracted advance and an expanded roster of corporate clients.

We expect show sizes in corporate marketing budgets to continue to increase as companies return to their pre pandemic travel policy.

And what's the new more variable cost structure in place that <unk>, yes, we've lowered our breakeven point for that business and expect to realize margin expansion as revenue continues to recover.

Expect SG&A will gradually increase to support increased business activity in future revenue credit.

We currently expect your free cash outflow during the second quarter of 2022, and the range at $10 million to $15 million.

This assumes an operating cash painful out somewhere in the range at $15 million to $20 million in capital expenditures of approximately $30 million, including Chris Capex for the New Forest Park Hotel failed.

And as I mentioned earlier, we acquired the Glacier asks company for $26.5 million, which was partially funded by trying on a revolver.

For the full year, we expect capital expenditures of approximately 75 million to $80 million, primarily at pursuit and including <unk> Capex for the Forest Park Hotel and fly over Chicago.

We will continue to carefully manage our cashless and be strong stewards of our capital to maximize shareholder value.

With continued recovery or industry and our new proceed experienced since we're well positioned surpass our 2019 consolidated EBITDA by 2023.

The high return crowds investments we have made to proceed to refresh the thigh strategy combined with the pent up demand for leisure travel will help offset a slower recovery and business travel at T S and propel us back to our pre pandemic growth trajectory.

Our financial outlook assumes no future material adverse changes to the macro environment from COVID-19 geopolitical events or other factors.

We continue to operate in a very dynamic environment and our performance can vary significantly from the guidance provided.

It's evident that there is pent up demand for our industry. We remain focused on positioning the company for great success and grabbed as our businesses continue to recover in 2022 and beyond.

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

Thanks, Ellen our company is well positioned to reemerge for the pandemic in a position of strike with pent up demand for our industry on both sides of the business New World class experiences that precede it have transformed more profitable <unk>, yes, I'm encouraged by the progress that we've made this quarter and optimistic about.

The recovery and leisure travel a pursuit in light of an activity at G. S. As we head into the balance of the year.

We remain focused on our strategy to create extraordinary experiences and strong returns for our shareholders for pursuit, we will continue to significantly scale the business and drive growth through our proven refresh your bill by strategy as well, let's take advantage of economic disruption and opportunities in the space.

<unk>, Yes, we will build on the progress we've made to date to improve the margin profile and resumed generating strong cash flow through are more flexible cost structure and more focus on higher margin clients and services.

We have a clear path to accelerate growth and significantly enhance shareholder returns are.

Liquidity position as strong and we have the financial flexibility to sustain and continue investing in the future.

We have high quality businesses with leading market position and experiential leisure travel an experiential for you to be events, we plan to capitalize on pandemic disruptions to strengthen our leading market position.

Growth strategy is proven to be successful driving strong returns prepaid diabetic and there are tremendous opportunities to continue investing for long term growth.

Excited about the bright future that lies ahead for our company I want to thank our hardworking and dedicated employees, who make all of this possible and thank you to our shareholders for your continued support <unk> and <unk>.

That will open up the call for questions.

At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad repulse for just a moment to compile the Q&A roster.

Our first question goes to Kartik meta with Northcoast research.

Your line is open. Please proceed.

Oh, thank you.

Maybe just a little bit on pursuit I'm wondering if you could talk about capacity, where you are for 2022 or what portion of capacity.

Do you think you'll utilized for 2022 sounds like <unk>.

Reservations are really strong and sounds like you were expecting us.

Really good year.

Yeah. Thanks for the question cartoon and as you mentioned, we saw during the call the pacing.

Is ahead of 19, and we feel really good about that I'll, let David jump into more detail about what you're saying in terms of capacity or what we expect and capacity for some of our attraction in hospitality assets.

<unk>, Yes, I think it's interesting we have certain dates already within the summer that are completely sold out from our lodging perspective, and then obviously, there's a ton of compression so lodger.

Lodging that have a big impact in terms of how busy destinations get I expect that we will.

Be returning to historical levels and if you think of say a peak day for instance at the vast gondola may have been 5000 or 6000.

2019, both numbers were obviously much smaller through the throes of the pandemic in 2021, and we expect that we will see a return to historical levels.

Just in terms of what we're seeing for demand and how busy we think things will be over this summer.

Mmm.

And then you talk about a little bit about international demand and I'm wondering.

You know in a typical year.

When do you have a good idea about wearing it out from the band is or how early.

Early do international travellers walk and.

There are potential for that to increase considering where you are from a capacity standpoint.

Well right now for instance, you have a really good view to who is coming from where and so obviously western Europe and within North America, everyone is traveling very freely Canadian borders are wide open so folks are moving between countries quite comfortably.

There are certain countries in the world that obviously are a little bit more lockdown, China being a good example of one right now that.

We don't expect a lot of travel from China, and India. This year, but definitely we've got a good view to international visitation.

And we think that the perception of North American destinations is very strong and so for both Iceland and then what we're seeing in North America, We expect a steady return to international visits coming back to their peak levels.

Okay and just one last question if I could just add some free cash flow for the year I know.

EBITDA guidance, obviously gave capex, which is really good start I just wanted to know if they're.

Okay is there any other factors may be that are different in 2022.

So just expectations for free cash flow for the year.

No I mean, the EBITDA guidance for the operating company and then let's see the interest expense and get payments on on corporate so just to give it.

Just to give a perspective are operating cash flow approximate dark capex.

Give or take.

<unk>, Yeah, my name's carpet.

Okay perfect. Thank you so much I appreciate it.

I tried it thank you perfect.

Again, if you would like to ask a question restore then the number one on the telephone keypad.

Next question goes to Brian Marr with be Riley security, Brian . Your line is open. Please go ahead.

Thank you and good afternoon.

And and team. Thank you so much of that slide deck, that's super helpful. All that extra.

Extra information, but I do want to add before I get into my questions Uhm, a balance sheet and cashless statement, we did see the abbreviated balance sheet on in the slide deck, but when will at full balance sheet and cash flow statement be available at that you have to wait for the cue for that.

And yes that will be filing a Q either tomorrow or Monday so shortly.

Okay, Great Super helpful. And then can you give us any color on their trajectory visitation growth and.

Maybe the pricing for some of the newer pursuit attractions like Sky Lagoon, and Las Vegas fly over I know for competitive reasons, you probably don't want to get too specific but can you give us an idea of how quickly those are ramping.

Sure.

We talked a little bit about it and David comments around the visitation, we see it in the first quarter, but I'll, let him give more insight into what you say from a pacing for both the scale again and fly Rebecca.

Yeah, So Bryan I'll be a little bit careful in terms of how I catch it from a competitive standpoint, but we expect to see a significant ramp up into the peak summer period.

Okay.

Obviously demand ratings are very strong there's a lot of demand for the new attractions. It will be Goldman skybridge. His first full season of operation Sky Lagoon, just celebrated its first anniversary and had a very strong first quarter.

And we expect that is going to continue through the year and then obviously fly over Las Vegas, gaining momentum. So we're encouraged by what we're seeing in looking forward to the rest of the year.

Okay great.

<unk>.

But.

If I could just add one other thing is I think it's important to point out.

The two new attractions kind of made up a significant portion of the visitors or packs during the quarter that as they continue to ramp up we have continued to focus on year round activity and this is a good step in that direction.

Got it and then the flyover Chicago and the flyover Toronto.

<unk> those are both of 2024 opening what kind of capital costs are gonna be associated with those and and how is that going to.

You know kind of hit the cash flow statement over the next couple of years.

So we haven't given guidance on the level of Capex that we're spending over the next couple of years, but that'll be development capex and you'll see that within precedes development plan. He said today here is that it hits so over the next couple of years.

Okay, and then I'll get a little bit about.

Sorry can I, just get a perspective Uhm Vegas was about $45 million in development costs.

Okay, and so I guess I mean that was a pretty big project.

Would it be reasonable to think that.

Chicago in Toronto might be a little less expensive, but then you have to adjust for inflation. So maybe you're in that $40 million to $45 million range again.

Would rather not give specific guidance on that.

Okay understood and then you talk a little bit about costs and inflation.

Yeah impacting numbers and on your slide 19, you have a.

I don't know if I want to call. It a goal or what you want to call. It at 35 per cent EBITDA margin how much does the current inflationary environment kind of slow down your ability to get there.

Well, there's a couple of things so one I think from.

When you worry about inflation, obviously, what is it impacted and blacks impacts rising costs.

Fuel cost of goods sold et cetera, et cetera, but we have a libra.

Pretty powerful and that Labour is obviously price. So a guest satisfaction is very very high.

We also feel that we are able to move price and the guests are understanding and as long as they're receiving good value then you're able to offset the majority of the inflationary impact with price adjustments and we price dynamically as a reminder, so in peak periods. Obviously, we're moving price further and we spend a lot of time and.

Energy around the price value relationship. So I think that's a big driver of how we manage inflation.

And then from a margin standpoint, obviously, there's two things that drive margin to the greatest degree one is the amount of visitation and so think of a typical attraction might be staff for a certain amount of visit say pick a number 2500 visits in a particular day.

As markets return and as visitation improve those numbers a visit grow quite.

Quite significantly, but our costs remain basically at that threshold level, because we're stopping the attraction to provide a great guest experience and the incremental visitation over that number.

Is basically pure profit so two drivers of margin when his visitation and then mix of guests and as international visitors return.

Remember 20, and 21 Prime we have primarily regional and local visitors.

They spend less they tend to travel shorter distances, they spend less time in a particular destination, whereas our visitors from further afield.

They wanted to do everything they wanted to experience everything and so their level of spend is higher and so those are two big drivers as we return to strong margin performance into the future and we're confident about that.

And that probably say that way as well and <unk> to my next question are you staying on an international basis.

Conflict in Eastern Europe impacting what you thought.

Thought you might've seen or thought you may see in the second quarter as it relates to the GDS functions.

Yeah, that's a good question Bryan.

We're not really I mean, obviously, it's a.

Perfect thing that's happening with the invasion.

But it is not really impacting the business that we see either in North America or in RMA operations.

Again, most of our <unk> is either based in the UK or in the UAE.

And so we're not seeing a significant impact.

Really from the invasion.

Okay, and just last <unk> wrapping up her suit staffing.

Heading in to kind of peek season, how much if any of the one two costs likely back end loaded up courts into March you might be kind of early staffing up or is it pretty much all showing up and to kill.

Yeah, that's it.

Really good question. So two things one is we anticipated that we would have higher levels of variable costs and some certain expenses and one imagine when you're securing supplies and you're worried about supply chain. So we did move to make sure. We had enough of what we would need for the coming year. The other is we we're pretty good students of other industries that have <unk>.

And in winter and for those of you that have followed some of the large ski companies and seeing some of the struggles they've had with staffing and other things.

We paid pretty careful attention to say, who don't Wanna be that guy, we're going to be focused on getting organized in terms of our staffing levels. So we've worked really hard to make sure that we have the right amount of staff on board, we've taken a lot of steps to secure those folks and have them on on path to be working this summer and.

In place and so that had an impact we didn't want to be caught flat footed, we've onboarded and trained seasonal workforce earlier, so that we're ready when guests show up and <unk>.

I remember last year and 21, when you look at the year over year comparisons we were still certainly a little bit unsure as to what our volumes would be in the 21 pandemic year. This year, we've got a really good view to how busy it's gonna be it's gonna be busy it's gonna need a lot of staff and a lot of energy and effort.

And we're ready to deliver that.

Great. Thank you very much.

Okay. Thank.

Thank you Brian .

There are no further questions at this time, Steve Monster I turn the call back over to you.

Alright, thanks, everybody for attorney or a call we look forward to talking to her again the next.

Next quarter. Thanks, so much.

That concludes today's conference call you may now disconnect your lines.

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