Q4 2023 Viad Corp Earnings Call

Operator: Good afternoon, my name is Lydia, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Viad Corp's fourth quarter and full year 2023 earnings conference. All lines have been placed on mute to prevent any background noise.

Good afternoon, My name is Lydia and ill be your conference operator today.

At this time I'd like to welcome everyone to VF Corp, fourth quarter and full year 2023 earnings conference call.

All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone. If you'd like to withdraw your question, press star followed by.

After the Speakers' remarks, there'll be a question and answer session.

If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad.

If you'd like to withdraw your question Press Star followed by Chi.

Carrie Long: I'll now hand you over to Carrie Long to begin. Please go ahead. Good afternoon, and thank you for joining us for Viad's 2023 fourth quarter and full year earnings conference call. We issued our earnings release after the market closed today along with an earnings presentation, both of which are available on our website at viad.com. We'll be referencing specific pages from the presentation during the call as we discuss our business performance and outlook. I'd like to point out that our earnings press release and presentation contain important disclosures regarding non-GAAP measures that we'll be referencing during the call, including adjusted EBITDA and income before other items. During the call, you'll be hearing from Steve Moster, our President and CEO, and President of GES, Ellen Ingersoll, our Chief Financial Officer, and David Berry, President of Pursuit.

I'll now hand, you wanted that you carry long to begin. Please go ahead.

Good afternoon, and thank you for joining us for beyond 2023 fourth quarter and full year earnings Conference call. We issued our earnings release after the market close today, along with an earnings presentation, which are both available on our website at <unk> Dot com will.

We will be referencing specific pages from the presentation during the call as we discuss our business performance and outlook.

I'd like to point out that our earnings press release and presentation contain important disclosures regarding non-GAAP measures that we'll be referencing during the call, including adjusted EBITDA and income before other items.

During the call you'll be hearing from Steve Moster, our president and CEO and president of GE Yeah.

Ellen Ingersoll, our Chief Financial Officer, and David Barry President of pursuit.

Carrie Long: Before I turn the call over to Steve, I'd like to remind everyone that 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 FBI. And with that, I will turn the call over to Steve, who will be starting on page four of the earnings presentation. Thanks, Carrie.

Before I turn the call over to Steve I'd like to remind everyone that certain statements made during the call which are not historical facts may constitute forward looking statements.

Formation 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.

And with that I will turn the call over to Steve who will be starting on page four of the earnings presentation.

Thanks, Gary and thanks to all of you for joining our call I'm very happy to report that our finish to 2023 exceeded our expectation.

Steven W. Moster: And thanks to all of you for joining our call. I'm very happy to report that our finish to 2023 exceeded our expectations in what was a great year for our business. GES substantially outperformed our prior guidance during the quarter, and Pursuit delivered solid results in this seasonally slower period. Looking at the year as a whole, Pursuit set new records for both revenue and EBITDA with the continued return of international leisure travel to our destination and our expanded portfolio of experiences.

What a great year for our businesses.

Substantially outperformed our prior guidance during the quarter and pursuit delivered solid results in the seasonally slower period.

At the year as a whole pursuit set new records for both revenue and EBITDA with the continued return of international leisure travel to our destination and our expanded portfolio of experiences.

Steven W. Moster: GES delivered strong full-year revenue growth with an EBITDA margin that was just 30 basis points shy of our 8% target and as positive momentum continued for GES and the industry overall. We have a great deal of optimism as we enter 2024 in a position of strength, with robust demand for our extraordinary experiences at Pursuit and GES and tailwinds from a strong non-annual show schedule and the opening of Flyover Chicago. We expect to deliver very strong revenue and EBITDA growth again this year. So let's get into the details, starting with Ellen, who will review our 2023 financial performance and 2024 guidance. Thanks, Steve.

<unk> delivered strong full year revenue growth with an EBITDA margin that was just 30 basis points shy of our 8% target and as positive momentum continued for ges and the industry overall.

Have a great deal of optimism as we enter 2024 and a position of strength.

With robust demand for our extraordinary experiences at pursuit and Ges and tailwind from strong non annual shows schedule and the opening of flyover Chicago, we expect to deliver very strong revenue and EBITDA growth again this year.

So let's get into the details starting with Ellen who will review, our 2023 financial performance and 2020 for guidance.

Thanks, Steve I'll start on page six with our consolidated fourth quarter results revenue increased $43 7 million or 17, 6% year over year with healthy growth at both pursuit and Ges.

Ellen M. Ingersoll: I'll start on page six with our consolidated fourth-quarter results. Revenue increased $43.7 million, or 17.6% year-over-year, with healthy growth at both Pursuit and GES. Consolidated and adjusted EBITDA increased $16.5 million, and our fourth quarter net loss before other items improved by $10.9 million. Our gap basis net loss attributable to VAD of $15.3 million was $9.6 million higher than the 2022 fourth quarter, primarily reflecting the $19.6 million pre-tax gain on sale of the on-services AV business in 2022, partially offset by stronger 2023 operating results at both GES and Pursuit.

Consolidated adjusted EBITDA increased $16 5 million and our fourth quarter net loss before other items improved by $10 9 million.

Our GAAP basis net loss attributable to the added $15 3 million was $9 6 million higher than the 2022 fourth quarter, primarily reflecting the $19 $6 million pre tax gain on sale of the on services.

Business in 2022, partially offset by stronger 2023 operating results at both Ges and pursuit.

Ellen M. Ingersoll: As shown on page 7, Pursuit's fourth-quarter revenue grew $8.1 million, or 23.6% year-over-year, and adjusted EBITDA improved by $2.9 million. Pursuit delivered growth across all revenue categories as we continue to see strong demand for our experiences and destinations in this seasonally slow period. Attractions ticket revenues were the largest year-over-year gain, with an increase of 34% driven by a 23% increase in visitors and higher effective ticket prices. Visitation growth was particularly strong across our Western Canada attractions, as well as at our Sky Lagoon attraction in Iceland.

As shown on page seven pursuits fourth quarter revenue grew $8 1 million or 23, 6% year over year.

And adjusted EBITDA improved by $2 9 million.

Pursuit delivered growth across all revenue categories as we continue to see strong demand for experiences and destinations in the seasonally slow period.

Attraction ticket revenue so the largest year over year gain with an increase of 34% driven by a 23% increase in visitors and higher effective ticket prices visit.

Visitation growth was particularly strong across our western Canada attractions as well as at our Sky lagoon in attraction in Iceland.

Ellen M. Ingersoll: As shown on page 8, GES delivered consolidated revenue growth of $35.6 million, or 16.6%, and adjusted EBITDA growth of $13.9 million during the fourth quarter. When adjusting to exclude the favorable impact of non-annual shows and the loss of revenue from on-services, which we sold on December 22, GES's fourth quarter year-over-year revenue growth was about 20%. Spiro delivered revenue growth of $11.4 million, or 15.8%.

As shown on page eight Ges delivered consolidated revenue growth of $35 6 million or 16, 6% and adjusted EBITDA growth of $13 9 million during the fourth quarter.

When adjusting to exclude the favorable impact of non annual shows and the loss of revenue from <unk> services.

Which we sold in December 'twenty, two qts's fourth quarter year over year revenue growth was about 20%.

<unk> delivered revenue growth of 11 4 million or 15, 8%.

Ellen M. Ingersoll: Excluding the impact of non-annual events in the sales on services, Spiros' revenue growth rate was about 23% versus the 2022 fourth quarter, driven by strong spending from existing and new clients. GES Exhibitions delivered revenue growth of $24.7 million, or 17.2%. Excluding the impact of non-annual events and sales on services, GES Exhibitions' revenue growth rate was about 18% versus the 2022 fourth quarter, as show sizes continue to improve. Additionally, GES Exhibitions was selected to produce COP28, a large globally rotating event during the quarter that added nearly $15 million in revenue.

Excluding the impact of non annual events yourself on services <unk> revenue growth rate was about 23% versus the 2022 fourth quarter, driven by strong spending from existing and new clients.

Ges exhibitions delivered revenue growth of $24 7 million or 17, 2% excluding.

Excluding the impact of non annual events and so on services Ges exhibitions revenue growth rate was about 18% versus the 2022 fourth quarter as show sizes continue to improve additional.

Additionally, <unk> exhibitions of selected <unk> cop 28, large globally rotating events during the quarter that added nearly $15 million in revenue.

Ellen M. Ingersoll: Page 9 summarizes our strong four-year performance in 2023. Our consolidated adjusted EBITDA increased $30.9 million, or 26.6%, on a 9.9% increase in revenue, reflecting strong year-over-year growth at both Pursuit and GES on improved demand. Pursuit's full-year adjusted EBITDA grew $24.7 million, or 36.3%, on a $51 million increase in revenue, reflecting the very high margin characteristics and operating leverage of the Pursuit business. GES's full-year adjusted EBITDA grew $6.9 million on a $60.4 million increase in revenue. A strong underlying performance more than offset the $74 million revenue impact from the sale of on services and the timing of major non Our full-year net income attributable to VIA decreased $7.2 million, primarily due to the $19.6 million gain on the sale of on-services in the prior year. However, full-year income before other items, which excludes that gain, improved by $6.3 million, reflecting stronger EBITDA, partially offset by higher interest expense and tax expense. We ended 2023 with total liquidity of $160.7 million, comprising $52.7 million in cash and approximately This is down from liquidity of 201.3 million at the end of the third quarter, reflecting operating cash outflows of 9.8 million and capital expenditures of 23.6 million.

Page nine summarizes our strong full year performance in 2023.

Our consolidated adjusted EBITDA increased $30 9 million or 26, 6% on a nine 9% increase in revenue, reflecting strong year over year growth at both pursuit and Ges unimproved demand.

For full year, adjusted EBITDA grew $24 7 million or 36, 3% on a $51 million increasing revenue, reflecting the very high margin characteristics and operating leverage of the pursuit business.

Ges's full year adjusted EBITDA grew $6 9 million on a $64 million increase in revenue.

Strong underlying performance more than offset the $74 million revenue impact from the sale of on services and the timing of major non annual shows.

Our full year net income attributable to be decreased $7 2 million, primarily due to the $19 $6 million gain on the sale of on services in the prior year.

Our full year income before other items, which excludes that gain improved by $6 $3 million, reflecting stronger EBITDA, partially offset by higher interest expense and tax expense.

We ended 2023 with total liquidity of $160 7 million, comprising $52 7 million in cash and approximately $108 million of capacity available on our revolving credit facility.

This is down from liquidity of $201 3 million at the end of the third quarter, reflecting operating cash outflows of $9 8 million and capital expenditures of $23 6 million.

Ellen M. Ingersoll: Our full-year cash flow from operations was an inflow of $106.7 million, and our capital expenditures totaled $78.3 million, including approximately $39 million of growth capex at pursuit. We made net debt payments of $22.3 million and paid $7.8 million in dividends on our convertible preferred equity. Next, I'll cover our 2024 outlook on page 10 before turning the call over to David for additional color on pursuit. We expect full-year consolidated adjusted EBITDA to be in the range of $171 to $191 million, which is up approximately 16 to 30 percent from 2023, reflecting increases of $12 to $22 million at both Pursuit and GES. For pursuit, we expect full-year adjusted EBITDA to be in the range of $105 million to $115 million on mid-single-digit revenue growth with a full-year adjusted EBITDA margin of about 30 percent.

Our full year cash flow from operations was an inflow of $106 7 million and our capital expenditures totaled $78 3 million, including approximately $39 million of growth Capex at pursuit.

We made net debt payments of $22 3 million and paid $7 8 million in dividends on our convertible preferred equity.

Next I'll cover our 2020 for outlook on page 10, before turning the call over to David for additional color on pursuit.

We expect full year consolidated adjusted EBITDA to be in the range of $171 million to $191 million, which is up approximately 16% to 30% from 2023, reflecting increases of $12 million to $22 million at both pursuit and Ges.

For pursuit, we expect full year adjusted EBITDA to be in the range of $105 million to $115 million on mid single digit revenue growth with full year adjusted EBITDA margin of about 30%.

Ellen M. Ingersoll: For Pursuit's Seasonally Slow First Quarter, we expect adjusted EBITDA to be in the range of negative $12 million to negative $8 million, as compared to negative $10.3 million in the 2023 first quarter. For GES, we expect full-year adjusted EBITDA to be in the range of $80 to $90 million on low double-digit revenue growth with a full-year adjusted EBITDA margin of about 8.5%. Non-annual shows are expected to contribute net incremental revenue of about $65 million, primarily during the third quarter. We expect GES's first quarter adjusted EBITDA to be in the range of 15 to 19 millimeters, versus $16.7 million in the 2023 first quarter.

For pursuit seasonally slow first quarter, we expect adjusted EBITDA to be in the range of negative 12 million to negative $8 million.

As compared to negative $10 3 million in the 2023 first quarter start.

Yes, we expect full year adjusted EBITDA to be in the range of $80 million to $90 million on low double digit revenue growth with a full year adjusted EBITDA margin of about eight 5%.

Non annual shows are expected to contribute net incremental revenue of about $65 million, primarily during the third quarter.

We expect <unk> first quarter adjusted EBITDA to be in the range of 15 to 19 million.

Versus $16 7 million in the 2023 first quarter.

Ellen M. Ingersoll: With the meaningful full-year EBITDA growth we are anticipating, we also expect very strong operating cash flow, particularly in the third quarter, with Pursuit's seasonal contribution and GES's two largest non-annual shows taking place. This should present us with an opportunity to further reduce our level of debt, while still selectively investing in growth at Pursuit to maximize long-term value for shareholders through our Refresh, Build, Buy growth strategy. For the full year, we anticipate an operating cash inflow in the range of $120 million to $140 million, and we are planning for full-year capital expenditures of $65 million to $70 million, including growth capex of about $20 million at acquisition. I also want to quickly comment on our expectations for tax expense, which, absent guidance from us, is very challenging to model given our jurisdictional tax position. For the full year, we anticipate an effective tax rate of 27 to 28 percent.

With the meaningful full year EBITDA growth. We are anticipating we also expect very strong operating cash flow, particularly in the third quarter with pursuits seasonal contribution and Ges's two largest non annual shows taking place.

This should present us with an opportunity to further reduce our level of debt, while still selectively investing in growth at pursuit to maximize long term value for shareholders through our refresh build buy growth strategy.

For the full year, we anticipate an operating cash inflow in the range of $120 million to $140 million and we are planning for full year capital expenditures of $65 million to $70 million, including growth capex of about $20 million at pursuit.

I also want to quickly comment on our expectations for tax expense, which absolute guidance from us is very challenging to model given our jurisdictional tax position for.

For the full year, we anticipate an effective tax rate of 27% to 28%.

David Berry: During the first quarter, we expect to record minimal tax expense on an anticipated pre-tax loss because any tax benefits on pre-tax losses in the U.S. are subject to a valuation allowance. Now David and Steve will provide further insight into our business performance and the exciting growth coming our way at Pursuit and GES. David, over to you.

During the first quarter, we expect to record minimal tax expense on an anticipated pre tax loss because any tax benefit on pre tax losses in the U S are subject to evaluation allowance.

Now, David and Steve will provide further insight into our business performance and the exciting growth coming our way at pursuit and Ges David over to you.

David Berry: Thanks, Ellen. Let's dive into Pursuit starting on page 12. 2023 was an exceptional year for Pursuit with robust demand for our inspiring, unforgettable experiences, and we produced record-breaking results. Starting with attractions, Pursuit's world-class attractions finished the year with strong momentum. Our full-year ticket revenue grew approximately 25% to $143 million, and this was driven by the powerful delivery of our guest experiences, impressive increases in visitation, which was up about 21%, and continued focus on our revenue maximization and pricing initiatives. Our attractions in Western Canada and Iceland experienced significant demand with particularly strong increases in international guests. And we're seeing strength from independent travelers, which helped offset group volume that has not fully recovered. The Pursuit Pass helped maximize visitation from independent travelers to our Banff-Jasper Collection attractions with advanced, non-refundable commitments totaling about $11 million in ticket revenue in 2023.

Thanks, Alan let's dive in a pursuit starting on page 12, 2023 was an exceptional year for pursuit with robust demand for our inspiring unforgettable experiences and we produced record breaking results.

Starting with attractions pursuits and World class attractions finished the year with strong momentum on a full year ticket revenue grew approximately 25% to $143 million and this was driven by the powerful delivery of our guest experiences impressive increases in visitation, which was up about 21% and continued focus on our revenue.

Maximization and pricing initiatives.

Our attractions in Western Canada in Iceland experienced significant demand with particularly strong increases in international guests and we're seeing strength from independent travelers, which helped offset the group volume that has not fully recovered yet.

The pursuit pass helped maximize visitation from independent travelers to our Banff Jasper collection attractions with advanced nonrefundable commitments totaling about $11 million a ticket revenue in 2023, and we're continuing to market this compelling value proposition to our guests for the upcoming 2024 season.

David Berry: And we're continuing to market this compelling value proposition to our guests for the upcoming 2024 season. I'm also happy with the growth of our newer experiences that have launched in recent years. Sky Lagoon, Flyover Las Vegas, and Golden Sky Bridge all delivered significant visitation increases over 2022. Sky Lagoon had a remarkable fourth quarter and benefited from the temporary closures of its most notable competitor on ice.

I'm also happy with the growth of our newer experiences that have launched in recent years Sky lagoon fiber Las Vegas, and Goldman Skybridge, all delivered significant visitation increases over 2022.

Sky Lagoon had a remarkable fourth quarter and benefited from the temporary closures of its most notable competitor in Iceland thankfully, our competitors' facilities were on harm and his people are safe our operating team at Sky Lagoon did a terrific job responding to the situation increasing operating hours and staffing up to meet increased demand.

David Berry: Thankfully, our competitors' facilities were unharmed, and their people are safe. Our operating team at Sky Lagoon did a terrific job responding to the situation, increasing operating hours and staffing up to meet increased demand. And the work we did to make inventory available to travel partners drove increased awareness and helped to highlight the quality of the Sky Lagoon experience. All right, now, switching over to lodging.

And the work we did to make inventory available to travel partners drove increased awareness and help to highlight the quality of the sky lagoon experience.

David Berry: Next on page 13 are one-of-a-kind hotels and lodges. Group full-year room revenue increased by approximately 12% to $86 million from increases in both ADR and occupancy. Our same store REVPAR, which excludes the additional Forest Park Alpine Hotel and Paddle Ridge rooms that we added in 2022, was up 9% year over year. I'm very pleased to report that all of our geography has delivered year-over-year growth in room revenue. Western Canada was a strong contributor to our success, primarily driven by increased demand and the performance of the Forest Park Alpine Hotel. As shown on page 14, our room revenue on the books for 2024 is ahead of this time last year, with strong improvements in ADRs for both our Canadian and U.S. lodging properties. This early booking pacing trend is encouraging, and I'm optimistic about the season ahead. So when you look at overall revenue growth, and you'll see that on page 15, you can see our overall revenue growth trajectory. For the full year, our revenue increased by about 17% and set a new record of 350 million.

Switching over to lodging next on page 13, our one of a kind hotels and lodges grew full year room revenue of approximately 12% to $86 million from increases in both ADR and occupancy.

Same store Revpar, which excludes the additional forest Park Alpine Hotel and tunnel Ridge rooms that we added in 2022 was up 9% year over year.

I am very pleased to report that all of our geographies delivered year over year growth in room revenue west.

Western Canada was a strong contributor to our success, primarily driven by increased demand and the performance of the Forest Park Alpine Hotel.

As shown on page 14, our room revenue on the books for 2024 is ahead of this time last year with strong improvements in ADR for both our Canadian and U S margin properties.

This early booking pacing trend is encouraging and I am optimistic about the season ahead.

So when you look at overall revenue growth and Youll see that on page 15, you can see our overall revenue growth trajectory for the full year, our revenue increased by 17% and set a new record of $350 million and we're thrilled with the strong performance of our attractions and hotels as well as the $11 million of revenue growth we delivered.

David Berry: And we're thrilled with the strong performance of our attractions and hotels, as well as the $11 million of revenue growth we delivered from our integrated food and beverage and retail experiences in 2023. Favorable leisure travel trends and prioritization of discretionary spend on experiences, combined with our location's substantial barriers to entry and perennial guest demand set the backdrop for strong growth ahead. So let's just talk a little bit about the future. And I'd like to share, or start by sharing, my focus for 2024. So first, people.

Our integrated food and beverage and retail experiences in 2023.

The favorable leisure travel trends and prioritization of discretionary spend on experiences combined with our location substantial barriers to entry and perennial guest demand set the backdrop for strong growth ahead.

So, let's just talk a little bit about the future and I'd like to share our start by sharing my focus for 2024, So first people.

We have the right people in the right roles with the tools they need to be successful and we expect our leaders cross pursuit to have an owner's mindset.

David Berry: Ensuring we have the right people in the right roles with the tools they need to be successful. And we expect our leaders across pursuit to have an owner's mindset. Second, strategy. As a leadership team, we're focused on the right things that will ensure success, both in 24 hours and over the longer term. And thirdly, execution. Control the controllable.

Second strategy as a leadership team we're focused on the right things that will ensure success both in 'twenty four and over the longer term and thirdly execution control the controllable relentlessly seek opportunities to improve team member and guest satisfaction do that while driving rate utilization efficiency and eliminating waste wherever we can.

We expect revenue to grow mid single digits from strong guest demand pricing power and increased visitation from both home and abroad and 2024.

David Berry: Relentlessly seek opportunities to improve team member and guest satisfaction. Do that while driving rate, utilization, efficiency, and eliminating waste wherever we can. We expect revenue to grow mid-single digits from strong guest demand, pricing power, and increased visitation from both home and abroad in 2024. With our extraordinary bucket list experiences and dedicated revenue maximization team, we're planning for mid-single-digit same-store growth in RevPAR and effective ticket price. We anticipate overall attraction visitation will increase at a low double-digit rate year-over-year, with same-store visitation up mid-single-digit. This outlook does not anticipate any meaningful change in Asian travel trade visitation. In addition to growth across our same-store attractions, we're also looking forward to welcoming guests to our newest Flyver location at Chicago's Navy Pier. Flyover Chicago is set to open on March 1st.

With our extraordinary bucket list experiences and dedicated revenue maximization team. We're planning for mid single digit same store growth in Revpar and effective ticket prices.

We anticipate overall attraction visitation will increase at a low double digit rate year over year with same store visitation up mid single digits.

This outlook does not anticipate any meaningful change in Asian travel trade visitation. In addition to growth across our same store attractions. We're also looking forward to welcoming guests to our newest flavor location in Chicago, maybe Pierre <unk>.

<unk> Chicago is set to open on March the first we have an ideal location in a really powerful opportunity to work together with the other Navy pier attraction as a destination with one sure ticketing system and a grouping of World class attractions Navy Pier is positioned well to drive strong visitation in 2024, and we're glad to be there.

Alright, so margin expansion if you take a look on page 16, we'll discuss our adjusted EBITDA margin expansion, which is primarily driven by increased visitation at our high margin attractions.

David Berry: We have an ideal location and a really powerful opportunity to work together with the other Navy Pier attractions as a destination. With one shared ticketing system and a grouping of world-class attractions, Navy Pier is positioned well to drive strong visitation in 2024, and we're glad to be there. All right, so margin expansion. If you take a look on page 16, we'll discuss our adjusted EBITDA margin expansion, which is primarily driven by increased visitation at our high-margin attractions. Our attractions are built for volume, and revenue from every incremental guest flows through at a high rate to our bottom line. Additionally, with the easing of staffing and supply chain-related pressures, we were able to ratchet back the extraordinary measures put in place to address pandemic-related challenges.

Our attractions are built for volume and revenue from every incremental guest flow through at a high rate to our bottom line <unk>.

Additionally, with the easing of staffing and supply chain related pressures, we were able to ratchet back the extraordinary measures put in place to address pandemic related challenges.

For the full year, our adjusted EBITA margin improved by about 370 basis points as compared to 2022.

In 2024, we expect to drive further margin improvement and achieve our 2024 target adjusted EBITDA margin of 30% to higher attraction visitation revenue management and a very careful focus on labor and expense management.

David Berry: For the full year, our adjusted EBITDA margin improved by about 370 basis points as compared to 2022. In 2024, we expect to drive further margin improvement and achieve our 2024 target adjusted EBITDA margin of 30% through higher attraction visitation, revenue management, and a very careful focus on labor and expense management. We're gearing up for another year of record-breaking results, with our full-year adjusted EBITDA expected to be approximately triple our 2015 level. This reflects the strength of our powerful, refreshed Build. Buy it

We're gearing up for another year of record breaking results with our full year adjusted EBITDA expected to approximately triple our 2015 levels. This reflects the strength of our powerful refresh build buy growth strategy.

Pursuit is on a remarkable growth journey and our strategy to expand our collection of World class experiences remains unchanged. Our 2024 results will benefit from our newest build investment fiber Chicago as well as other smaller refresh investments at our well instrumented and strong performing existing experiences we are well positioned for.

Continued growth in 2024 and beyond.

Steven W. Moster: Grow. Strategy. Pursuit is on a remarkable growth journey, and our strategy to expand our collection of world-class experiences remains unchanged. Our 2024 results will benefit from our newest build investment, Plywood Chicago, as well as other smaller refresh investments at our well-instrumented and strong-performing existing experiences. We are well positioned for continued growth in 2024 and beyond. So, just as I conclude my remarks, I just want to say congratulations across the world to the Pursuit team members for a record 2023 and a big thank you for creating remarkable experiences and lasting memories for our guests and. Steve, back to you.

So just as I conclude my remarks, I, just want to say congratulations across the world to the pursuit team members for a record 2023 and a big thank you for creating remarkable experiences and lasting memories for our guests and staff Steve back to you.

Thanks, David now switching over to Ges, where we also had a fantastic year of continued revenue growth and margin gains in 2023, driven by underlying growth in exhibitions and our corporate clients as well as our focus on improving profitability across the business.

When I look back at where we were one year ago I'm, even more impressed and proud of what we've accomplished at Ges we.

We entered 2023, knowing our revenue would be negatively impacted by about $80 million from the sale of on services and the timing of non annual events show sizes had been hovering just over 80% of their pre pandemic levels for three consecutive quarters as smaller exhibiting companies and international.

Steven W. Moster: Thanks, David. Now, switching over to GES, where we also had a fantastic year of continued revenue growth and margin gains in 2023, driven by underlying growth in exhibitions and our corporate clients, as well as our focus on improving profitability across the business. When I look back at where we were one year ago, I'm even more impressed and proud of what we've accomplished at GES. We entered 2023 knowing our revenue would be negatively impacted by about $80 million from the sale of on-demand services and the timing of non-annual events. Show sizes had been hovering just over 80% of their pre-pandemic levels for three consecutive quarters as smaller exhibiting companies and international exhibitors had not fully returned.

Exhibitors had not fully return however, we were seeing stronger pricing in exhibitions and spending from our Spyros corporate clients, which gave US reason to believe that we could offset part of the revenue headwinds with growth elsewhere.

Shown on page 18, Ges was able to fully offset those headwinds and deliver revenue growth of $64 million or 7% versus 2022.

When adjusting to exclude the impact of on services and major non annual shows Ges as 2023 revenue grew an impressive 19% or $134 $6 million year over year with strong growth at both exhibitions and Spiro.

Steven W. Moster: However, we were seeing stronger pricing in exhibitions and spending from our Spiro corporate clients, which gave us reason to believe that we could offset part of the revenue headwinds with growth elsewhere. As shown on page 18, GES was able to fully offset those headwinds and deliver revenue growth of $60.4 million, or 7% versus 2022. When adjusting to exclude the impact of on-services and major non-annual shows, GES's 2023 revenue grew an impressive 19% to $134.6 million year-over-year, with strong growth at both Exhibitions and Spyro. Page 19 illustrates some important trends we've seen in key revenue drivers of the GES Exhibition Vision. Same-show revenue and same-show size versus pre-pandemic levels

Page 19 illustrates some important trends we've seen in key revenue drivers.

Exhibition business same show revenue and same show size versus pre pandemic levels, both have steadily improved.

Thanks to the great effort of our exhibition team to improving pricing deliver great service and grow our share of spend on the show floor. We are seeing full recovery in our same show revenue metrics.

However, same show square footage remains about 10% below pre pandemic level.

We see this as a meaningful opportunity for further revenue and margin growth as event sizes continue to recover.

But GDS exhibition success isn't all driven by same show performance and major non annual events are well established leadership position in key Tradeshow market in North America, and EMEA puts us in a strong position to win and service new events.

A Prime example is cop 28, the United Nations Climate change conference, which we serviced in Dubai during the 2023 fourth quarter we.

Steven W. Moster: Both have steadily improved. Thanks to the great effort of our exhibition team to improve pricing, deliver great service, and grow our share of spend on the show floor, we have seen full recovery in our same show revenue. However, same-show square footage remains about 10% below pre-pandemic level.

We produced the 2022 edition of this conference in Canada, and with our leading position in the UAE. We are proud to have been selected once again to producers globally important events.

Ges played a pivotal role in top 28 by offering a range of essential services and aligning with the event commitment to sustainability, including sustainable fabric graphics reusable furniture in pavilion structures live plant and recyclable carpet.

Steven W. Moster: We see this as a meaningful opportunity for further revenue and margin growth as event sizes continue to recover. But GES exhibition success isn't all driven by same-show performance and major non-annual events. Our well-established leadership position in key trade show markets in North America and EMEA puts us in a strong position to win and service new events. A prime example is COP28, the United Nations Climate Change Conference, which we serviced in Dubai during the 2023 fourth quarter. We produced the 2022 edition of this conference in Canada, and with our leading position in the UAE, we are proud to have been selected once again to produce this globally important event. GES played a pivotal role in COP28 by offering a range of essential services and aligning with the event's commitment to sustainability, including sustainable fabric graphics, reusable furniture and pavilion structures, live plants, and recyclable carpet. The seamless event management and dedication to sustainable solutions contributed significantly to the success and impact of COP28. Now, let's talk about Spyro on page 20.

Seamless event management and dedication to sustainable solutions contributed significantly to the success and impact of Cop 28.

Now, let's talk about Spiro on page 20.

I'm very happy with the underlying growth in new client wins that we continue to see expired during 2023 with six additional client wins during the fourth quarter. <unk> has reached a total of 55, new client wins since launching as a discrete experiential marketing agency within Ges in early 2022.

This is a testament to the strength of spire as teams and capabilities as well as the importance of experiential marketing as a means for brands to connect with customers in a powerful way.

<unk> marketing is a large fragmented market that is forecasted to grow significantly.

And as one of the few agencies with end to end capabilities and global reach <unk> is well positioned to continue winning and growing.

On page 21, you can see Ges's overall revenue growth trajectory.

Since early 2022, Ges has experienced improving industry dynamics and steady underlying growth as I highlighted earlier when adjusting to remove the impact of on services and major non annual events Ges's consolidated revenue grew by 19% in 2023.

Steven W. Moster: I'm very happy with the underlying growth and new client wins that we continue to see at Spyro in 2023. With six additional client wins during the fourth quarter, Spyro has reached a total of 55 new client wins since launching as a discrete experiential marketing agency within GES in early 2022. This is a testament to the strength of Spira's team and capability, as well as the importance of experiential marketing as a means for brands to connect with customers in a powerful way. Experiential marketing is a large, fragmented market that is forecasted to grow significantly. And as one of the few agencies with end-to-end capabilities and global reach, SPIRO is well positioned to continue winning and growing. On page 21, you can see GES's overall revenue growth trajectory.

For Ges exhibitions that growth rate was 23% driven by same show revenue growth and our ability to win and produce new events like top 28.

Notably U S exhibitions same show revenue grew about 19% and event sizes increased about 11% compared to the prior year.

<unk> the adjusted growth rate was about 11% driven by our success in winning new clients and growing revenue from existing clients.

Participation at trade shows and conferences continues to improve each quarter and the demand for Tradeshows services is approaching 2019 levels.

Additionally, corporate marketing budgets are exceeding 2019 levels as corporate marketers are finding new ways to engage with their target audiences through experiential marketing.

Steven W. Moster: Since early 2022, GES has experienced improving industry dynamics and steady underlying growth. As I highlighted earlier, when adjusting to remove the impact of on-services and major non-annual events, GES's consolidated revenue grew by 19% in 2023. For GES Exhibitions, that growth rate was 23% driven by same-show revenue growth and our ability to win and produce new events like COP28. Notably, U.S. exhibitions and same-show revenue grew about 19 percent, and event sizes increased about 11 percent compared to the prior year. For Spyro, the adjusted growth rate was about 11%, driven by our success in winning new clients and growing revenue from existing clients.

These favorable trends along with a much stronger non annual shows schedule in 2024 gives us confidence in our outlook for another year of strong growth in 2024 as Ellen mentioned earlier, we expect to deliver full year revenue growth in the low double digit range.

Next let's take a look on page 22, and discuss our adjusted EBITDA margin expansion.

I've talked a lot in the past about our efforts to drive margin improvement at Ges and I'm very happy with the results. We're seeing historically ges's adjusted EBITDA margin had fluctuated between about 5% to 7% with higher margins in years with strong incremental revenue per major non annual shows achieving a seven.

Steven W. Moster: Participation at trade shows and conferences continues to improve each quarter, and the demand for trade show services is approaching 2019 levels. Additionally, corporate marketing budgets are exceeding 2019 levels as corporate marketers are finding new ways to engage with their target audiences through experiential marketing. These favorable trends, along with a much stronger non-annual show schedule in 2024, give us confidence in our outlook for another year of strong growth in 2024. As Ellen mentioned earlier, we expect GES to deliver full-year revenue growth in the low double-digit range. Next, let's take a look at page 22 and discuss our adjusted EBITDA margin expansion. I've talked a lot in the past about our efforts to drive margin improvement at GES, and I'm very happy with the results.

7% adjusted EBITDA margin in 2023, which was a slow year for non annual shows is a tremendous proof point that our efforts to transform <unk> cost structure are paying dividends.

Over the past few years, we've eliminated approximately $50 million in SG&A through lean productivity initiatives.

And we have a robust multi year roadmap of lean initiatives to enhance our margin each year going forward.

With a strong non annual shows scheduled 24, and our continued focus on efficiency gains we expect to deliver an adjusted EBITDA margin of about eight 5% this year.

Across Ges, we're performing at a very high level with growth oriented and winning culture.

In closing, we're very happy to have finished 2023 on a high note and with strong momentum heading into what should be an even better 2024.

We're thrilled with our performance and the strength, we're seeing across our businesses as well as the bright future. We see ahead of US we remain committed to our strategy to create extraordinary experiences and strong returns for our shareholders.

Steven W. Moster: Historically, GES's adjusted EBITDA margin fluctuated between about 5-7%, with higher margins in years with strong incremental revenue from major non-annual shifts. Achieving a 7.7% adjusted EBITDA margin in 2023, which was a slow year for non-annual shows, is a tremendous proof point that our efforts to transform GS's cost structure are paying dividends. Over the past few years, we've eliminated approximately $50 million in SG&A through lean productivity initiatives.

I want to thank our hardworking and dedicated employees as well as our shareholders for their continued support and Fiat.

With that we'll open up the call for questions.

Thank you.

At this time I'd like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad.

We'll pause for just a moment to compile the Q&A roster.

Our first question today comes from Bryan Maher of B Riley.

Steven W. Moster: And we have a robust multi-year roadmap of lean initiatives to enhance our margin each year going forward. With a strong non-annual show schedule on 24 and our continued focus on efficiency gains, we expect to deliver an adjusted EBITDA margin of about 8.5% this year. Across TES, we're performing at a very high level with a growth-oriented and winning culture. In closing, we're very happy to have finished 2023 on a high note and with strong momentum heading into what should be an even better 2024. We're thrilled with our performance and the strength we're seeing across our businesses, as well as the bright future we see ahead of us. We remain committed to our strategy to create extraordinary experiences and strong returns for our shareholders. I want to thank our hardworking and dedicated employees, as well as our shareholders, for their continued support of FIAT. And with that, we'll open up the call for questions. At this time, I'd like to remind everyone, in order to ask a question, please press star, then the number one on your telephone keypad.

Please go ahead your line is open.

Great. Thank you and good afternoon to everyone.

First of all I just wanted to compliment you on the enhanced slide deck, I mean, very very helpful and thanks for compiling that.

And getting that out.

As it comes to questions.

Maybe we can just start with and I just added to my list. The non annual shows the bigger ones for 2024 can you just remind the audience because I don't think you did in your prepared comments exactly what those bigger two or three shows are and what quarters those are in.

Yes, the larger ones. It's a good question Brian. Thanks for the question the larger ones in 2024 happened in the third quarter and it's <unk>.

MTF is the international manufacturing technology show.

As well as mine Expo.

And then the third largest would be Farnborough Air show.

The U K.

And all in the third quarter correct.

That's correct.

Okay.

Operator: We'll pause for just a moment to compile the Q&A roster. Our first question today comes from Ryan Mayer of Be Riley. Please go ahead, your line is open.

Moving on to Iceland real quick maybe for David I think in your prepared comments you talked about how you actually kind of benefited I guess from Blue lagoon shutting down because of the volcanic activity can you give us a little more color there like how much was the benefit maybe house, how long list literally doing shut down for and how closer to anything.

Ryan Mayer: Great, thank you, and good afternoon to everyone. First of all, I just wanted to compliment you on the enhanced slide deck. I mean, very, very helpful, and thanks for compiling the larger ones. It's a good question, Brian.

Steven W. Moster: Thanks for the question. The larger ones in 2024 happen in the third quarter, and it's IMTS, the International Manufacturing Technology Show, as well as my next one, and then the third largest would be Farnborough Airshow. OK, and all in the third quarter, correct?

This activity get to your property.

I answered the last question first so no proximity to us at all so.

No risk there.

Blue Lagoon had its first closure on the ninth of November and then was able to reopen in a few weeks later and then had to re close reopened and we closed several times so.

David Berry: That's correct. Kind of moving on to Iceland real quick, maybe for David, I think in your prepared comments, you talked about how you actually kind of benefited, I guess, from the Blue Lagoons shutting down because of the volcanic activity. Can you give us a little more color there, like how much the benefit was, maybe how long Blue Lagoon was shut down for, and how close, if anything, did this activity get to you? I'll answer the last question first. So no proximity to us at all, so no risk there.

<unk>.

I think it's been beneficial in the sense that it's exposed sky lagoon to a lot of folks that perhaps might not have visited at blue Lagoon has a long 25 30 year history. So we were just pleased to be able to host guests for the first time and.

You never want to benefit from someone else's misfortune, but.

It was just beneficial for us to expose the brand to lots of folks and host guests from all over the world.

And maybe sticking with <unk> for a minute I think your margins came in.

David Berry: And you know, Blue Lagoon had its first closure on the 9th of November and then was able to reopen a few weeks later and then had to re-close, re-open, and re-close several times. So, you know, I think it's been beneficial in the sense that it's exposed Sky Lagoon to a lot of folks that perhaps might not have visited it. Blue Lagoon has a long 25-30 year history, so we were just pleased to be able to host guests for the first time. You never want to benefit from someone else's misfortune, but, you know, it was just beneficial for us to expose the brand to lots of folks and host guests from all over the world.

It's about 400 bps better than we were thinking on the EBITDA line was there anything in particular that you did activity wise, maybe other than just better visitation that helped to those margins.

And with that.

Or where the expectation of a higher visitation in one queue potentially lift <unk> EBITDA margins as well.

Yes, I think that generally when you look at margin what drives it and so 370 basis points for us terrific improvement.

As we articulated last year on the calls making that move upwards. So we're pleased with the progress it's combination of many things, but overall visitation to our attractions generally very favorable.

David Berry: And maybe sticking with pursuit for a minute, I think your margins came in. It's about 400 bits better than we were thinking on the EBITDA line. Was there anything in particular?

David Berry: did activity-wise, maybe other than just better visitation that helped with those margins? And would that and or the expectation for higher visitation in 1Q potentially lift 1Q EBITDA margins as well? Yeah, I think that, you know, generally, when you look at margin, what drives it, and so 370 basis points for us, a terrific improvement, as we articulated last year on the calls, making that move upward. So we were pleased with the progress. It's a combination of many things, but, you know, overall visitation to attractions is generally very favorable. That's a profitable segment within our business, and as you hit certain visitation volumes, the majority of that, you know, drops to the bottom line. So we're just very encouraged by that.

That's a profitable segment within our business and as you hit certain visitation volumes majority of that drops to the bottom line. So we're just very encouraged with that and then just general overall, great management efforts by the teams across pursuit to.

To improve and.

I think we've given you a view into into the year.

A little early still in the quarter were just coming out of January and into February so.

Ill reserve judgment on that for now.

Okay, and just last for me.

Flyover Chicago is coming online I would assume that hopefully it came in on time on budget.

It's not maybe you can update us on that.

David Berry: And then just general overall great management efforts by the teams across pursuit to improve. And, you know, I think we've given you a view into the year, you know, a little early still in the quarter. We're just coming out of January and February. So I'll reserve judgment on that for now. Okay, and just last for me, you know, Flyover Chicago is coming online.

But can you give us also an update on.

Anything moving in Toronto and are there any other projects material in the works, whether you can share them or not.

From our standpoint from our side of the coin looking at future growth potential kind of outside of just.

David Berry: I would assume that, you know, hopefully it came in on time and on budget. If it's not, maybe you can update us on that. But can you also give us an update on, is anything moving in Toronto? And are there any other projects, you know, material in the works, whether you can share them or not? Just from the standpoint of, from our side of the coin, looking at, you know, future growth potential, kind of outside of just, you know, what's on the books now. Yeah, so I'll speak first about a project in Chicago that is on time and well within its budget, so we're very encouraged with that. The product itself is phenomenal. The team did a great job capturing the spirit of Chicago.

What's on the books now.

Yes, so I'll speak first to prop.

Project in Chicago is on timing and well within its budget. So we're very encouraged with the product itself is phenomenal the team's done a great job capturing the spirit of Chicago.

Toronto remains mired in some back and forth between.

On the site and the city of Toronto, So no real news there at this point and.

Can't really speculate about the future until we get there so just.

Right now we're stabilizing the business getting Chicago open and then we will focus on the future after that.

Okay. Thank you that's all for me.

Thanks, Brian.

Our next question comes from Carter.

Nik Mehta of Northcoast Research. Please go ahead.

David Berry: Toronto remains mired in some back and forth between the site and the city of Toronto, so no real news there at this point. And we can't really speculate about the future until we get there. So just right now, we're stabilizing the business, getting Chicago open, and then we'll focus on the future after that. Okay, thank you.

Sure.

Hey, good evening Steve.

Could you speak with your customers I'm wondering what you are noticing in terms of budgets for 2024 as they prepare for either corporate event or trade shows.

Yes, it's a great question Kartik.

So we're seeing that.

Within this industry.

We see things kind of six to nine months before they happen meeting.

Ryan Mayer: That's all for me. Thanks, Ryan. Our next question comes from Karthik Mehta of North Coast Research. Go ahead. Hey, good evening, Steve. As you speak with your customers, I'm wondering what you're noticing in terms of budgets for 2024 as they prepare for either corporate events or trade shows. Yeah, it's a great question, Karjak.

Right now people are booking space for events that will happen later this year.

And really even into 2025, so we have decent visibility on the exhibition side and we're seeing the continued trend that we saw through 2023, which is.

Kartik Mehta: So we're seeing that, as you know, within this industry, we see things kind of six to nine months before they happen, meaning right now, people are booking space for events that will happen later this year and really even into 2025. So we have decent visibility on the exhibition side, and we're seeing the continued trend that we saw through 2023, which is, you know, trade shows are still coming back. They're above, kind of on a same-show basis, above the revenue that they had in 2019.

The tradeshows are still coming back theyre above kind of on a same store basis above the revenue that they had in 2019. The square footage has made significant progress during the course of 'twenty three and we expect that to continue through 24 on our corporate marketing.

Syed.

We've been really pleased with what we've seen in 'twenty three that budgets are coming in above 2019 levels very solidly and we expect that to continue as well.

Steven W. Moster: The square footage has made significant progress during the course of 2023, and we expect that to continue through 2024. On the corporate marketing side, you know, we've been really pleased with what we've seen in 23 that budgets are coming in above 2019 levels very solidly, and we expect that to continue as well. You don't have as much visibility, but you have kind of six months' worth of visibility on the corporate marketer side, and we feel really good about the position we have going. And then just on the pursuit side, I'm wondering how much do you anticipate the new attractions and experiences to benefit in 2024? How much of a contribution are you anticipating? Yeah, I mean, how I would answer that is we're looking for continued growth. We had a good period of growth through 23.

You don't have as much visibility, but you have kind of six months worth of visibility on the corporate marketer side and we feel really good about.

The position, we have going into 'twenty four.

And then just on the pursuit side I'm wondering how.

How much do you anticipate the new.

Attractions experiences to benefit in 2024, how much of a contribution are you anticipating.

Yes.

How I would answer that is we're looking for continued growth we had a good period of growth through 'twenty. Three if you take a look in and you've got a variety of attractions that all of them at a healthy growth rate.

We're going to continue to see increases in stations, we expect those numbers to continue to perform.

Steven W. Moster: If you take a look, and we've got a variety of attractions, all of them at a healthy growth rate, we're going to continue to see increased visitations. We expect those numbers to continue to perform, and we're in a good position as we move forward. Thank you very much. Thanks, guys. Again, if you'd like to ask a question, please press star, then the number one on your remote control.

And we're going at a good position as we move forward.

Thank you very much I appreciate it.

Thanks Robert.

Again, if you'd like to ask a question. Please press Star then the number one on your telephone keypad.

Our next question comes from Tyler bakery of Oppenheimer.

Tyler Batory: And that question comes from Tyler Batory of Oppenheimer. Please go ahead. Good afternoon, thank you. First question for me on the GES side of things, Steve, what are your expectations for same show revenue in 2024? In the past few calls, there's been a lot of discussion about square footage and show sizes, so what are your latest thoughts on those topics? And then the third part of this question, price, has been a reason and a way you've been able to grow your revenue in GES. Do you think you can hold on to price going forward or perhaps even grow it from here? I'm just trying to get a good sense of your views on those topics.

Please go ahead.

Good afternoon, and thank you first question for me on the Ges side of things Steve.

What are your expectations for same show revenue in 2024.

Last few calls as well it was more of a discussion about square footage shows sizes. So what are your latest thoughts on those topics and then the third part of this question.

<unk> has been a reason why you've been able to grow your revenue in Ges.

Do you think you can hold on to it.

Don't going forward or perhaps even grow it from here I'm just trying to get a good sense of your views on those topics.

Steven W. Moster: Yeah, I think so. The drivers of growth for next year, one is, as you mentioned, same-show growth, and I would expect that to be, you know, in the mid-single-digit range, partially driven by pricing and partially driven by an increase in the square footage of those events, as we've talked about on prior calls. The second element of growth is obviously a large one, which is the non-annual events that are taking place, and it's roughly $65 million of incremental revenue that will occur in 2024 that did not occur in 2023. And then the last element of growth is just a continuation of what we've seen in the growth of Spiro. You know, we're really pleased with the new clients that we've picked up during the course of 23 and you know I feel there's momentum behind us and that will definitely help our overall growth for Spiro N24. So those are kind of the three buckets and kind of where I see them shaken out for this year.

Yes, I think so the drivers of growth for next year. One is as you mentioned same show growth and I would expect that to be.

The mid single digit.

Range.

Partially driven by pricing and partially driven by <unk>.

Kris and the square footage of those events as we've talked about on prior calls.

The second.

Obviously, a large one which is the non annual events that are taking place and it's.

Roughly $65 million of incremental revenue.

That will occur in 2004 that did not occur in 'twenty three and then the last element of growth is just a continuation of what we've seen in the growth of spiral.

We're really pleased with.

The new clients that we've picked up during the course of 'twenty, three and I feel there's momentum behind us.

That will.

That will definitely help our overall growth for <unk> and 'twenty four so those are kind of the three buckets.

And kind of where I see them.

Taken out.

For this year.

Steven W. Moster: Great. Switching gears to Pursuit, in terms of the revenue guide, what's implied in terms of long-haul visitation? Are you having any conversations with tour groups or the travel trade coming from Asia?

Okay, great switching gears to pursue.

So the revenue guide.

What's implied in terms of long haul visitation are.

Are you, having any conversations with <unk>.

Tour groups travel trade coming coming from Asia.

David Berry: We certainly are. And as we talked a little bit about in the remarks, one of the things we've been able to do, Tyler, is to have demand coming from other parts of the world as certain countries in Asia take longer to recover. So if you look at the visitation growth and you look at the room night growth, we've been able to basically substitute. And as China returns specifically, we think that's going to be a multi-year return, but we do believe it will return. So no meaningful change is anticipated from Asia group travel. Demand remains consistent, and they're really rebuilding. And they're rebuilding their channels out of the country and into Canada. And so, the good news is that we have demand from all over the world. And the other thing, we try not to concentrate too much on one country, so you're not stuck. If a country's economy falters, you're not stuck waiting for business from that country.

We certainly are and as we talked a little bit about in the remarks that.

One of the things we've been able to do Tyler has to have demand coming from other parts of the world as certain countries in Asia take longer to recover. So if you look at the visitation growth and you look at the room night growth, we've been able to basically substitute and as China returns specifically.

We think thats going to be a multiyear return, but we do believe it will return so no meaningful change anticipated from Asia group travel.

Demand remains consistent and they are really rebuilding and they're rebuilding their channels out of the country and into Canada and so the good news is we have demand from all over the world and the other thing we're trying to as a concentrate too much in one country. So you're not stuck if a country's economy falters youre not stuck waiting FERC business from that come.

David Berry: So we tend to spread out allocations into the forward look, and I can tell you that demand in 24, demand in 25 remains quite strong. Okay, and then in terms of the margin outlook there, the growth in terms of 2024 is really quite strong. In the past, you've talked about getting back to the low 30s on EBITDA margin and pursuits. Does that sound like something that you think is doable? Do you have any idea in terms of when that might happen?

So we tend to spread out allocations into the forward look and I can tell you that demand in 2000 and for demand in 25 remains quite strong.

Okay, and then in terms of the margin outlook there.

Growth in terms of 2024 is really quite strong in the past you've talked about getting back to low thirty's on EBITDA margin and pursuits.

So big that you think is doable do you have any line of sight in terms of when that when that might happen.

David Berry: Yeah, so if you take a look at page 16 in the deck, you can see a view of margin. I mean, we're quite confident and on track for our return to 30% margin in 24. And so we're working hard in that direction. And we're pleased with the 370 basis point increase in 23. But we're on track and working hard for 24. I feel confident about it.

Yes. So if you take a look at page 16 in the deck you can see a view to margin I mean, we're quite confident and on track for our return to 30% margin in 'twenty four.

And so we're working hard in that direction and we're pleased with the 370 basis point increase in 'twenty three but we're on track and working hard for 'twenty four feel confident about it.

Tyler Batory: Okay, my last question. In terms of cash flow here, on the CapEx side of things, 20 million of growth CapEx, I'm assuming that's all related to the flyover. So just wanted to be sure that that's the right way to be thinking about it.

Okay.

My last question.

Terms of cash flow here.

On the Capex side of things.

Dollars of growth Capex I am assuming that's all related to fly over so just wanted to be sure that thats the right way to be thinking about it and then free cash flow is going to be moving quite higher year over year I think in the prepared remarks, you called out perhaps bringing more into reducing debt. So wanted to be sure that I heard that correct.

Ellen M. Ingersoll: And then free cash flow is going to be moving quite higher year over year. I think in the prepared remarks you called out perhaps leaning more into reducing debt. So wanted to be sure that I heard that correctly. Kind of how are you thinking about leverage and the opportunities to reduce that going forward? Yes, you did hear that right.

How are you thinking about about leverage and the opportunities to reduce that going forward.

Yes, you did hear that right regarding the growth capex.

Ellen M. Ingersoll: Regarding the growth CapEx, though, about $6 million is supply over Chicago and a handful of smaller projects after that. As far as our cash flow, all three will obviously be a big cash flow quarter. We will likely pay off our revolver in Q3, probably add to it in Q4, but we will have access enough cash flow to pay down some debt and do some selective growth projects. Okay, great. That's all for me.

$6 million is flavor, Chicago, and a handful of smaller projects after that.

As far as our cash flow Q3, it will obviously be a big cash flow quarter.

It will likely pay off our revolver in Q3.

Probably add to it in Q4 that we will have.

Excess cash flow to pay down some debt and do some selective projects at pursuit.

Okay, Great. That's all for me thank you for the detail.

Tyler Batory: Thank you for the detail. The next question is from Alex Furhman of Craig Hallam. Your line is open.

Thanks, John.

The next question is from Alex Fuhrman of Craig Hallum.

Your line is open.

Alex Joseph Fuhrman: Hey, guys. Congratulations on a really strong year, and thanks for taking my question. I guess my first question would be on the pursuit side of things. It seems like you're guiding to very substantial EBITDA growth in 2024 but with fairly modest mid-single-digit revenue growth, so just kind of rough numbers here. Seems like something approximately like 100% flow-through on incremental revenue to EBITDA relative to what you did in 2023. Is the expectation that most of your revenue growth in 2024 is going to come from rate increases where there's not a lot of associated expenses or just increased flow-through to attractions where there's not a lot of cost? We'd love to just kind of hear a little bit more about how earnings are going to be up so much on a relatively small amount of revenue growth. So attractions scale with volume, and our profitability increases meaningfully when visitation is strong. So our fixed costs will remain fixed.

Yeah.

Hey, guys. Congratulations on a really strong year and thanks for taking my question I guess my first question would be on the pursuit side of things. It seems like youre guiding to very substantial EBITDA growth in 2024, but on fairly modest mid single digit revenue grew.

So just kind of rough numbers here.

It seems like something something approximately like 100% flow through on incremental revenue to EBITDA relative to what you did in 2023.

Yes.

Is the expectation that most of your revenue growth in 2024 is going to come from rate increases where theres not a lot of associated expenses or just increase flow through to attractions, where theres not a lot of cost would love to just kind of hear a little bit more.

About how earnings is going to be up so much on a relatively small amount of revenue growth.

Yes.

So attraction scale with volume.

Our profitability increases meaningfully when visitation is strong so our fixed costs remained fixed.

David Berry: Every dollar of incremental revenue flows at a very high margin to the bottom line. We've got consistent rate increases. And as we make experiences better, we're able to, you know, provide a better experience and then charge more for it. We're quite focused on that, you know, just better execution across the board in terms of the things that we can control and manage. The combination of technological improvements, if you look, we're experimenting in Chicago as an example with ticket kiosks and digital ticket purchasing, which, you know, we all use for everyday items like groceries and airline tickets and other things.

Every dollar of incremental revenue flows at very high margin to the bottom line, we've got consistent rate increases and as we make experiences better we're able to provide a better experience and then charge more for it.

Quite focused on that.

Better execution across the board in terms of the things that we can control and manage.

The combination of technology improvements you look we're experimenting in Chicago as an example, with ticket kiosks and digital ticket purchasing.

We all use for everyday items like groceries and airline tickets and other things, but it's all in areas, where we can make the business more efficient and more effective and there are some improvements.

David Berry: But it's all in areas where we can make the business, you know, more efficient and more effective. And there are some improvements that we continue to work on in terms of how we can deliver experiences from a cost side and just driving to greater profitability and greater experience. So that's what gets us to 30%, and then we just keep working hard. Okay, that's really helpful.

We continue to work on in terms of how we can deliver experienced from a cost side and just driving to greater profitability and greater experience. So.

That's what gets us to 30% and we just keep working hard.

Okay. That's really helpful. Thanks, David and then of the $20 million of growth Capex.

David Berry: Thanks, David. And then of the $20 million of growth CapEx that you're deploying this year, I imagine some amount of that is for the Chicago flyover opening. Can you give us a sense of what the rest of that is for? And, you know, when we could start to see any benefit from that spending? Yeah, I love Ellen also, just jumping on this thing. Ellen, do you want to go ahead, or would you like me to take it? No, go ahead, David.

Youre deploying this year I imagine some amount of that is for the Chicago flyover opening can you give us a sense of what the rest of that is for Ann.

And when we could start to see any benefit from that spending.

Yes.

So Jonathan.

Ill, let you want to go ahead or would you like me to take it.

No go ahead, David I was just going to reiterate at the $20 million about $6 million in Chicago, and then you can speak to the other smaller projects that you have going on.

David Berry: I was just going to reiterate, of the $20 million, about $6 million is for Chicago. And then you can speak to the other smaller projects that you have going on. Yeah, and Alex, it fits well with something that you experienced when you visited us and we did the tour around. You were at Moline Lake. And Moline Lake is a great example of a very successful business, very highly rated from a guest experience standpoint. We consistently sell out in the peak of the day.

Yeah and Alex.

Well with something that you've experienced when you visited us and we did the tour around Europe Mclean Lake in <unk> is a great example of that.

Very successful business very highly rated from a guest experience standpoint, we consistently sell out in the peak of the day, so something as simple as ordering and additional boat for the Marine Lake boat fleet enabled to respond to demand and so that fabrication is well underway and on track for delivery in time for the summer season. Another really good example in the Sky.

David Berry: So something as simple as ordering an additional boat for the Moline Lake boat fleet is able to respond to demand, and so the fabrication is well underway and on track for delivery in time for the summer season. Another really good example is at Sky Lagoon, where the ritual experience at Sky Lagoon, which is, you know, the sauna and the salt scrub and cold spines, etc., is limited today by the size of that facility.

Lagoon, where the ritual experience.

Sky Lagoon, which is.

On the Salt scrubbing and coal plans et cetera is limited today by the size of that facility by expanding that facility itself within Sky lagoon. It allows us to eliminate less.

David Berry: By expanding that facility itself within Sky Lagoon, it allows us to eliminate less expensive products, provide a better experience, but also charge a premium price. So those are just two initiatives. And then there's a myriad of other things across the board, you know, all across Pursuit, where we're looking at internal things that we can make better and improving the guest experience all the way across the company. That's really helpful. Thank you, David. And then, if I could ask you one on the GES side of the business?

Less expensive products provide a better experience, but also charge a premium price. So those are just two initiatives and then theres a myriad of other things across the board all across pursuit.

We're looking at internal things that we can make better and improving guest experience.

All the way across the company.

Yeah.

Great. That's really helpful. Thank you David and then if I could ask one on the on the Ges side of the business I mean, it looks like you if a rounding to the nearest percentage point you basically hit your your 8% EBITDA margin target early.

Alex Joseph Fuhrman: I mean, if we round to the nearest percentage point, you basically hit your 8% EBITDA margin target early, and it looks like you're guiding to margins a little bit above that for this year. Without getting into specific guidance for future years, can you just give us a sense at a high level? I mean, assuming you've got a pretty meaningful revenue headwind in 2025 when you lose some of these non-annual shows, do you think it's reasonable to maintain that 8.5% EBITDA margin even in odd-numbered years or at least the 8% level that you've referred to in the past? Yeah, it's a great question, Alex.

And it looks like Youre guiding to margins a little bit above that for this year can without getting into specific guidance for future years can you just give us a sense at a high level I mean, assuming.

You've got a pretty meaningful revenue headwind in 2025, when you lose some of those non annual mix.

<unk> do you think it's reasonable to maintain that eight 5% EBITDA margin even.

Even in odd numbered years or at least the 8% level that that you've referred to in the past.

Yes, it's a great question Alex.

Steven W. Moster: And, you know, we are very pleased with what we were able to accomplish in 2023, given that it's a traditionally lower non-annual show rotation for this year. But it does benefit us next year. But I think the thing to keep in mind is, you know, as revenue comes back, meaning same-show revenue and the square footage comes back, it comes back at a pretty high flow through. Additionally, the team has really been laser focused on finding lean projects throughout the business.

We are very pleased with what we were able to accomplish in 2023, given that it's a traditionally lower not annual.

Show rotation for this year it does benefit us next year, but I think the thing to keep in mind is.

As revenue comes back meaning same show revenue and the square footage comes back it comes back at a pretty high flow through.

Additionally, the team has really been laser focused on finding leading projects throughout the business. So we've talked about this over the last kind of two and a half years or so and we're really seeing the benefit of that play into the results that we had in 'twenty three and obviously as we tackle new projects in 'twenty four 'twenty five.

Steven W. Moster: So we've talked about this over the last kind of two and a half years or so, and we're really seeing the benefit of that play out in the results that we had in 23. And obviously, as we tackle new projects in 24 and 25, those will have a benefit as well. So it's my expectation that we can maintain that 8% or higher as we go into odd years where there isn't a big show rotation. Great! That's really helpful.

We'll have a benefit as well so it's my expectation that we can maintain that 8% or higher as we go into.

Hard years, where there isn't a.

Alex Joseph Fuhrman: Thank you, Steve, and thanks, everyone. Thanks, y'all. And we have a follow-up from Brian Mayer of the... Thanks, and this is kind of following up on Alex's question and really the kind of series of questions before that. This may come across as a loaded question; you don't have to answer it if you don't want to, but kind of aspirationally, as you think about the next three to four years and what you're seeing with, you know, technology and what you've learned from the business, et cetera, where could margins go? both at GES and at PURSUIT, and, you know, maybe more on the PURSUIT side because I think, Steve, you kind of answered that on the GES side.

Our big show rotation.

Great. That's really helpful. Thank you, Steve and thanks, everyone.

Thanks, Alex.

And we have a follow up from Brian <unk> of B Riley. Please go ahead.

Yeah.

Thanks, and kind of following up on Alex's question and really the kind of series of questions before that in May.

It may come across as a loaded question you don't have to answer it if you don't want to but kind of aspirational Lee as you think about the next three to four years and what Youre seeing with technology, and what you've learned from the business and et cetera.

Where could margins go.

Both ges and pursuit.

Maybe more on the pursuit side, because I think Steve you kind of answered it on the GDS side.

Brian Mayer: I'll let David talk about what he sees going forward for pursuit. Yeah, our goal is to get to 33%. It's going to take some time. But you know, the jump this year to almost 27, and then coming in on 24 at 30%.

I'll, let David talk about what he sees going forward for pursuit.

Yes, our goal is to as soon as we can get to 33% it's going to take some time.

The jumped.

This year two to almost 27% and then coming in on 24 at 30%. We believe 33% is that really sustainable and powerful margin for the business. It allows us to continue to maintain things at a high level.

David Berry: We believe 33% is a really sustainable and powerful margin for the business. It allows us to continue to maintain things at a high level. And also, you know, keep improving experiences and, at the same time, be a great margin business that we can sustain over the long term. Perfect. Thank you. Welcome. There are no further questions at this time. Steve Moster, I turn the call back over to you. Thanks, Lydia. And thanks again to our hardworking team members around the globe and our shareholders for their support of VIAD. We look forward to giving you another update for the next quarter. Thank you so much. This concludes today's call. Thank you for joining us. You may now disconnect your line.

And also keep improving experiences and at the same time.

<unk> be a great margin business that we can sustain over the long term.

Perfect. Thank you.

Thanks, Brian welcome.

There are no further questions at this time, Steve Master I'll turn the call back over to Jay.

Okay.

Thanks, Laura and thanks, again to our hard working team members around the globe and our shareholders for their support and we look forward to giving you another update in for the next quarter. Thanks, So much.

This concludes today's call. Thank you for joining you may now disconnect your lines.

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