Convention services company doubles 1st-quarter earnings, sees trouble ahead
The company that operates Las Vegas-based Global Experience Specialists, a major convention services provider, reported that first-quarter earnings more than doubled over last year.
But there are storm clouds on the horizon with a weak convention calendar.
Phoenix-based Viad Corp, parent company of GES in Las Vegas, reported earnings of $8.1 million, 40 cents a share, on revenue of $285.2 million for the quarter that ended March 31. That compared with earnings of $1 million, 5 cents a share, on revenue of $268.8 million for the same period a year earlier.
The company’s earnings are based on net income attributable to Viad. The company’s segment operating income, which includes losses and charges from noncontrolling interests, was $12.8 million for the quarter compared with $5.5 million last year.
While Viad Chairman and CEO Paul Dykstra said results mean the company is off to a great start in 2013, the future convention calendar shows several show rotations — events that don’t occur every year — expected to reduce revenue by $55 million to $60 million for the year.
The company said same-show revenue, events that occur every year, is expected to show single-digit percentage increases for 2013 but not enough to counter anticipated declines in the third and fourth quarters.
Steve Moster, president of GES, said efforts to lower costs through more efficient use of resources led to increased margin performances as well as modest year-over-year show growth.
Negative show rotations will affect most of GES’ markets, but the most visible show that isn’t returning to Las Vegas in 2013 is MINExpo, an exhibition of mining equipment that occurs every four years. The event ran at the Las Vegas Convention Center in the fall.
Moster said an important show on Las Vegas’ horizon is May’s International Council of Shopping Centers, RECon Las Vegas, which annually brings shopping center developers to the city. GES also is planning for the summer edition of Magic Marketplace, a fashion exhibition that occurs in August.