Viad Corp Announces Second Quarter Results; Earnings per Share of $0.50

Robert H. Bohannon, chairman, president and chief executiveofficer said, "We had another terrific quarter of growth, with a 19.0percent increase in earnings per share over the 2004 second quarter.Revenue increased 9.5 percent, reflecting growth at all of ouroperating segments. Total segment operating income increased 18.1percent, led by GES and Exhibitgroup."

Second Quarter 2005 Financial Highlights

Highlights of the 2005 second quarter, compared to second quarter2004 results, and year-to-date results are presented below.
Q2 2005 Q2 2004 Change
----------- --------- ---------
($ in millions)
Revenue $ 227.0 $207.4 9.5%
Segment operating income $ 22.3 $ 18.9 18.1%
Operating margins (a) 9.8% 9.1% 70 bps
Income from continuing operations $ 11.1 $ 9.2 20.7%
Net income (b) $ 11.1 $ 9.2 21.4%
Adjusted EBITDA (c) $ 25.5 $ 19.7 29.5%
Cash from (used in) operations $ (1.1) $ 15.6 NM
Free cash flow (outflow) (c) $ (9.1) $ 13.5 NM

YTD 2005 YTD 2004 Change
----------- --------- ---------
($ in millions)
Revenue $ 476.5 $ 414.9 14.8%
Segment operating income $ 45.1 $ 35.1 28.4%
Operating margins (a) 9.5% 8.5% 100 bps
Income from continuing operations $ 23.5 $ 16.7 40.4%
Net income (b) $ 23.3 $ 16.7 39.4%
Adjusted EBITDA (c) $ 52.6 $ 39.0 34.9%
Cash from operations $ 9.6 $ 22.4 -56.9%
Free cash flow (outflow) (c) $ (2.8) $ 16.4 NM

(a) For operating margins, the change from the prior year period is
presented in basis points.

(b) Net income in 2005 includes income from discontinued operations of
$59,000 in the second quarter and a year-to-date loss from
discontinued operations of $168,000, relating to tax matters
associated with previously sold operations.

(c) Adjusted EBITDA is defined by Viad as net income before interest
expense, income taxes, depreciation and amortization, goodwill and
intangible asset impairments, changes in accounting principles and
the effects of discontinued operations. Free cash flow is defined
by Viad as net cash provided by operating activities minus capital
expenditures and dividends. Adjusted EBITDA and free cash flow are
supplemental to results presented under accounting principles
generally accepted in the United States of America (GAAP) and may
not be comparable to similarly titled measures presented by other
companies.

These non-GAAP measures are used by management to facilitateperiod-to-period comparisons and analysis of Viad's operatingperformance and liquidity. Free cash flow is also used by managementto assess the company's ability to service debt, fund capitalexpenditures and finance growth. Management believes these non-GAAPmeasures are useful to investors in benchmarking and trending theperformance and value of Viad's business. These non-GAAP measuresshould be considered in addition to, but not as a substitute for,other similar measures reported in accordance with GAAP. See Table Twofor reconciliations of net income to Adjusted EBITDA, and of net cashprovided by operating activities to free cash flow.

At the end of the second quarter 2005:

-- Cash and cash equivalents were $120.0 million.

-- Debt totaled $17.9 million, with a debt-to-capital ratio of 4.5 percent.

Free cash flow for the second quarter was an outflow of $9.1million, reflecting decreases in customer deposits and accountspayable attributable to the timing of trade show activity. The timingof income tax payments as well as the level of capital expendituresduring the quarter also contributed to the outflow. For the full year,Viad expects free cash flow to approximate net income, plusdepreciation and amortization, minus restructuring payments, capitalexpenditures and dividends, with a minimal impact from workingcapital.

GES Exposition Services (GES)

GES' revenue for the second quarter of 2005 was $150.4 million, up$13.0 million or 9.5 percent from $137.4 million in the second quarter2004. Segment operating income was $16.1 million, up 14.4 percent from$14.1 million in 2004 and operating margins were 10.7 percent ascompared to 10.3 percent in 2004.

Bohannon said, "As expected, GES had another strong quarter. Theimproved results over the 2004 quarter were driven mainly by continuedsuccess in capturing additional exhibitor discretionary spendingthrough the Products and Services group and continued growth in theoverall trade show industry. While the industry is clearly improving,certain challenges, including high fuel costs and pricing pressures,continue to impact GES' margins."

Exhibitgroup/Giltspur (Exhibitgroup)

Exhibitgroup's second quarter revenue was $58.5 million, up $5.9million or 11.1 percent from $52.7 million in the 2004 second quarter.Segment operating income was $2.0 million, as compared to $96,000 inthe 2004 second quarter. The 2005 second quarter included $2.3 millionin legal fees incurred to defend against unfair competitive practices,including violation of intellectual property rights, related toExhibitgroup's kiosk business.

Bohannon said, "Exhibitgroup delivered better than expected secondquarter results. Revenue growth was driven in large part by positiverevenue rotation of approximately $10 million from a European airshowthat did not occur in the 2004 second quarter. This benefit waspartially offset by reduced spending by certain clients in thepharmaceutical industry. Exhibitgroup's operating profit, despite thelegal fees incurred, reflects significant improvement in gross marginsas the result of new revenue initiatives and improved efficiency."

Bohannon continued, "We have recently settled the kiosk litigationby way of Consent Judgments that recognize the validity and value ofour intellectual property rights. The legal expenses we have incurredare an unfortunate but necessary cost. Our intellectual propertyrights protect our discernible differences and therefore the value ofour business. We will not allow a competitor to violate these rights."

Travel and Recreation Services

Travel and Recreation Services segment revenue for the 2005 secondquarter was $18.1 million, as compared to $17.3 million in the 2004second quarter. Segment operating income was $4.2 million, as comparedto $4.7 million in the 2004 second quarter. Operating margins were23.0 percent compared to 26.9 percent in 2004.

Bohannon said, "Results in the Travel and Recreation Servicessegment were negatively impacted by excessive rainfall in Alberta,Canada in the second quarter, which resulted in reduced passengervolumes at Brewster's gondola and ice field tours. Despite lowervolumes at Brewster's high throughput attractions, operating marginsfor this segment were still very strong."

2005 Outlook

Guidance provided by Viad is subject to change as a variety offactors can affect actual operating results. Those factors areidentified in the safe harbor language at the end of this pressrelease.

Full Year 2005

Viad's guidance for the full year 2005 has changed slightly. Fullyear income per diluted share is expected to be in the range of $1.23to $1.34, versus prior guidance of $1.23 to $1.36, and compared toincome from continuing operations before impairment losses of $1.07per share in 2004. Revenue is expected to increase by a low-singledigit rate from the 2004 amount of $785.7 million. Segment operatingincome is expected to increase by a mid-single digit to mid-teens ratefrom $53.4 million in 2004. This improvement is expected to be drivenmainly by cost reductions and improved margins at Exhibitgroup.Despite negative show rotation of approximately $10 million, GES'revenue is expected to be slightly better than 2004, driven mainly bycontinued growth in the Products and Services group.

Third Quarter 2005

Consistent with Viad's prior guidance, income per share isexpected to be in the range of $0.27 to $0.33, as compared to incomebefore impairment losses per share of $0.57 in the 2004 third quarter.Revenue is expected to decrease by 15 to 20 percent from the 2004amount of $218.6 million. These decreases are expected to be drivenmainly by negative show rotation of approximately $34 million at GESand $10 million at Exhibitgroup (from the European airshow thatoccurred in the 2005 second quarter). Segment operating income isexpected to be in the range of $13.5 million to $15.5 million.

This guidance is based upon the following segment revenue andoperating income expectations.
Segment
Segment Operating Income
Revenue (Loss)
---------------------------------------------
low-end high-end low-end high-end
-------------------------- ------------------
($ in millions)

GES $ 105 to $ 115 $ 0 to $ 1.0
Exhibitgroup $ 28 to $ 33 $(6.0) to $(5.0)
Travel & Recreation $ 40 to $ 45 $19.0 to $20.0

Fourth Quarter 2005

Viad's guidance for the fourth quarter has been reduced slightlybased on the expectation that Exhibitgroup will continue to experiencereduced spending by certain of its clients in the pharmaceuticalindustry. Viad's fourth quarter loss per share is now expected to bein the range of $0.05 to $0.10, as compared to Viad's prior guidanceof a loss per share in the range of $0.04 to $0.08, and the 2004fourth quarter loss from continuing operations before impairmentlosses of $0.27 per share.

Bohannon said, "We've had a strong first half of 2005 and wecontinue to be optimistic about the industries we serve. Certainly, wehave many challenges ahead of us, but we are well on our way towardrealizing meaningful earnings growth in 2005."

Conference Call and Web Cast

Viad Corp will hold a conference call with investors and analystsfor a review of second quarter 2005 results on Friday, July 29, 2005at 9 a.m. (EDT). To join the live conference call, dial 800-967-7134,passcode 1467124, or access the webcast through Viad's Web site atwww.viad.com. A replay will be available for a limited time at888-203-1112, passcode 1467124, or visit the Viad Web site and link toa replay of the webcast.

Viad is an S&P SmallCap 600 company. Major subsidiaries includeGES Exposition Services of Las Vegas, Exhibitgroup/Giltspur ofChicago, Brewster Transport Company Limited of Banff, Alberta, Canada,and Glacier Park, Inc. of Phoenix. For more information, visit thecompany's Web site at www.viad.com.

Forward-Looking Statements

As provided by the safe harbor provision under the "PrivateSecurities Litigation Reform Act of 1995," Viad cautions readers that,in addition to historical information contained herein, this pressrelease includes certain information, assumptions and discussions thatmay constitute forward-looking statements. These forward-lookingstatements are not historical facts, but reflect current estimates,projections, expectations, or trends concerning future growth,operating cash flows, availability of short-term borrowings, consumerdemand, new business, investment policies, productivity improvements,ongoing cost reduction efforts, efficiency, competitiveness, legalexpenses, tax rates and other tax matters, and the realization ofrestructuring cost savings. Actual results could differ materiallyfrom those projected in the forward-looking statements. Viad'sbusinesses can be affected by a host of risks and uncertainties. Amongother things natural disasters, gains and losses of customers,consumer demand patterns, labor relations, purchasing decisionsrelated to customer demand for convention and event services, existingand new competition, industry alliances, consolidation, and growthpatterns within the industries in which Viad competes and anydeterioration in the economy may individually or in combination impactfuture results. In addition to factors mentioned elsewhere, economic,competitive, governmental, technological, capital marketplace andother factors, including further terrorist activities or war, couldaffect the forward-looking statements in this press release.Additional information concerning business and other risk factors thatcould cause actual results to materially differ from those in theforward-looking statements can be found in Viad's annual and quarterlyreports filed with the Securities and Exchange Commission.

Information about Viad Corp obtained from sources other than thecompany may be out-of-date or incorrect. Please rely only on companypress releases, SEC filings and other information provided by thecompany, keeping in mind that forward-looking statements speak only asof the date made. Viad undertakes no obligation to update anyforward-looking statements, including prior forward-lookingstatements, to reflect events or circumstances arising after the dateas of which the forward-looking statements were made.
VIAD CORP AND SUBSIDIARIES
TABLE ONE - QUARTERLY AND YEAR-TO-DATE RESULTS
(UNAUDITED)

Three months ended June 30, Six months ended June 30,
-------------------------- --------------------------
(000 omitted,
except per
share data) 2005 2004 % 2005 2004 %
-------- -------- ------ -------- -------- ------


Revenues
(Note A) $227,031 $207,378 9.5% $476,543 $414,933 14.8%
======== ======== ====== ======== ======== ======


Segment operating
income (Note A) $ 22,289 $ 18,878 18.1% $ 45,056 $ 35,084 28.4%
Corporate
activities and
minority
interests (3,147) (3,835) 17.9% (5,766) (6,357) 9.3%
Restructuring
recoveries
(charges) (Note B) 73 (853) NM 363 (853) NM
Net interest
income (expense) 262 (265) NM 412 (606) NM
-------- -------- ------ -------- -------- ------
Income before
income taxes 19,477 13,925 39.9% 40,065 27,268 46.9%
Income tax expense (8,391) (4,743) -76.9% (16,554) (10,527) -57.3%
-------- -------- ------ -------- -------- ------
Income from
continuing
operations 11,086 9,182 20.7% 23,511 16,741 40.4%
Income (loss)
from discontinued
operations (Note C) 59 - NM (168) - NM
-------- -------- ------ -------- -------- ------
Net income $ 11,145 $ 9,182 21.4% $ 23,343 $ 16,741 39.4%
======== ======== ====== ======== ======== ======

Diluted income
per common
share:
Income from
continuing
operations $ 0.50 $ 0.42 19.0% $ 1.06 $ 0.77 37.7%
Income (loss)
from discontinued
operations - - NM (0.01) - NM
-------- -------- ------ -------- -------- ------
Net income
per share $ 0.50 $ 0.42 19.0% $ 1.05 $ 0.77 36.4%
======== ======== ====== ======== ======== ======

Basic income per
common share:
Income from
continuing
operations $ 0.51 $ 0.42 21.4% $ 1.07 $ 0.77 39.0%
Income (loss)
from discontinued
operations - - NM (0.01) - NM
-------- -------- ------ -------- -------- ------
Net income
per share $ 0.51 $ 0.42 21.4% $ 1.06 $ 0.77 37.7%
======== ======== ====== ======== ======== ======

Common shares treated as
outstanding for net income per share
calculations:

Average
outstanding
shares 22,033 21,732 1.4% 21,975 21,705 1.2%
======== ======== ====== ======== ======== ======

Average
outstanding
and
potentially
dilutive
shares 22,191 21,839 1.6% 22,142 21,811 1.5%
======== ======== ====== ======== ======== ======

NM = not meaningful


VIAD CORP AND SUBSIDIARIES
TABLE ONE - NOTES TO QUARTERLY AND YEAR-TO-DATE RESULTS
(UNAUDITED)

(A) Reportable Segments


Three months ended June 30, Six months ended June 30,
-------------------------- --------------------------
(000 omitted) 2005 2004 % 2005 2004 %
-------- -------- ------ -------- -------- ------

Revenues:
GES
Exposition
Services $150,420 $137,392 9.5% $348,770 $300,955 15.9%
Exhibitgroup/
Giltspur 58,517 52,652 11.1% 104,949 92,705 13.2%
Travel and
Recreation
Services 18,094 17,334 4.4% 22,824 21,273 7.3%
-------- -------- ------ -------- -------- ------
$227,031 $207,378 9.5% $476,543 $414,933 14.8%
======== ======== ====== ======== ======== ======

Segment
operating
income
(loss):
GES
Exposition
Services $ 16,144 $ 14,113 14.4% $ 42,896 $ 34,671 23.7%
Exhibitgroup/
Giltspur 1,985 96 NM 157 (2,933) NM
Travel and
Recreation
Services 4,160 4,669 -10.9% 2,003 3,346 -40.1%
-------- -------- ------ -------- -------- ------
$ 22,289 $ 18,878 18.1% $ 45,056 $ 35,084 28.4%
======== ======== ====== ======== ======== ======

NM = not meaningful

(B) Restructuring Charges and Recoveries -- In the first quarter of
2005, $290,000 ($175,000 after-tax) of the reserve was reversed as
certain costs originally anticipated were not incurred.
Additionally, in the second quarter of 2005, $73,000 ($44,000
after-tax) related to certain facility closure and lease
termination costs that were less than original estimates, was also
reversed. In the second quarter of 2004, Viad recorded a
restructuring charge of $853,000 ($530,000 after-tax) primarily
related to planned employee reductions.

(C) Income (Loss) from Discontinued Operations -- In the second
quarter of 2005, Viad recorded income from discontinued operations
of $59,000 relating to tax matters associated with previously sold
operations. In the first quarter of 2005, Viad recorded a loss
from discontinued operations of $227,000, also related to tax
matters.


VIAD CORP AND SUBSIDIARIES
TABLE TWO - ADJUSTED EBITDA AND FREE CASH FLOW
(UNAUDITED)

Three months ended June 30, Six months ended June 30,
------------------------ -------------------------
(000 omitted) 2005 2004 % 2005 2004 %
------- ------- ------ -------- ------- ------

Adjusted EBITDA:
Net income $11,145 $ 9,182 21.4% $ 23,343 $16,741 39.4%
(Income) loss from
discontinued
operations (59) - NM 168 - NM
------- ------- ------ -------- ------- ------
Income from
continuing
operations 11,086 9,182 20.7% 23,511 16,741 40.4%
Interest expense 602 391 -54.0% 1,159 958 -21.0%
Income tax expense 8,391 4,743 -76.9% 16,554 10,527 -57.3%
Depreciation and
amortization 5,409 5,368 -0.8% 11,403 10,797 -5.6%
------- ------- ------ -------- ------- ------
Adjusted EBITDA $25,488 $19,684 29.5% $ 52,627 $39,023 34.9%
======= ======= ====== ======== ======= ======

Three months ended June 30, Six months ended June 30,
------------------------ -------------------------
(000 omitted) 2005 2004 % 2005 2004 %
------- ------- ------ -------- ------- ------

Free Cash Flow:
Net cash provided
by (used in)
operating
activities $(1,060) $15,587 NM $ 9,640 $22,363 -56.9%
Less:
Capital
expenditures (7,172) (2,112) NM (10,646) (5,974) -78.2%
Dividends paid (882) - NM (1,763) - NM
------- ------- ------ -------- ------- ------
Free cash flow
(outflow) $(9,114) $13,475 NM $ (2,769) $16,389 NM
======= ======= ====== ======== ======= ======

NM = not meaningful