GES posts record third-quarter revenue

Trade show and convention contractor GES Exposition Services posted record revenue of $203 million in the third quarter, but company officials warned fourth-quarter earnings are unlikely to meet expectations.

It was a 34.1 percent increase for GES, which counts owners of the massive International Consumer Electronics Show among its clients. Profits were $7.9 million, versus an operating loss of $2.9 million in the third quarter of 2007.

GES President and CEO Kevin Rabbitt said the company benefited from a number of big events that fell in the third quarter of 2008, such as the International Woodworking Machinery and Furniture Supply Fair in Atlanta, the Democratic National Convention in Denver, both in August, and the Mine Expo International in Las Vegas as well as the International Manufacturing Technology Show in Chicago, both in September.

“Many of the major rotating shows during the quarter were industrial shows, which is a sector that has continued to show strength,” Rabbitt said, without mentioning shows by name.

The numbers were reported during a conference call to discuss quarterly earnings of Viad Corp. of Phoenix, parent company of GES.

During the call, Rabbitt also said he expects the rocky national economy will take its toll on the trade show and convention industry in the upcoming quarter and into next year.

“We are not seeing an increase in show cancellations, but we are seeing fewer new show launches and short-term bookings of smaller conferences and meetings,” he said.

Neither Viad nor GES reports Las Vegas-specific convention numbers for Las Vegas.

The Las Vegas Convention and Visitors Authority, however, reported convention attendance inched up 0.6 percent in July, but nongambling spending by attendees fell 3.7 percent. In August convention attendance in Las Vegas was down 22.3 percent and nongambling spending fell 23.6 percent.

September figures for Las Vegas aren’t yet available.

For parent Viad, which owns a number of convention and trade show industry companies, net income in the third quarter was $16.8 million or 81 cents per share, up 95 percent from the third quarter of 2007.

After one-time items, the company made $14.4 million in income or 70 cents per share, which the Associated Press reported met analyst expectations.

Looking ahead to the fourth quarter and next year, Rabbitt said it is likely the industry will take a hit due to the emerging recession. It’s hard to say how, specifically, a recession would affect the industry because exhibitors and attendees have myriad choices to curb spending. Rabbitt believes spending cuts will be selective.

“Rather than pulling out of a show altogether, exhibitors are seeking to reduce costs by sending fewer people to staff their booths and by using lighter weight (exhibits) and less product, which lowers shipping and (moving) costs,” he said.

In addition to reporting earnings, GES reported a business expansion in Abu Dhabi.

The plan is for GES subsidiary Melville Middle East to broaden the array of services it offers in the Abu Dhabi National Exhibitions Centre to include wiring, furniture, carpet, graphics, logistics, custom design and building and regstration services.

“Abu Dhabi continues to be a important growth market and we are pleased with the progress of our operations there,” Rabbitt said.

Contact reporter Benjamin Spillman at bspillman@reviewjournal.com or 702-477-3861.