Phoenix – When Paul Dykstra takes over the reins of Viad Corp. next Spring, the 44-year-old executive will be assuming responsibility for a company with more than 3,000 employees and a $643.9 million market cap. Viad boasted a 52-week high in its stock price ($32.18) just before the hurricanes hit the Gulf Coast this Fall and posted a Third Quarter profit of $10.7 million compared to a $68.3 million loss for the same period last year. Viad Corp is an S&P SmallCap 600 company that ranks in the top third among industry peers in revenue growth. Major subsidiaries include GES Exposition Services; Exhibitgroup/Giltspur; Brewster Transport Company Limited of Banff, Alberta, Canada; and Glacier Park, Inc. of Phoenix.
Dykstra will succeed Robert H. Bohannon, 60, who has been Viad’s Chairman, President and CEO since 1997. In a two-step succession plan, Dykstra will become COO of Viad on January 1, and then three months later, on April 1st, Dykstra assumes the role of President and CEO. Bohannon will remain Viad’s Chairman of the Board. Replacing Dykstra at GES Exposition Services on January 1 will be Kevin Rabbitt, who becomes President and CEO of the Viad subsidiary. Rabbitt, 34, has been COO of GES since April.
Dykstra Persevered Through One Challenge After Another
Shortly after Dykstra assumed the top job at GES in 2000, he was faced with the after-effects of the dot-com implosion, 9/11 and SARS—all of which brought major challenges to the trade show industry. Nevertheless, he said this year’s intrepid hurricane season has been the most difficult for him during his tenure at GES. “9/11 had a huge business impact, but this year’s hurricanes impacted the lives of our people intensely,” he said. The loss of homes and the destruction in New Orleans in particular was devastating to employees as well as clients.
But employee response to the crisis also highlighted what Dykstra said he is most proud of during his tenure: employee commitment and teamwork — with each other and with clients. “I couldn’t be more proud of that,” he said. Dykstra worked to instill deep-rooted values of integrity and leadership at the company and believes most of the employees understand and share those values. He credits that employee buy-in for the company’s ability to succeed.
Under Dykstra, GES focused on economic efficiencies that helped the company and its clients. Last year, GES introduced three online services to make the exhibitor experience more efficient.
How Rabbitt Plans to Run GES
Dykstra had a stated goal of growing GES to a $1 billion per year company and thinks it still can hit that goal under Rabbitt’s leadership.” The trend lines are going in the right direction,” he said. “And Kevin (Rabbitt) is the right person to take it to that goal.”
Rabbitt, who joined GES in 2002, has risen rapidly through the ranks but also has developed well-rounded experience at the company. He has worked in operations, sales and service over the past three years. And he believes that experience will help make the transition smooth. “People know who I am and how I work,” he said.
Rabbitt said it was the GES focus on integrity that drew him to the company and he plans to continue that focus. An additional focus on improvements and innovation that work to the benefit of both the company and its clients is a priority, he said. “We want to find innovative ways to serve clients that also help us grow,” he said.
Dykstra Commended by Peers
Dykstra, who will make a move from Las Vegas to Viad’s headquarters in Phoenix, said he hopes to remain close to key people and clients in the exhibit industry once he steps in at the parent company. “There’s a constant need to balance between hands-on (management) and getting too close to the details so you can evaluate the big picture,” he said.
“But I suspect you’ll see me once in a while (at shows),” he said. “I’ve had great relationships with great people in this industry. And I want to thank all the employees and people in the industry who have been terrific to work with.”
Industry colleagues commended Dykstra for his leadership style and results. David Korse, CEO of IDG World Expo Corp. in Boston, said Dykstra “understands the industry, cares about it and tried to do what was best for the industry while trying to do what was best for GES at the same time.” Korse succeeds Dykstra as Chairman of CEIR, the Center for Exhibition Industry Research, next month. He said Dykstra has set a “good tone for the industry” with his honesty, integrity and professionalism. “I’m sure he’ll continue to excel,” Korse said.
Hurricane and Show Rotation Impact Performance
In 2005, Q3 revenue for GES was $119.6 million, down $21.2 million or 15% from Q3 2004 due to negative show rotation. Viad’s Q3 results were also impacted by Hurricane Katrina. Viad’s New Orleans offices, which housed GES and Exhibitgroup, were damaged by the storm and are now temporarily closed. The company sustained losses of $843,000 related to the net book value of the assets and is in the process of filing insurance claims for damaged property and business interruption.
Bohannon said these challenges were partially offset by the strong growth in the company’s base shows and continued improvement in the exhibition and event industry. “Year to date, revenue has increased 6.0%,” he said. “GES is performing very well on the top line, but certain challenges, including high fuel costs, continue to weigh on its margins.”
GES Announces Petroleum Surcharge
GES Exposition Services announced on Oct. 31 it was enacting a Petroleum Surcharge Program to recover a portion of the increased cost of petroleum-based products, including carpet, plastics and visqueen. The surcharge will mean a 2 % increase on all services published in exhibitor service manuals, with the exception of GES Logistics, which already has a fuel surcharge built into its rates.
Dykstra said the company already took steps to reduce costs, but can’t absorb any more of the increases alone. ”We’ve seen airline freight charges of as much as 30%,” he said. “We think our clients understand and know how hard we worked to keep costs down.”