|
|
--
and Cost Reductions at Every Level Are Part of American Skiing Company's Plan to Enhance Operating Performance |
NEWRY, MAINE, May 30, 2001 - American Skiing Company (NYSE: SKI - news)
today announced a comprehensive strategic plan to improve its capital structure
and enhance future operating performance. The plan includes the following
key components:
"The plan represents a fundamental change in the way we manage our businesses,'' said American Skiing Company CEO B.J. Fair. "It entails a number of significant corporate events, including a strategic asset sale, cost reduction initiatives at every level of the organization and restructuring of the senior debt of our real estate company to reduce interest cost and extend amortization and maturity dates. This plan positions American Skiing Company to deleverage its capital structure and execute on growth opportunities within its portfolio of resort and real estate assets in a manner that maximizes value for our investors and provides the highest quality guest experience for our customers.'' The strategic plan includes a series of steps that are outlined below: Strategic Plan American Skiing Company's strategic plan will redirect management and capital resources towards high growth opportunities within the existing resort and real estate network. The plan will focus on building out resort villages and integrating real estate development with resort village amenities. The Company's marketing efforts will emphasize the complete resort experience, targeting increased destination business. "Over the last several years, American Skiing Company has made significant investments in state-of-the-art lifts, snow-making and skier development programs in order to solidify its reputation for delivering the ultimate skiing and riding experience at all its resorts nationwide,'' said Fair. ``As part of the strategic plan, we will turn our focus to enhancing the broader resort village experience through the development of core amenities, to improve guest service and strengthen the resort destination experience offered to our customers.'' With an improved capital structure, American Skiing Company Resort Properties,
Inc. (``ASCRP'') will pursue its strategy of developing high-return projects
internally as well as continue to use partnerships and joint ventures with
strategic third party developers in order to create immediate value and
speed the build-out of resorts, thereby generating incremental resort revenues.
$5 Million of Operational Cost Savings American Skiing Company is in the process of implementing a staff reorganization at every level of the organization in order to provide greater flexibility in its cost structure. The Company is converting 160 full-time year-round positions to seasonal positions, in order to better match its operating cycle. In addition, the Company has eliminated approximately 70 full time year-round positions. Prior to the reorganization, the Company had approximately 1,600 full time, year-round positions. At peak employment during the ski season, the Company employs approximately 11,700 people. The reorganization is intended to provide the Company greater flexibility in its cost structure and more appropriately respond to the seasonal nature of the business. Management estimates that these measures, along with other organizational changes and cost reduction initiatives, will result in approximately $5 million of annual cost savings. Although the impact of the cost savings will be immediate, near-term restructuring costs will likely delay the benefit from cost savings until the first quarter of fiscal 2002. Capital Structure Improvements Resort
Real Estate
The Company is also in advanced discussions with potential sources of additional investment capital for the real estate Company. Additional capital would both address the Company's near-term liquidity needs and enhance its ability to execute on the growth opportunities within the existing portfolio of assets. The terms of such investments, however, would likely result in dilution to common equity holders. Preliminary Third Quarter Results The following statements are based on current expectations. These statements are forward-looking and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions, business combinations, divestitures, asset sales, recapitalizations or any other significant business transactions that may be completed after May 30, 2001. The Company's anticipated results for the third quarter of fiscal 2001 excluding non-recurring charges are as follows: Resort:
"Although challenged by inconsistent weather and a decline in destination visits at our western resorts, overall skier visits returned to a more normalized level and the Company's Resort business generated revenues and EBITDA in line with our March 28th revised guidance, excluding non-recurring charges,'' Fair said. "Coupled with non-recurring charges related to our corporate restructuring and merger activities, we expect lower Real Estate revenues to result in total company EBITDA performance that will fall short of what we had anticipated to report for the third quarter. Consequently, we are revising the previously provided full-year fiscal 2001 financial guidance.'' Fiscal 2001 Business Outlook For fiscal 2001, the Company expects resort skier visits of slightly under 5.3 million and growth in revenue per skier visit of 6% to 7% generating resort revenues between $328 and $331 million and resort EBITDA of between $49 and $51 million (excluding approximately $7.6 million in non-recurring charges), in line with its March 28th revised guidance. Real estate revenues are expected to be between $98 and $102 million and real estate EBITDA is expected to be between $7 and $9 million, excluding the loss on the sale of development rights for the Heavenly Grand Summit quartershare hotel, which correlates to the lower than expected visitation at our western resorts. On a consolidated basis, the Company anticipates revenue of between $426 and $433 million and EBITDA of between $56 and $60 million (excluding approximately $8.4 million in non-recurring charges) as compared to total revenue and EBITDA of $424.1 million and $47.0 million, respectively, for fiscal 2000. "While we have had a challenging year, looking further ahead, we are confident that this new plan places us on track toward generating steady improvement in our financial performance in fiscal 2002 and beyond. We will continue to focus on improving our capital structure and achieving efficiencies in our resort operations, high return projects in our real estate business and partnership opportunities that leverage our resort network,'' Fair concluded. Headquartered in Newry, Maine, American Skiing Company is the largest operator of alpine ski, snowboard and golf resorts in the United States. Its resorts include Steamboat in Colorado; Killington, Mount Snow and Sugarbush in Vermont; Sunday River and Sugarloaf/USA in Maine; Attitash Bear Peak in New Hampshire; The Canyons in Utah; and Heavenly in California/Nevada. This document contains both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. |
###
Erik Preusse, Investor Relations, 207-824-8140 Skip King, Media Relations, 207-824-5020 www.peaks.com |
Also See | Leslie B. Otten Resigns; William J. Fair Named CEO of American Skiing Company; Company Gives Outlook for Fiscal Year / Mar 2001 |