-
Seasonally expected loss from operations improved 16.8% or $6.2 million
-
Net loss relatively flat to prior year - loss increased $289,000 or $0.01
per share
-
Resort Reported EBITDA improved $2.5 million
-
Real Estate Reported EBITDA improved $2.0 million
VAIL, Colo., Dec. 11, 2003 - Vail Resorts, Inc. (NYSE: MTN) announced today
financial results for the first quarter of fiscal 2004 ending October 31,
2003. The Company historically used EBITDA when reporting its financial
results for each of its reportable segments: mountain, lodging, resort
(the combination of mountain and lodging) and real estate. In conjunction
with the recently adopted Securities and Exchange rules regarding the use
of non-GAAP financial measures, the Company currently uses the term "Reported
EBITDA" when reporting financial results. The Company defines Reported
EBITDA for the mountain, lodging and resort segments as segment net revenue
less segment operating expense plus segment equity investment income. The
Company defines Reported EBITDA for the real estate segment as segment
net revenue less segment operating expense plus gain on transfer of property
plus segment equity investment income.
FIRST QUARTER PERFORMANCE
Mountain revenue for the first quarter of fiscal 2004 was $34.1 million,
a 1.3% increase from $33.6 million for the comparable period last year.
Mountain expense decreased $2.7 million, or 4.2%, to $61.9 million.
Lodging revenue for the quarter grew $2.1 million, or 5.1%, to $42.7
million. Lodging expense increased $1.2 million, or 3.1%, to $40.5 million.
Resort revenue, the combination of mountain and lodging revenues, rose
$2.5 million, or 3.4%, to $76.7 million. Resort expense decreased 1.5%
to $102.4 million, down $1.5 million.
Real estate revenue for the quarter fell $12.5 million to $26.9 million,
and real estate expense decreased $15.4 million to $12.1 million.
Total revenue declined $10.0 million, or 8.8%, to $103.6 million and
total operating expense decreased $16.1 million, or 10.7%, to $134.0 million.
The expected seasonal loss from operations for the quarter improved
$6.2 million, or 16.8%, to a loss of $30.4 million compared to a loss of
$36.6 million for the same period last year.
Reported EBITDA for the mountain segment improved $2.1 million, or 7.0%,
to negative $27.9 million compared to negative $29.9 million for the comparable
period last year.
Reported EBITDA for the lodging segment increased from breakeven in
the first quarter of last year to $0.4 million in the current year first
quarter. The first quarter of fiscal 2004 includes $1.6 million of equity
loss attributed to the Ritz-Carlton, Bachelor Gulch, which was open during
the seasonally low occupancy period of the first quarter. Last year, in
the first quarter of fiscal 2003, the equity loss attributed to the Ritz-Carlton
was $1.3 million due to pre-opening and start-up expenses for the hotel.
As the Company uses the equity method of accounting for the Ritz-Carlton,
Bachelor Gulch, included in the fiscal 2004 first quarter loss is $0.6
million of depreciation and $0.6 million of interest expense.
First quarter Resort Reported EBITDA was negative $27.5 million, a $2.5
million or 8.3% improvement from negative $29.9 million for the comparable
period last year.
Real Estate Reported EBITDA for the quarter rose $2.0 million to $16.9
million from $14.9 million in the same quarter a year ago. The current
year's first quarter includes a $1.9 million net gain from the transfer
of property.
First quarter net loss increased $0.3 million, or 1.2%, to a loss of
$25.4 million, or $0.72 per diluted share, compared to a loss of $25.1
million, or $0.71 per diluted share, for the same period last year.
Adam Aron, Chairman and Chief Executive Officer, commented, "We are
delighted to announce that Vail Resorts' financial performance for the
first quarter of fiscal 2004 was better than anticipated. While the net
loss was slightly higher than last year due to an expected increase in
depreciation and interest expense, we are quite pleased with our Reported
EBITDA results in this seasonally low profit quarter. Reported EBITDA for
the mountain and lodging segments improved year-over-year through a combination
of revenue growth and expense management. And the real estate division
once again closed on a significant portion of its expected annual sales
in the first quarter, giving it strong momentum towards hitting its target
for the entire year."
Aron added, "We have begun the implementation of our expense savings
plan as seen in the decrease in year-over-year mountain expense. The lodging
division has also begun to realize savings; however, expense reductions
are somewhat masked by two factors. First, operations increased at the
Vail Marriott, which was partially closed for renovation in the first quarter
last year. Second, we saw stronger summer business at the Grand Teton Lodge
Company which resulted in both increased revenue and expense for the quarter."
Commenting on the current 2003-2004 ski season, Aron said, "We are pleased
with the momentum we have going into the ski season. Our ski areas have
received normal early season snowfall, and for the fifth year in a row
we have had record season pass sales, with overall pass revenue for the
five ski resorts up by about 20% year-over-year. While year-to-date revenue
booked into our central reservation system is 2% ahead of last year at
this time, air bookings into Vail's Eagle County airport are actually up
7% compared to last season."
Added Aron, "In addition to the season pass sales and bookings information
we receive, we also track reservations for our ski school products. More
encouraging is that advance reservations for our children's ski school
are currently tracking 22% ahead of last year at our Colorado resorts.
These are just a few of the barometers we monitor to track how our season
is shaping up. With the normal early season snowfall, record season pass
sales, strong advance ski school reservations and solid bookings, we continue
to be upbeat about this year's ski season. Therefore, at this time, we
are reiterating the year-end financial guidance we provided in November."
Vail Resorts, Inc.
Consolidated Financial Statements
(in thousands except per share amounts)
(unaudited)
Three Months Ended
October 31,
2003 2002
(as restated)
Net revenue:
Mountain
$34,079 $33,629
Lodging
42,652 40,601
Real estate
26,892 39,354
Total net revenue
103,623 113,584
Operating expense:
Mountain
61,914 64,656
Lodging
40,518 39,294
Real Estate
12,124 27,546
Gain on transfer
of property
(1,913)
--
Loss on disposal
of fixed assets
1,010
16
Depreciation &
amortization
20,366 18,625
Total operating expense
134,019 150,137
Loss from operations
(30,396) (36,553)
Other income (expense)
Mountain equity
investment loss
(18) 1,089
Lodging equity investment
loss
(1,740) (1,306)
Real estate equity
investment income
203 3,070
Interest income
565 206
Interest expense
(13,408) (11,778)
Loss on put option
(610)
--
Other income
--
30
Minority interest
in income of
consolidated
joint ventures
2,091 2,024
Loss before provision for income
taxes (43,313)
(43,218)
Benefit for income taxes
17,910 18,104
Net loss
$(25,403) $(25,114)
Basic weighted average shares
35,275 35,166
Diluted weighted average shares
35,275 35,166
Per share amounts:
Basic net loss per
share
$(0.72) $(0.71)
Diluted net loss
per share
$(0.72) $(0.71)
Other Data:
Mountain Reported EBITDA
$(27,853) $(29,938)
Lodging Reported EBITDA
394
1
Resort Reported EBITDA
(27,459) (29,937)
Real estate Reported EBITDA
$16,884 $14,878
Note: Certain reclassifications have been made to the
Consolidated Financial Statements as of and for the three months ended
October 31, 2002 to conform to the current period presentation.
Vail Resorts, Inc.
Resort Revenue by Business Line and Skier Visits
(in thousands)
Three Months Ended
October 31,
2003 2002
% Change
Business Line
Lift tickets
$26 $(113)
123.0%
Ski school
23
71 (67.6)%
Dining
3,914 3,818
2.5%
Retail/rental
17,040 16,330
4.3%
Other
13,076 13,523
(3.3)%
Total Mountain Revenue
34,079 33,629
1.3%
Total Lodging Revenue
42,652 40,601
5.1%
Total Resort Revenue
$76,731 $74,230
3.4%
As of October 31,
2003 2002
Key Balance Sheet Data:
Real estate held for
sale and investment
$115,570 $152,760
Total stockholders' equity
470,909 479,279
Total debt
580,431 628,529
Less: cash and
cash equivalents
18,525 25,165
Net debt
$561,906 $603,364
Note: Certain reclassifications have been made to the
Consolidated Financial Statements as of and for the three months ended
October 31, 2002 to conform to the current period presentation.
Reconciliation of Non-GAAP Financial Measures
Resort, mountain, lodging and real estate Reported EBITDA
have been presented herein as measures of the Company's financial operating
performance. Reported EBITDA is not a measurement of financial performance
under accounting principles generally accepted in the United States ("GAAP"),
and it might not be comparable to similarly titled measures. Reported EBITDA
does not purport to represent cash provided by operating activities and
should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with GAAP. The Company believes that
Reported EBITDA is an indicative measure of the Company's operating performance,
and it is generally used by investors to evaluate companies in the resort
and lodging industries. In addition, because of the significance of long-lived
assets to the operations of the Company and the level of the Company's
indebtedness, the Company also believes that Reported EBITDA is useful
in measuring the Company's ability to fund capital expenditures and service
debt. The Company uses Reported EBITDA targets in determining management
bonuses.
Presented below is a reconciliation of Reported EBITDA
to net income for the Company calculated in accordance with GAAP for the
three months ended October 31, for the fiscal years 2004 and 2003.
Three Months Ended
October 31, 2003
Real
Total Estate
Resort* Mountain Lodging
Net Income $(25,403)
Adjustments
to reconcile
income to
Reported
EBITDA:
Loss on
disposal of
fixed assets 1,010
Depreciation
and
amortization 20,366
Interest
income
(565)
Interest
expense
13,408
Loss on
put option
610
Other income
--
Minority
interest in
income of
consolidated
joint
ventures
(2,091)
Benefit from
income
taxes
(17,910) --
-- --
--
Reported
EBITDA
$(10,575) $16,884 $(27,459)
$(27,853) $394
Three Months Ended
October 31, 2002
Real
Total Estate
Resort* Mountain Lodging
Net Income $(25,114)
Adjustments
to reconcile
income to
Reported
EBITDA:
Loss on
disposal of
fixed assets
16
Depreciation
and
amortization 18,625
Interest
income
(206)
Interest
expense
11,778
Loss on
put option
--
Other income
(30)
Minority
interest in
income of
consolidated
joint
ventures
(2,024)
Benefit from
income
taxes
(18,104) --
-- --
--
Reported
EBITDA
$(15,059) $14,878 $(29,937)
$(29,938) $1
* Resort represents the sum of Mountain
and Lodging. |
Vail Resorts, Inc. is the premier mountain resort operator in North
America. The Company's subsidiaries operate the mountain resorts of Vail,
Beaver Creek, Breckenridge and Keystone in Colorado, Heavenly Resort in
California and Nevada and the Grand Teton Lodge Company in Jackson Hole,
Wyoming. In addition, the Company's RockResorts luxury resort hotel company
operates 10 resort hotels throughout the United States.
Statements in this press release, other than statements of historical
information, are forward looking statements that are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act
of 1995.
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