| MADISON, Wis. - May 5, 2005 -- Great Wolf Resorts, Inc. (NASDAQ: WOLF),
the nation's largest owner, operator and developer of drive-to family resorts
featuring indoor waterparks and other family-oriented entertainment activities,
today reported results for the quarter ended March 31, 2005.
For the quarter ended March 31, 2005, the company reported (amounts
in thousands, except per share data):
Net income (loss) $(2,325)
Net income (loss) perdiluted share $(0.08)
Adjusted EBITDA $7,066
Adjusted net income $766
Adjusted net income per diluted share $0.03
Revenues $26,996
Adjusted EBITDA and Adjusted net income are non-GAAP financial measures
within the meaning of the Securities and Exchange Commission (SEC) regulations.
See the discussion below in the "Non-GAAP Financial Measures" section of
this press release. Reconciliations of Adjusted EBITDA and Adjusted net
income are provided in the tables of this press release.
Operating statistics for the company's portfolio of resorts for the
quarter were as follows:
All Properties Same Store
Comparison (a)
First First
First Increase (Decrease)
Quarter Quarter Quarter
---------------------
2005 2005
2004 $
%
Occupancy
69.9% 71.7%
68.0% N/A
5.4%
ADR
$211.17 $216.58 $209.67
$6.91 3.3%
RevPAR
$147.55 $155.33 $142.66
$12.67 8.9%
Total RevPOR $315.04
$311.44 $304.44 $7.00
2.3%
Total RevPAR $220.13
$223.36 $207.14 $16.22
7.8%
(a) Same store comparison includes
properties that were open for the full periods in 2004 and 2005. |
"We enjoyed a solid first quarter, our first full quarter since our
initial public offering in December 2004," said John Emery, chief executive
officer. "March revenues were particularly strong, principally due to the
timing of the Easter holiday and school spring breaks. One of our key indicators
is same store total revenue per available room, or Total RevPAR, which
includes all revenue sources at the resort and is a good measure of our
overall performance. Same store Total RevPAR in the first quarter increased
7.8 percent. Our resorts were all at or near their expected operating results
for the quarter. We saw particular strength in the Traverse City and Kansas
City markets, with Total RevPAR increases of 12.8% and 20.7% at these resorts."
"We continue to receive very positive feedback from our guests about
the Great Wolf Resorts family experience," Emery noted. "As we expand our
brands to more and more locations, increasing numbers of families are staying
with us and then coming back for repeat visits or referring others to our
resorts. We believe this is a particularly telling indicator of guest satisfaction."
Emery added that the company achieved a number of milestones during
the quarter, including the opening of its sixth property--an 83-acre, 301-suite
resort in Williamsburg, Virginia. "We opened the facility ahead of schedule
and have had a terrific reception in the Williamsburg market. Our advance
bookings for the summer look very strong."
At the heart of the Williamsburg resort is a 66,000 square foot indoor
entertainment area, featuring one of the nation's largest indoor waterparks,
four stories high with 300,000 gallons of water, eight waterslides and
six pools, including a giant indoor wave pool. The property also includes
an Aveda(R) Concept Spa, an arcade and game room, multiple restaurants,
confectionery cafe, gift emporium, fitness center, and more than 7,000
square feet of meeting space, including a state-of-the-art, audio/visual
meeting symposium.
"Also during the quarter, we announced the promotion of Kimberly Schaefer
to the position of chief operating officer of the company," said Emery.
"She previously was our chief brand officer and has been with the company
since 1995. In her new role, she will oversee all aspects of our resort
operations, including brand development and marketing. Kim's nearly 20
years of hospitality operating and finance experience matches up well with
our growth strategies, and she has exceptional leadership skills.
Development Activity
"Construction continues on our Great Wolf Lodge in the Pocono Mountains
in Pennsylvania, and we are on schedule to open in the fall of 2005," Emery
said. "And, we are on target to open in 2006 the Great Wolf Lodge in Niagara
Falls, Ontario, which is being built by an affiliate of Ripley Entertainment,
Inc. and licensed from and operated by Great Wolf Resorts.
"We also just announced an exciting joint venture with Paramount Parks,
a unit of Viacom Inc., to develop a 39-acre, $100+ million Great Wolf Lodge
resort at Paramount's Kings Island in Mason, Ohio (just north of Cincinnati),"
Emery added. "We will operate the resort under our Great Wolf Lodge brand
and will maintain a majority of the equity position in the project. Paramount
will have a minority equity interest in the development by contributing
the land needed for the resort."
"Our business plan calls for the development of two owned resorts a
year," Emery said. "We expect to announce our next new-development project
soon and continue to actively seek strategic relationships to expand and
enhance our brands."
Capital Structure
During the first quarter the company repaid the construction loans on
its Williamsburg and Pocono Mountains resorts. "We used a combination of
available cash from our IPO and net proceeds from the $50 million of Trust
Preferred Securities (TPS) we issued in March," said James A. Calder, chief
financial officer. "The TPS are unsecured, have a 30-year maturity, carry
a fixed rate of 7.80 percent for the first 10 years, and are callable after
five years with no prepayment penalty. By issuing the TPS and eliminating
two floating-rate, short-term construction loans, we increased our average
debt maturity to 15 years, increased the share of our total indebtedness
subject to fixed rates to over 80 percent, and removed first mortgages
from two flagship assets. Although we believe our current capital structure
is well-positioned to fund our development plans, we will continue to look
for opportunities to add long-term flexibility and value in our capital
structure."
Key Financial Data
As of March 31, 2005, Great Wolf Resorts had:
-- Total cash and cash equivalents of $67 million
-- Total secured debt of $105.7 million
-- Total unsecured debt of $51.5 million
-- Weighted average cost of total debt of 7.3%
-- Weighted average debt maturity of 15 years
Outlook and Guidance
The company provides the following outlook and earnings guidance for
the second, third, and fourth quarters and for the full year 2005 (amounts
in thousands, except per share data):
Second Quarter Third Quarter
Low High Low
High
Net income (loss)
$(400) $200 $9,700 $10,900
Net income (loss) per diluted share $(0.01)
$0.01 $0.32 $0.36
Adjusted EBITDA (a)
$8,000 $9,000 $25,400 $27,400
Adjusted net income (loss) (a)
$(100) $500 $10,300 $11,500
Adjusted net income per diluted share $0.00
$0.02 $0.34 $0.38
Fourth Quarter Full Year 2005
Low High Low
High
Net income (loss)
$(1,400) $(800) $5,600 $8,000
Net income (loss) per diluted share $(0.05)
$(0.03) $0.18 $0.26
Adjusted EBITDA (a)
$9,500 $10,500 $50,000 $54,000
Adjusted net income (loss) (a)
$(560) $40 $10,400 $12,800
Adjusted net income (loss)
per diluted share
$(0.02) $0.00 $0.34 $0.42
(a) For reconciliations of Adjusted
EBITDA and Adjusted net income
(loss), see the tables accompanying this press release. |
Great Wolf Resorts, Inc.
Consolidated Statement of Operations
(in thousands, except per share amounts)
Three Months
Ended March 31,
2005
Revenues:
Rooms
$ 18,076
Food and beverage
4,758
Other resort operations
4,162
-----------------
Total revenues
26,996
-----------------
Operating expenses:
Resort departmental expenses
9,670
Selling, general and administrative
7,238
Property operating costs
3,360
Debt extinguishment costs
2,116
Pre-opening costs for resorts under
development
2,697
Depreciation and amortization
5,010
Total operating expenses
30,091
Operating income (loss)
(3,095)
Interest income
(292)
Interest expense
1,056
Income (loss) before income taxes
(3,859)
Income tax expense (benefit)
(1,534)
Net income (loss)
$ (2,325)
Net income (loss) per share:
Basic
$ (0.08)
Diluted
$ (0.08)
Weighted average common shares outstanding:
Basic
30,133
Diluted
30,133
Great Wolf Resorts, Inc.
Reconciliations of Non-GAAP Financial Measures
(in thousands, except per share amounts)
Three Months
Ended March 31,
2005
Net income (loss)
$ (2,325)
Adjustments:
Interest expense, net
764
Income tax expense (benefit)
(1,534)
Depreciation and amortization
5,010
Non-cash employee compensation
338
Debt extinguishment costs
2,116
Pre-opening costs for resorts under
development
2,697
Adjusted EBITDA (1)
$ 7,066
Net income (loss)
$ (2,325)
Adjustments to net income (loss), net of
income taxes:
Non-cash employee compensation
203
Debt extinguishment costs
1,270
Pre-opening costs for resorts under
development
1,618
Adjusted net income (loss) (1)
$ 766
Adjusted net income (loss) per share:
Basic
$ 0.03
Diluted
$ 0.03
Weighted average shares outstanding:
Basic
30,133
Diluted
30,340
Great Wolf Resorts, Inc.
Operating Statistics (2)
Three Months Ended March 31,
2005
2004
------------- -------------
Wisconsin Dells:
Occupancy
65.2%
64.4%
ADR
$ 190.88 $
188.69
RevPAR
$ 124.51 $
121.47
Total RevPOR
$ 279.30 $
269.70
Total RevPAR
$ 182.18 $
173.62
Sandusky:
Occupancy
70.8%
73.8%
ADR
$ 231.08 $
228.75
RevPAR
$ 163.51 $
168.93
Total RevPOR
$ 328.08 $
329.28
Total RevPAR
$ 232.15 $
243.17
Traverse City:
Occupancy
82.9%
73.3%
ADR
$ 224.15 $
224.32
RevPAR
$ 185.76 $
164.51
Total RevPOR
$ 324.67 $
325.36
Total RevPAR
$ 269.07 $
238.61
Kansas City:
Occupancy
68.7%
61.2%
ADR
$ 219.86 $
194.15
RevPAR
$ 150.97 $
118.77
Total RevPOR
$ 312.50 $
290.65
Total RevPAR
$ 214.58 $
177.80
Sheboygan:
Occupancy
56.2%
-
ADR
$ 159.79
-
RevPAR
$ 89.83
-
Total RevPOR
$ 327.80
-
Total RevPAR
$ 184.27
-
We define our operating statistics as follows:
Occupancy is calculated by dividing
total occupied rooms
by total available rooms.
Average daily rate (ADR) is the average
daily room rate
charged and is calculated by
dividing total rooms
revenue by total occupied rooms.
Revenue per available room (RevPAR)
is the product of (a)
occupancy and (b) ADR.
Total revenue per occupied room (Total
RevPOR) is
calculated by dividing total
resort revenue (including
revenue from rooms, food and
beverage, and other
amenities) by total occupied
rooms.
Total revenue per available room (Total
RevPAR) is the
product of (a) occupancy and
(b) Total RevPOR.
Great Wolf Resorts, Inc.
Reconciliations of Outlook
Financial Information (3)
(in thousands, except per share amounts)
Three Three Three
Months Months Months Year
Ending Ending Ending Ending
June Sept. Dec.
Dec.
30, 30,
31, 31,
2005 2005 2005
2005
------ --------- -------- -------
Net income (loss) (4)
$ (100) $ 10,300 $ (1,100) $ 6,800
Adjustments:
Interest expense, net
1,900 2,000 2,800
7,400
Income tax expense (benefit)
(100) 6,800 (800)
4,500
Depreciation and amortization
6,300 6,300 7,700
25,300
Non-cash employee compensation
- -
- 300
Debt extinguishment costs
- -
- 2,100
Pre-opening costs of resorts
under development
500 1,000 1,400
5,600
------ --------- -------- -------
Adjusted EBITDA (1)
$8,500 $ 26,400 $ 10,000 $52,000
====== ========= ======== =======
Net income (loss) (4)
$ (100) $ 10,300 $ (1,100) $ 6,800
Adjustments to net income (loss),
net of income taxes:
Non-cash employee compensation
- -
- 180
Debt extinguishment costs
- -
- 1,260
Pre-opening costs of resorts
under development
300 600
840 3,360
------ --------- -------- -------
Adjusted net income (loss) (1) $
200 $ 10,900 $ (260) $11,600
====== ========= ======== =======
Net income (loss) per share:
Basic
$(0.00) $ 0.34 $ (0.04) $ 0.23
Diluted
$(0.00) $ 0.34 $ (0.04) $ 0.22
Adjusted net income (loss) per
share:
Basic
$ 0.01 $ 0.36 $ (0.01) $ 0.38
Diluted
$ 0.01 $ 0.36 $ (0.01) $ 0.38
Weighted average shares
outstanding:
Basic
30,133 30,133 30,133
30,133
Diluted
30,340 30,340 30,133
30,340
(1) See discussions of Adjusted EBITDA and Adjusted net
income located in the "Non-GAAP Financial Measures" section of this press
release.
(2) Operating statistics for individual resorts are only
presented for resorts that were open for the entire quarter ended March
31, 2005.
(3) Our outlook reconciliations use the mid-points of
our estimates of Adjusted EBITDA and Adjusted net income.
(4) Net income for year ending December 31, 2005 includes
a gain of $4,800, net of income taxes, on sale of condominiums.
|
Great Wolf Resorts is the leader in indoor waterpark destination resorts
and owns and operates its family resorts under the Great Wolf Lodge and
Blue Harbor Resort brands. Great Wolf Resorts is a fully integrated resort
company and owns and/or manages Great Wolf Lodge locations in: Wisconsin
Dells, Wisconsin; Sandusky, Ohio; Traverse City, Michigan; Kansas City,
Kansas; Williamsburg, Virginia; the Pocono Mountains, Pennsylvania (scheduled
to open in Fall 2005) and Niagara Falls, Ontario (scheduled to open in
2006); and Blue Harbor Resort & Conference Center in Sheboygan, Wisconsin.
The company's resorts are family-oriented destination facilities that
generally feature 300 to 400 rooms and a large indoor entertainment area
measuring 40,000 - 100,000 square feet. The all-suite properties offer
a variety of room styles, arcade/game rooms, fitness centers, themed restaurants,
spas, supervised children's activities and other amenities.
This press release may contain forward-looking statements within the
meaning of the federal securities laws.
|
