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Vail Resorts Reports Fiscal 2009 Results and 2010 Outlook
BROOMFIELD, Colo., September 24, 2009 - Vail Resorts, Inc. (NYSE:MTN)
today reported results for the fiscal year ended July 31, 2009.
Fiscal 2009 Highlights
-
Resort Reported EBITDA, which includes the Company's Mountain and Lodging
segments, of $171.1 million in Fiscal 2009 decreased $59.6 million,
or 25.8%, from the prior year.
-
Real Estate Reported EBITDA of $44.1 million in Fiscal 2009 decreased $1.9
million, or 4.0%, from the prior year.
-
Net income of $49.0 million in Fiscal 2009 decreased $54.0 million, or
52.4%, from the prior year.
-
Net Debt leverage ratio of 1.96 times trailing twelve months Total Reported
EBITDA, $69.3 million of cash and cash equivalents on hand as of July 31,
2009, and no revolver borrowings under the Company's $400 million senior
credit facility.
Commenting on the Company's Fiscal 2009 results, Rob Katz, Chief Executive
Officer said, "I am pleased that Vail Resorts was able to deliver solid
results for the fiscal year ended July 31, 2009, given the unprecedented
economic environment and its impact on the travel and leisure sectors.
Our fourth fiscal quarter is a seasonally low quarter with no ski operations.
Therefore, our year-end results, especially in our Mountain segment, tracked
with trends previously reported for our third quarter to date. Overall,
our Fiscal 2009 net income as well as Resort Reported EBITDA fell in the
upper end of our guidance ranges (which we issued in March 2009 and reaffirmed
in June 2009, in our second and third quarter earnings releases, respectively),
while Real Estate Reported EBITDA slightly exceeded the upper end of our
previous range. These results all benefited from our continued focus on
cost controls. The Company implemented cost savings initiatives in Fiscal
2009, which helped to insulate our results from the full impact of the
downturn in travel and leisure spending and better position the Company
for Fiscal 2010. Importantly, we were able to achieve these expense reductions,
while actually improving our company-wide overall guest satisfaction scores
over the prior year. Total skier visits declined 5.3% for the 2008/2009
ski season and total lift ticket revenue declined 8.4%. We estimate that
total Destination (out-of-state and international) visitation declined
by approximately 15% for the 2008/2009 ski season, while we saw overall
visits from season pass holders improve by 17.0% due to an increase in
the number of passes sold and an increase in pass usage during the season.
Visitation at our Colorado resorts declined by 3.5% during the 2008/2009
ski season compared to the 2007/2008 ski season. This compares very favorably
to the skier visit results reported by the rest of the Colorado ski industry,
which declined 6.9% over the same period and the Utah ski industry, which
declined 6.5%. The number of season passes sold for the 2008/2009 ski season
was 12.2% greater than the number of passes sold for the 2007/2008 ski
season, due in large part to the introduction of the Epic Season Pass in
the 2008/2009 season, and when combined with an 8.3% increase in effective
pass price, drove a 21.7% increase in season pass revenue. Season pass
revenue as a percent of total lift ticket revenue grew from 26% for the
2007/2008 ski season to 34% for the 2008/2009 ski season. Our ancillary
business revenue lines, including ski school, dining and retail/rental,
experienced greater percentage declines than our lift ticket revenue variance
due to the combination of lower Destination visitation and lower average
guest spend during their stay."
Katz continued, "The impact of the economic environment continued into
the fourth quarter for our Lodging segment, where our properties continued
to experience a much closer-in booking window and offered an increased
level of promotions and packaging discounts that reduced revenue per available
room ("RevPAR"). RevPAR at our owned hotels, on a same store basis, declined
by 10.9% for Fiscal 2009, which was a smaller decline than that experienced
by the luxury and the upper upscale segments of the lodging industry as
a whole, which had estimated RevPAR declines of approximately 21% and 15%,
respectively. Our group lodging business was also negatively impacted and
as a result the Company saw a mix shift from group to transient business.
While the Company was able to reduce Resort operating expenses, including
from our previously announced cost savings initiatives, our Resort Reported
EBITDA as a percentage of revenue for Fiscal 2009 declined by 5.4 percentage
points as cost reductions could not offset revenue declines. We were very
pleased with our Fiscal 2009 Real Estate segment results, which included
the closing on eight Lodge at Vail Chalet units, 42 residences at Crystal
Peak Lodge and two condominium units at the Arrabelle, which together represented
the vast majority of our $186 million in Fiscal 2009 Real Estate segment
revenue. In addition, we received final initiation fee deposits on 400
memberships to the Vail Mountain Club and Arrabelle Club representing total
membership proceeds in excess of $71 million. Our Fiscal 2009 Resort operating
results, real estate sales proceeds and private club initiation fee deposits,
combined with stringent discipline in managing our balance sheet and capitalization
positioned us well in this challenging environment with Net Debt leverage
less than two times trailing twelve months Total Reported EBITDA, no borrowings
under our revolver and virtually no principal maturities due on any of
our debt until 2014."
Mountain Segment
-
Mountain segment net revenue was $614.6 million in Fiscal 2009 compared
to $685.5 million in Fiscal 2008, a decline of 10.3%.
-
Mountain Reported EBITDA was $164.4 million in Fiscal 2009 compared to
$220.6 million in Fiscal 2008, a decline of 25.5%.
Lift ticket revenue in Fiscal 2009 decreased $25.4 million, or 8.4%, from
the prior fiscal year primarily due to a 21.1% decrease in visits excluding
season pass holders, driving an 18.8% decrease in lift revenue excluding
season pass revenue, partially offset by the 21.7% increase in season pass
revenue and a 2.9% increase in effective ticket price excluding season
passes. The overall visitation decline was primarily as a result of the
decrease in visitation from Destination guests, partially offset by strong
visitation from season pass holders, especially from the new Epic Season
Pass holders, who on average skied more in the current year per pass than
holders of our other season pass products. Our season pass holders used
their season passes to a greater degree this season, skiing on average
10.6 times in the 2008/2009 ski season compared to 9.7 times per season
pass in the prior season. A portion of the decline in lift revenue excluding
season pass revenue was caused by a shift in Destination guests purchasing
the Epic Season Pass instead of other lift ticket products, with the increase
in season pass visits causing the overall decline in effective ticket price
of 3.2% for the fiscal year. The mix of Destination to in-state guest visits
for the 2008/2009 ski season was approximately 57% to 43%, respectively,
compared to approximately 63% to 37%, respectively, in the prior ski season.
Revenues for the Company's ski school, dining and retail/rental operations,
were all negatively impacted by the severe downturn in the economic environment,
which resulted from the decrease in Destination guest visitation as well
as an overall decrease in spending per guest. Ski school revenue decreased
$16.0 million, or 19.7%, in Fiscal 2009 compared to Fiscal 2008, as ski
school revenue is primarily driven by Destination guests. Dining revenue
decreased $10.2 million, or 16.4%, in Fiscal 2009 compared to Fiscal 2008,
due to an approximate 11% decrease in the number of total on-mountain food
and beverage transactions, coupled with an even greater decline in fine
dining. Revenue from retail/rental operations decreased $21.4 million,
or 12.7%, in Fiscal 2009 compared to Fiscal 2008 primarily due to lower
sales and rental volumes at the Company's mountain resort stores. For Fiscal
2009, other revenue increased $2.1 million, or 2.9%, favorably impacted
by private club operations (which revenue increased $4.1 million) resulting
from the opening of the Vail Mountain Club in November 2008, which partially
offset other revenue declines.
Mountain segment operating expenses decreased $19.3 million, or 4.1%,
during Fiscal 2009 compared to Fiscal 2008, which primarily resulted from
a decrease in labor and labor-related benefits expense of $10.1 million,
or 5.8%, as well as a $6.5 million, or 9.0%, decrease in retail cost of
sales (commensurate with the decrease in retail revenue). The labor expense
decline was primarily due to decreased staffing levels driven by lower
volume in ski school, dining and retail/rental operations as well as the
impacts of cost reduction initiatives including the suspension of the Company's
matching contribution to its 401(k) program effective January 2009 and
a company-wide wage reduction plan implemented in April 2009. Additionally,
resort related fees (including Forest Service fees, other resort-related
fees, credit card fees and commissions) decreased $3.2 million, or 8.9%,
compared to Fiscal 2008 due to overall declines in revenue on which those
fees are calculated, and other expenses decreased $1.3 million, or 1.3%,
due primarily to lower food and beverage cost of sales, supplies and fuel
expense, partially offset by higher property taxes, utilities and repairs
and maintenance expense. All of the above decreases were slightly offset
by a $1.9 million, or 2.3%, increase in general and administrative expenses
primarily due to higher allocated corporate expenses. The decreases in
operating expenses however were not enough to offset the declines in segment
net revenues resulting in lower flow through of net revenue to Mountain
Reported EBITDA of approximately 5.5 percentage points for Fiscal 2009,
compared to the same period in the prior year. Mountain equity investment
income, which primarily includes the Company's share of income from the
operations of a real estate brokerage joint venture, decreased $4.6 million
for Fiscal 2009 compared to Fiscal 2008 primarily due to decreased commissions
earned by the brokerage due to a lower level of real estate closures compared
to Fiscal 2008.
Lodging Segment
-
Lodging segment net revenue was $176.2 million in Fiscal 2009 compared
to $170.1 million in Fiscal 2008, an increase of 3.6%, primarily due to
the acquisition of Colorado Mountain Express ("CME") on November 1, 2008
and a full year of operations at The Arrabelle at Vail Square hotel (the
"Arrabelle"), which opened in January 2008. Excluding the impact
of CME, Lodging segment net revenue would have decreased $11.8 million,
or 6.9%.
-
Fiscal 2009 average daily rate ("ADR") decreased 5.2% and RevPAR decreased
15.0% at the Company's owned hotels and managed condominiums on a "same
store" basis, excluding the Arrabelle, compared to the prior year.
-
Lodging Reported EBITDA was $6.8 million in Fiscal 2009 compared to $10.2
million in Fiscal 2008, a decline of 33.9%. Fiscal 2009 Lodging segment
results included $18.0 million of revenue and $12.8 million of operating
expense from CME, while the prior year Lodging segment results included
approximately $3.1 million of start-up and pre-opening expenses related
to the Arrabelle.
The Lodging segment experienced significantly less visibility in Fiscal
2009 with a much closer-in booking window in both peak and non-peak periods
with Lodging segment results impacted by similar trends realized by the
Mountain segment, including the decline in Destination visitation at our
mountain resorts. Total Lodging net revenue for Fiscal 2009 increased $6.2
million, or 3.6%, compared to Fiscal 2008, primarily due to the acquisition
of CME on November 1, 2008 and a full year of operations at the Arrabelle,
which opened in January 2008. CME operations contributed $18.0 million
in net revenue for Fiscal 2009 and the full year operations of the Arrabelle
contributed $11.3 million in net revenue for Fiscal 2009 compared to net
revenue of $5.2 million for the partial year of operations of the Arrabelle
in Fiscal 2008.
Revenue from owned hotel rooms, including the Arrabelle, decreased $3.7
million, or 7.8%, for Fiscal 2009 compared to Fiscal 2008, which was driven
by a decrease in occupancy of 6.2 percentage points, which primarily occurred
at the lodging properties proximate to the Company's ski resorts. This
was due to a decline in Destination visitation and declines in group business
(including a decrease in Grand Teton Lodge Company's ("GTLC") room revenue
of $0.8 million in the fourth quarter of Fiscal 2009 compared to the fourth
quarter of Fiscal 2008 primarily due to a decline in group business) as
well as decreases in ADR of 0.5%, partially offset by the full year of
operations at the Arrabelle (the Arrabelle generated $0.8 million of incremental
owned hotel room revenue for Fiscal 2009 compared to Fiscal 2008). Revenue
from managed condominium rooms decreased $2.6 million, or 6.9%, for Fiscal
2009, due to decreases in visitation as noted above, declines in group
business primarily at Keystone and decreases in ADR of 2.5%, partially
offset by the full year of operations at the Arrabelle, which includes
condominium property management (the Arrabelle generated $2.1 million of
incremental revenue from managed properties for Fiscal 2009 compared to
Fiscal 2008).
Dining revenue for Fiscal 2009 decreased $1.6 million, or 4.9%, as compared
to Fiscal 2008 mainly due to decreased overall guest and group visitation
as well as decreases in guest spending per visit (GTLC's dining revenue
decreased $1.0 million in the fourth quarter of Fiscal 2009 compared to
the fourth quarter of Fiscal 2008 primarily due to a decline in group business).
The decline in dining revenue was partially offset by a full year of dining
operations at the Arrabelle (the Arrabelle generated $1.2 million of incremental
dining revenue for Fiscal 2009 compared to Fiscal 2008). Golf revenues
decreased $1.2 million, or 7.5%, for Fiscal 2009 compared to Fiscal 2008,
primarily resulting from a 6.0% decrease in the number of golf rounds played.
Other revenue decreased $2.8 million, or 7.3%, in Fiscal 2009 compared
to Fiscal 2008 primarily due to a reduction in commissions earned from
reservations booked through the Company's central reservation system, which
were partially offset by a full year of spa operations at the Arrabelle
(the Arrabelle generated $0.9 million of incremental spa revenue for Fiscal
2009 compared to Fiscal 2008).
Lodging segment operating expense increased $9.7 million, or 6.0%, for
Fiscal 2009 compared to Fiscal 2008. Operating expenses for Fiscal 2009
included $12.8 million of CME operating expenses as well as an increase
in operating expenses at the Arrabelle of $6.8 million as a result of a
full year of operations in Fiscal 2009, which was partially offset by $3.1
million of start-up and pre-opening expenses associated with the Arrabelle
recorded in Fiscal 2008. Excluding the impact of CME operating expenses
and operating expenses for the Arrabelle due to a full year of operations
(net of start-up and pre-opening expenses recorded in Fiscal 2008), total
operating expenses decreased $6.9 million, or 4.6%, in Fiscal 2009 compared
to Fiscal 2008, primarily due to a decrease in labor and labor-related
benefits of $4.9 million, or 6.9%, due primarily to lower staffing levels
associated with decreased occupancy and wage decreases as a result of a
company-wide wage reduction plan and a decrease in other expenses of $3.0
million, or 5.6%, primarily due to decreased variable operating costs associated
with lower revenue resulting in lower food and beverage cost of sales and
credit card fees, offset by an increase in general and administrative expenses
of $1.0 million due to higher allocated corporate expenses.
Resort - Combination of Mountain and Lodging Segments
-
Resort net revenue was $790.8 million in Fiscal 2009 compared to $855.6
million in Fiscal 2008, a decline of 7.6%.
-
Resort Reported EBITDA was $171.1 million in Fiscal 2009 compared to $230.8
million in Fiscal 2008, a decline of 25.8%.
Real Estate Segment
-
Real Estate segment net revenue was $186.2 million in Fiscal 2009 compared
to $296.6 million in Fiscal 2008, a decline of 37.2%.
-
Real Estate Reported EBITDA was $44.1 million in Fiscal 2009 compared
to $45.9 million in Fiscal 2008, a decline of 4.0%.
In Fiscal 2009, Real Estate revenue was driven primarily by the closings
of eight Lodge at Vail Chalet units with an average price per square foot
of $2,860, 42 residences at Crystal Peak Lodge with an average price per
square foot of $1,038 and two condominium units at the Arrabelle with an
average price per square foot of $1,623. Real Estate revenue for Fiscal
2008 was driven primarily by the closings of 64 condominium units at the
Arrabelle with an average price per square foot of $1,220, the closings
of five Lodge at Vail Chalet units with an average price per square foot
of $2,336, the closings of the remaining Jackson Hole Golf & Tennis
Club ("JHG&TC") cabins and contingent gains of $13.0 million on development
parcel sales that closed in previous periods.
In Fiscal 2009, Real Estate segment operating expenses included cost
of sales of $101.1 million commensurate with revenue recognized, sales
commissions of approximately $10.6 million commensurate with revenue recognized
and general and administrative costs of approximately $27.6 million (including
$4.1 million of stock-based compensation expense). General and administrative
costs were primarily comprised of marketing expenses for the major real
estate projects under development (including those that have not yet closed),
overhead costs such as labor and labor-related benefits and allocated corporate
costs. In addition, included in segment operating expense for Fiscal 2009,
the Company recorded $2.8 million of estimated costs in excess of anticipated
sales proceeds for an affordable housing commitment resulting from the
cancellation of a contract by a third party developer related to its JHG&TC
development. Real Estate segment operating expenses for Fiscal 2008 included
cost of sales of $208.8 million commensurate with revenue recognized, sales
commissions of approximately $17.1 million commensurate with revenue recognized
and general and administrative costs of approximately $25.4 million (including
$3.1 million of stock-based compensation expense).
Total Performance
-
Total net revenue was $977.0 million in Fiscal 2009 compared to $1.2 billion
in Fiscal 2008, a decline of 15.2%.
-
Net income was $49.0 million, or $1.33 per diluted share, in Fiscal 2009
compared to net income of $102.9 million, or $2.64 per diluted share, in
Fiscal 2008. Included in the Fiscal 2008 net income results was the
receipt of the final cash settlement from Cheeca Holdings, LLC of which
$11.9 million (net of final attorney's fees and on a pre-tax basis) was
included in contract dispute credit, net.
Balance Sheet
At July 31, 2009, the Company had cash and cash equivalents on hand
of $69.3 million, Net Debt of 1.96 times trailing twelve months Total Reported
EBITDA and a $400 million senior credit facility, which matures in 2012,
with no revolver borrowings under the facility. The Company has virtually
no principal maturities due until 2014.
Stock Repurchase Program
During Fiscal 2009, the Company repurchased 874,427 shares of common
stock at a cost of $22.4 million. Since inception of this stock repurchase
plan in 2006, the Company has repurchased 3,878,535 shares at a cost of
approximately $147.8 million, through July 31, 2009. As of July 31, 2009,
2,121,465 shares remained available to repurchase under the existing repurchase
authorization. The purchases under this program are reviewed by the Company's
Board quarterly and are based on a number of factors, including the Company's
expected future financial performance, the Company's available cash resources
and competing uses for cash that may arise in the future, the restrictions
in the Company's senior credit facility and in the indenture governing
the outstanding 6.75% senior subordinated notes, prevailing prices of the
Company's common stock and the number of shares that become available for
sale at prices that the Company believes are attractive.
Outlook and Fiscal Year 2010 Guidance
Providing an update on the Company's 2009/2010 season pass sales, Katz
said, "We are very pleased with our advance period season pass sales for
our upcoming 2009/2010 ski season, compared to the comparable period of
the prior year. It is clearly a key early indicator for Fiscal 2010 as
the Company is able to lock-in a greater portion of its lift ticket revenue
before the start of the ski season, which provides significant operating
stability as more of our guests each year are willing to commit, prior
to the season, to visiting our resorts during the season, in exchange for
the value that the pass price provides to the guests relative to our individual
day ticket pricing. Through September 20, 2009, our total season pass sales
to date for the upcoming 2009/2010 ski season have increased approximately
15% in sales dollars and approximately 14% in units, over the same period
last year, with the prior year selling period representing approximately
55% of the total passes sold for the 2008/2009 ski season. The pace of
the increase to prior year reflects that more people have committed to
our pass products earlier in the selling period as compared to the prior
year, indicating the strength of our marketing efforts and customer database
expansion, with the sales of the Epic Season Pass continuing to outpace
our other pass products. While this remains strong pre-season performance,
it is too early to discern the extent to which this trend will continue,
and what the ultimate level of any incremental new season pass purchases
may be."
Highlighting some of the Company's new initiatives, Katz commented,
"We have recently announced some very exciting new initiatives for the
2009/2010 ski season targeted at recapturing certain revenue that we lost
in our ski school and dining areas in Fiscal 2009. 'The Adventure Sessions'
program is tailored to give guests a whole new way to explore the mountain
with an expert guide to gain insider's knowledge of each resort and receive
tips to improve their skiing and riding throughout the day. The program,
which teams up guests with other like-minded skiers or riders, is geared
towards intermediate, advanced and expert level skiers and riders who are
looking for more adventure with the locals' view of the mountain and less
instruction, while at a similar price point to a group lesson. We also
will introduce a guaranteed small group class size program tailored for
children, which will offer a cap of four students per class on a reservation
only basis. In addition, we have unveiled new mountain dining initiatives
designed to offer the highest quality food combined with some great values.
This includes higher quality signature burgers, a new daily value meal
for $9.95 at our on-mountain dining establishments at each resort and a
convenient new pre-paid Mountain Meal Card, which will offer added value
by providing up to a 20% discount based upon the amount purchased. We look
forward to aggressively marketing these and other programs to our guests
throughout this coming year."
Commenting on Fiscal 2010 guidance, Katz continued, "We would like to
announce our guidance for Fiscal 2010. After the economic turbulence experienced
in Fiscal 2009, we expect to benefit from a relatively more stable overall
macro economic environment in Fiscal 2010, although our visibility at this
point is limited as we are not yet in a period where our ski operations
have commenced for the upcoming ski season nor where we would expect to
see meaningful bookings for the ski season. In addition, supported by the
momentum of our advance season pass sales for the upcoming 2009/2010 ski
season combined with our focused efforts on improving Destination visitation
and ancillary business spend, including from newly formulated programs
and offerings, we anticipate that the revenue lines of our Resort business
will improve year-over-year. Additionally, the cost savings initiatives
implemented during Fiscal 2009 will provide a favorable full year impact
in Fiscal 2010. Therefore based on our current estimates, our Fiscal 2010
guidance range anticipates growth in year-over-year Resort Reported EBITDA.
Contrasting the Resort segment, our Real Estate segment results, which
are impacted in any given year by the timing and mix of real estate sold
and closed, are expected to decrease significantly given the type and number
of units closed in Fiscal 2009 as compared to anticipated closings for
Fiscal 2010."
The following table reflects the forecasted guidance range for the Company's
Fiscal year ending July 31, 2010, for Reported EBITDA (after stock-based
compensation expense) and reconciles such Reported EBITDA guidance to net
income guidance for Fiscal 2010.
Fiscal 2010 Guidance
(In thousands)
For the Year Ending
July 31, 2010
-------------
Low End High End
Range Range
----- -----
Mountain Reported EBITDA (1)
$170,000 $180,000
Lodging Reported EBITDA (2)
5,000 11,000
--------------------------
----- ------
Resort Reported EBITDA (3)
178,000 188,000
Real Estate Reported EBITDA (4)
(8,000)
--
-------------------------------
------
Total Reported EBITDA
170,000 188,000
Depreciation and amortization
(111,000) (111,000)
Loss on disposal of fixed assets, net
(1,100) (1,100)
Investment income
800
850
Interest expense, net
(17,000) (17,000)
Income before provision for income taxes
41,700 59,750
----------------------------------------
------ ------
Provision for income taxes
(16,050) (23,000)
----------------------------
------- -------
Net income
$25,650 $36,750
==========
======= =======
Net income attributable to the
non-controlling interests
$(650) $(1,750)
==============================
===== =======
Net income attributable to Vail Resorts,
Inc.
$25,000 $35,000
========================================
======= =======
(1) Mountain Reported EBITDA includes approximately
$5 million of
stock-based compensation.
(2) Lodging Reported EBITDA includes approximately
$2 million of
stock-based compensation.
(3) Resort represents the sum of Mountain
and Lodging. The
Company provides
Reported EBITDA ranges for the Mountain and
Lodging segments,
as well as for the two combined. Readers are
cautioned to recognize
that the low end of the expected ranges
provided for the
Lodging and Mountain segments, while possible, do
not sum to the low
end of the Resort Reported EBITDA range provided
because we do not
necessarily expect or assume that we will actually
hit the low end
of both ranges, as the actual Resort Reported EBITDA
will depend on the
actual mix of the Lodging and Mountain
components.
Similarly, the high end of the ranges for the Lodging
and Mountain segments
do not sum to the high end of the Resort
Reported EBITDA
range.
(4) Real Estate Reported EBITDA includes
approximately $4 million of
stock-based compensation.
Earnings Conference Call
For further discussion of the contents of this press release,
please listen to our live webcast today at 11:00 am ET, available at www.vailresorts.com
in the Investor Relations section.
Vail Resorts, Inc., through its subsidiaries, is the leading
mountain resort operator in the United States. The Company's subsidiaries
operate the mountain resort properties of Vail, Beaver Creek, Breckenridge
and Keystone mountain resorts in Colorado, the Heavenly Ski Resort in the
Lake Tahoe area of California and Nevada, and the Grand Teton Lodge Company
in Jackson Hole, Wyoming. The Company's subsidiary, RockResorts, a luxury
resort hotel company, manages casually elegant properties across the United
States and the Caribbean. Vail Resorts Development Company is the real
estate planning, development and construction subsidiary of Vail Resorts,
Inc. Vail Resorts, Inc. is a publicly held company traded on the New York
Stock Exchange (NYSE: MTN) . The Vail Resorts company website is www.vailresorts.com
and consumer website is www.snow.com.
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. Such forward-looking statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those projected. Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the date hereof.
Such risks and uncertainties include but are not limited to: prolonged
downturn in general economic conditions, including continued adverse affects
on the overall travel and leisure related industries; unfavorable weather
conditions or natural disasters; competition in our mountain and lodging
businesses; our ability to grow our resort and real estate operations;
our ability to successfully complete real estate development projects and
achieve the anticipated financial benefits from such projects; further
adverse changes in real estate markets; continued volatility in credit
markets; our ability to obtain financing on terms acceptable to us to finance
our real estate development, capital expenditures and growth strategy;
our reliance on government permits or approvals for our use of Federal
land or to make operational improvements; adverse consequences of current
or future legal claims; our ability to hire and retain a sufficient seasonal
workforce; willingness of our guests to travel due to terrorism, the uncertainty
of military conflicts or outbreaks of contagious diseases, and the cost
and availability of travel options; negative publicity or unauthorized
use of our trademarks which diminishes the value of our brands; our ability
to integrate and successfully operate future acquisitions; and implications
arising from new Financial Accounting Standards Board ("FASB")/governmental
legislation, rulings or interpretations. All forward-looking statements
attributable to us or any persons acting on our behalf are expressly qualified
in their entirety by these cautionary statements. All guidance and forward-looking
statements in this press release are made as of the date hereof and we
do not undertake any obligation to update any forecast or forward-looking
statements, except as may be required by law. Investors are also directed
to other risks discussed in documents filed by the Company with the Securities
and Exchange Commission.
The Company uses the terms "Reported EBITDA" and "Net
Debt" when reporting financial results in accordance with Securities and
Exchange Commission rules regarding the use of non-GAAP financial measures.
The Company defines Reported EBITDA as segment net revenue less segment
operating expense plus or minus segment equity investment income or loss
and for the Real Estate segment plus gain on sale of real property. The
Company defines Net Debt as long-term debt plus long-term debt due within
one year less cash and cash equivalents.
Vail Resorts, Inc.
Consolidated Condensed Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
July 31,
2009
2008
----
----
Net revenue:
Mountain
$36,150 $37,549
Lodging
44,942 48,323
Real estate
20,836 184,587
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Total net revenue
101,928 270,459
Segment operating expense:
Mountain
68,616 68,421
Lodging
46,899 46,300
Real estate
17,056 146,454
-----------
------ -------
Total segment operating expense
132,571 261,175
Other operating expense:
Depreciation and
amortization
(27,115) (23,941)
Loss on disposal
of fixed assets, net (256)
(1,167)
---------------------------------
---- ------
Loss from operations
(58,014) (15,824)
Mountain equity
investment (loss)
income, net
(949) 1,797
Investment income,
net
365
589
Interest expense,
net
(5,816) (7,047)
Minority interest
in loss of consolidated
subsidiaries,
net
2,588 2,548
-------------------------------
----- -----
Loss before benefit for income taxes
(61,826) (17,937)
Benefit for income
taxes
23,096 6,814
------------------------
------ -----
Net loss
$(38,730) $(11,123)
========
======== ========
Per share amounts:
Basic net loss per
share
$(1.07) $(0.29)
========================
====== ======
Diluted net loss
per share
$(1.07) $(0.29)
==========================
====== ======
Weighted average shares outstanding:
Basic
36,312 38,031
=====
====== ======
Diluted
36,312 38,031
=======
====== ======
Other Data:
Mountain Reported EBITDA
$(33,415) $(29,075)
Lodging Reported EBITDA
$(1,957) $2,023
-----------------------
------- ------
Resort Reported EBITDA
$(35,372) $(27,052)
Real Estate Reported EBITDA
$3,780 $38,133
---------------------------
------ -------
Total Reported EBITDA
$(31,592) $11,081
=====================
======== =======
Mountain stock-based compensation
$1,415
$985
Lodging stock-based compensation
$406
$354
--------------------------------
----
----
Resort stock-based compensation
$1,821 $1,339
Real Estate stock-based compensation
$1,114
$880
------------------------------------
------
----
Total stock-based compensation
$2,935 $2,219
==============================
====== ======
Vail Resorts, Inc.
Consolidated Condensed Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Twelve Months Ended
July 31,
2009
2008
----
----
Net revenue:
Mountain
$614,597 $685,533
Lodging
176,241 170,057
Real estate
186,150 296,566
-----------
------- -------
Total net revenue
976,988 1,152,156
Segment operating expense:
Mountain
451,025 470,362
Lodging
169,482 159,832
Real estate
142,070 251,338
-----------
------- -------
Total segment operating expense 762,577
881,532
Other operating (expense) income:
Gain on sale of
real property
--
709
Depreciation and
amortization (107,213)
(93,794)
Loss on disposal
of fixed assets, net (1,064)
(1,534)
---------------------------------
------ ------
Income from operations
106,134 176,005
Mountain equity
investment income, net 817
5,390
Investment income,
net
1,793
8,285
Interest expense,
net
(27,548) (30,667)
Contract dispute
credit, net
-- 11,920
Minority interest
in income of
consolidated
subsidiaries, net
(1,602) (4,920)
------------------------------
------ ------
Income before provision for income taxes
79,594 166,013
Provision for income
taxes
(30,644) (63,086)
--------------------------
------- -------
Net income
$48,950 $102,927
==========
======= ========
Per share amounts:
Basic net income
per share
$1.34
$2.67
==========================
=====
=====
Diluted net income
per share
$1.33
$2.64
============================
=====
=====
Weighted average shares outstanding:
Basic
36,546 38,616
=====
====== ======
Diluted
36,673 38,934
=======
====== ======
Other Data:
Mountain Reported EBITDA
$164,389 $220,561
Lodging Reported EBITDA
$6,759 $10,225
-----------------------
------ -------
Resort Reported
EBITDA
$171,148 $230,786
Real Estate Reported EBITDA
$44,080 $45,937
---------------------------
------- -------
Total Reported EBITDA
$215,228 $276,723
=====================
======== ========
Mountain stock-based compensation
$4,826 $3,834
Lodging stock-based compensation
$1,778 $1,294
--------------------------------
------ ------
Resort stock-based
compensation $6,604
$5,128
Real Estate stock-based compensation
$4,129 $3,136
------------------------------------
------ ------
Total stock-based compensation
$10,733 $8,264
==============================
======= ======
Vail Resorts, Inc.
Mountain Segment Operating Results
(In thousands, except Effective Ticket Price)
(Unaudited)
Three Months
Twelve Months
Ended Percentage
Ended Percentage
July 31, Increase
July 31, Increase
2009 2008 (Decrease) 2009
2008 (Decrease)
---- ---- ---------- ----
---- ----------
Net Mountain
revenue:
Lift tickets
$-- $123 (100.0)% $276,542
$301,914 (8.4)%
Ski school
-- --
-- 65,336 81,384
(19.7)%
Dining
3,803 4,504 (15.6)%
52,259 62,506 (16.4)%
Retail/rental 17,537
18,921 (7.3)% 147,415 168,765
(12.7)%
Other
14,810 14,001 5.8%
73,045 70,964 2.9%
----
------ ------ ----
------ ------ ----
Total Mountain
net revenue $36,150
$37,549 (3.7)% $614,597 $685,533
(10.3)%
============== =======
======= ==== ======== ========
=====
Mountain
operating
expense:
Labor and
labor-
related
benefits
$22,075 $22,615 (2.4)% $165,550
$175,674 (5.8)%
Retail cost
of sales
10,273 10,713 (4.1)%
66,022 72,559 (9.0)%
Resort
related
fees
763 670 13.9%
33,102 36,335 (8.9)%
General and
administrative 16,862
15,873 6.2% 83,117
81,220 2.3%
Other
18,643 18,550 0.5%
103,234 104,574 (1.3)%
----
------ ------ ---
------- ------- ----
Total Mountain
operating
expense
$68,616 $68,421 0.3% $451,025
$470,362 (4.1)%
============== =======
======= === ======== ========
====
Mountain equity
investment
(loss) income,
net
(949) 1,797 (152.8)%
817 5,390 (84.8)%
--------------- ----
----- ------ ---
----- -----
Total Mountain
Reported
EBITDA
$(33,415) $(29,075) (14.9)% $164,389 $220,561
(25.5)%
============== ========= ========
===== ======== ======== =====
Total skier
visits
-- 5 (100.0)%
5,864 6,195 (5.3)%
ETP
$-- $24.60 (100.0)% $47.16
$48.74 (3.2)%
Twelve Months
Ended Percentage
July 31, Increase
2009 2008 (Decrease)
---- ---- ----------
Skier Visits
Vail
1,622 1,570
3.3%
Breckenridge
1,528 1,630
(6.3)%
Keystone
981 1,129 (13.1)%
Beaver Creek
931 918
1.4%
Heavenly
802 948
(15.4)%
--------
--- ---
-----
Total Skier Visits
5,864 6,195
(5.3)%
==================
===== =====
====
ETP
$47.16 $48.74 (3.2)%
Vail Resorts, Inc.
Lodging Operating Results
(In thousands, except ADR and RevPAR)
(Unaudited)
Three Months
Twelve Months
Ended Percentage
Ended Percentage
July 31, Increase
July 31, Increase
2009 2008 (Decrease) 2009
2008 (Decrease)
---- ---- ---------- ----
---- ----------
Lodging net
revenue:
Owned hotel
rooms
$11,686 $12,968 (9.9)% $43,153
$46,806 (7.8)%
Managed
condominium
rooms
5,164 5,771 (10.5)%
34,571 37,132 (6.9)%
Dining
8,920 10,578 (15.7)% 30,195
31,763 (4.9)%
Transportation 1,861
-- -- 17,975
-- --
Golf
6,873 7,975 (13.8)%
15,000 16,224 (7.5)%
Other
10,438 11,031 (5.4)%
35,347 38,132 (7.3)%
----
------ ------ ----
------ ------ ----
Total Lodging net
revenue
$44,942 $48,323 (7.0)% $176,241
$170,057 3.6%
================ ======= =======
==== ======== ======== ===
Lodging operating
expense
Labor and
labor-related
benefits
$20,396 $21,514 (5.2)% $81,290
$75,746 7.3%
General and
administrative 7,319
5,944 23.1% 27,823
26,877 3.5%
Other
19,184 18,842 1.8%
60,369 57,209 5.5%
----
------ ------ ---
------ ------ ---
Total Lodging
operating
expense
$46,899 $46,300 1.3% $169,482
$159,832 6.0%
============= =======
======= === =======
======= ===
Total Lodging
Reported EBITDA $(1,957) $2,023
(196.7)% $6,759 $10,225 (33.9)%
================ ======= ======
====== ====== ======
=====
Owned hotel
statistics:
ADR
$164.82 $165.36 (0.3)% $183.59
$184.42 (0.5)%
RevPAR
$87.63 $103.08 (15.0)% $107.06
$118.97 (10.0)%
Managed
condominium
statistics:
ADR
$166.04 $172.52 (3.8)% $273.38
$280.37 (2.5)%
RevPAR
$37.84 $46.76 (19.1)% $84.50
$98.68 (14.4)%
Owned hotel and
managed
condominium
statistics
(combined):
ADR
$165.26 $167.99 (1.6)% $225.12
$230.17 (2.2)%
RevPAR
$59.48 $70.86 (16.1)% $93.10
$106.43 (12.5)%
Key Balance Sheet Data
(In thousands)
(Unaudited)
As of July 31,
2009
2008
----
----
Real estate held for sale and
investment
$311,485 $249,305
Total stockholders' equity
$765,295 $728,756
Long-term debt
$491,608 $541,350
Long-term debt due within one year
352 15,355
-----------------------------
--- ------
Total debt
491,960 556,705
Less: cash and cash equivalents
69,298 162,345
-------------------------------
------ -------
Net debt
$422,662 $394,360
========
======== ========
Reconciliation of Non-GAAP Financial Measures
Resort, Mountain and Lodging, and Real Estate Reported
EBITDA have been presented herein as measures of the Company's financial
operating performance. Reported EBITDA and Net Debt are not measures of
financial performance or liquidity under accounting principles generally
accepted in the United States of America ("GAAP"), and they might not be
comparable to similarly titled measures of other companies. Reported EBITDA
and Net Debt should not be considered in isolation or as an alternative
to, or substitute for, measures of financial performance or liquidity prepared
in accordance with GAAP including net income, net change in cash and cash
equivalents or other financial statement data. The Company believes that
Reported EBITDA is an indicative measurement of the Company's operating
performance, and is similar to performance metrics generally used by investors
to evaluate companies in the resort and lodging industries. The Company
primarily uses Reported EBITDA based targets in evaluating performance.
The Company believes that Net Debt is an important measurement as it is
an indicator of the Company's ability to obtain additional capital resources
for its future cash needs.
Presented below is a reconciliation of Total Reported
EBITDA to net income (loss) for the Company calculated in accordance with
GAAP for the three and twelve months ended July 31, 2009 and 2008.
(In thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
July 31,
July 31,
2009 2008
2009 2008
---- ----
---- ----
Mountain Reported EBITDA
$(33,415) $(29,075) $164,389 $220,561
Lodging Reported EBITDA
(1,957) 2,023
6,759 10,225
-----------------------
----- -----
----- ------
Resort Reported EBITDA*
(35,372) (27,052) 171,148 230,786
Real Estate Reported EBITDA
3,780 38,133 44,080
45,937
---------------------------
----- ------ ------
------
Total Reported EBITDA
(31,592) 11,081 215,228
276,723
Loss on disposal of fixed
assets, net
(256) (1,167) (1,064)
(1,534)
Depreciation and amortization
(27,115) (23,941) (107,213) (93,794)
Investment income, net
365 589
1,793 8,285
Interest expense, net
(5,816) (7,047) (27,548) (30,667)
Contract dispute credit, net
-- --
-- 11,920
Minority interest in loss (income)
of consolidated subsidiaries,
net
2,588 2,548
(1,602) (4,920)
--------------------------------- -----
----- -----
-----
(Loss) income before benefit
(provision) for income taxes
(61,826) (17,937) 79,594
166,013
Benefit (provision) for income
taxes
23,096 6,814 (30,644)
(63,086)
Net (loss) income
$(38,730) $(11,123) $48,950 $102,927
=================
====== ====== ======
=======
* Resort represents the sum of Mountain and Lodging
Presented below is a reconciliation of Net Debt to Long-term
Debt and the calculation of Net Debt to Total Reported EBITDA for the twelve
months ended July 31, 2009.
(In thousands)
As of July 31,
2009
--------------
Long-term debt
$491,608
Long-term debt due within one year
352
----------------------------------
---
Total debt
491,960
Less: cash and cash equivalents
69,298
-------------------------------
------
Net debt
$422,662
========
========
Net debt to Total Reported
EBITDA
1.96x
========================== ===== |
|
