VAIL, Colo., June 12 , 2003 - Vail Resorts, Inc. (NYSE: MTN)
announced today results for the third quarter of fiscal 2003, ending April
30, 2003.
THIRD QUARTER PERFORMANCE
Mountain revenue for the third quarter of fiscal 2003 was $211.7 million,
a 9.6% increase from $193.2 million for the comparable period last year.
Excluding the May 2002 acquisition of the Heavenly Ski Resort, third quarter
"same-store" mountain revenue at the Company's four Colorado resorts declined
6.0% compared to the same period last year.
Lodging revenue for the third quarter fell $3.6 million, or 7.3%, to
$45.5 million.
Resort revenue, the combination of the mountain and lodging segments,
rose $14.9 million, or 6.1%, to $257.2 million. Real estate revenue
for the third quarter rose $7.6 million to $11.9 million, a 175.0% increase
compared to the same period last year. Total revenue rose $22.5 million,
or 9.1%, to $269.1 million.
Income from operations for the third quarter declined $3.3 million,
or 3.8%, to $84.8 million compared to the same period last year.
Earnings before interest, income taxes, depreciation and amortization
("EBITDA") for the mountain segment increased 1.4% to $93.3 million.
Excluding the Heavenly acquisition, "same-store" mountain EBITDA for the
quarter fell 14.2% compared to the same period last year.
Lodging EBITDA decreased $2.5 million, or 17.7%, to $11.6 million for
the quarter; $0.4 million of the decrease was attributed to the Ritz-Carlton,
Bachelor Gulch, which opened in November of fiscal 2003. As the Company
uses the equity method of accounting for the Ritz-Carlton, included in
the third quarter Ritz-Carlton, Bachelor Gulch loss is $1.7 million of
depreciation and interest expense.
Third quarter resort EBITDA was $104.9 million, a 1.1% decrease from
the comparable period last year, and "same-store" resort EBITDA, excluding
Heavenly and the Ritz-Carlton, fell 14.3% versus the third quarter in fiscal
2002.
Real estate EBITDA for the quarter rose $2.2 million to $1.2 million.
Third quarter net income fell $11.5 million to $35.5 million, or $1.01
per
diluted share, compared to $47.0 million, or $1.34 per diluted share,
for the same period last year.
NINE MONTH PERFORMANCE
Mountain revenue for the nine months ended April 30, 2003 was $435.3
million, an 18.1% increase from $368.6 million for the comparable period
last year. Excluding the acquisition of the Heavenly Ski Resort,
the nine month "same-store" mountain revenue rose 1.9% compared to the
same period last year.
Lodging revenue for the nine months rose $10.3 million, or 9.4%, to
$120.6 million and resort revenue increased $77.0 million, or 16.1%, to
$555.9 million. Real estate revenue for the period rose $19.5 million
to $73.9 million, a 35.9% increase compared to the same period last year.
Total revenue rose $96.5 million, or 18.1%, to $629.7 million.
Income from operations for the nine months decreased $5.0 million,
or 5.1%, to $92.5 million compared to the same period last year.
Mountain EBITDA increased 6.8% to $128.8 million. Included in
the nine-month fiscal 2003 mountain EBITDA is $2.5 million of severance
expense as reported in the first and second fiscal quarters. Excluding
the Heavenly acquisition, "same-store" mountain EBITDA for the nine months
fell 9.7% compared to the same period last year.
Lodging EBITDA decreased $7.9 million, or 51.8%, to $7.4 million for
the nine months, with $3.7 million of the decrease attributed to the Ritz-Carlton,
Bachelor Gulch, including $3.7 million of depreciation and interest expense.
Resort EBITDA for the nine month period was $136.2 million, a 0.2%
increase from the comparable period last year, and resort EBITDA excluding
Heavenly and the Ritz-Carlton fell 11.8% versus the nine months ended April
30, 2002. Included in resort EBITDA is $2.5 million of severance
expense associated with the first and second fiscal quarters.
Real estate EBITDA for the nine months rose $3.5 million to $17.2 million.
Net income for the nine month period fell $15.1 million to $27.5 million,
or $0.78 per diluted share, compared to $42.6 million, or $1.21 per
diluted share, for the same period last year.
Adam Aron, Chairman and Chief Executive Officer, commented, "The financial
results for the first half of our fiscal year were impressive and robust,
but as talk of war with Iraq heightened after New Year's Day in January,
we began to experience a slowdown of bookings at our resorts. Then,
with the actual outbreak of war during the busiest weeks of our ski season,
both our mountain and lodging segments were adversely affected. Visitation
at all our Colorado resorts was below last year's levels for the month
of March. RockResorts owned hotels, as well as the non-branded Vail
Resorts Lodging Company owned hotels, also saw reduced year-over-year occupancy
and ADR in the month of March. The contrast between Vail Resorts'
financial success in the first half of this fiscal year and the war-impacted
third quarter could not be more dramatic," added Aron.
Aron continued, "Despite the lackluster financial performance by the
Company during the quarter, there is, nonetheless, much good news to report
in this fiscal year. Beaver Creek had a record ski season with some
718,000 skier visits, in no small part due to the new and beautiful Ritz-Carlton,
Bachelor Gulch. The Heavenly acquisition was successful even beyond
our expectations, with skier visits and lift ticket revenue at Heavenly
increasing 12.5% and 19.3%, respectively, when compared to the prior year
under a different ownership. The cost savings program we implemented
in October 2002 was successful, as the projected cost savings were in fact
realized. In addition, the affluent real estate market continued
at a brisk pace, RockResorts secured a new 20-year management agreement
for the Cheeca Lodge, and a new four-year or longer $425 million bank revolving
credit line and institutional term loan was completed, in management's
judgment, on favorable terms."
Aron further stated, "Looking ahead, we see no reason at this point
to change the guidance we issued on April 29th for the balance of fiscal
2003. As for fiscal 2004, given the unfortunate state of the world
and the still weak national economy, Vail Resorts management believes it
is prudent to continue to very tightly manage the Company's costs.
As we finalize fiscal 2003 and prepare for fiscal 2004, we are undergoing
another extensive cost cutting program. At this juncture, we have
identified numerous ways to significantly enhance the Company's permanent
cost structure and believe we can make additional expense reductions of
more than $25 million in fiscal 2004. We have also scrutinized our
capital expenditure plan for calendar 2003 and have been able to trim down
our expenditures to a range of $80 to $90 million for the year. Importantly,
we expect to achieve these financial improvements without compromising
our long-standing tradition of offering a world-class vacation experience
and excellent guest service. Our employees will also be pleased to
know that we plan to attain these savings without having to implement sweeping
company-wide layoffs."
Vail Resorts, Inc.
Consolidated Financial Statements
(in thousands except per share amounts)
Three Months Ended Nine Months Ended
April 30,
April 30,
2003 2002
2003 2002
Net revenue:
Mountain
211,710 193,243 435,313
368,620
Lodging
45,519 49,096 120,558
110,220
Real estate
11,888 4,322
73,866 54,354
Total net revenue
269,117 246,661 629,737
533,194
Operating expense:
Mountain
118,450 101,520 307,737
249,520
Lodging
33,521 34,979 109,456
94,875
Real Estate
11,567 5,488
61,371 43,319
Depreciation &
amortization
20,785 16,566 58,656
47,995
Total operating expense
184,323 158,553 537,220
435,709
Income from operations
84,794 88,108 92,517
97,485
Other income (expense)
Mountain equity
investment income
31 300
1,254 1,508
Lodging equity
investment loss
(373) --
(3,705) --
Real estate equity
investment income
881 204
4,721 2,673
Interest income
474 301
879 1,256
Interest expense
(12,867) (9,644) (37,613)
(27,870)
Gain on put option
-- --
1,371 --
Gain (loss) on disposal
of fixed assets
(270) 35
(289) (92)
Other income (expense):
(1) (19)
20 (68)
Minority interest in
income of consolidated
joint ventures
(2,577) (3,423) (2,615)
(3,380)
Income before income taxes
70,092 75,862 56,540
71,512
Provision for income taxes (34,600)
(28,829) (29,056) (27,175)
Income before cumulative
effect of change in
accounting principle
35,492 47,033 27,484
44,337
Cumulative effect of
change in accounting
principle, net of
income taxes
-- --
-- (1,708)
Net income
35,492 47,033 27,484
42,629
Basic weighted average
shares
35,188 35,145 35,180
35,138
Diluted weighted average
shares
35,193 35,188 35,206
35,180
Per share amounts (basic):
Income before cumulative
effect of change in
accounting principle
$1.01 $1.34
$0.78 $1.26
Cumulative effect
of
change
in accounting
principle,
net of
income
taxes
-- --
-- (0.05)
Net income
$1.01 $1.34
$0.78 $1.21
Per share amounts (diluted):
Income before cumulative
effect of change in
accounting principle
$1.01 $1.34
$0.78 $1.26
Cumulative effect
of
change
in accounting
principle,
net of
income
taxes
-- --
-- (0.05)
Net income
$1.01 $1.34
$0.78 $1.21
Other Data:
Mountain EBITDA
$93,291 $92,023 $128,830
$120,608
Lodging EBITDA
11,625 14,117
7,397 15,345
Resort EBITDA
104,916 106,140 136,227
135,953
Real estate EBITDA
$1,202 $(962) $17,216
$13,708
Vail Resorts, Inc.
Resort Revenue by Business Line and Skier Visits
(in thousands)
Three Months Ended
Nine Months Ended
April 30,
April 30,
2003 2002 % Change
2003 2002 % Change
Business Line
Lift tickets $105,174
$95,349 10.3% $196,089 $162,046 21.0%
Ski school
31,401 28,480 10.3%
55,367 46,076 20.2%
Dining
23,757 21,285 11.6%
47,413 40,732 16.4%
Retail/rental 36,817
33,722 9.2% 94,443
83,155 13.6%
Other
14,561 14,407 1.1%
42,001 36,611 14.7%
Total Mountain
Revenue
211,710 193,243 9.6% 435,313
368,620 18.1%
Total Lodging
Revenue
45,519 49,096 (7.3)% 120,558
110,220 9.4%
Total Resort
Revenue
$257,229 $242,339 6.1% $555,871
$478,840 16.1%
Three Months Ended
Nine Months Ended
April 30,
April 30,
2003 2002 % Change
2003 2002 % Change
Skier Visits
Vail
873 864 1.0%
1,611 1,536 4.9%
Beaver Creek
404 395 2.3%
718 658 9.1%
Keystone
519 532 (2.4)%
1,039 1,069 (2.8)%
Breckenridge
776 808 (4.0)%
1,425 1,469 (3.0)%
Heavenly
533 -- 100.0%
935 -- 100.0%
Total Skier
Visits
3,105 2,599 19.5%
5,728 4,732 21.0%
As of April 30,
2003 2002
Key Balance Sheet Data:
Real estate held for sale and investment
$136,821 $184,704
Total stockholders' equity
535,920 540,928
Total debt
520,289 454,920
Less: cash and cash equivalents
20,374 53,515
Net debt
$499,915 $401,405
Reconciliation of Non-GAAP Financial Measures
Resort, mountain and lodging EBITDA have been presented herein as measures
of the Company's financial operating performance. 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. 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 EBITDA is an indicative measure of
resort and lodging companies' 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 EBITDA is useful in measuring the Company's ability
to fund capital expenditures and service debt. The Company uses EBITDA
targets in determining management
bonuses.
Presented below is a reconciliation of resort EBITDA to income from
operations for the Company calculated in accordance with GAAP.
Three Months Ended Nine Months Ended
April 30,
April 30,
2003 2002
2003 2002
Income from operations* $84,794
$88,108 $92,517 $97,485
Adjustments to reconcile
income from operations
to resort EBITDA:
Real estate revenue
(11,888) (4,322) (73,866)
(54,354)
Real estate expense
11,567 5,488
61,371 43,319
Depreciation and
amortization
20,785 16,566
58,656 47,995
Mountain equity
investment income
31 300
1,254 1,508
Lodging equity
investment loss
(373) --
(3,705) --
Resort EBITDA
$104,916 $106,140 $136,227
$135,953
Presented below is a reconciliation of mountain EBITDA
to income from
operations for the Company calculated in accordance with GAAP.
Three Months Ended Nine Months Ended
April 30,
April 30,
2003 2002
2003 2002
Income from operations* $84,794
$88,108 $92,517 $97,485
Adjustments to reconcile
income from operations
to mountain EBITDA:
Lodging revenue
(45,519) (49,096) (120,558) (110,220)
Lodging expense
33,521 34,979
109,456 94,875
Real estate revenue
(11,888) (4,322) (73,866)
(54,354)
Real estate expense
11,567 5,488
61,371 43,319
Depreciation and
amortization
20,785 16,566
58,656 47,995
Mountain equity
investment income
31 300
1,254 1,508
Mountain EBITDA
$93,291 $92,023 $128,830
$120,608
Presented below is a reconciliation of lodging EBITDA
to income from
operations for the Company calculated in accordance with GAAP.
Three Months Ended Nine Months Ended
April 30,
April 30,
2003 2002
2003 2002
Income from operations* $84,794
$88,108 $92,517 $97,485
Adjustments to reconcile
income from operations
to lodging EBITDA:
Mountain revenue
(211,710) (193,243) (435,313) (368,620)
Mountain expense
118,450 101,520 307,737
249,520
Real estate revenue
(11,888) (4,322) (73,866)
(54,354)
Real estate expense
11,567 5,488
61,371 43,319
Depreciation and
amortization
20,785 16,566
58,656 47,995
Lodging equity
investment loss
(373) --
(3,705) --
Lodging EBITDA
$11,625 $14,117 $7,397
$15,345
Real estate EBITDA has been presented herein as a measure of the Company's
financial operating performance for the real estate segment.
Real estate EBITDA is calculated as real estate revenue less real estate
expense plus real estate equity investment income. Real estate expense
includes selling and holding costs, operating expenses and an allocation
of the land, infrastructure, mountain improvement and other costs relating
to property sold as well as an allocation of corporate administrative costs.
Depreciation and amortization are excluded from real estate EBITDA as the
Company has determined that the portion of those expenses allocable to
real estate are not significant. Real estate EBITDA is not a measurement
of financial performance under GAAP, and it might not be comparable to
similarly titled measures. Real estate 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 uses real estate EBITDA targets in determining management bonuses.
Presented below is a reconciliation of real estate EBITDA to income
from operations for the Company calculated in accordance with GAAP.
Three Months Ended Nine Months Ended
April 30,
April 30,
2003 2002
2003 2002
Income from operations*
$84,794 $88,108 $92,517
$97,485
Adjustments to reconcile
income from operations
to real estate EBITDA:
Mountain revenue
(211,710) (193,243) (435,313) (368,620)
Mountain expense
118,450 101,520 307,737
249,520
Lodging revenue
(45,519) (49,096) (120,558) (110,220)
Lodging expense
33,521 34,979 109,456
94,875
Depreciation and
amortization
20,785 16,566 58,656
47,995
Real estate equity
investment income
881 204
4,721 2,673
Real estate EBITDA
$1,202 $(962) $17,216
$13,708
*Income from operations represents net income from
continuing operations
excluding interest expense, income tax expense and certain other non-operating
gains and losses.
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.
The Vail Resorts corporate website is http://www.vailresorts.com and the
consumer websites are http://www.snow.com and http://www.rockresorts.com
. Vail Resorts is a publicly held company traded on the New York
Stock Exchange (NYSE: MTN).
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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