| MADISON, Wis. - Feb. 28, 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 fourth quarter and year ended
December 31, 2004.
Great Wolf Resorts began operations with the closing of the initial
public offering of its common stock (IPO) on December 20, 2004. For 2004,
both historical financial data (covering the operating period from the
IPO date) and pro forma financial data (assuming the IPO was completed
on January 1, 2004) are included in the tables of this press release.
Fourth-Quarter and Full Year Results
For 2004, the company reported (amounts in thousands, except per share
data):
Period Ended
Year Ended
December 31, 2004 December 31, 2004
Historical (a) Pro
Forma (b)
----------------------------------------------------------------------
Net income (loss)
$(3,842)
$(9,331)
----------------------------------------------------------------------
Net income (loss) per
diluted share
$(0.13)
$(0.31)
----------------------------------------------------------------------
Adjusted EBITDA
$1,947
$23,896
----------------------------------------------------------------------
Adjusted net income
(loss)
$(97)
$(2,805)
----------------------------------------------------------------------
Adjusted net income
(loss) per diluted
share
$(0.00)
$(0.09)
----------------------------------------------------------------------
Revenues
$4,629
$91,036
----------------------------------------------------------------------
(a) Information reflects operating results from the December
20, 2004
closing date of the IPO through December
31, 2004.
(b) Information gives pro forma effect to the IPO and
related
formation transactions as if they
had occurred on January 1, 2004. |
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.
Pro forma operating statistics for the company's resorts were as follows:
2004
----------------------------------------------------------------------
Fourth Quarter
Full Year
----------------------------------------------------------------------
Occupancy
53.3 %
65.3 %
----------------------------------------------------------------------
ADR
$195.56
$208.48
----------------------------------------------------------------------
RevPAR
$104.30
$136.04
----------------------------------------------------------------------
Total RevPAR
$157.07
$198.26
----------------------------------------------------------------------
Total RevPOR
$294.51
$303.84
----------------------------------------------------------------------
"We are very satisfied with our operating results for 2004," said John
Emery, chief executive officer. "While the closing of the IPO was obviously
a significant event in the life of the company, it did not distract us
from providing great service and resort experiences to our guests. We believe
our results continue to show the strength of our operating model -- offering
a drive-to family vacation at an affordable price within a comfortable,
safe setting with a wide range of amenities for all members of the family."
"With the completion of the IPO, we now are able to fully concentrate
on consolidating and strengthening the consistency of our brand and our
operations," Emery continued. "We believe our portfolio of upscale, branded,
drive-to resorts provides families with a great experience at a good value.
We are very focused on our marketing efforts to our core group of customers,
families with children from two to 14 years old that live within a convenient
driving distance of one of our resorts. Our family customers use our resorts
for their primary vacation or for weekend/holiday getaways, and provide
us with a broad base of customers. We also seek to attract other customer
types, such as small companies, business groups and social clubs, who find
our meeting facilities both unique and accommodating. The combination of
all these factors helped contribute positively to our results."
Capital Structure
In December 2004, the company successfully completed its IPO with the
issuance of 16.1 million shares of common stock, including 2.1 million
shares issued in connection with the exercise in full of the over-allotment
option granted to underwriters of the offering. The offering raised net
proceeds of approximately $248.1 million. "The IPO transaction allowed
us to put in place a solid capital structure to support both our current
operations and future growth," said James A. Calder, chief financial officer.
"We plan to maintain low leverage levels in order to have financial flexibility
going forward."
"We expect that the combination of cash on hand, our new $75 million,
undrawn line of credit, and cash flows from our operating properties will
fund the equity portion of our future development properties without additional
sales of common stock for the foreseeable future," Calder added. "In addition,
in February 2005 we used a portion of the IPO proceeds to retire the construction
loan on our Great Wolf Lodge under development in Williamsburg, Va., lowering
our annual cash outlay for interest by more than $2 million and leaving
one of our largest resorts unencumbered by mortgage debt."
Key Financial Data
As of December 31, 2004, Great Wolf Resorts had:
-
Total cash and cash equivalents of $79.5 million
-
Total mortgage debt of $130.6 million
-
Weighted average cost of mortgage debt of 7.0%
-
Weighted average debt maturity of 7.2 years
Development Activity
The company currently owns and operates five resorts - Great Wolf Lodges
in Wisconsin Dells, Wis.; Sandusky, Ohio; Traverse City, Mich.; and Kansas
City, Kans., and the Blue Harbor Resort in Sheboygan, Wis. "Our Great Wolf
Lodge resorts under construction in Williamsburg, Va. and the Pocono Mountains,
Pa. are progressing well and are on target to open in late March and the
fall of 2005, respectively," Emery noted. "The Great Wolf Lodge in Niagara
Falls, Ontario, being built by Ripley Entertainment, will be licensed from
and operated by Great Wolf Resorts. That property is scheduled for completion
in early 2006."
"Our business plan calls for the development of two new owned resorts
each year," Emery said. "We expect to announce our next resort construction
projects within a few months and begin construction in mid-2005. We also
continue to actively seek additional licensing opportunities and strategic
relationships to expand and enhance our brands."
Outlook and Guidance
The company provides the following outlook and earnings guidance for
the first quarter and full year 2005 (amounts in thousands, except per
share data):
First Quarter
Full Year
----------------------------------------------------------------------
Low High
Low High
----------------------------------------------------------------------
Net income
$(1,700) $(1,100) $7,700
$10,100
----------------------------------------------------------------------
Net income (loss) per
diluted share
$(0.06) $(0.04) $0.25
$0.33
----------------------------------------------------------------------
Adjusted EBITDA (a) $5,800
$6,800 $50,000 $54,000
----------------------------------------------------------------------
Adjusted net income
(loss) (a)
$(700) $(100) $10,300
$12,700
----------------------------------------------------------------------
Adjusted net income
(loss) per diluted
share
$(0.02) $(0.00) $0.34
$0.41
----------------------------------------------------------------------
(a) For reconciliations of Adjusted EBITDA and Adjusted
net income,
see the tables accompanying this press
release.
Non-GAAP Financial Measures
Included in this press release are certain "non-GAAP financial measures,"
which are measures of the company's historical or future performance that
are different from measures calculated and presented in accordance with
GAAP, within the meaning of applicable SEC rules, that Great Wolf Resorts
believes are useful to investors. They are as follows: (i) Adjusted EBITDA
and (ii) Adjusted net income. The following discussion defines these terms
and presents the reasons the company believes they are useful measures
of its performance.
Great Wolf Resorts defines Adjusted EBITDA as net income plus (a) interest
expense, net, (b) income taxes, (c) depreciation and amortization, (d)
IPO-related costs, (e) non-cash employee compensation, (f) costs associated
with early extinguishment of debt and (g) pre-opening costs of resorts
under development. The company defines Adjusted net income as net income
without the effects of (a) IPO-related costs, (b) non-cash employee compensation,
(c) costs associated with early extinguishment of debt, and (d) pre-opening
costs of resorts under development.
Adjusted EBITDA and Adjusted net income as calculated by the company
are not necessarily comparable to similarly titled measures by other companies.
In addition, adjusted EBITDA (a) does not represent net income or cash
flows from operations as defined by GAAP, (b) is not necessarily indicative
of cash available to fund the company's cash flow needs, and (c) should
not be considered as an alternative to net income, operating income, cash
flows from operating activities or the company's other financial information
as determined under GAAP. Also, Adjusted net income does not represent
net income as defined by GAAP.
Management believes Adjusted EBITDA is useful to an investor in evaluating
the company's operating performance because a significant portion of its
assets consists of property and equipment that are depreciated over their
remaining useful lives in accordance with GAAP. Because depreciation and
amortization are non-cash items, management believes that presentation
of Adjusted EBITDA is a useful measure of the company's operating performance.
Also, management believes Adjusted EBITDA is widely used in the hospitality
and entertainment industries to measure operating performance without regard
to items such as unusual items.
Similarly, management believes Adjusted net income is a useful performance
measure because certain items included in the calculation of unadjusted
net income may either mask or exaggerate trends in the company's ongoing
operating performance. Furthermore, performance measures that include these
types of items may not be indicative of the continuing performance of the
company's underlying business. Therefore, the company presents Adjusted
EBITDA and Adjusted net income because they may help investors to compare
Great Wolf Resort's ongoing performance before the effect of various items
that do not directly affect the company's ongoing financial performance.
Great Wolf Resorts, Inc.
Consolidated Statements of Operations
(in thousands, except per share amounts)
Period Ended Year Ended
December 31, December 31,
2004 -- 2004 --
Historical (1) Pro Forma (2)
---------------- ----------------
Revenues:
Rooms
$ 3,261 $
62,188
Food and beverage
776 15,400
Other resort operations
592 13,448
--------------- ----------------
4,629
91,036
--------------- ----------------
Operating expenses:
Resort departmental expenses
1,256
33,323
Selling, general and
administrative
7,372
29,540
Property operating costs
295 15,153
Depreciation and amortization
1,897
21,809
--------------- ----------------
Total operating expenses
10,820
99,825
--------------- ----------------
Operating income (loss)
(6,191) (8,789)
Interest income
(66)
(188)
Interest expense
280
6,952
--------------- ----------------
Income (loss) before income taxes
(6,405) (15,553)
Income tax expense (benefit)
(2,563) (6,222)
--------------- ----------------
Net income (loss)
$ (3,842) $
(9,331)
=============== ================
Net income (loss) per share:
Basic
$ (0.13) $
(0.31)
Diluted
$ (0.13) $
(0.31)
Weighted average common shares
outstanding:
Basic
30,133
30,133
Diluted
30,133
30,133
Great Wolf Resorts, Inc.
Reconciliations of Non-GAAP Financial Measures
(in thousands, except per share amounts)
Period Ended Year Ended
December 31, December 31,
2004 -- 2004 --
Historical(1) Pro Forma (2)
------------- --------------
Net income (loss)
$ (3,842) $ (9,331)
Adjustments:
Interest expense, net
214 6,764
Income tax expense (benefit)
(2,563) (6,222)
Depreciation and amortization
1,897 21,809
IPO-related costs
5,550 6,413
Non-cash employee compensation
691 691
Pre-opening costs for resorts under
development
- 3,772
------------- -------------
Adjusted EBITDA (3)
$ 1,947 $
23,896
============= =============
Net income (loss)
$ (3,842) $ (9,331)
Adjustments to net income (loss), net of
income taxes:
IPO-related costs
3,330 3,848
Non-cash employee compensation
415 415
Pre-opening costs for resorts under
development
- 2,263
------------- -------------
Adjusted net income (loss) (3)
$ (97) $
(2,805)
============= =============
Adjusted net income (loss) per share:
Basic
$ (0.00) $
(0.09)
Diluted
$ (0.00) $
(0.09)
Weighted average shares outstanding:
Basic
30,133 30,133
Diluted
30,133 30,133
Great Wolf Resorts, Inc.
Operating Statistics
Three Months Ended
Year Ended
December 31,
December 31,
------------------------ -----------------------
2004 2003
2004 2003
------------ ---------- ----------- ----------
Wisconsin Dells:
Occupancy
52.4% 50.1%
62.2% 60.6%
ADR
$ 162.43 $ 189.27 $
188.76 $ 200.85
RevPAR
$ 85.15 $ 94.88
$ 117.47 $ 121.75
Total RevPOR
$ 245.20 $ 264.27 $
267.20 $ 277.76
Total RevPAR
$ 128.53 $ 132.48 $
166.29 $ 168.37
Sandusky:
Occupancy
52.8% 54.3%
68.0% 70.0%
ADR
$ 220.91 $ 217.28 $
231.45 $ 224.53
RevPAR
$ 116.56 $ 117.94 $
157.50 $ 157.11
Total RevPOR
$ 319.12 $ 311.31 $
325.78 $ 315.94
Total RevPAR
$ 168.38 $ 168.98 $
221.68 $ 221.07
Traverse City:
Occupancy
56.5% 54.6%
69.4% 70.4%
ADR
$ 208.26 $ 204.10 $
223.43 $ 210.95
RevPAR
$ 117.72 $ 111.47 $
155.04 $ 148.47
Total RevPOR
$ 303.87 $ 304.86 $
320.68 $ 310.06
Total RevPAR
$ 171.76 $ 166.50 $
222.52 $ 218.22
Kansas City:
Occupancy
55.6% 43.8%
64.4% 52.6%
ADR
$ 210.73 $ 209.53 $
196.18 $ 196.90
RevPAR
$ 117.07 $ 91.76
$ 126.31 $ 103.49
Total RevPOR
$ 298.41 $ 323.38 $
285.85 $ 306.88
Total RevPAR
$ 165.78 $ 141.62 $
184.05 $ 161.29
Sheboygan
Occupancy
47.4% -
58.3% -
ADR
$ 165.07
- $ 190.35
-
RevPAR
$ 78.26
- $ 110.93
-
Total RevPOR
$ 321.85
- $ 351.61
-
Total RevPAR
$ 152.59
- $ 204.91
-
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 (4)
(in thousands, except per share amounts)
Three Months Year Ending
Ending March December 31,
31, 2005
2005
--------------- -----------------
Net income (loss) (5)
$ (1,400) $
8,900
Adjustments:
Interest expense, net
1,900
8,900
Income tax expense (benefit)
(800)
5,900
Depreciation and amortization
4,800
23,900
Debt extinguishment costs
900
900
Pre-opening costs of resorts
under development
900
3,500
--------------- -----------------
Adjusted EBITDA (3)
$ 6,300 $
52,000
=============== =================
Net income (loss) (5)
$ (1,400) $
8,900
Adjustments to net income (loss),
net of income taxes:
Debt extinguishment costs
500
500
Pre-opening costs of resorts
under development
500
2,100
--------------- -----------------
Adjusted net income (loss) (3)
$ (400) $
11,500
=============== ================
Net income (loss) per share:
Basic
$ (0.05) $
0.30
Diluted
$ (0.05) $
0.29
Adjusted net income (loss) per
share:
Basic
$ (0.01) $
0.38
Diluted
$ (0.01) $
0.38
Weighted average shares
outstanding:
Basic
30,133
30,133
Diluted
30,133
30,633
(1) Information represents operating activity for Great
Wolf Resorts,
Inc. from date of initial public offering
(December 20, 2004)
through December 31, 2004
(2) Information has been prepared to give pro forma effect
to the
initial public offering of common
stock of Great Wolf Resorts,
Inc. and the related formation transactions
(including acquisition
of all of the interests in the entities
that owned our resort
properties, spin-off of non-resort
businesses, and repayment and
refinancing of certain mortgage indebtedness)
as if they had
occurred on January 1, 2004.
(3) See discussions of Adjusted EBITDA and Adjusted net
income located
in the "Non-GAAP Financial Measures"
section of this press
release.
(4) Our outlook reconciliations use the mid-points of
our estimates of
Adjusted EBITDA and Adjusted net income.
(5) Net income for year ending December 31, 2005 includes
a gain of
$4,800, net of income taxes, on sale
of condominiums. |
This press release may contain forward-looking statements within the
meaning of the federal securities laws.
|
