Reports 2004 Earnings
|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
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:
"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."
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:
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):
(a) For reconciliations of Adjusted EBITDA and Adjusted
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.
This press release may contain forward-looking statements within the meaning of the federal securities laws.
Great Wolf Resorts, Inc.
|Also See:||Great Wolf Lodge, Kansas City, Kansas Enjoyed Outstanding First Year of Business / May 2004|
|Wisconsin Developers Building $48 million Great Wolf Lodge and Water Park Resort in Lightfoot, Virginia / December 2003|
|Great Wolf Resorts Inc. Raises $238 million with Successful Initial Public Offering; Plans to Open 10 Resorts Over Next Five Years / December 2004|