MADISON, Wis.--November 2, 2011-- Great Wolf Resorts, Inc. (NASDAQ: WOLF), North America’s largest family of indoor waterpark resorts, reported results today for the third quarter ended September 30, 2011.

Third Quarter 2011 Highlights

• Adjusted EBITDA increased 12.7 percent to $28.9 million from the prior year quarter.
• Same store revenue per available room (RevPAR) increased 9.1 percent and total revenue per available room (Total RevPAR) increased 7.9 percent over the prior year quarter, and same store RevPAR increased 10.1 percent for the nine months ended September 30, 2011 as compared to the prior year period.
• Same store occupancy increased by 330 basis points and average daily rate (ADR) increased 4.2 percent as compared to the prior year quarter.

For the third quarter ended September 30, 2011, the Company reported net income of $1.5 million, or $0.05 per share, compared to a net loss of $(1.0) million, or $(0.03) per share, for the same period a year earlier. The year over year improvement was due primarily to higher overall revenues, along with ongoing expense discipline.

Kim Schaefer, chief executive officer, commented, “We delivered a quarter of outstanding results as we maintained our focus on operational excellence. As we continue to advance our Great Wolf Lodge® brand through our sales and marketing strategies, we are driving strong organic revenue growth at our resorts. Through our efforts we are attracting more new guests to our resorts, improving our booking pace and steering more customers to engage and book with us through our website. With these steps, we are well positioned to continue to outperform. Also, we are pleased with our progress on balance sheet improvements over the past two years, where we have meaningfully reduced our leverage level and eliminated our near-term debt maturities. While we remain focused on unlocking further value embedded in our operating resorts, we are confident there are exciting opportunities to capitalize on the platform we have developed.”

Operating Results

Total revenues increased 7.2 percent to $83.6 from $77.9 million in the third quarter of 2010, due primarily to increased demand at the Company’s resorts. Adjusted EBITDA in the 2011 third quarter increased 12.7 percent to $28.9 million from $25.7 million in the third quarter of 2010.

As a percentage of total revenue, Adjusted EBITDA was 34.6 percent, up 167 basis points from 33.0 percent in the third quarter of 2010. As a percentage of total revenues, resort departmental expenses, property operating costs and SG&A costs combined decreased 240 basis points in the 2011 third quarter as compared to the 2010 period.

Brand Results

Same store RevPAR in the third quarter of 2011 was up 9.1 percent (8.3 percent increase using constant dollars, which normalizes the foreign currency translation effect on operating statistics of the Company’s Canadian resort) compared to the 2010 quarter. Same store occupancy was up 330 basis points compared to the prior year quarter. Same store ADR increased 4.2 percent (3.3 percent increase using constant dollars) compared to the 2010 quarter. Total same store revenue per occupied room (Total RevPOR), which includes revenue from rooms, food and beverage, and other amenities, increased 3.0 percent (2.1 percent increase using constant dollars) compared to the prior year quarter.

Same store RevPAR for Great Wolf’s Generation II resorts, whichare generally larger resorts that better represent the Company's current resort development model and contribute about 80 percent of the Company’s Adjusted EBITDA, increased 10.4 percent (9.2 percent increase using constant dollars) in the 2011 third quarter versus 2010. Same store occupancy increased 370 basis points and same store ADR increased 4.8 percent (3.7 percent using constant dollars), and same store Total RevPOR for Generation II resorts increased 3.5 percent (2.4 percent using constant dollars) compared to the 2010 quarter.

Balance Sheet and Liquidity

The Company continues to enhance its balance sheet and liquidity position. With the refinancing of its Concord, North Carolina property completed in July 2011, it has no debt maturities until July 2014 and no significant long-term capital commitments for construction or development of new properties. Over the near term, the Company intends to utilize a substantial portion of its free cash flow to manage its balance sheet leverage.

The Company has reduced its ratio of net debt (defined as total debt less unrestricted cash) to trailing twelve-month Adjusted EBITDA to 6.1 times as of September 30, 2011 as compared to 8.0 times as of December 31, 2009.

As of September 30, 2011, the Company had:

Outlook and Guidance

The Company is introducing the following outlook and earnings guidance for the fourth quarter and is increasing its outlook for full year 2011. Based on its current operating outlook, the Company is increasing the midpoint of its guidance for full year Adjusted EBITDA by $1.5 million from $77.5 million to $79.0 million. The outlook and earnings guidance information is based on the Company’s current assessment of business conditions, including a forecast of consumer demand and discretionary spending trends. The Company may update any portion of its business outlook at any time as conditions dictate:

(a) For reconciliations of net income (loss) to Adjusted EBITDA, see tables accompanying this press release.

The forecast above projects fourth quarter 2011 same store RevPAR growth in the range of approximately 6 percent to 8 percent in constant dollars versus fourth quarter 2010 and full year 2011 same store RevPAR growth in the range of approximately 8 percent to 10 percent.

Adjusted EBITDA is a non-GAAP financial measure. See the discussion below in the “Non-GAAP Financial Measure” section of this press release. A reconciliation of net income (loss) to Adjusted EBITDA is provided in the tables of this press release.

Conference Call

Great Wolf Resorts will hold a 2011 third quarter results conference call today at 9:00 a.m. Eastern Time. The conference call will be hosted by Chief Executive Officer Kim Schaefer and Chief Financial Officer Jim Calder. Stockholders and other interested parties may listen to a simultaneous webcast of the conference call on the Internet by logging onto the Company’s Corporate Web site at, http://corp.greatwolfresorts.com, then going to the “Investor Relations” tab and selecting “Event Calendar.” Interested parties may also call 1-877-705-6003, or for international callers 1-201-493-6725. A recording of the call will be available by telephone until midnight on November 9, 2011 by dialing 1-877-870-5176, or for international callers 1-858-384-5517 and using the conference ID 380770.

Non-GAAP Financial Measure

Included in this press release is Adjusted EBITDA, which is a “non-GAAP financial measure,” which is a measure of the Company’s historical or future performance that is different from measures calculated and presented in accordance with GAAP that Great Wolf Resorts believes is useful to investors. The following discussion defines Adjusted EBITDA and presents the reasons the Company believes it is a useful measure of the Company’s performance. Great Wolf Resorts defines Adjusted EBITDA as net income (loss) plus (a) interest expense, net, (b) income taxes, (c) depreciation and amortization, (d) non-cash employee and director compensation, (e) costs associated with early extinguishment of debt or potential capital markets transactions, (f) opening costs of projects under development, (g) equity in earnings (loss) of unconsolidated related parties, (h) gain or loss on disposition of property or investments, (i) separation payments to senior executives, (j) environmental liability costs, (k) asset impairment charges, (l) non-controlling interests, (m) acquisition-related expenses, and (n) other unusual or non-recurring items. Adjusted EBITDA as calculated by the Company is 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.

Management uses Adjusted EBITDA: (i) as a measurement of operating performance because it assists in comparing the Company's operating performance on a consistent basis by removing the impact of items directly resulting from the Company's asset base (primarily depreciation and amortization) from its operating results; (ii) for planning purposes, including the preparation of the Company's annual operating budget; (iii) as a valuation measure for evaluating the Company's operating performance and its capacity to incur and service debt, fund capital expenditures and expand its business; and (iv) as one measure in determining the value of other acquisitions and dispositions.

Adjusted EBITDA is an operating performance measure, and not a liquidity measure, that provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets among otherwise comparable companies. The Company also presents Adjusted EBITDA because it is used by some investors as a way to measure its ability to incur and service debt, make capital expenditures and meet working capital requirements. The Company believes Adjusted EBITDA is useful to an investor in evaluating the Company's operating performance because: (i) a significant portion of the Company's assets consists of property and equipment that are depreciated over their remaining useful lives in accordance with GAAP; (ii) it is widely used in the hospitality and entertainment industries to measure operating performance without regard to items such as depreciation and amortization; and (iii) the Company believes it helps investors meaningfully evaluate and compare the results of the Company's operations from period to period by removing the impact of items directly resulting from its asset base (primarily depreciation and amortization) from the Company's operating results. Adjusted EBITDA is a measure commonly used in the Company's industry, and the Company presents EBITDA to enhance investors' understanding of its operating performance. The Company uses Adjusted EBITDA as one criterion for evaluating its performance relative to that of its peers. The compensation committee of the Company's board of directors determines the annual variable compensation for certain members of the Company's management based in part on Adjusted EBITDA.

The Company also believes Adjusted EBITDA is a useful performance measure because it also eliminates a number of non-cash items and other items that do not reflect the Company's core operating performance on a consolidated basis, which allows investors to more easily compare the Company's performance over various reporting periods on a consistent basis. Although the Company believes that Adjusted EBITDA can make an evaluation of the Company's operating performance more consistent because it removes items that do not reflect its core operations, other companies in the hospitality industry may define Adjusted EBITDA differently than the Company does. As a result, it may be difficult to compare the performance of other companies to the Company's performance by using Adjusted EBITDA or similarly named non-GAAP measures that other companies may use.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by the Private Securities Litigation Act of 1995. All statements, other than statements of historical facts, including, among others, statements regarding the Company’s future financial results or position, business strategy, projected levels of growth, projected costs and projected financing needs, are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Great Wolf Resorts, Inc. and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “might,” “will,” “could,” “plan,” “objective,” “predict,” “project,” “potential,” “continue,” “ongoing,” “seeks,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that actual results may differ materially from those contemplated by such forward-looking statements. Many of these factors are beyond the Company's ability to control or predict. Such factors include, but are not limited to, competition in the Company’s markets, changes in family vacation patterns and consumer spending habits, regional or national economic downturns, the Company’s ability to attract a significant number of guests from its target markets, economic conditions in its target markets, the impact of fuel costs and other operating costs, the Company’s ability to develop new resorts in desirable markets or further develop existing resorts on a timely and cost efficient basis, the Company's ability to manage growth, including the expansion of the Company’s infrastructure and systems necessary to support growth, the Company’s ability to manage cash and obtain additional cash required for growth, the general tightening in the U.S. lending markets, potential accidents or injuries at its resorts, decreases in travel due to pandemic or other widespread illness, its ability to achieve or sustain profitability, downturns in its industry segment and extreme weather conditions, reductions in the availability of credit to indoor waterpark resorts generally or to the Company and its subsidiaries, increases in operating costs and other expense items and costs, uninsured losses or losses in excess of the Company's insurance coverage, the Company's ability to protect its intellectual property, trade secrets and the value of its brands, current and possible future legal restrictions and requirements. A further description of these risks, uncertainties and other matters can be found in the Company’s annual report and other reports filed from time to time with the Securities and Exchange Commission, including but not limited to the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. Great Wolf Resorts cautions that the foregoing list of important factors is not complete and assumes no obligation to update any forward-looking statement that it may make.

Management believes these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. All written and oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by these cautionary statements. Further, forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time unless otherwise required by law. Past financial or operating performance is not necessarily a reliable indicator of future performance and investors should not use the Company’s historical performance to anticipate results or future period trends.

About Great Wolf Resorts, Inc.

Great Wolf Resorts, Inc.® (NASDAQ: WOLF), Madison, Wis., is North America’s largest family of indoor waterpark resorts, and, through its subsidiaries and affiliates, owns, licenses and/or operates its family resorts under the Great Wolf Lodge® brand. Great Wolf Resorts is a fully integrated resort company with Great Wolf Lodge locations in: Wisconsin Dells, Wis.; Sandusky, Ohio; Traverse City, Mich.; Kansas City, Kan.; Williamsburg, Va.; the Pocono Mountains, Pa.; Niagara Falls, Ontario; Mason, Ohio; Grapevine, Texas; Grand Mound, Wash.; and Concord, N.C.

The Company’s resorts are family-oriented destination facilities that generally feature 300 to 600 rooms and a large indoor entertainment area measuring 40,000 to 100,000 square feet. The all-suite properties offer a variety of room styles, arcade/game rooms, fitness rooms, themed restaurants, spas, supervised children’s activities and other amenities. The Company’s consolidated subsidiary, Creative Kingdoms, LLC, is a developer and operator of technology-based, interactive quest adventure experiences such as MagiQuest®.

Additional information may be found on the Company’s Web site at www.greatwolf.com.