Jun. 21, 2003 - In its ongoing efforts to reduce expenses, financially struggling American Skiing Co. is laying off chief operating officer Mark J. Miller and not filling the vacant position. 

Miller's departure from the company was revealed in a statement to investors that blamed "a challenging business environment affecting the entire U.S. travel industry and the overall economy [that] requires the company to streamline its cost structure ... at all levels of the organization." 

Efforts to contact Miller for comment were unsuccessful. 

In February, the company refinanced its resort-related debt, securing a $91.5 million credit facility from GE Structured Finance and CapitalSource. 

That agreement, ongoing negotiations to restructure other debts and successful cost-cutting measures implemented thus far prompted Phelps Hoyt, a high yield analyst with KDP Investment Advisors in Montpelier, Vt., to opine last week that the GE and CapitalSource loans "should be enough to sustain the company through our forecast period without the need for sales of any of [American Skiing's] seven remaining resorts." 

In addition to The Canyons outside of Park City, American Skiing owns Steamboat resort in Colorado, Killington and Mount Snow in Vermont, Sunday River and Sugarloaf/USA in Maine and Attitash Bear Peak in New Hampshire. 

But Hoyt said the company "is still on the edge" and he gave it almost a 50/50 shot of being pushed into Chapter 11 bankruptcy. He does not expect Miller's departure to worsen the company's plight because each of the seven resorts already has its own chief operating officer. 

"While it's nice to have someone overseeing coordination, I don't think it will be a material impact on the company's ability to operate," Hoyt said. "Their real estate operation is hurting the worst." 

In a quarterly earnings report released last week, American Skiing reported its losses for the nine-month period ending April 27 were $15.1 million, compared with $49.8 million for the same time frame a year earlier. 

The report also said revenue from sales of real estate developments, such as "fractional" shares of condos in The Canyons' Grand Summit Hotel, was $5.6 million in February, March and April. The company took in $7.6 million in real-estate sales in the same three months in 2002. 

"As of June 1, the Steamboat Grand and Canyons' Grand Summit hotels were 54 percent and 77 percent sold out, respectively," the company reported. 

Net income dropped from 39 cents per share in the third quarter of 2002 to 18 cents in the same period of 2003. 

Resort and total consolidated revenue were down slightly from the previous year, reflecting "the impact of war in Iraq and economic weakness on destination visits, which was partially offset by modest improvements at The Canyons and an extended season in the East," the report said. 

It added that "The Canyons shrugged off a poor snow year and posted record skier visits" -- 333,738 last winter, a 16 percent increase over the 287,843 lift-ticket purchasers in the winter of 2001-02. Overall, American Skiing's seven resorts attracted 3.97 million skiers and snowboarders, a 6 percent gain over the previous winter. 

American Skiing's stock dropped 3 cents per share Friday to 9 cents.
 
 

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