Peak Resorts, Inc. reported retail revenue dropped 9.2 and 13.3 percent in the three months and fiscal year ended April 30 as traffic to its 14 ski resorts in the Northeast and Midwest fell.
The company reported retail sales reached declined $199,000 to $1.97 million in the fiscal fourth quarter compared with the comparable period a year earlier. Retail sales for the fiscal year reached $4.56 million, down $701,000 compared with fiscal 2015.
“We faced significant weather challenges during the 2015/2016 ski season due to unseasonably warm weather in the Midwest and the Northeast, which ultimately caused a decrease in the total of overall visits to our resorts,” said Peak Resorts President and CEO Timothy D. Boyd. “Further, the weather negatively impacted the industry overall. According to the National Ski Areas Association (NSAA), there was a 28.1 percent decrease in total U.S. skier visits to Northeast resorts and a 16.7 percent decrease in total U.S. skier visits to Midwest resorts, as compared to a 25.0 percent combined decrease in skier visits to our Northeast and Midwest resorts in fiscal 2016.”
| (dollars in thousands) | Three months ended April 30, | Year ended April 30, | ||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||
| Revenues | ||||||||||
| Lift and tubing tickets | $ | 24,824 | $ | 26,155 | $ | 45,541 | $ | 50,821 | ||
| Food and beverage | $ | 6,903 | $ | 7,782 | $ | 15,816 | $ | 18,927 | ||
| Equipment rental | $ | 3,682 | $ | 3,951 | $ | 7,036 | $ | 8,017 | ||
| Ski instruction | $ | 3,196 | $ | 3,272 | $ | 6,580 | $ | 7,242 | ||
| Hotel/lodging | $ | 3,117 | $ | 2,585 | $ | 7,972 | $ | 7,623 | ||
| Retail | $ | 1,972 | $ | 2,171 | $ | 4,560 | $ | 5,261 | ||
| Summer activities | $ | – | $ | – | $ | 4,309 | $ | 3,671 | ||
| Other | $ | 1,781 | $ | 1,131 | $ | 3,915 | $ | 3,296 | ||
| Total | $ | 45,475 | $ | 47,047 | $ | 95,729 | $ | 104,858 | ||
| (dollars in thousands) | Three months ended April 30, | Year ended April 30, | ||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||
| Resort operating expenses | ||||||||||
| Labor and labor related expenses | $ | 12,920 | $ | 12,319 | $ | 39,331 | $ | 38,744 | ||
| Retail and food and beverage cost of sales | $ | 3,042 | $ | 3,710 | $ | 7,735 | $ | 9,571 | ||
| Power and utilities | $ | 3,113 | $ | 2,225 | $ | 6,839 | $ | 6,950 | ||
| Other | $ | 6,803 | $ | 5,621 | $ | 18,310 | $ | 17,405 | ||
| Total | $ | 25,879 | $ | 23,875 | $ | 72,215 | $ | 72,670 | ||
Financial Position
Peak Resorts reported its net loss before income taxes doubled to $5.3 million, which translated to a net loss after an income tax benefit of 23 cents per diluted share.
It ended the period with cash and cash equivalents of $5.40 million, down 68 percent from a year earlier. However, restricted cash balances rose to $61.1 million from $37.5 million a year earlier thanks to $52 million raised from overseas investors through the EB-5 program which remains in escrow. The company plans to invest those proceeds to improve its Mount Snow resort in Vermont.
“While we were very pleased that the United States Citizenship and Immigration Services (USCIS) approved our EB-5 program recently, we continue to wait eagerly for the first Petition to be approved,” said Richard K. Deutsch, vice president, business and real estate development, and president of Mt. Snow, Ltd. “Once the first Petition is approved, the escrowed funds will be released. While we are in the final stage of this process, we have no direct insight into the government’s approval timeline.”
Peak Resorts board, which recently suspended dividend payments pending release of the EB-5 funds, has begun exploring alternative sources of financing for future working capital needs to ensure future financial flexibility.
