Vail Resorts announced financial results for the first quarter of fiscal 2004 ending October 31, 2003. Mountain revenue for the first quarter of fiscal 2004 was $34.1 million, a 1.3% increase from $33.6 million for the comparable period last year. Mountain expense decreased $2.7 million, or 4.2%, to $61.9 million.
Lodging revenue for the quarter grew $2.1 million, or 5.1%, to $42.7
million. Lodging expense increased $1.2 million, or 3.1%, to $40.5 million.
Resort revenue, the combination of mountain and lodging revenues, rose
$2.5 million, or 3.4%, to $76.7 million. Resort expense decreased 1.5% to
$102.4 million, down $1.5 million.
Real estate revenue for the quarter fell $12.5 million to $26.9 million,
and real estate expense decreased $15.4 million to $12.1 million.
Total revenue declined $10.0 million, or 8.8%, to $103.6 million and total
operating expense decreased $16.1 million, or 10.7%, to $134.0 million.
The expected seasonal loss from operations for the quarter improved
$6.2 million, or 16.8%, to a loss of $30.4 million compared to a loss of
$36.6 million for the same period last year.
Reported EBITDA for the mountain segment improved $2.1 million, or 7.0%,
to negative $27.9 million compared to negative $29.9 million for the
comparable period last year.
Reported EBITDA for the lodging segment increased from breakeven in the
first quarter of last year to $0.4 million in the current year first quarter.
The first quarter of fiscal 2004 includes $1.6 million of equity loss
attributed to the Ritz-Carlton, Bachelor Gulch, which was open during the
seasonally low occupancy period of the first quarter. Last year, in the first
quarter of fiscal 2003, the equity loss attributed to the Ritz-Carlton was
$1.3 million due to pre-opening and start-up expenses for the hotel. As the
Company uses the equity method of accounting for the Ritz-Carlton, Bachelor
Gulch, included in the fiscal 2004 first quarter loss is $0.6 million of
depreciation and $0.6 million of interest expense.
First quarter Resort Reported EBITDA was negative $27.5 million, a
$2.5 million or 8.3% improvement from negative $29.9 million for the
comparable period last year.
Real Estate Reported EBITDA for the quarter rose $2.0 million to
$16.9 million from $14.9 million in the same quarter a year ago. The current
year's first quarter includes a $1.9 million net gain from the transfer of
property.
First quarter net loss increased $0.3 million, or 1.2%, to a loss of $25.4
million, or $0.72 per diluted share, compared to a loss of $25.1 million, or
$0.71 per diluted share, for the same period last year.
Adam Aron, Chairman and Chief Executive Officer, commented, “We are
delighted to announce that Vail Resorts' financial performance for the first
quarter of fiscal 2004 was better than anticipated. While the net loss was
slightly higher than last year due to an expected increase in depreciation and
interest expense, we are quite pleased with our Reported EBITDA results in
this seasonally low profit quarter. Reported EBITDA for the mountain and
lodging segments improved year-over-year through a combination of revenue
growth and expense management. And the real estate division once again closed
on a significant portion of its expected annual sales in the first quarter,
giving it strong momentum towards hitting its target for the entire year.”
Aron added, “We have begun the implementation of our expense savings plan
as seen in the decrease in year-over-year mountain expense. The lodging
division has also begun to realize savings; however, expense reductions are
somewhat masked by two factors. First, operations increased at the Vail
Marriott, which was partially closed for renovation in the first quarter last
year. Second, we saw stronger summer business at the Grand Teton Lodge
Company which resulted in both increased revenue and expense for the quarter.”
Commenting on the current 2003-2004 ski season, Aron said, “We are pleased
with the momentum we have going into the ski season. Our ski areas have
received normal early season snowfall, and for the fifth year in a row we have
had record season pass sales, with overall pass revenue for the five ski
resorts up by about 20% year-over-year. While year-to-date revenue booked
into our central reservation system is 2% ahead of last year at this time, air
bookings into Vail's Eagle County airport are actually up 7% compared to last
season.”
Added Aron, “In addition to the season pass sales and bookings information
we receive, we also track reservations for our ski school products. More
encouraging is that advance reservations for our children's ski school are
currently tracking 22% ahead of last year at our Colorado resorts. These are
just a few of the barometers we monitor to track how our season is shaping up.
With the normal early season snowfall, record season pass sales, strong
advance ski school reservations and solid bookings, we continue to be upbeat
about this year's ski season. Therefore, at this time, we are reiterating the
year-end financial guidance we provided in November.”
Vail Resorts, Inc.
Consolidated Financial Statements
(in thousands except per share amounts)
(unaudited)
Three Months Ended
October 31,
2003 2002
(as restated)
Net revenue:
Mountain $34,079 $33,629
Lodging 42,652 40,601
Real estate 26,892 39,354
Total net revenue 103,623 113,584
Operating expense:
Mountain 61,914 64,656
Lodging 40,518 39,294
Real Estate 12,124 27,546
Gain on transfer of property (1,913) --
Loss on disposal of fixed assets 1,010 16
Depreciation & amortization 20,366 18,625
Total operating expense 134,019 150,137
Loss from operations (30,396) (36,553)
Other income (expense)
Mountain equity investment loss (18) 1,089
Lodging equity investment loss (1,740) (1,306)
Real estate equity investment income 203 3,070
Interest income 565 206
Interest expense (13,408) (11,778)
Loss on put option (610) --
Other income -- 30
Minority interest in income of
consolidated joint ventures 2,091 2,024
Loss before provision for income taxes (43,313) (43,218)
Benefit for income taxes 17,910 18,104
Net loss $(25,403) $(25,114)
Basic weighted average shares 35,275 35,166
Diluted weighted average shares 35,275 35,166
Per share amounts:
Basic net loss per share $(0.72) $(0.71)
Diluted net loss per share $(0.72) $(0.71)
Other Data:
Mountain Reported EBITDA $(27,853) $(29,938)
Lodging Reported EBITDA 394 1
Resort Reported EBITDA (27,459) (29,937)
Real estate Reported EBITDA $16,884 $14,878
Note: Certain reclassifications have been made to the Consolidated
Financial Statements as of and for the three months ended October 31, 2002 to
conform to the current period presentation.
Vail Resorts, Inc.
Resort Revenue by Business Line and Skier Visits
(in thousands)
Three Months Ended
October 31,
2003 2002 % Change
Business Line
Lift tickets $26 $(113) 123.0%
Ski school 23 71 (67.6)%
Dining 3,914 3,818 2.5%
Retail/rental 17,040 16,330 4.3%
Other 13,076 13,523 (3.3)%
Total Mountain Revenue 34,079 33,629 1.3%
Total Lodging Revenue 42,652 40,601 5.1%
Total Resort Revenue $76,731 $74,230 3.4%
As of October 31,
2003 2002
Key Balance Sheet Data:
Real estate held for
sale and investment $115,570 $152,760
Total stockholders' equity 470,909 479,279
Total debt 580,431 628,529
Less: cash and
cash equivalents 18,525 25,165
Net debt $561,906 $603,364
