The American Skiing Company, parent company to Sugarloaf USA, Killington, The Canyons, and several other ski resorts, reported a strong start to fiscal 2005. First fiscal quarter revenues increased 5.8% to 19.5 million compared to 18.5 million last year. Resort revenues showed even stronger gains, climbing 10.5% for the quarter to $17.8 million while real estate revenues were down compared to last year.
The increase in resort revenues was primarily due to an increase in lodging related revenues at Steamboat and The Canyons resorts, primarily as a result of improved group and conference business.
The Company also reported significantly higher season pass sales than at the same time in fiscal 2004. This increase has been driven primarily by the successful introduction of the All For One multi-resort pass in the eastern market.
“The introduction of our All For One pass has contributed to a great start to the season for the Company, locking in early season revenues in the East. In the West, abundant early season snowfall and cool winter temperatures for snowmaking have created fantastic skiing and riding conditions at both The Canyons and Steamboat,” said CFO Betsy Wallace.
Resort operating expenses again outpaced revenue to keep the company in the red, but AESK managed to reduce the net loss by 8.6% to ($37.3 million) compared to a net loss of ($41.3 million) last year. Diluted loss per common share was ($1.19) compared to ($1.30) last year.
The company stated in an SEC filing that approximately 88% of resort revenues and over 100% of resort operating income is realized during the period from November through April. A significant portion of resort revenue and approximately 22% of annual skier visits were generated during the Christmas and Presidents Day vacation weeks in fiscal 2004. This causes AESK resorts to typically experience operating losses and negative cash flows for the first quarter.
Looking ahead, through December 5, 2004, eastern season pass sales are 48% greater than at the same time last year. The company anticipates a reduction in paid day ticket sales at its eastern resorts this year because of this increase. Overall net resort revenues for the eastern resorts are expected to increase this year.
Western season pass sales for the 2004-05 ski season are approximately 13% greater than at the same time last year, but most of this increase is due to timing differences in purchase deadlines. Nonetheless, American Skiing Company expects to see a modest increase in season pass revenues in the west for fiscal 2005.
Lodging reservation pace and leading indicators for the ski season reflect increases for both western and eastern resorts on a year over year basis. Eastern resorts are experiencing an increase in reservations for mid-week visitation which AESK believes is a result of specific initiatives targeting non-peak periods. Western resort lodging reservations continue to improve from the prior year as a result of strong conference business at The Canyons and growth at Steamboat.
