American Skiing Company reported significant improvement from ongoing operations. It credited record financial results from its western resorts and effective costs control measures which mitigated adverse weather conditions at its eastern resorts. In addition, the sale of remaining unit inventory at The Canyons Grand Summit Hotel, gains on extinguishment of debt, and gains on transfer of assets associated with extinguishment of debt, led the Company to post a net loss available to common
shareholders of $28.5 million in fiscal 2004, a decrease of $53.5 million compared to a net loss available to shareholders of $82.0 million is fiscal 2003.
“Our results out west were nothing short of spectacular,” said CEO B.J.
Fair. “The Canyons experienced yet another year of significant growth in skier
visits. And both Steamboat and The Canyons noted increased activity from
destination markets,” added Fair. Results in the east were positively impacted
by the sale of innovative lift ticket products at its Sunday River and
Attitash resorts. “Our success with the Sunday River-Attitash season pass
helped mitigate the impact of weather and has led us to the creation of the
six resort All-For-One season pass. This new product is expected to
dramatically impact our business models in the east,” added Fair.
“We took some major steps forward as a company in fiscal 2004,” Fair said.
“We have a host of new initiatives in place to build on those successes,
particularly in the area of the guest experience. Significant enhancements in
our web strategies, including fully automated web-based bookings at four of
our resort reservation centers, provide new industry leading tools for
increasing sales and managing the vacation experience,” added Fair.
The Company has substantially completed work on its Form 10-K for the
fiscal year ended July 25, 2004. On October 25, 2004, the Company's
independent registered public accounting firm, KPMG LLP, advised the Company
that it would be unable to deliver its audit report on the Company's
consolidated financial statements for the year ended July 25, 2004 because it
had not completed its assessment as to whether substantial doubt exists about
the Company's ability to continue as a going concern. Specifically, KPMG is
continuing to assess the facts and circumstances surrounding the Company's
10.5% Repriced Convertible Exchangeable Preferred Stock (the “Series A
Preferred Stock”). Under the terms of the Series A Preferred Stock, the
Company was required to redeem the Series A Preferred Stock on November 12,
2002 to the extent that it had legally available funds to effect such
redemption. Prior to and since the November 12, 2002 redemption date of the
Series A Preferred Stock, based upon all relevant factors, the Company's Board
of Directors has determined that legally available funds do not exist for the
redemption of any shares of Series A Preferred Stock. Because the holder of
the Series A Preferred Stock has made a demand for redemption and has not
agreed to extend the redemption date of the Series A Preferred Stock, KPMG has
advised the Company that it needs additional time and information to complete
its assessment.
Concurrently with the issuance of this press release, the Company will
file a Form 8-K with the SEC which will contain the Company's unaudited
consolidated financial statements as of and for the fiscal year ended July 25,
2004 and other information that is required to be included in Form 10-K. The
Company expects to file its Form 10-K for the fiscal year July 25, 2004 within
15 calendar days. The unaudited consolidated financial statements do not
address any impact that could or would result from a decision by KPMG LLP to
add an explanatory paragraph to its audit opinion to address a going concern
issue and, accordingly, the unaudited consolidated financial statements are
subject to further change.
As previously disclosed, the Company is in the process of refinancing its
existing senior secured credit facility and its senior subordinated notes. As
part of this refinancing, the Company entered into an agreement with the
holder of the Series A Preferred Stock under which the Company has agreed to
issue, and the holder has agreed to accept, new junior subordinated notes in
exchange for the Series A Preferred Stock. The exchange of the Series A
Preferred Stock for the new junior subordinated notes is subject to the
consummation of the refinancing.
Fiscal 2004 Fourth Quarter Results
Net income available to common shareholders for the fourth quarter of
fiscal 2004 was $9.9 million, or $0.13 per basic common share (after
considering $5.8 million being allocated to participating securities as
prescribed by Emerging Issues Task Force Issue No. 03-06, “Participating
Securities and the Two Class Method Under FASB Statement No. 128, Earnings Per
Share,”(EITF No. 03-06) adopted on April 26, 2004), and $0.13 per diluted
common share, compared with net loss available to common shareholders of $39.2
million, or $1.24 per basic and diluted common share for the fourth quarter of
fiscal 2003.
Total consolidated revenue was $17.0 million for the fourth quarter of
fiscal 2004, compared with $15.9 million for the fourth quarter of fiscal
2003. Resort revenue was $13.6 million for the fourth quarters of both fiscal
2004 and fiscal 2003. Real estate revenue was $3.4 million versus $2.2
million for the comparable period in fiscal 2003. The increase in real estate
revenue was primarily due to increased land sales at our eastern resorts.
The Company's consolidated net income was $9.9 million for the fourth
quarter of fiscal 2004, compared with a consolidated net loss of $29.3 million
for the comparable period in fiscal 2003. The loss from resort operations was
$37.4 million for the fourth quarter of fiscal 2004 versus a loss from resort
operations of $24.5 million for the fourth quarter of fiscal 2003. Excluding
accretion of discount and dividends on preferred stock, the loss from resort
operations was $26.0 million for the fourth quarter of fiscal 2004 versus a
loss of $24.5 million for the fourth quarter of fiscal 2003. Income from real
estate operations was $47.3 million for the fourth quarter of fiscal 2004,
compared with a loss of $4.8 million for the fourth quarter of fiscal 2003.
Excluding gain on extinguishment of debt and gain on transfer of assets
associated with extinguishment of debt, the loss for the fourth quarter of
fiscal 2004 was $1.3 million, versus a loss of $4.8 million for the comparable
quarter of fiscal 2003. The Company has provided reconciliations from GAAP
financial measures to non-GAAP financial measures in the tables following this
discussion.
Fiscal 2004 Year End Results
Net loss available to common shareholders for the fiscal year ended July
25, 2004 was $28.5 million, or $0.90 per basic and diluted common share,
compared with net loss available to common shareholders of $82.0 million, or
$2.59 per basic and diluted common share, for fiscal 2003.
Total consolidated revenue grew seven percent to $284.1 million in fiscal
2004, from $264.5 million in fiscal 2003. Resort revenue was $250.7 million
in fiscal 2004, compared with $251.6 million in fiscal 2003, primarily
reflecting lower skier visits at the eastern resorts and record high skier
visits at The Canyons. Real estate revenue was $33.4 million in fiscal 2004
versus $12.9 million in fiscal 2003, reflecting the successful sale of
remaining unit inventory at the Grand Summit Hotel at The Canyons.
The Company's consolidated net loss for fiscal 2004 was $28.5 million
versus $44.4 million for fiscal 2003. Excluding accretion of discount and
dividends on preferred stock, gain on extinguishment of debt, and gain on
transfer of assets associated with extinguishment of debt, the consolidated
net loss was $34.0 million for fiscal 2004 versus $44.4 million for fiscal
2003. The loss from resort operations was $66.6 million for fiscal 2004
compared to a loss of $23.3 million for fiscal 2003. Excluding accretion of
discount and dividends on preferred stock, the loss from resort operations was
$23.5 million for fiscal 2004 versus $23.3 million for fiscal 2003, mainly due
to lower skier visits at the Company's eastern resorts. Income from real
estate operations was $38.1 million for fiscal 2004 compared to a loss of
$21.1 million for fiscal 2003. Excluding gain on extinguishment of debt and
gain on transfer of assets associated with extinguishment of debt in fiscal
2004, the loss from real estate operations was $10.5 million for fiscal 2004
versus a loss of $21.1 million for fiscal 2003. The Company has provided
reconciliations from GAAP financial measures to non-GAAP financial measures in
the tables following this discussion.
American Skiing Company and Subsidiaries
Unaudited Condensed Consolidated Financial
Statement Information
(in thousands except per share amounts)
Fiscal Year Ended
Net revenues: July 25, 2004 July 27, 2003
Resort $250,706 $251,638
Real estate 33,405 12,898
Total net revenues 284,111 264,536
Operating expenses:
Resort 167,518 168,010
Real estate 24,661 12,166
Marketing, general and
administrative 54,801 49,645
Merger, restructuring and asset
impairment charges 137 1,451
Depreciation and amortization 26,477 27,513
Write-off of deferred financing
costs - 2,761
Total operating expenses 273,594 261,546
Income (loss) from operations 10,517 2,990
Interest expense, net (87,603) (47,364)
Gain on extinguishment of debt 23,091 -
Gain on transfer of assets associated
with extinguishment of debt 25,493 -
Net income (loss) (28,502) (44,374)
Accretion of discount and dividends
on
mandatorily redeemable preferred
stock - (37,644)
Net income (loss) available to common
shareholders $(28,502) $(82,018)
Basic net income (loss) per common
share:
Net income (loss) available to common
shareholders $(0.90) $(2.59)
Weighted average common shares
outstanding - basic 31,738 31,724
Diluted net income (loss) per common
share:
Net income (loss) available to common
shareholders $(0.90) $(2.59)
Weighted average common shares
outstanding - diluted 31,738 31,724
American Skiing Company and Subsidiaries
Unaudited Supplemental Resort Revenue Data and Skier Visits
(in thousands of dollars)
Total Skier Visits For The Fiscal Year Ended
Skier Visits July 25, 2004 July 27, 2003 %Change
Attitash Bear Peak 207,400 196,023 6%
The Canyons 374,458 333,738 12%
Killington 954,853 1,044,640 (9%)
Mount Snow 489,411 546,304 (10%)
Sugarloaf/USA 334,830 354,634 (6%)
Sunday River 522,927 500,790 4%
Steamboat 1,002,821 1,001,020 0%
Total Skier Visits 3,886,700 3,977,149 (2%)
