American Skiing Company announced results for its second fiscal quarter and 26 weeks ended January 26, 2003. The Company reported that second quarter financial performance was favorably impacted by improved early season weather conditions relative to the comparable period in fiscal 2002.
“Better early season conditions nationwide set the stage for strong second quarter resort operating results,” said CEO B.J. Fair. “Following the stronger early season results, we have witnessed some softening in visitation due primarily to extremely cold weather in the northeast as well as ongoing concerns about the economy and the threat of war with Iraq. More recently, the weather in the northeast has moderated, our western resorts have received considerable snowfall and our improvement continues over the prior year. Conditions at our resorts are excellent and we expect that they will remain outstanding through the remainder of the 2002/2003 ski season.”
The net loss available to common shareholders for the second quarter of fiscal 2003 was $16.7 million, or $0.53 per basic and diluted share, compared with a net loss of $43.7 million, or $1.38 per basic and diluted share for the second fiscal quarter of 2002. Excluding other items(1) and results from Heavenly, the net loss available to common shareholders for the second quarter of fiscal 2002 was $20.0 million, or $0.63 per basic and diluted share.
Total consolidated revenues were $100.3 million for the second quarter of fiscal 2003, compared with $100.1 million for the previous year’s second quarter.
Resort revenue was $99.0 million for the quarter, compared with $88.0 million for the second quarter of fiscal 2002. The increase in resort revenues primarily reflects better early season ski conditions and higher visitation at Company resorts.
Real estate revenue from ongoing fractional ownership sales was $1.3 million, versus $12.1 million for the same period in fiscal 2002. The decline reflects a $5.2 million decrease in closings of fractional ownership units at Steamboat and The Canyons and the sell-out of our eastern hotel quartershare inventory last year, which contributed $5.6 million in revenue during the second quarter of fiscal 2002. The decrease in real estate revenues at Steamboat and The Canyons relates to the impact of continuing disruptions related to the Company’s real estate restructuring effort, weakening economic conditions as well as difficulty of some potential buyers in obtaining end-loan financing for fractional real estate purchases.
The Company’s total earnings before interest expense, income taxes, depreciation and amortization (“EBITDA”), was $16.0 million in the second fiscal quarter of 2003, compared with $12.2 million in the same period in fiscal 2002. Resort EBITDA for the quarter was $16.6 million versus $12.1 million for the previous year’s second quarter after excluding results from Sugarbush, again reflecting improved fiscal 2003 early season operating results. Real estate EBITDA was a loss of $0.6 million compared with earnings of $0.1 million in the second fiscal quarter of 2002.
(1) During the first six months of fiscal 2002, the Company recorded a number of charges that impacted net income. These charges include; the cumulative effect of an accounting change, restructuring charges, and an asset impairment charge. For the purpose of this press release, the Company refers to these items as "other items" in its discussion of net income. For a more detailed discussion of these charges and the events that gave rise to them, please refer to the Company's Form 10-K and Form 10-Q, dated March 7, 2003 and March 12, 2003, respectively, on file with the Securities and Exchange Commission.
The net loss available to common shareholders for the six months ended January 26, 2003 was $55.8 million, or $1.76 per basic and diluted share, compared with a loss of $109.2 million, or $3.47 per basic and diluted share, in the corresponding period of fiscal 2002. Excluding other items and results from Heavenly, the net loss available to common shareholders for the first six months of fiscal 2002 was $62.5 million, or $1.98 per basic and diluted share.
Total consolidated revenues were $120.9 million for the first six months of fiscal 2003, compared with $120.2 million for the first six months of fiscal 2002. Resort revenue was $115.9 million compared with $105.3 million in fiscal 2002 reflecting better early season conditions. Excluding results from Sugarbush, resort revenue was $104.6 million for the first six months of fiscal 2002. Real estate revenue was $5.0 million, versus $14.9 million during the same period last year reflecting the factors discussed earlier.
Total EBITDA for the first six months of fiscal 2003, was $0.6 million versus a loss of $5.1 million, or a loss of $4.1 million excluding results from Sugarbush, in the comparable period in fiscal 2002. Resort EBITDA was $1.0 million compared to a loss of $3.9 million last year. Excluding results from Sugarbush, resort EBITDA was a loss of $2.9 million during the first six months of fiscal 2002. Real estate EBITDA was a loss of $0.4 million compared to a loss of $1.2 million in fiscal 2002.
As previously announced, on May 9, 2002, the Company closed on the sale of its Heavenly ski resort in South Lake Tahoe, a key element of its restructuring plan. In accordance with Statement of Financial Accounting Standards (SFAS) No. 144, the financial statements for the three and six month periods of fiscal 2002 present the operating results of Heavenly as discontinued operations. For additional information, please refer to disclosures made in the Company’s Form 10-K, dated March 7, 2003, on file with the Securities and Exchange Commission.
On October 1, 2001, the Company announced that it had completed the sale of Sugarbush Ski Resort in Warren, Vermont. The sale was completed on September 28, 2001 and operating results of Sugarbush are included in the Company’s financial statements through that date.
During the second quarter and first six months of fiscal 2002, the Company incurred $0.9 million, and $2.5 million, respectively, in restructuring charges. All of these restructuring charges relate to resort operations except for $0.2 million associated with real estate operations incurred during the second quarter of fiscal 2002. During the second quarter of fiscal 2002, the Company also incurred a $25.4 million impairment charge related to long- lived assets at its Steamboat ski resort. During the first quarter of fiscal 2002, the Company incurred an $18.7 million charge related to the impairment of goodwill resulting from the adoption of Statement of Financial Accounting Standards No. 142.
Contact: Erik Preusse Director of Strategic Planning & Corporate Communications 435-615-0380 American Skiing Company and Subsidiaries Condensed Consolidated Financial Statements (in thousands of dollars except per share amounts) Unaudited Unaudited Three Months Ended (1) Six Months Ended (1) Net revenues: January 26, January 27, January 26, January 27, 2003 2002 2003 2002 Resort $98,961 $87,986 $115,872 $105,308 Real estate 1,325 12,080 5,039 14,871 Total net revenues 100,286 100,066 120,911 120,179 Operating expenses: Resort 65,794 60,799 88,294 84,210 Real estate 1,898 11,953 5,474 16,062 Marketing, general and administrative 16,552 15,154 26,585 24,959 Restructuring and asset impariment charges (2) - 26,253 - 27,879 Depreciation and amortization 11,978 10,757 15,549 14,686 Total operating expenses 96,222 124,916 135,902 167,796 Loss from operations 4,064 (24,850) (14,991) (47,617) Interest expense, net 11,513 13,106 22,632 26,817 Loss from continuing operations (7,449) (37,956) (37,623) (74,434) Discontinued operations (3) Income (Loss) from operations of Heavenly resort - 2,523 - (204) Loss before cumulative effects of changes in accounting principles (7,449) (35,433) (37,623) (74,638) Cumulative effect of change in accounting principle - - - (18,658) Loss before preferred stock dividends (7,449) (35,433) (37,623) (93,296) Accretion of discount and dividends on mandatorily redeemable preferred stock (9,243) (8,266) (18,174) (15,952) Net loss available to common shareholders $(16,692) $(43,699) $(55,797) $(109,248) American Skiing Company and Subsidiaries Unaudited Supplemental Revenue Data (in thousands of dollars) For the three months ended January 26, 2003 January 27, 2002 % Change Resort revenues (1)(2) Lift Tickets $49,931 $43,230 16% Food and beverage 13,225 11,523 15% Retail sales 11,746 10,648 10% Skier Development 8,869 7,515 18% Golf, summer activities 10 40 -75% Lodging and Property 11,440 10,998 4% Miscellaneous Revenue 3,740 4,032 -7% Total resort revenues $98,961 $87,986 12% American Skiing Company and Subsidiaries Unaudited Supplemental Revenue Data (in thousands of dollars) Excluding Sugarbush For the six months For the six months ended (1)(2) ended (2) January January % Change January January % Change 26, 2003 27, 2002 26, 2003 27, 2002 Resort revenues Lift Tickets $50,051 $43,269 16% $50,051 $43,161 16% Food and beverage 16,921 15,133 12% 16,921 15,133 12% Retail sales 12,632 11,675 8% 12,632 11,673 8% Skier Development 8,950 7,608 18% 8,950 7,608 18% Golf, summer activities 3,623 3,817 -5% 3,623 3,522 3% Lodging and Property 17,347 16,664 4% 17,347 16,385 6% Miscellaneous Revenue 6,348 7,142 -11% 6,348 7,128 -11% Total resort revenues $115,872 $105,308 10% $115,872 $104,610 11% Season to Date Unaudited Skier Visits January 26, January 27, 2003 2002 Attitash 73,360 68,078 The Canyons 149,287 122,812 Killington 482,384 414,616 Mount Snow 257,332 196,215 Sugarloaf 133,993 121,685 Sunday River 202,488 204,437 Steamboat 418,878 402,897 Total Skier Visits 1,717,722 1,530,740 (1) The sale of Sugarbush was completed on September 28, 2001, results of operations are included through that date. (2) Excludes operating results from Heavenly which was sold on May 9, 2002.