Vail Resorts, Inc. first quarter of fiscal 2007 total revenues increased $28.1 million, or 32.9% to $113.5 million from $85.4 million for the comparable period last fiscal year. Loss from operations for the quarter increased $1.0 million, or 2.0%, to a loss of $50.9 million.
The Company recorded total pre-tax stock-based compensation expense of $2.0 million in the three months ended October 31, 2006, as compared to $1.7 million, for the three months ended October 31, 2005.
The Company reported a first quarter net loss of $35.8 million, or a loss of 93 cents per diluted share, compared to a net loss of $34.3 million, or a loss of 93 cents per diluted share, for the same period last fiscal year. Excluding stock-based compensation expense, the Company's net loss for the first quarter of fiscal 2007 would have been $34.6 million, or a loss of $0.89 per diluted share compared to a loss of $33.2 million excluding stock-based compensation, or a loss of $0.90 per diluted share, for the same quarter last fiscal year.
Mountain revenue grew $5.9 million, or 14.6%, in the first quarter of fiscal 2007 to $46.2 million from $40.3 million for the comparable period last fiscal year. Mountain expense increased $7.2 million, or 10.0%, to $79.5 million. Reported EBITDA for the Mountain segment decreased $1.3 million, or 4.2%, to a loss of $32.5 million compared to a loss of $31.2 million for the comparable quarter last fiscal year.
Lodging revenue decreased by $1.3 million, or 3.2%, in the first quarter fiscal 2007 to $40.4 million from $41.8 million for the comparable period last fiscal year. Lodging expense decreased $1.3 million, or 3.4%, to $36.3 million. For the first quarter of fiscal 2006, the Lodging segment included revenue of $3.4 million and operating expense of $2.5 million related to Snake River Lodge & Spa (“SRL&S”), which was sold by the Company in January 2006; the Company subsequently obtained a long-term management contract for the hotel. Excluding the impact of the sale of SRL&S, Lodging revenue increased $2.0 million, or 5.3% and expenses increased $1.2 million, or 3.3%. Additionally, the Company recognized $2.4 million in revenue in the first quarter of fiscal 2007 associated with a termination fee pursuant to the terms of the management agreement at The Lodge at Rancho Mirage, in conjunction with the closing of the hotel as part of a redevelopment plan by the current hotel owner. Reported EBITDA for the Lodging segment was essentially flat at $4.1 million in the current and prior fiscal year first quarters.
Resort revenue, the combination of Mountain and Lodging revenues, increased $4.5 million, or 5.5%, in the first quarter of fiscal 2007 to $86.6 million from $82.0 million for the comparable period last fiscal year. Resort expense increased $5.9 million, or 5.4%, to $115.8 million. First quarter Resort Reported EBITDA decreased $1.4 million to a loss of $28.4 million, a 5.1% decline over the comparable period last fiscal year. Resort Reported EBITDA excluding stock-based compensation decreased $1.4 million, or 5.4%, to a loss of $27.1 million.
Robert Katz, Chief Executive Officer, commented, “The first fiscal quarter is a seasonally low quarter and historically a loss quarter, as none of our mountain resorts are open for winter business. This year's first quarter was no exception with our financial performance essentially meeting our expectations. More importantly, the first quarter is critical as a ramp-up to the coming ski season and the metrics we have seen to date have been favorable.”
Commenting on the 2006/2007 ski season, Katz said, “I am very excited about the 2006/2007 ski season. We have had strong openings at all of our mountain resorts with Keystone even opening ahead of schedule. As of today, the vast majority of our terrain is open at our Colorado resorts with Vail having over 4,000 acres currently open, including most of the Back Bowls as well as Blue Sky Basin. Our sales of season passes continued at a strong rate with sales to date increasing 12% in units and 21% in sales dollars over the same period last year. As a reminder, these sales will be booked into revenue during the 2006/2007 ski season. The Company's marketing activities for the 2006/2007 ski season are paying off with bookings through our central reservations systems for our five mountain resorts up 15% in room nights and 24% in sales dollars. While at this point the results from season pass sales clearly reflect strong growth over the prior year's record sales, we will not know until much further into the ski season whether central reservations bookings represent earlier bookings or an absolute level of increased bookings. We are nevertheless very pleased with our early season metrics at this point.”
Katz added, “We also have recently commenced the marketing for the Vail Mountain Club, an exclusive slope-side private club steps from the Vista Bahn Express lift as part of Vail's Front Door project. Construction is expected to be completed early in calendar year 2008. We are currently selling 150 full memberships, which include parking privileges, with a membership deposit of $250,000 and 300 social memberships, which do not include parking, with a membership deposit of $100,000. Although we just began accepting deposits for this premier private club on December 6th, we already have sales commitments representing $15.2 million of total proceeds. ”
Katz added, “The new Breckenridge gondola is nearing completion and will be ready for the vast majority of the 2006/2007 ski season. This gondola will transform an already exciting town and continue to add momentum to the Breckenridge resort, already the second most visited resort in the U.S. Additionally, Crystal Peak Lodge, the first phase of Breckenridge's redevelopment representing a 46 unit project at the base of Peak 7, is being brought to market this winter. We are excited about this ski-in/ski-out project and what it will bring to the Breckenridge resort. We are also anticipating that we would begin our marketing efforts on our first project in West LionsHead this season and we hope to shortly finalize our plans for this opportunity.”
Katz concluded, “While indicators continue to look favorable compared to last year, we are still very early into fiscal 2007 with a full ski season ahead of us and therefore at this time we are reiterating our full year guidance for fiscal 2007, provided on our October 5, 2006 earnings call.
Vail Resorts, Inc.
Consolidated Condensed Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
October 31,
2006 2005
Net revenue:
Mountain $46,164 $40,277
Lodging 40,408 41,750
Real estate 26,922 3,393
Total net revenue 113,494 85,420
Segment operating expense:
Mountain 79,487 72,291
Lodging 36,349 37,641
Real estate 26,118 6,069
Total segment operating expense 141,954 116,001
Other operating expense:
Depreciation and amortization (21,585) (18,923)
Relocation and separation charges (735) --
Asset impairment charges -- (136)
Loss on disposal of fixed assets, net (81) (240)
Loss from operations (50,861) (49,880)
Mountain equity investment income, net 835 850
Real estate equity investment income, net -- 69
Investment income, net 2,063 1,188
Interest expense, net (8,936) (9,437)
Contract dispute charges (3,605) --
Loss on put options, net -- (992)
Minority interest in loss of consolidated
subsidiaries, net 1,790 1,926
Loss before benefit from income taxes (58,714) (56,276)
Benefit from income taxes 22,899 21,947
Net loss $(35,815) $(34,329)
Per share amounts:
Basic net loss per share $(0.93) $(0.93)
Diluted net loss per share $(0.93) $(0.93)
Other Data:
Mountain Reported EBITDA $(32,488) $(31,164)
Mountain Reported EBITDA excluding
stock-based compensation $(31,468) $(30,209)
Lodging Reported EBITDA $4,059 $4,109
Lodging Reported EBITDA excluding
stock-based compensation $4,392 $4,515
Resort Reported EBITDA $(28,429) $(27,055)
Resort Reported EBITDA excluding
stock-based compensation $(27,076) $(25,694)
Real Estate Reported EBITDA $804 $(2,607)
Real Estate Reported EBITDA excluding
stock-based compensation $1,412 $(2,226)
Vail Resorts, Inc.
Resort Revenue by Business Line
(In thousands)
(Unaudited)
Three Months Ended Percentage
October 31, Increase
2006 2005 (Decrease)
Lift tickets $-- $-- --%
Ski school -- -- --%
Dining 3,887 3,506 10.9%
Retail/rental 24,518 21,705 13.0%
Other 17,759 15,066 17.9%
Total Mountain Revenue 46,164 40,277 14.6%
Total Lodging Revenue 40,408 41,750 (3.2)%
Total Resort Revenue $86,572 $82,027 5.5%
