Vail Resorts Inc. reported Retail/Rental revenue decreased $2.7 million, or 3.7 percent, for the fiscal third quarter ended April 30, compared to the same period in the prior year, due primarily to decreases in retail sales and rental revenue in Tahoe, partially offset by the addition of Park City.

Other highlights from the company's Mountain Segment, include:

  • Total lift revenue increased $33.3 million, or 13.2 percent, compared to the same period in the prior year, to $285.2 million for the three months ended April 30, 2015, driven by an $18.3 million, or 21.0 percent, increase in season pass revenue, as well as a $15.0 million, or 9.1 percent, increase in lift revenue excluding season pass revenue.
  • Ski school revenue increased by $3.7 million, or 5.9 percent, and dining revenue increased $1.7 million, or 4.0 percent, for the three months ended April 30, 2015 compared to the same period in the prior year, driven by increases in yields as well as the addition of Park City.
  • Operating expense increased $11.4 million, or 4.9 percent, for the three months ended April 30, 2015 compared to the three months ended April 30, 2014, due primarily to incremental expenses of $14.0 million from the addition of Park City. Operating expense in the fiscal quarter included $0.9 million of transaction related costs for Perisher and integration related costs for Park City and the prior year included $2.4 million of Canyons integration and Park City litigation related expenses.
  • Mountain Reported EBITDA increased $26.8 million, or 11.8 percent, for the fiscal quarter compared to the same period in the prior year.
  • Mountain Reported EBITDA includes $2.6 million of stock-based compensation expense for the three months ended April 30, 2015 compared to $2.5 million in the same period in the prior year.

Epic Discovery Update
The company said it had received all necessary approvals to begin construction of Epic Discovery activities at Heavenly during the summer of 2015. With the addition of these projects, the calendar year 2015 Epic Discovery capital plan is expected to total $17 million in anticipated spending which will result in approximately $6 million to $8 million of incremental Resort Reported EBITDA in calendar year 2016.

Vail Resorts, through its subsidiaries, is the leading mountain resort operator in the United States. The company's subsidiaries operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado; Park City and Canyons in Utah; Heavenly, Northstar and Kirkwood in the Lake Tahoe area of California and Nevada; Afton Alps in Minnesota and Mt. Brighton in Michigan; and the Grand Teton Lodge Company in Jackson Hole, Wyoming. It expects to close on the acquisition of Perisher, Australia's largest mountain resort, in the fourth quarter of fiscal 2015 for cash consideration of approximately AU$176 million (approximately US$135 million)

Season Pass Sales
Vail Resorts CEO Rob Katz said pass sales through May 26 for the upcoming 2015/2016 ski season increased approximately 12 percent in units and approximately 20 percent in sales dollars, as compared to the prior year period through May 27, 2014.

“These season pass results represent another record-breaking effort and are driven by the compelling value proposition offered by our season pass products, our successful targeted marketing efforts and the transformational changes we are making in Park City for the upcoming season,” said Katz. “Our results also include very strong growth in our destination markets, which represented 43 percent of our total pass sales, up from 30 percent just four years ago. This represents an incredible achievement in our destination marketing efforts, particularly given the dramatic growth in our overall program, building guest loyalty and increased guest spend and giving us a strong competitive advantage as we look to grow our business into the future. We are also seeing strong momentum in Utah. Our Colorado sales continue to deliver consistent growth which has been modestly offset by softness in Tahoe after the challenging season for local skiers in that market.”

Katz continued, “Our early season pass results demonstrate the success of our efforts to accelerate the timing of when our guests purchase their season passes. As always, it is important to note that we do not believe that the growth rates from our early sales will be maintained through the remainder of the selling season, as our early growth includes pass holders who purchased last fall. However, we believe the earlier we can move our guest's purchase decision in the year, the more opportunity it provides us for more stable and consistent growth. Season passes sold for the 2015/2016 ski season through May 26, 2015 represent approximately 44 percent of the total season passes sold for 2014/2015 ski season.”

Perisher's traditional Freedom Pass selling season is August through October for the subsequent June through October ski season. As part of the announcement of its acquisition, Perisher reopened sales of the Freedom Pass, including “Epic Benefits” with access to Vail Resort's U.S. resorts, from March 31, 2015 through June 2, 2015.

“We have been very pleased with the engagement and enthusiasm in the Australian ski market from our announcement,” said Katz. “In total, Perisher's Freedom Pass sales for the upcoming 2015 Australian ski season increased 68 percent compared to the prior year, with over two thirds of the growth occurring in the last two months following the acquisition announcement and after adding access to our U.S. resorts. Based on what we have seen to date, we believe our acquisition of Perisher will drive greater loyalty and visitation to Perisher and to our U.S. resorts.”