Vail Resorts Reports Fiscal 2014 First Quarter Results and Early Season Indicators
Highlights
- Resort Reported EBITDA loss, which includes the Company's Mountain and Lodging segments, was
$66.5 million for the first fiscal quarter of 2014 versus a loss of$54.5 million in the same period in the prior year. This includes operating results of the Urban Ski Areas and Canyons, transactions in fiscal 2013, which generated$7.6 million of negative EBITDA, including$2.7 million of integration and litigation related costs (Canyons, together with the Urban Ski Areas, referred to collectively as the "Acquisitions"). - Net loss attributable to
Vail Resorts, Inc. was$73.4 million for the first fiscal quarter of 2014 compared to a net loss of$60.6 million in the same period in the prior year. - Sales of season passes through
December 7, 2013 for the upcoming 2013/2014 ski season were up approximately 13% in units and approximately 16% in sales dollars versus the comparable period in the prior year, including the Acquisitions in both periods. - Company reissued guidance for Fiscal 2014, which was unchanged from guidance issued in
September 2013 . - In the first quarter of fiscal 2014, we closed on two
Ritz-Carlton Residence units, and oneOne Ski Hill Place unit. Net Real Estate Cash Flow was$7.5 million for the first fiscal quarter of 2014.
Commenting on the Company's fiscal 2014 first quarter results,
Regarding Real Estate, Katz said, "In the first fiscal quarter, we closed on sales of two
Katz continued, "Our balance sheet remains very strong. We ended the quarter with
Regarding the upcoming ski season, Katz said, "Our 2013/2014 ski season is just underway and we are excited about the quality and variety of enhancements we are offering guests this year. We look forward to welcoming new and returning skiers and riders to Canyons, marking our first season in
Moving to the early ski season indicators, Katz said, "Our season pass results continue to be strong as we approach the end of our selling period, with season pass sales (including 4-Packs) up approximately 13% in units and 16% in sales dollars through
Operating Results
A complete Management's Discussion and Analysis of Financial Condition and Results of Operations can be found in the Company's Form 10-Q for the first fiscal quarter of 2014 ended
Mountain Segment
- Mountain segment net revenue increased
$5.4 million , or 10.4%, to$57.3 million for the three months endedOctober 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions, Mountain segment net revenue increased$3.0 million , or 5.9%, to$55.0 million for the quarter. - Mountain Reported EBITDA declined
$11.6 million , or 21.1%, to a loss of$66.8 million for the three months endedOctober 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions, Mountain Reported EBITDA declined$4.2 million , or 7.7%, for the quarter. - Mountain Reported EBITDA includes
$2.7 million of stock-based compensation expense for both the three months endedOctober 31, 2013 and 2012, respectively.
Lodging Segment
- Lodging segment net revenue increased
$4.7 million , or 9.0%, to$57.2 million for the three months endedOctober 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions and payroll cost reimbursements, Lodging segment net revenue increased$1.8 million , or 3.5%, to$51.1 million for the quarter. - Lodging Reported EBITDA declined
$0.4 million , or 56.0%, to$0.3 million for the three months endedOctober 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions, Lodging Reported EBITDA declined$0.2 million , or 29.8%, for the quarter. - Lodging Reported EBITDA includes
$0.4 million of stock-based compensation expense for both the three months endedOctober 31, 2013 and 2012, respectively.
Resort - Combination of Mountain and Lodging Segments
- Resort net revenue increased
$10.1 million , or 9.7%, to$114.5 million for the three months endedOctober 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions, Resort net revenue increased$4.0 million , or 3.9%, to$108.5 million for the quarter. - Resort Reported EBITDA declined
$12.0 million , or 22.1%, to a loss of$66.5 million for the three months endedOctober 31, 2013 as compared to the same period in the prior year. Excluding the Acquisitions, Resort Reported EBITDA declined$4.4 million , or 8.1%, for the quarter.
Real Estate Segment
- Real Estate segment net revenue declined
$3.1 million , or 25.9%, to$8.8 million for the three months endedOctober 31, 2013 as compared to the same period in the prior year. - Net Real Estate Cash Flow was
$7.5 million for the three months endedOctober 31, 2013 , up 36.5% from the same period in the prior year. - Real Estate Reported EBITDA improved
$3.3 million , or 89.5%, to a loss of$0.4 million for the three months endedOctober 31, 2013 as compared to the same period in the prior year. - Real Estate Reported EBITDA includes
$0.4 million of stock-based compensation expense for both the three months endedOctober 31, 2013 and 2012, respectively.
Total Performance
- Total net revenue increased
$7.0 million , or 6.1%, to$123.4 million for the three months endedOctober 31, 2013 as compared to the same period in the prior year. - Net loss attributable to
Vail Resorts, Inc. was$73.4 million , or a loss of$2.04 per diluted share, for the first quarter of fiscal 2014 compared to net loss attributable toVail Resorts, Inc. of$60.6 million , or a loss of$1.70 per diluted share, in the first quarter of the prior year.
Share Repurchase
The Company did not repurchase any shares of common stock in the first quarter of fiscal 2014. Since inception of the stock repurchase program in 2006, the Company has repurchased an aggregate of 4,949,111 shares at a cost of approximately
Outlook
Commenting on fiscal 2014 guidance, Katz continued, "Our guidance, issued in September, of Resort Reported EBITDA between
Regarding calendar year 2014 capital expenditures, Katz said, "We remain committed to reinvesting in our resorts and generating strong returns for our shareholders. While we will announce our final capital plan for 2014 in
Earnings Conference Call
The Company will conduct a conference call today at
About
Forward-Looking Statements
Statements in this press release, other than statements of historical information, are forward looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. All forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include but are not limited to prolonged weakness in general economic conditions, including adverse affects on the overall travel and leisure related industries; unfavorable weather conditions or natural disasters; adverse events that occur during our peak operating periods combined with the seasonality of our
business; competition in our mountain and lodging businesses; our ability to grow our resort and real estate operations; our ability to successfully initiate, complete, and sell new real estate development projects and achieve the anticipated financial benefits from such projects; further adverse changes in real estate markets; continued volatility in credit markets; our ability to obtain financing on terms acceptable to us to finance our future real estate development, capital expenditures and growth strategy; our reliance on government permits or approvals for our use of Federal land or to make operational and capital improvements; demand for planned summer activities and our ability to successfully obtain necessary approvals and construct the planned improvements; adverse consequences of current or future legal claims; our ability to hire and retain a sufficient seasonal workforce;
willingness of our guests to travel due to terrorism, the uncertainty of military conflicts or outbreaks of contagious diseases, and the cost and availability of travel options; negative publicity which diminishes the value of our brands; our ability to integrate and successfully realize anticipated benefits from the lease of
All forward-looking statements attributable to us or any persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. All guidance and forward-looking statements in this press release are made as of the date hereof and we do not undertake any obligation to update any forecast or forward-looking statements whether as a result of new information, future events or otherwise, except as may be required by law.
Statement Concerning Non-GAAP Financial Measures
When reporting financial results, we use the terms Reported EBITDA, Net Debt, Net Real Estate Cash Flow, Lodging net revenue excluding payroll cost reimbursement, and Lodging operating expense excluding reimbursed payroll costs, which are not financial measures under accounting principles generally accepted in
| ||||||||
Consolidated Condensed Statements of Operations | ||||||||
(In thousands, except per share amounts) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
2013 |
2012 | |||||||
Net revenue: |
||||||||
Mountain |
$ |
57,331 |
$ |
51,912 |
||||
Lodging |
57,214 |
52,508 |
||||||
Real estate |
8,846 |
11,930 |
||||||
Total net revenue |
123,391 |
116,350 |
||||||
Segment operating expense: |
||||||||
Mountain |
124,774 |
107,548 |
||||||
Lodging |
56,905 |
51,806 |
||||||
Real estate |
9,231 |
15,614 |
||||||
Total segment operating expense |
190,910 |
174,968 |
||||||
Other operating expense: |
||||||||
Depreciation and amortization |
(34,156) |
(31,679) |
||||||
Loss on disposal of fixed assets |
(429) |
(2) |
||||||
Loss from operations |
(102,104) |
(90,299) |
||||||
Mountain equity investment income, net |
603 |
434 |
||||||
Investment income, net |
95 |
54 |
||||||
Interest expense |
(16,098) |
(8,375) |
||||||
Loss before benefit from income taxes |
(117,504) |
(98,186) |
||||||
Benefit from income taxes |
44,067 |
37,583 |
||||||
Net loss |
$ |
(73,437) |
$ |
(60,603) |
||||
Net loss attributable to noncontrolling interests |
61 |
23 |
||||||
Net loss attributable to |
$ |
(73,376) |
$ |
(60,580) |
||||
Per share amounts: |
||||||||
Basic net loss per share attributable to |
$ |
(2.04) |
$ |
(1.70) |
||||
Diluted net loss per share attributable to |
$ |
(2.04) |
$ |
(1.70) |
||||
Cash dividends declared per share |
$ |
0.2075 |
$ |
0.1875 |
||||
Weighted average shares outstanding: |
||||||||
Basic |
36,026 |
35,700 |
||||||
Diluted |
36,026 |
35,700 |
||||||
Other Data (unaudited): |
||||||||
Mountain Reported EBITDA |
$ |
(66,840) |
$ |
(55,202) |
||||
Lodging Reported EBITDA |
$ |
309 |
$ |
702 |
||||
Resort Reported EBITDA |
$ |
(66,531) |
$ |
(54,500) |
||||
Real Estate Reported EBITDA |
$ |
(385) |
$ |
(3,684) |
||||
Total Reported EBITDA |
$ |
(66,916) |
$ |
(58,184) |
||||
Mountain stock-based compensation |
$ |
2,647 |
$ |
2,720 |
||||
Lodging stock-based compensation |
$ |
419 |
$ |
370 |
||||
Resort stock-based compensation |
$ |
3,066 |
$ |
3,090 |
||||
Real Estate stock-based compensation |
$ |
426 |
$ |
382 |
||||
Total stock-based compensation |
$ |
3,492 |
$ |
3,472 |
| |||||||||||
Mountain Segment Operating Results | |||||||||||
(In thousands) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended |
Percentage Increase | ||||||||||
2013 |
2012 |
(Decrease) | |||||||||
|
|||||||||||
Lift |
$ |
— |
$ |
— |
— |
% | |||||
Ski school |
— |
— |
— |
% | |||||||
Dining |
7,464 |
6,373 |
17.1 |
% | |||||||
Retail/rental |
28,900 |
26,725 |
8.1 |
% | |||||||
Other |
20,967 |
18,814 |
11.4 |
% | |||||||
|
$ |
57,331 |
$ |
51,912 |
10.4 |
% | |||||
Mountain operating expense: |
|||||||||||
Labor and labor-related benefits |
$ |
39,302 |
$ |
34,294 |
14.6 |
% | |||||
Retail cost of sales |
16,863 |
16,191 |
4.2 |
% | |||||||
General and administrative |
31,152 |
27,304 |
14.1 |
% | |||||||
Other |
37,457 |
29,759 |
25.9 |
% | |||||||
|
$ |
124,774 |
$ |
107,548 |
16.0 |
% | |||||
Mountain equity investment income, net |
603 |
434 |
38.9 |
% | |||||||
Mountain Reported EBITDA |
$ |
(66,840) |
$ |
(55,202) |
(21.1) |
% |
| |||||||||||
Lodging Operating Results | |||||||||||
(In thousands, except ADR and RevPAR) | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended |
Percentage Increase | ||||||||||
2013 |
2012 |
(Decrease) | |||||||||
Lodging net revenue: |
|||||||||||
Owned hotel rooms |
$ |
14,113 |
$ |
13,694 |
3.1 |
% | |||||
Managed condominium rooms |
7,772 |
5,814 |
33.7 |
% | |||||||
Dining |
13,346 |
10,610 |
25.8 |
% | |||||||
Transportation |
1,872 |
1,691 |
10.7 |
% | |||||||
Golf |
7,527 |
7,536 |
(0.1)% |
||||||||
Other |
10,162 |
9,983 |
1.8 |
% | |||||||
54,792 |
49,328 |
11.1 |
% | ||||||||
Payroll cost reimbursements |
2,422 |
3,180 |
(23.8)% |
||||||||
Total Lodging net revenue |
$ |
57,214 |
$ |
52,508 |
9.0 |
% | |||||
Lodging operating expense: |
|||||||||||
Labor and labor-related benefits |
$ |
26,372 |
$ |
23,450 |
12.5 |
% | |||||
General and administrative |
7,487 |
7,024 |
6.6 |
% | |||||||
Other |
20,624 |
18,152 |
13.6 |
% | |||||||
54,483 |
48,626 |
12.0 |
% | ||||||||
Reimbursed payroll costs |
2,422 |
3,180 |
(23.8)% |
||||||||
Total Lodging operating expense |
$ |
56,905 |
$ |
51,806 |
9.8 |
% | |||||
Lodging Reported EBITDA |
$ |
309 |
$ |
702 |
(56.0) |
% | |||||
Owned hotel statistics: |
|||||||||||
ADR |
$ |
182.62 |
$ |
180.70 |
1.1 |
% | |||||
RevPar |
$ |
115.35 |
$ |
113.32 |
1.8 |
% | |||||
Managed condominium statistics: |
|||||||||||
ADR |
$ |
195.62 |
$ |
194.26 |
0.7 |
% | |||||
RevPar |
$ |
36.13 |
$ |
30.75 |
17.5 |
% | |||||
Owned hotel and managed condominium statistics (combined): |
|||||||||||
ADR |
$ |
186.93 |
$ |
184.89 |
1.1 |
% | |||||
RevPar |
$ |
65.53 |
$ |
60.54 |
8.2 |
% |
Key Balance Sheet Data | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
As of | ||||||||
2013 |
2012 | |||||||
Real estate held for sale and investment |
$ |
188,205 |
$ |
227,662 |
||||
Total |
744,556 |
738,371 |
||||||
Long-term debt |
797,062 |
489,525 |
||||||
Long-term debt due within one year |
1,003 |
848 |
||||||
Total debt |
798,065 |
490,373 |
||||||
Less: cash and cash equivalents |
114,225 |
43,985 |
||||||
Net debt |
$ |
683,840 |
$ |
446,388 |
Reconciliation of Non-GAAP Financial Measures
Reported EBITDA, Net Debt, and Net Real Estate Cash Flow are not measures of financial performance under GAAP, and they might not be comparable to similarly titled measures of other companies. Reported EBITDA, Net Debt, and Net Real Estate Cash Flow should not be considered in isolation or as an alternative to, or substitute for, measures of financial performance or liquidity prepared in accordance with GAAP including net income (loss), net change in cash and cash equivalents or other financial statement data.
Reported EBITDA and Net Real Estate Cash Flow have been presented herein as measures of the Company's performance. The Company believes that Reported EBITDA is an indicative measurement of the Company's operating performance, and is similar to performance metrics generally used by investors to evaluate other companies in the resort and lodging industries. The Company primarily uses Reported EBITDA based targets in evaluating performance. The Company believes that Net Debt is an important measurement of liquidity as it is an indicator of the Company's ability to obtain additional capital resources for its future cash needs. Additionally, the Company believes Net Real Estate Cash Flow is important as a cash flow indicator for our Real Estate segment.
Presented below is a reconciliation of Total Reported EBITDA to net loss attributable to
(In thousands) | ||||||||
Three Months Ended | ||||||||
2013 |
2012 | |||||||
Mountain Reported EBITDA |
$ |
(66,840) |
$ |
(55,202) |
||||
Lodging Reported EBITDA |
309 |
702 |
||||||
Resort Reported EBITDA* |
(66,531) |
(54,500) |
||||||
Real Estate Reported EBITDA |
(385) |
(3,684) |
||||||
Total Reported EBITDA |
(66,916) |
(58,184) |
||||||
Depreciation and amortization |
(34,156) |
(31,679) |
||||||
Loss on disposal of fixed assets |
(429) |
(2) |
||||||
Investment income, net |
95 |
54 |
||||||
Interest expense |
(16,098) |
(8,375) |
||||||
Loss before benefit from income taxes |
(117,504) |
(98,186) |
||||||
Benefit from income taxes |
44,067 |
37,583 |
||||||
Net loss |
$ |
(73,437) |
$ |
(60,603) |
||||
Net loss attributable to noncontrolling interests |
61 |
23 |
||||||
Net loss attributable to |
$ |
(73,376) |
$ |
(60,580) |
* |
Resort represents the sum of Mountain and Lodging |
Presented below is a reconciliation of Total Reported EBITDA to net income attributable to
(In thousands) | ||||
Twelve Months Ended | ||||
2013 | ||||
Mountain Reported EBITDA |
$ |
217,061 |
||
Lodging Reported EBITDA |
11,768 |
|||
Resort Reported EBITDA* |
228,829 |
|||
Real Estate Reported EBITDA |
(5,807) |
|||
Total Reported EBITDA |
223,022 |
|||
Depreciation and amortization |
(135,165) |
|||
Loss on disposal of fixed assets |
(1,649) |
|||
Investment income, net |
392 |
|||
Interest expense |
(46,689) |
|||
Income before provision for income taxes |
39,911 |
|||
Provision for income taxes |
(15,135) |
|||
Net income |
$ |
24,776 |
||
Net loss attributable to noncontrolling interests |
171 |
|||
Net income attributable to |
$ |
24,947 |
* |
Resort represents the sum of Mountain and Lodging |
The following table reconciles Net Debt to long-term debt and the calculation of Net Debt to Total Reported EBITDA for the twelve months ended
(In thousands) (Unaudited) As of October 31, 2013 |
|||||
Long-term debt |
$ |
797,062 |
|||
Long-term debt due within one year |
1,003 |
||||
Total debt |
798,065 |
||||
Less: cash and cash equivalents |
114,225 |
||||
Net debt |
$ |
683,840 |
|||
Net debt to Total Reported EBITDA |
3.1 |
x |
The following table reconciles Real Estate Reported EBITDA to Net Real Estate Cash Flow for the three months ended
(In thousands) (Unaudited) Three Months Ended | ||||
Real Estate Reported EBITDA |
$ |
(385) |
||
|
6,713 |
|||
|
426 |
|||
Change in Real Estate deposits and recovery of previously incurred project costs less investments in Real Estate |
701 |
|||
Net Real Estate Cash Flow |
$ |
7,455 |
SOURCE
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