UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of the Securities Exchange Act of
1934
Date
of
report (Date of earliest event reported): June 8, 2007
Vail
Resorts, Inc.
(Exact
Name of Registrant as Specified in Charter)
|
Delaware
|
1-9614
|
51-0291762
|
||
|
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
||
|
390
Interlocken Crescent, Suite 1000,
Broomfield,
Colorado
|
80021
|
|||
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
|||
|
Registrant's
telephone number, including area code:
|
(303)
404-1800
|
|
(Former
Name or Former Address, if Changed Since Last
Report)
|
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting materials pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
2.02. Results of Operations and Financial Condition.
On
June
8, 2007, Vail Resorts, Inc. issued a press release announcing its results for
the three and nine months ended April 30, 2007. A copy of the press release
is
being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The
information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall
not be deemed to be “filed” for the purposes of Section 18 of the Securities
Exchange Act of 1934, as amended, and will not be incorporated by reference
into
any registration statement filed under the Securities Act of 1933, as amended,
unless specifically identified therein as being incorporated therein by
reference.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits.
A
list of
exhibits furnished herewith is contained on the Exhibit Index which immediately
precedes such exhibits and is incorporated herein by reference.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
|
Vail
Resorts, Inc.
|
|
|
Date:
June 8, 2007
|
By:
|
/s/
Jeffrey W. Jones
|
|
|
|
Jeffrey
W. Jones
|
|
|
|
Senior
Executive Vice President and
Chief
Financial Officer
|
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
Release, dated June 8, 2007, announcing fiscal 2007 third quarter
results.
|
Exhibit
99.1
VAIL
RESORTS
NEWS
RELEASE
|
FOR
IMMEDIATE RELEASE
|
Vail
Resorts Contacts:
Media: Kelly
Ladyga, (303) 404-1862, kladyga@vailresorts.com
Investor
Relations: Jeff Jones, CFO, (303) 404-1802,
jwjones@vailresorts.com
VAIL
RESORTS ANNOUNCES STRONG FISCAL 2007 THIRD QUARTER
RESULTS
|
l
|
Third
quarter net income of $78.5 million, or $1.99 per diluted share,
a 14.9%
increase in net income and a 13.7% increase in earnings per diluted
share
over the prior year third quarter.
|
|
l
|
Third
quarter Resort revenue of $352.4 million, a 5.4% increase over the
prior
year third quarter.
|
|
l
|
Third
quarter Resort Reported EBITDA of $169.9 million, a 9.5% increase
over the
prior year third quarter.
|
BROOMFIELD,
Colo. - June 8, 2007 - Vail Resorts, Inc. (NYSE: MTN) announced today financial
results for the third quarter of fiscal 2007 ended April 30, 2007.
The
Company uses the term “Reported EBITDA” and “Reported EBITDA excluding
stock-based compensation” when reporting financial results in accordance with
SEC rules regarding the use of non-GAAP financial measures. The Company defines
Reported EBITDA as segment net revenue less segment operating expense plus
segment equity investment income or loss.
THIRD
QUARTER PERFORMANCE
Mountain
Segment
Mountain
revenue increased $13.9 million, or 4.7%, in the third quarter of fiscal 2007
to
$308.7 million from $294.8 million for the comparable quarter last fiscal year.
Mountain expense increased $3.6 million, or 2.4%, to $153.0 million. Mountain
Reported EBITDA grew $11.3 million, or 7.7%, to $157.4 million compared to
$146.1 million for the comparable quarter last fiscal year.
Lodging
Segment
Lodging
revenue increased $4.2 million, or 10.5%, in the third quarter of fiscal 2007
to
$43.6 million from $39.5 million for the comparable quarter last fiscal year.
Lodging expense increased $0.6 million, or 2.0%, to $31.1 million. For the
third
quarter of fiscal 2007, the Lodging segment revenue included $2.6 million
of
revenue associated with the termination of the management agreement at The
Equinox (pursuant to the terms of the management agreement) as a result of
the
sale of the hotel by the hotel owner.
Lodging
Reported EBITDA grew $3.5 million, or 39.4%, to $12.5 million compared to $9.0
million for the comparable quarter last fiscal year.
Resort
- Combination of Mountain and Lodging Segments
Resort
revenue, the combination of Mountain and Lodging revenue, increased $18.1
million, or 5.4%, in the third quarter of fiscal 2007 to $352.4 million from
$334.3 million for the comparable quarter last fiscal year. Resort expense
increased $4.2 million, or 2.3%, to $184.1 million. Third fiscal quarter Resort
Reported EBITDA increased $14.8 million to $169.9 million, a 9.5% increase
over
the comparable quarter last fiscal year. Resort Reported EBITDA excluding
stock-based compensation increased $15.2 million, or 9.8%, to $171.2
million.
Real
Estate Segment
Real
Estate revenue increased $10.0 million, or 140.5%, in the third quarter of
fiscal 2007 to $17.1 million from $7.1 million for the comparable quarter last
fiscal year. Real Estate expense increased 122.2% to $25.3 million. Real Estate
Reported EBITDA for the quarter ended April 30, 2007, decreased $3.9 million,
or
90.5%, to a loss of $8.1 million compared to a loss of $4.3 million in the
comparable quarter last fiscal year.
Total
Performance
Total
revenue increased $28.1 million, or 8.2%, in the third quarter of fiscal 2007
to
$369.5 million from $341.4 million for the comparable quarter last fiscal year.
Income from operations for the quarter increased $12.9 million, or 10.5%, to
$136.2 million. The Company recorded total pre-tax stock-based compensation
expense of $1.7 million in the three months ended April 30, 2007, as compared
to
$1.1 million for the three months ended April 30, 2006.
The
Company reported third quarter fiscal 2007 net income of $78.5 million, or
$1.99
per diluted share, compared to net income of $68.3 million, or $1.75 per diluted
share, for the same quarter last fiscal year. Excluding stock-based compensation
expense, the Company’s net income for the third quarter of fiscal 2007 would
have been $79.6 million, or $2.02 per diluted share, compared to net income
of
$69.1 million excluding stock-based compensation, or $1.77 per diluted share,
for the same quarter last fiscal year.
NINE
MONTH PERFORMANCE
Mountain
Segment
Mountain
revenue grew $45.6 million, or 7.8%, for the nine months ended April 30, 2007,
to $626.9 million from $581.3 million for the comparable period last fiscal
year. Mountain expense increased $20.0 million, or 5.4%, to $392.4 million.
Mountain Reported EBITDA in the first nine months of fiscal 2007 grew $26.6
million, or 12.5%, to $238.5 million compared to $212.0 million for the
comparable period last fiscal year.
Lodging
Segment
Lodging
revenue increased $3.5 million, or 3.1%, for
the
nine months ended April 30, 2007,
to
$116.8 million from $113.3 million for the comparable period last fiscal year.
Lodging expense decreased $2.8 million, or 2.8%, to $98.2 million. For the
first
nine months of fiscal 2006, the Lodging segment included revenue of $5.2 million
and operating expenses of $4.4 million related to Snake River Lodge & Spa
(“SRL&S”), which was sold in January 2006. Excluding the impact of the sale
of SRL&S, Lodging revenue increased $8.8 million, or 8.1%. Additionally,
revenues for the nine months ended April 30, 2007, included $2.6 million of
revenue associated with the termination of the management agreement at The
Equinox (pursuant to the terms of the management agreement) as a result of
the
sale of the hotel by the hotel owner and $2.4 million of revenue associated
with
the termination (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. Lodging Reported EBITDA in the
first nine months of fiscal 2007 grew $6.3 million, or 51.7%, to $18.6 million
compared to $12.3 million in the comparable period last fiscal year.
Resort
- Combination of Mountain and Lodging Segments
Resort
revenue, the combination of Mountain and Lodging revenue, increased $49.2
million, or 7.1%, for
the
nine months ended April 30, 2007,
to
$743.8 million from $694.6 million for the comparable period last fiscal year.
Resort expense increased $17.2 million, or 3.6%, to $490.6 million. Resort
Reported EBITDA in the first nine months of fiscal 2007 increased $32.9 million
to $257.2 million, a 14.7% increase over the comparable period last fiscal
year.
Resort Reported EBITDA excluding stock-based compensation increased $33.2
million, or 14.6%, to $261.1 million.
Real
Estate Segment
Real
Estate revenue increased $80.0 million, or 395.8%, for the nine months ended
April 30, 2007, to $100.3 million from $20.2 million for the comparable period
last fiscal year. Real Estate expense increased 327.2% to $101.8 million. Real
Estate Reported EBITDA in the first nine months of fiscal 2007 improved $2.0
million, or 57.4%, to a loss of $1.5 million compared to a loss of $3.5 million
in the comparable period last fiscal year.
Total
Performance
Total
revenue increased $129.2 million, or 18.1%, for the nine months ended April
30,
2007, to $844.0 million from $714.8 million for the comparable period last
fiscal year. Income from operations for the nine months increased $32.7 million,
or 21.7%, to $183.1 million. The Company recorded total pre-tax stock-based
compensation expense of $5.5 million in the nine months ended April 30, 2007,
as
compared to $4.7 million for the nine months ended April 30, 2006.
The
Company reported net income of $95.7 million, or $2.44 per diluted share, for
the first nine months of fiscal 2007 compared to net income of $77.0 million,
or
$2.01 per diluted share, for the same period last fiscal year. Excluding
stock-based compensation expense, the Company’s net income for the first nine
months of fiscal 2007 would have been $99.1 million, or $2.52 per diluted share,
compared to net income of $80.0 million excluding stock-based compensation,
or
$2.08 per diluted share, for the same period last fiscal year.
Business
Commentary and Outlook
Robert
Katz, Chief Executive Officer, commented, “I am very pleased with our results in
the third quarter and for the entire 2006/2007 ski season. With the nine months
ended April 30, 2007, incorporating our entire ski season, our Mountain segment
revenue increased 7.8% with a lift ticket revenue increase of 9.1% compared
to
the prior year nine months. The lift revenue increase was attributable to a
10.3% increase in our effective ticket price as well as a 17.7% increase in
season pass revenue, partially offset by a decrease in visitation for the nine
months. The season pass revenue growth was due to the combination of more passes
sold and higher pass prices. Our effective ticket price was positively impacted
by an increase in absolute pricing of our individual lift ticket and pass
products, as well as an increase in the mix of our destination guest visitation,
who generally purchase higher priced tickets. We are pleased that our
destination visitation increased on an absolute basis and constituted 64% of
total visitation compared to 60% in the prior year. This also benefited our
ancillary businesses including ski school where revenues grew 8.6% over the
prior year ski season. In addition, the capacity for destination visitation
growth will be further amplified when projects such as The Arrabelle in Vail
open their doors starting in the 2007/2008 ski season.”
Katz
continued, “While the 2006/2007 ski season presented some challenging weather,
we were able to continue to drive significantly improved year-over-year Resort
performance. This certainly is a testament to the success of our capital
investments in improving the quality of our resorts, our commitment to expanding
our destination visitation base, the benefit of our season pass programs, the
passion of our employees and the outstanding experience we provide our guests.
Total visitation at all five of our resorts for the 2006/2007 ski season
decreased 1.1% compared to the prior season. While the Colorado resorts’
visitation for the 2006/2007 ski season increased 1.0%, Heavenly’s visitation
experienced a 12.0% decline related to highly unfavorable weather conditions
throughout the ski season. The increase in Colorado visitation was driven by
a
7.0% increase in destination guests, offset by an 8.6% decline from in-state
visitation. In-state Colorado visitation, including visitation by season pass
holders, was negatively impacted by adverse weather conditions especially in
the
Denver metropolitan area. We are very excited with the performance of Keystone,
which had an outstanding season. Keystone had very strong destination visitation
and modest growth in in-state visitation, resulting in a 7.0% increase in skier
visits over the 2006/2007 ski season. In addition, Breckenridge and Beaver
Creek
realized new skier visitation records this season for their respective resorts.
The positive impact of the destination visitation at our resorts also carried
over to our Lodging segment. The average daily rate and revenue per available
room, excluding The Equinox and The Lodge at Rancho Mirage termination fee
revenue and the impact of the Snake River Lodge & Spa sale, increased 8.3%
and 10.7%, respectively, for the nine months at our owned lodging properties
and
condominiums that we manage around our mountain resorts.”
Katz
added, “Looking ahead towards the next winter season, the Company’s marketing
activities are already showing positive results in our spring sales of season
passes for the 2007/2008 season. Pass sales to date increased 39% in units
and
54% in sales dollars over the same period last year. The increase in season
pass
sales is largely due to a higher number of renewals at this point in our selling
process combined with an 11% increase in effective pass price for our spring
sales. However, it clearly establishes early momentum going into the 2007/2008
ski season.”
Commenting
on the Heavenly Master Plan Amendment Katz said, “We are excited about the
recent unanimous approval of Heavenly Mountain Resort’s 2006 Master Plan
Amendment by the Tahoe Regional Planning Agency’s Governing Board, effectively
charting the course for Heavenly over the next ten years as a premiere mountain
destination and putting Heavenly at the forefront of environmental stewardship
within the snow sports industry. Phase I projects approved under the plan
include the replacement of the existing Olympic fixed-grip chair lift with
a
high-speed, detachable lift, a 1,000-seat on-mountain restaurant, 152 acres
of
new ski trails and a zip line adventure ride. This plan creates a new
opportunity for us to further enhance the guest experience at
Heavenly.”
On
our
real estate business, Katz said, “Our real estate activity not only advances in
Vail with The Arrabelle, The Front Door, The Ritz-Carlton Residences and Ever
Vail projects, but also with significant opportunities in Breckenridge. We
are
in the process of designing Peak 8 in Breckenridge with initial plans calling
for a new Peak 8 base area including a seven building multi-use development,
anticipating 325,000 to 350,000 saleable residential square feet or
approximately 280 units, 48,000 square feet of skier services and 14,000 square
feet of commercial space. The first phase of this project, Building 801, is
expected to include 89 studio to four-bedroom ski-in/ski-out residences with
approximately 100,000 to 110,000 saleable residential square feet. At our
Crystal Peak development on Peak 7, we have 45 of the 46 units under contract
at
an average sales price per square foot of $962, representing gross sales
proceeds of $54.4 million.”
Katz
added, “We
are
pleased with the progress on The Arrabelle at Vail Square project in LionsHead
where we currently anticipate the hotel and commercial components to be open
before the end of our second fiscal quarter in 2008 and the condominiums to
all
close within fiscal 2008. In addition, the marketing of The Ritz-Carlton
Residences, Vail project continues with 71 whole ownership two- to six-bedroom
condominium units and 45 fractional ownership units. Of the 54 executed
reservations announced in the second quarter earnings release, we have converted
74% of these reservations into executed contracts. We currently have a total
of
40 whole ownership units and all 45 fractional units under contract,
representing 62% of total expected revenue.”
As
an
update on the Vail Mountain Club Katz said, “The marketing of the Vail Mountain
Club, an exclusive slope-side private club steps from the Vista Bahn Express
lift, is
on-going with 107 full memberships, which include parking privileges, and an
additional 105 social memberships, which exclude parking, sold to
date.
We have
been able to increase our pricing of the full memberships to a membership
initiation fee deposit of $260,000 and the social memberships to a membership
initiation fee deposit of $105,000. We currently have total sales commitments
representing $37.3 million of total proceeds when paid in full.”
On
our
lodging business, Katz commented, “We are extremely excited about our recent
announcement of adding the Hotel Jerome, a celebrated historic luxury property
in Aspen, to our portfolio of RockResorts’ properties. RockResorts also
confirmed that it plans to operate The Chateau at Heavenly Village at the base
of Heavenly. The Chateau at Heavenly Village will stand out as the jewel of
South Lake Tahoe, connecting Heavenly’s world-class slopes to the treasured
shore of Lake Tahoe. Construction of the proposed LEED-certified redevelopment
project has commenced and the $420 million, 11.53 acre redevelopment will
include two luxury condo-hotels, a 16,000 square-foot RockResorts Spa,
convention center and a collection of shops and restaurants, and is expected
to
be completed in early winter 2009.”
On
the
retail/rental business, Katz said, “Specialty Sports Ventures, a joint venture
majority owned by Vail Resorts, has closed its acquisition of 18 Breeze Ski
Rental shops at locations throughout Colorado, California and Utah. With this
acquisition, Specialty Sports Ventures becomes one of the leading ski rental
and
retailers in the United States with a total of more than 145 shops in Colorado,
California and Utah. The acquisition also included an agreement whereby Vail
Resorts directly purchased two Starbucks retail stores adjacent to the Breeze
locations at the base of Aspen Mountain and in Dumont along the I-70 corridor.
The acquisition of the 18 strategically located Breeze ski and snowboard rental
shops and the Starbucks locations further enhances our Company’s ability to
provide the highest levels of service to our skiing and snowboarding guests.
The
addition of stores along the I-70 corridor in Colorado, the gateway to the
state’s most visited mountain resorts, is particularly attractive because of
both the day and destination skier traffic heading to the
mountains.”
Katz
concluded, “Based on the performance that we have delivered to date this fiscal
year, we would like to take this opportunity to increase the guidance previously
announced in our second quarter earnings release and call. Based on our current
estimates, we expect full year Resort Reported EBITDA, the combination of our
Mountain and Lodging segments, to range from $220 million to $225 million and
Resort Reported EBITDA excluding stock-based compensation expense to range
from
$225 million to $230 million. The Resort guidance includes a range for Mountain
Reported EBITDA of $201 million to $206 million and Mountain Reported EBITDA
excluding stock-based compensation expense of $205 million to $210 million,
while we expect Lodging Reported EBITDA to range from $18 million to $22 million
and Lodging Reported EBITDA excluding stock-based compensation expense expected
to range from $19 million to $23 million. Real Estate Reported EBITDA is
expected to range from negative $2 million to $1 million and Real Estate
Reported EBITDA excluding stock-based compensation expense is expected to range
from zero to $3 million. Based on our current estimates, we expect net income
to
range from $63 million to $68 million and net income excluding stock-based
compensation expense to range from $67 million to $72 million. This
includes an assumption that we will receive payment of the arbitration award
relating to the termination of RockResorts’ Cheeca Lodge & Spa management
agreement in the fourth quarter. Finally, in the third quarter, the Company
did
not repurchase any shares of common stock under our previously announced share
repurchase program. Since inception of this program in fiscal 2006, the Company
has repurchased 673,500 shares at an average price of $38.38 for a total amount
of approximately $25.8 million, with 2,326,500 shares remaining available under
the existing repurchase authorization.”
CONFERENCE
CALL
For
further discussion of the contents of this press release, please listen to
our
live webcast today at 11:00 am EDT, available on www.vailresorts.com. In order
to access the non-GAAP financial information that will be referenced on the
call, click on the Regulation G Compliance section under the Investor Relations
tab at www.vailresorts.com.
Vail
Resorts, Inc. 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, Heavenly in California and Nevada and
the
Grand Teton Lodge Company in Jackson Hole, Wyoming. The Company's subsidiary,
RockResorts, a luxury resort hotel company, manages casually elegant properties
across the United States. Vail Resorts Development Company is the real estate
planning, development and construction subsidiary of Vail Resorts, Inc. Vail
Resorts is a publicly held company traded on the New York Stock Exchange (NYSE:
MTN). The Vail Resorts company website is www.vailresorts.com
and
consumer website is www.snow.com.
***
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. Such forward-looking
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from those projected. Readers are cautioned
not to place undue reliance on these forward-looking statements which speak
only
as of the date hereof. Such risks and uncertainties include but are not limited
to: economic downturns; terrorist acts upon the United States; threat of or
actual war; unfavorable weather conditions; our ability to obtain financing
on
terms acceptable to us to finance our real estate investments, capital
expenditures and growth strategy; our ability to continue to grow our resort
and
real estate operations; competition in our Mountain and Lodging businesses;
termination of existing hotel management contracts; adverse changes in the
real
estate markets; failure to commence or complete the planned real estate
development projects; failure to achieve the anticipated short and long-term
financial benefits from the planned real estate development projects; shortages
or rising costs in construction materials; implications arising from new
Financial Accounting Standards Board (“FASB”)/governmental legislation, rulings
or interpretations; our reliance on government permits or approvals for our
use
of federal land or to make operational improvements; our ability to integrate
and successfully operate future acquisitions; and adverse consequences of
current or future legal claims. All forward-looking statements attributable
to
us or any persons acting on our behalf are expressly qualified in their entirety
by these cautionary statements. Investors are also directed to other risks
discussed in documents filed by the Company with the Securities and Exchange
Commission.
|
Vail
Resorts, Inc.
|
|||||||||
|
Consolidated
Condensed Statements of Operations
|
|||||||||
|
(In
thousands, except per share amounts)
|
|||||||||
|
(Unaudited)
|
|||||||||
|
Three
Months Ended
|
|||||||||
|
April
30,
|
|||||||||
|
2007
|
2006
|
||||||||
|
Net
revenue:
|
|||||||||
|
Mountain
|
$
|
308,712
|
$
|
294,773
|
|||||
|
Lodging
|
43,643
|
39,492
|
|||||||
|
Real
estate
|
17,134
|
7,124
|
|||||||
|
Total
net revenue
|
369,489
|
341,389
|
|||||||
|
Segment
operating expense:
|
|||||||||
|
Mountain
|
152,997
|
149,431
|
|||||||
|
Lodging
|
31,126
|
30,515
|
|||||||
|
Real
estate
|
25,261
|
11,370
|
|||||||
|
Total
segment operating expense
|
209,384
|
191,316
|
|||||||
|
Other
operating expense:
|
|||||||||
|
Depreciation
and amortization
|
(23,513
|
)
|
(22,942
|
)
|
|||||
|
Relocation
and separation charges
|
(166
|
)
|
(3,778
|
)
|
|||||
|
Loss
on disposal of fixed assets, net
|
(242
|
)
|
(108
|
)
|
|||||
|
Income
from operations
|
136,184
|
123,245
|
|||||||
|
Mountain
equity investment income, net
|
1,660
|
780
|
|||||||
|
Real
estate equity investment loss
|
--
|
(20
|
)
|
||||||
|
Investment
income
|
4,334
|
3,156
|
|||||||
|
Interest
expense, net
|
(8,039
|
)
|
(8,849
|
)
|
|||||
|
Loss
on sale of business
|
(601
|
)
|
--
|
||||||
|
Contract
dispute charges
|
(184
|
)
|
(816
|
)
|
|||||
|
Gain
(loss) on put options, net
|
690
|
(113
|
)
|
||||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(5,343
|
)
|
(5,355
|
)
|
|||||
|
Income
before provision for income taxes
|
128,701
|
112,028
|
|||||||
|
Provision
for income taxes
|
(50,193
|
)
|
(43,691
|
)
|
|||||
|
Net
income
|
$
|
78,508
|
$
|
68,337
|
|||||
|
Per
share amounts:
|
|||||||||
|
Basic
net income per share
|
$
|
2.02
|
$
|
1.78
|
|||||
|
Diluted
net income per share
|
$
|
1.99
|
$
|
1.75
|
|||||
|
Other
Data:
|
|||||||||
|
Mountain
Reported EBITDA
|
$
|
157,375
|
$
|
146,122
|
|||||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
$
|
158,361
|
$
|
146,820
|
|||||
|
Lodging
Reported EBITDA
|
$
|
12,517
|
$
|
8,977
|
|||||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
$
|
12,823
|
$
|
9,139
|
|||||
|
Resort
Reported EBITDA
|
$
|
169,892
|
$
|
155,099
|
|||||
|
Resort
Reported EBITDA excluding stock-based compensation
|
$
|
171,184
|
$
|
155,959
|
|||||
|
Real
Estate Reported EBITDA
|
$
|
(8,127
|
)
|
$
|
(4,266
|
)
|
|||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
$
|
(7,671
|
)
|
$
|
(3,983
|
)
|
|||
|
Vail
Resorts, Inc.
|
|||||||||
|
Consolidated
Condensed Statements of Operations
|
|||||||||
|
(In
thousands, except per share amounts)
|
|||||||||
|
(Unaudited)
|
|||||||||
|
Nine
Months Ended
|
|||||||||
|
April
30,
|
|||||||||
|
2007
|
2006
|
||||||||
|
Net
revenue:
|
|||||||||
|
Mountain
|
$
|
626,902
|
$
|
581,279
|
|||||
|
Lodging
|
116,848
|
113,321
|
|||||||
|
Real
estate
|
100,272
|
20,226
|
|||||||
|
Total
net revenue
|
844,022
|
|
714,826
|
||||||
|
Segment
operating expense:
|
|||||||||
|
Mountain
|
392,355
|
372,387
|
|||||||
|
Lodging
|
98,233
|
101,050
|
|||||||
|
Real
estate
|
101,770
|
23,823
|
|||||||
|
Total
segment operating expense
|
592,358
|
497,260
|
|||||||
|
Other
operating (expense) income:
|
|||||||||
|
Depreciation
and amortization
|
(66,857
|
)
|
(63,296
|
)
|
|||||
|
Relocation
and separation charges
|
(1,401
|
)
|
(3,778
|
)
|
|||||
|
Asset
impairment charge
|
--
|
(136
|
)
|
||||||
|
Mold
remediation credit
|
--
|
852
|
|||||||
|
Loss
on disposal of fixed assets, net
|
(332
|
)
|
(835
|
)
|
|||||
|
Income
from operations
|
183,074
|
150,373
|
|||||||
|
Mountain
equity investment income, net
|
3,990
|
3,085
|
|||||||
|
Real
estate equity investment income
|
--
|
79
|
|||||||
|
Investment
income
|
8,815
|
5,390
|
|||||||
|
Interest
expense, net
|
(24,885
|
)
|
(27,788
|
)
|
|||||
|
(Loss)
gain on sale of businesses, net
|
(601
|
)
|
4,625
|
||||||
|
Contract
dispute charges
|
(4,460
|
)
|
(816
|
)
|
|||||
|
Gain
(loss) on put options, net
|
690
|
(79
|
)
|
||||||
|
Other
income, net
|
--
|
50
|
|||||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(9,707
|
)
|
(8,660
|
)
|
|||||
|
Income
before provision for income taxes
|
156,916
|
126,259
|
|||||||
|
Provision
for income taxes
|
(61,197
|
)
|
(49,240
|
)
|
|||||
|
Net
income
|
$
|
95,719
|
$
|
77,019
|
|||||
|
Per
share amounts:
|
|||||||||
|
Basic
net income per share
|
$
|
2.47
|
$
|
2.05
|
|||||
|
Diluted
net income per share
|
$
|
2.44
|
$
|
2.01
|
|||||
|
Other
Data:
|
|||||||||
|
Mountain
Reported EBITDA
|
$
|
238,537
|
$
|
211,977
|
|||||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
$
|
241,601
|
$
|
214,630
|
|||||
|
Lodging
Reported EBITDA
|
$
|
18,615
|
$
|
12,271
|
|||||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
$
|
19,474
|
$
|
13,254
|
|||||
|
Resort
Reported EBITDA
|
$
|
257,152
|
$
|
224,248
|
|||||
|
Resort
Reported EBITDA excluding stock-based compensation
|
$
|
261,075
|
$
|
227,884
|
|||||
|
Real
Estate Reported EBITDA
|
$
|
(1,498
|
)
|
$
|
(3,518
|
)
|
|||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
$
|
52
|
$
|
(2,454
|
)
|
||||
|
Vail
Resorts, Inc.
|
||||||||||||||||||||||||||
|
Resort
Revenue by Business Line and Skier Visits
|
||||||||||||||||||||||||||
|
(In
thousands, except effective ticket price
(“ETP”))
|
||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||||
|
April
30,
|
Percentage
|
April
30,
|
Percentage
|
|||||||||||||||||||||||
|
2007
|
2006
|
Increase
|
2007
|
2006
|
Increase
|
|||||||||||||||||||||
|
Business
Line
|
||||||||||||||||||||||||||
|
Lift
tickets
|
$
|
158,380
|
$
|
149,563
|
5.9
|
%
|
$
|
286,997
|
$
|
263,036
|
9.1
|
%
|
||||||||||||||
|
Ski
school
|
44,650
|
41,851
|
6.7
|
%
|
78,848
|
72,628
|
8.6
|
%
|
||||||||||||||||||
|
Dining
|
28,624
|
27,973
|
2.3
|
%
|
54,978
|
52,745
|
4.2
|
%
|
||||||||||||||||||
|
Retail/rental
|
53,401
|
53,091
|
0.6
|
%
|
141,210
|
131,708
|
7.2
|
%
|
||||||||||||||||||
|
Other
|
23,657
|
22,295
|
6.1
|
%
|
64,869
|
61,162
|
6.1
|
%
|
||||||||||||||||||
|
Total
Mountain Revenue
|
$
|
308,712
|
$
|
294,773
|
4.7
|
%
|
$
|
626,902
|
$
|
581,279
|
7.8
|
%
|
||||||||||||||
|
Total
Lodging Revenue
|
$
|
43,643
|
$
|
39,492
|
10.5
|
%
|
$
|
116,848
|
$
|
113,321
|
3.1
|
%
|
||||||||||||||
|
Total
Resort Revenue
|
$
|
352,355
|
$
|
334,265
|
5.4
|
%
|
$
|
743,750
|
$
|
694,600
|
7.1
|
%
|
||||||||||||||
|
Three
Months Ended
|
Percentage
|
Nine
Months Ended
|
Percentage
|
|||||||||||||||||||||||
|
April
30,
|
Increase
|
April
30,
|
Increase
|
|||||||||||||||||||||||
|
2007
|
2006
|
(Decrease)
|
2007
|
2006
|
(Decrease)
|
|||||||||||||||||||||
|
Skier
Visits
|
||||||||||||||||||||||||||
|
Vail
|
883
|
923
|
(4.3
|
)
|
%
|
1,608
|
1,676
|
(4.1
|
)
|
%
|
||||||||||||||||
|
Breckenridge
|
875
|
863
|
1.4
|
%
|
1,650
|
1,620
|
1.9
|
%
|
||||||||||||||||||
|
Keystone
|
573
|
547
|
4.8
|
%
|
1,171
|
1,094
|
7.0
|
%
|
||||||||||||||||||
|
Heavenly
|
493
|
590
|
(16.4
|
)
|
%
|
900
|
1,023
|
(12.0
|
)
|
%
|
||||||||||||||||
|
Beaver
Creek
|
483
|
489
|
(1.2
|
)
|
%
|
890
|
875
|
1.7
|
%
|
|||||||||||||||||
|
Total
Skier Visits
|
3,307
|
3,412
|
(3.1
|
)
|
%
|
6,219
|
6,288
|
(1.1
|
)
|
%
|
||||||||||||||||
|
ETP
|
$
|
47.89
|
$
|
43.83
|
9.3
|
%
|
$
|
46.15
|
$
|
41.83
|
10.3
|
%
|
||||||||||||||
|
Key
Balance Sheet Data
|
|||||||
|
(In
thousands)
|
|||||||
|
(Unaudited)
|
|||||||
|
As
of April 30,
|
|||||||
|
2007
|
2006
|
||||||
|
Real
estate held for sale and investment
|
$
|
305,085
|
$
|
240,615
|
|||
|
Total
stockholders' equity
|
743,189
|
679,585
|
|||||
|
Long-term
debt
|
575,162
|
516,871
|
|||||
|
Long-term
debt due within one year
|
401
|
4,420
|
|||||
|
Total
debt
|
575,563
|
521,291
|
|||||
|
Less:
cash and cash equivalents
|
316,439
|
240,116
|
|||||
|
Net
debt
|
$
|
259,124
|
$
|
281,175
|
|||
Reconciliation
of Non-GAAP Financial Measures
Resort,
Mountain, Lodging and Real Estate Reported EBITDA and Resort, Mountain, Lodging
and Real Estate Reported EBITDA excluding stock-based compensation have been
presented herein as measures of the Company's financial operating performance.
Reported EBITDA, Reported EBITDA excluding stock-based compensation and Net
Debt
(defined as long-term debt plus long-term debt due within one year less cash
and
cash equivalents) are not measures of financial performance or liquidity under
accounting principles generally accepted in the United States of America
("GAAP"), and they might not be comparable to similarly titled measures of
other
companies. Reported EBITDA, Reported EBITDA excluding stock-based compensation
and Net Debt do not purport to represent cash flows generated by operating,
investing or financing activities or other financial statement data and should
not be considered in isolation or as a substitute for measures of financial
performance or liquidity prepared in accordance with GAAP. The Company believes
that Reported EBITDA and Reported EBITDA excluding stock-based compensation
are
indicative measures of the Company's operating performance, and each similar
to
performance metrics generally used by investors to evaluate companies in the
resort and lodging industries. The Company primarily uses Reported EBITDA
excluding stock-based compensation targets in determining management
bonuses.
Presented
below is a reconciliation of Reported EBITDA and Reported EBITDA excluding
stock-based compensation to net income for the Company calculated in accordance
with GAAP for the three and nine months ended April 30, 2007 and 2006.
|
(In
thousands)
|
||||||||||
|
Three
Months Ended
|
||||||||||
|
April
30,
|
||||||||||
|
(Unaudited)
|
||||||||||
|
2007
|
2006
|
|||||||||
|
Mountain
revenue, net
|
$
|
308,712
|
$
|
294,773
|
||||||
|
Mountain
operating expense excluding stock-based compensation
|
(152,011
|
)
|
(148,733
|
)
|
||||||
|
Mountain
equity investment income, net
|
1,660
|
780
|
||||||||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
158,361
|
146,820
|
||||||||
|
Mountain
stock-based compensation
|
(986
|
)
|
(698
|
)
|
||||||
|
Mountain
Reported EBITDA
|
157,375
|
146,122
|
||||||||
|
Lodging
revenue, net
|
43,643
|
39,492
|
||||||||
|
Lodging
operating expense excluding stock-based compensation
|
(30,820
|
)
|
(30,353
|
)
|
||||||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
12,823
|
9,139
|
||||||||
|
Lodging
stock-based compensation
|
(306
|
)
|
(162
|
)
|
||||||
|
Lodging
Reported EBITDA
|
12,517
|
8,977
|
||||||||
|
Resort
Reported EBITDA excluding stock-based compensation*
|
171,184
|
155,959
|
||||||||
|
Resort
Reported EBITDA*
|
169,892
|
155,099
|
||||||||
|
Real
Estate revenue, net
|
17,134
|
7,124
|
||||||||
|
Real
Estate operating expense excluding stock-based
compensation
|
(24,805
|
)
|
(11,087
|
)
|
||||||
|
Real
Estate equity investment loss
|
--
|
(20)
|
||||||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
|
(7,671
|
)
|
(3,983
|
)
|
|||||
|
Real
Estate stock-based compensation
|
(456
|
)
|
(283
|
)
|
||||||
|
Real
Estate Reported EBITDA
|
(8,127
|
)
|
(4,266
|
)
|
||||||
|
Total
Reported EBITDA
|
161,765
|
150,833
|
||||||||
|
Depreciation
and amortization
|
(23,513
|
)
|
(22,942
|
)
|
||||||
|
Relocation
and separation charges
|
(166
|
)
|
(3,778
|
)
|
||||||
|
Loss
on disposal of fixed assets, net
|
(242
|
)
|
(108
|
)
|
||||||
|
Investment
income
|
4,334
|
3,156
|
||||||||
|
Interest
expense, net
|
(8,039
|
)
|
(8,849
|
)
|
||||||
|
Loss
on sale of business
|
(601
|
)
|
--
|
|||||||
|
Contract
dispute charges
|
(184
|
)
|
(816
|
)
|
||||||
|
Gain
(loss) on put options, net
|
690
|
(113
|
)
|
|||||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(5,343
|
)
|
(5,355
|
)
|
||||||
|
Income
before provision for income taxes
|
128,701
|
112,028
|
||||||||
|
Provision
for income taxes
|
(50,193
|
)
|
(43,691
|
)
|
||||||
|
Net
income
|
$
|
78,508
|
$
|
68,337
|
||||||
*
Resort
represents the sum of Mountain and Lodging
|
(In
thousands)
|
||||||||||
|
Nine
Months Ended
|
||||||||||
|
April
30,
|
||||||||||
|
(Unaudited)
|
||||||||||
|
2007
|
2006
|
|||||||||
|
Mountain
revenue, net
|
$
|
626,902
|
$
|
581,279
|
||||||
|
Mountain
operating expense excluding stock-based compensation
|
(389,291
|
)
|
(369,734
|
)
|
||||||
|
Mountain
equity investment income, net
|
3,990
|
3,085
|
||||||||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
241,601
|
214,630
|
||||||||
|
Mountain
stock-based compensation
|
(3,064
|
)
|
(2,653
|
)
|
||||||
|
Mountain
Reported EBITDA
|
238,537
|
211,977
|
||||||||
|
Lodging
revenue, net
|
116,848
|
113,321
|
||||||||
|
Lodging
operating expense excluding stock-based compensation
|
(97,374
|
)
|
(100,067
|
)
|
||||||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
19,474
|
13,254
|
||||||||
|
Lodging
stock-based compensation
|
(859
|
)
|
(983
|
)
|
||||||
|
Lodging
Reported EBITDA
|
18,615
|
12,271
|
||||||||
|
Resort
Reported EBITDA excluding stock-based compensation*
|
261,075
|
227,884
|
||||||||
|
Resort
Reported EBITDA*
|
257,152
|
224,248
|
||||||||
|
Real
Estate revenue, net
|
100,272
|
20,226
|
||||||||
|
Real
Estate operating expense excluding stock-based
compensation
|
(100,220
|
)
|
(22,759
|
)
|
||||||
|
Real
Estate equity investment income
|
--
|
79
|
||||||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
|
52
|
(2,454
|
)
|
||||||
|
Real
Estate stock-based compensation
|
(1,550
|
)
|
(1,064
|
)
|
||||||
|
Real
Estate Reported EBITDA
|
(1,498
|
)
|
(3,518
|
)
|
||||||
|
Total
Reported EBITDA
|
255,654
|
220,730
|
||||||||
|
Depreciation
and amortization
|
(66,857
|
)
|
(63,296
|
)
|
||||||
|
Relocation
and separation charges
|
(1,401
|
)
|
(3,778
|
)
|
||||||
|
Asset
impairment charge
|
--
|
(136
|
)
|
|||||||
|
Mold
remediation credit
|
--
|
852
|
||||||||
|
Loss
on disposal of fixed assets, net
|
(332
|
)
|
(835
|
)
|
||||||
|
Investment
income
|
8,815
|
5,390
|
||||||||
|
Interest
expense, net
|
(24,885
|
)
|
(27,788
|
)
|
||||||
|
(Loss)
gain on sale of businesses, net
|
(601
|
)
|
4,625
|
|||||||
|
Contract
dispute charges
|
(4,460
|
)
|
(816
|
)
|
||||||
|
Gain
(loss) on put options, net
|
690
|
(79
|
)
|
|||||||
|
Other
income, net
|
--
|
50
|
||||||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(9,707
|
)
|
(8,660
|
)
|
||||||
|
Income
before provision for income taxes
|
156,916
|
126,259
|
||||||||
|
Provision
for income taxes
|
(61,197
|
)
|
(49,240
|
)
|
||||||
|
Net
income
|
$
|
95,719
|
$
|
77,019
|
||||||
*
Resort
represents the sum of Mountain and Lodging
Presented
below is a reconciliation of net income excluding stock-based compensation,
tax
effected, to net income of the Company calculated in accordance with GAAP for
the three and nine months ended April 30, 2007 and 2006. Also presented is
a
reconciliation of net income per diluted share excluding stock-based
compensation, tax effected, to net income per diluted share of the Company
calculated in accordance with GAAP for the three and nine months ended April
30,
2007 and 2006. The Company has presented these non-GAAP measures as it believes
that this presentation provides a more comparable measure of the Company's
historical results from ongoing operations for the three and nine months ended
April 30, 2007 and April 30, 2006 to prior periods.
|
Three
Months Ended
|
|||||||||
|
April
30,
|
|||||||||
|
(Unaudited)
|
|||||||||
|
(In
thousands, except per share amounts)
|
2007
|
2006
|
|||||||
|
Net
income excluding stock-based compensation
|
$
|
79,599
|
$
|
69,051
|
|||||
|
Stock-based
compensation expense, before benefit from income taxes
|
(1,748
|
)
|
(1,143
|
)
|
|||||
|
Adjustment
for benefit from income taxes
|
657
|
429
|
|||||||
|
Net
income
|
$
|
78,508
|
$
|
68,337
|
|||||
|
Diluted
net income per share excluding stock-based compensation
|
$
|
2.02
|
$
|
1.77
|
|||||
|
Stock-based
compensation expense per diluted common share, before
benefit
|
|||||||||
|
from
income taxes
|
(0.04
|
)
|
(0.03
|
)
|
|||||
|
Adjustment
for benefit from income taxes, per diluted common share
|
0.02
|
0.01
|
|||||||
|
Diluted
net income per share
|
$
|
1.99
|
$
|
1.75
|
|||||
|
Nine
Months Ended
|
|||||||||
|
April
30,
|
|||||||||
|
(Unaudited)
|
|||||||||
|
(In
thousands, except per share amounts)
|
2007
|
2006
|
|||||||
|
Net
income excluding stock-based compensation
|
$
|
99,136
|
$
|
79,954
|
|||||
|
Stock-based
compensation expense, before benefit from income taxes
|
(5,473
|
)
|
(4,700
|
)
|
|||||
|
Adjustment
for benefit from income taxes
|
2,056
|
1,765
|
|||||||
|
Net
income
|
$
|
95,719
|
$
|
77,019
|
|||||
|
Diluted
net income per share excluding stock-based compensation
|
$
|
2.52
|
$
|
2.08
|
|||||
|
Stock-based
compensation expense per diluted common share, before
benefit
|
|||||||||
|
from
income taxes
|
(0.14
|
)
|
(0.12
|
)
|
|||||
|
Adjustment
for benefit from income taxes, per diluted common share
|
0.05
|
0.05
|
|||||||
|
Diluted
net income per share
|
$
|
2.44
|
$
|
2.01
|
|||||
A
reconciliation of the low and high ends of the forecasted guidance range given
for Reported EBITDA and Reported EBITDA excluding stock-based compensation
for
the Company's fiscal year ending July 31, 2007 is presented below.
|
(In
thousands)
|
|||||||
|
For
the Year Ending
|
|||||||
|
July
31, 2007
|
|||||||
|
Low
End Range
|
High
End Range
|
||||||
|
Resort
Reported EBITDA excluding stock-based compensation(1)
|
$
|
225,000
|
$
|
230,000
|
|||
|
Resort
segment stock-based compensation
|
(5,000
|
)
|
(5,000
|
)
|
|||
|
Resort
Reported EBITDA(1)
|
220,000
|
225,000
|
|||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
--
|
3,000
|
|||||
|
Real
Estate segment stock-based compensation
|
(2,000
|
)
|
(2,000
|
)
|
|||
|
Real
Estate Reported EBITDA
|
(2,000
|
)
|
1,000
|
||||
|
Total
Reported EBITDA
|
218,000
|
226,000
|
|||||
|
Depreciation
and amortization
|
(87,000
|
)
|
(87,000
|
)
|
|||
|
Relocation
and separation charges
|
(1,500
|
)
|
(1,500
|
)
|
|||
|
Loss
on disposal of fixed assets, net
|
(500
|
)
|
(500
|
)
|
|||
|
Investment
income
|
11,800
|
12,000
|
|||||
|
Interest
expense, net
|
(33,600
|
)
|
(33,600
|
)
|
|||
|
Loss
on sale of business
|
(600
|
)
|
(600
|
)
|
|||
|
Contract
dispute credit, net(2)
|
4,000
|
4,000
|
|||||
|
Gain
on put options, net
|
700
|
700
|
|||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(7,800
|
)
|
(7,700
|
)
|
|||
|
Income
before provision for income taxes
|
103,500
|
111,800
|
|||||
|
Provision
for income taxes
|
(40,400
|
)
|
(43,600
|
)
|
|||
|
Net
income
|
$
|
63,100
|
$
|
68,200
|
|||
| (1) |
Resort
represents the sum of Mountain and Lodging. The Company provides
Reported
EBITDA ranges for the Mountain and Lodging segments, as well as for
the
two combined. Readers are cautioned to recognize that the low end
of the
expected ranges provided for the Lodging and Mountain segments, while
possible, do not sum to the low end of the Resort Reported EBITDA
range
provided because we do not necessarily expect or assume that we will
actually hit the low end of both ranges, as the actual Resort Reported
EBITDA will depend on the actual mix of the Lodging and Mountain
components. Similarly, the high end of the ranges for the Lodging
and
Mountain segments do not sum to the high end of the Resort
range.
|
| (2) |
Assumes
that we will receive payment of the arbitration award relating to
the
termination of RockResorts’ Cheeca Lodge & Spa management agreement in
the fourth quarter.
|
A
reconciliation of the low and high ends of the forecasted guidance range given
for net income excluding stock-based compensation for the Company's fiscal
year
ending July 31, 2007 is presented below.
|
(In
thousands)
|
|||||||
|
For
the Year Ending
|
|||||||
|
July
31, 2007
|
|||||||
|
Low
End Range
|
High
End Range
|
||||||
|
Net
income excluding stock-based compensation
|
$
|
67,370
|
$
|
72,470
|
|||
|
Stock-based
compensation expense, before benefit from income taxes
|
(7,000
|
)
|
(7,000
|
)
|
|||
|
Adjustment
for benefit from income taxes
|
2,730
|
2,730
|
|||||
|
Net
income
|
$
|
63,100
|
$
|
68,200
|
|||