Vail Resorts Reports Fiscal 2011 First Quarter Results and Early Season Indicators
Highlights
- Resort Reported net revenue, which includes our mountain and lodging segments, increased
$4.6 million , or 5.7%, for the first quarter of fiscal 2011 on improved summer business at our Mountain resorts and Lodging properties. Total Real Estate net revenue equaled$149.3 million reflecting closings at theRitz-Carlton Residences , Vail. Â Real estate net cash proceeds totaled approximately$130 million in the quarter.- Net loss attributable to
Vail Resorts, Inc. in the historical loss first quarter worsened by$1.9 million in the current year due to the ownership of 100 percent of Specialty Sports Venture in the current year. Â Net loss before adjustments for noncontrolling interests improved 1% for the first quarter of 2011 compared to the same period in the prior year. - Through
December 5, 2010 , and compared to the same period last year, season pass sales are up 5% in units and 7% in sales dollars, excludingNorthstar -at-Tahoe. Â Including Northstar-at-Tahoe during these same periods, season pass sales have increased 8% and 10%, respectively. Â Both Heavenly andNorthstar -at-Tahoe have experienced a significant acceleration of season pass sales following the acquisition byVail Resorts, Inc. ofNorthstar -at-Tahoe onOctober 25, 2010 . - Raising Resort Reported EBITDA guidance range by
$11 million primarily to reflect the acquisition ofNorthstar -at-Tahoe.
Commenting on our fiscal 2011 first quarter results,
Katz continued, "We also had an exciting announcement during the quarter as we closed on the acquisition of
Commenting on early season indicators, Katz said, "With the 2010/2011 ski season just underway, we are seeing strong momentum across several metrics including pass sales, bookings and retail sales. Â Our season pass sales continued to improve throughout the fall selling season and are now higher by 5% in units and 7% in sales dollars, excluding
Regarding real estate, Katz said, "Real Estate net revenue was significantly higher in the first quarter of fiscal 2011 on closings at the
Katz added, "Our balance sheet remains in strong condition. We ended the seasonally low first quarter of fiscal 2011 with Net Debt at 2.7 times trailing twelve months Total Reported EBITDA,
Mountain Segment
- Mountain segment net revenue was
$40.8 million in the first quarter of fiscal 2011 compared to$39.2 million in the first quarter of fiscal 2010, a 4.0% improvement. - Mountain Reported EBITDA totaled a loss of
$41.6 million in the first quarter of fiscal 2011 compared to a loss of$37.0 million in the first quarter of fiscal 2010, a 12.3% decline. Â Adjusted for transaction expenses related to the acquisition ofNorthstar -at-Tahoe, as well as current year assessments related to aBreckenridge commercial property, Mountain Reported EBITDA would have been essentially flat as compared to the prior year.
Our first fiscal quarter historically results in negative Mountain Reported EBITDA, as our ski resorts generally do not open for ski operations until our second fiscal quarter. Â The first fiscal quarter consists primarily of operating and administrative expense plus summer business and retail operations.
Other revenue mainly consists of private club revenue (which includes both club dues and amortization of initiation fees), summer visitation and other mountain activities revenue, marketing and internet advertising revenue, commercial leasing revenue, employee housing revenue, municipal services revenue and other recreation activity revenue. Â For the three months ended
Operating expense increased
Mountain equity investment income, net, which primarily represents our share of income from our real estate brokerage joint venture, was favorably impacted for the three months ended
Lodging Segment
- Lodging segment net revenue was
$44.4 million in the first quarter of fiscal 2011 compared to$41.4 million in the first quarter of fiscal 2010, a 7.3% increase. - First fiscal quarter 2011 average daily rate ("ADR") increased 1.5% and RevPAR advanced 21.0% at the Company's owned hotels and managed condominiums compared to the prior year first fiscal quarter.
- Lodging Reported EBITDA was a positive
$1.5 million in the first quarter of fiscal 2011 compared to a negative$1.3 million in the first quarter of fiscal 2010. Â Fiscal 2011 first quarter Lodging segment results benefited from a legal settlement of$2.9 million (net of legal expenses) partially offset by a$0.4 million assessment at aBreckenridge commercial property.
Revenue from owned hotel and managed condominium rooms increased
Dining revenue for the three months ended
Operating expense increased
Resort — Combination of Mountain and Lodging Segments
- Resort net revenue was
$85.2 million in the first quarter of fiscal 2011 compared to$80.6 million in the first quarter of fiscal 2010, a 5.7% improvement. - Resort Reported EBITDA was a loss of
$40.0 million in the first quarter of fiscal 2011 compared to a loss of$38.3 million in the first quarter of fiscal 2010, a 4.6% decline.
Real Estate Segment
- Real Estate segment net revenue was
$149.3 million in the first quarter of fiscal 2011 compared to$0.2 million in the first quarter of fiscal 2010. - Real Estate Reported EBITDA was
$4.2 million in the first quarter of fiscal 2011 compared to$1.1 million in the first quarter of fiscal 2010.
Real Estate segment net revenue for the three months ended
Operating expense for the three months ended
Total Performance
- Total net revenue was
$234.4 million in the first quarter of fiscal 2011 compared to$80.8 million in the first quarter of fiscal 2010, a 190.3% increase, driven primarily by the timing of real estate closings. - Net loss attributable to
Vail Resorts, Inc. was$43.0 million , or a loss of$1.20 per diluted share, in the first quarter of fiscal 2011 compared to a net loss attributable toVail Resorts, Inc. of$41.2 million , or a loss of$1.14 per diluted share, in the first quarter of fiscal 2010 with the current year reflecting the 100 percent ownership of Specialty Sports Venture and the resulting additional losses in the first quarter seasonal low period as compared to the approximate 70 percent ownership in the same quarter last year.
Balance Sheet
As of
Stock Repurchase Program
We did not repurchase any shares of common stock during the three months ended
Outlook
Commenting on our fiscal 2011 outlook, Katz said, "Overall, our key early season metrics are running ahead of last year, however, the vast majority of the ski season remains ahead. Â While we are optimistic, we also believe that it would be premature to make changes to our Resort outlook for the 2010/2011 ski season based on early indicators. Â We are raising our fiscal 2011 Resort Reported EBITDA guidance to reflect the recent acquisition of
The following table reflects the forecasted guidance range for our fiscal year ending
Fiscal 2011 Guidance | ||||||||
(In thousands) | ||||||||
For the Year Ending | ||||||||
July 31, 2011 | ||||||||
Low End Range | High End Range | |||||||
Mountain Reported EBITDA (1) | $ | 203,000 | $ | 213,000 | ||||
Lodging Reported EBITDA (2) | 6,000 | 12,000 | ||||||
Resort Reported EBITDA (3) | 211,000 | 221,000 | ||||||
Real Estate Reported EBITDA Â (4) | (10,000) | -- | ||||||
Total Reported EBITDA | 201,000 | 221,000 | ||||||
Depreciation and amortization | (115,750) | (117,250) | ||||||
Loss on disposal of fixed assets, net | (500) | (1,275) | ||||||
Investment income | 1,200 | 1,200 | ||||||
Interest expense, net | (35,000) | (36,000) | ||||||
Income before provision for income taxes | 50,950 | 67,675 | ||||||
Provision for income taxes | (18,991) | (25,716) | ||||||
Net income | 31,959 | 41,959 | ||||||
Net loss attributable to noncontrolling interests | 41 | 41 | ||||||
Net income attributable to Vail Resorts, Inc. | $ | 32,000 | $ | 42,000 | ||||
(1) Mountain Reported EBITDA includes approximately $7 million of stock-based compensation. (2) Lodging Reported EBITDA includes approximately $2 million of stock-based compensation. (3) 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. Â 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. Â Similarly, the high end of the ranges for the Lodging and Mountain segments do not sum to the high end of the Resort Reported EBITDA range. (4) Real Estate Reported EBITDA includes approximately $3 million of stock-based compensation. | |
Earnings Conference Call
For further discussion of the contents of this press release, please listen to our live webcast today at
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. Â Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Â Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Â 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 complete 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 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 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 of future acquisitions; and implications arising from new
All forward-looking statements attributable to us or any persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Â 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, except as may be required by law. Â Investors are also directed to other risks discussed in documents filed by us with the
We use the terms "Reported EBITDA" and "Net Debt" when reporting financial results in accordance with
Vail Resorts, Inc. | ||||||||||
Consolidated Condensed Statements of Operations | ||||||||||
(In thousands, except per share amounts) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended | ||||||||||
October 31, | ||||||||||
2010 | 2009 | |||||||||
Net revenue: | ||||||||||
Mountain | $ | 40,779 | $ | 39,204 | ||||||
Lodging | 44,378 | 41,355 | ||||||||
Real estate | 149,261 | 205 | ||||||||
Total net revenue | 234,418 | 80,764 | ||||||||
Segment operating expense: | ||||||||||
Mountain | 83,136 | 76,468 | ||||||||
Lodging | 42,835 | 42,623 | ||||||||
Real estate | 145,063 | 5,177 | ||||||||
Total segment operating expense | 271,034 | 124,268 | ||||||||
Other operating (expense) income: | ||||||||||
Depreciation and amortization | (27,732) | (27,184) | ||||||||
Gain on sale of real property | -- | 6,087 | ||||||||
Gain (loss) on disposal of fixed assets, net | 92 | (113) | ||||||||
Loss from operations | (64,256) | (64,714) | ||||||||
Mountain equity investment income, net | 780 | 254 | ||||||||
Investment income | 238 | 230 | ||||||||
Interest expense, net | (7,936) | (4,835) | ||||||||
Loss before benefit from income taxes | (71,174) | (69,065) | ||||||||
Benefit from income taxes | 28,114 | 25,554 | ||||||||
Net loss | $ | (43,060) | $ | (43,511) | ||||||
Net loss attributable to noncontrolling interests | 37 | 2,338 | ||||||||
Net loss attributable to Vail Resorts, Inc. | $ | (43,023) | $ | (41,173) | ||||||
Per share amounts: | ||||||||||
Basic net loss per share attributable to Vail Resorts, Inc. | $ | (1.20) | $ | (1.14) | ||||||
Diluted net loss per share attributable to Vail Resorts, Inc. | $ | (1.20) | $ | (1.14) | ||||||
Weighted average shares outstanding: | ||||||||||
Basic | 35,938 | 36,201 | ||||||||
Diluted | 35,938 | 36,201 | ||||||||
Other Data (unaudited): | ||||||||||
Mountain Reported EBITDA | $ | (41,577) | $ | (37,010) | ||||||
Lodging Reported EBITDA | $ | 1,543 | $ | (1,268) | ||||||
Resort Reported EBITDA | $ | (40,034) | $ | (38,278) | ||||||
Real Estate Reported EBITDA | $ | 4,198 | $ | 1,115 | ||||||
Total Reported EBITDA | $ | (35,836) | $ | (37,163) | ||||||
Mountain stock-based compensation | $ | 1,952 | $ | 1,573 | ||||||
Lodging stock-based compensation | $ | 556 | $ | 516 | ||||||
Resort stock-based compensation | $ | 2,508 | $ | 2,089 | ||||||
Real Estate stock-based compensation | $ | 790 | $ | 1,375 | ||||||
Total stock-based compensation | $ | 3,298 | $ | 3,464 | ||||||
| ||||||||||
Vail Resorts, Inc. | ||||||||||
Mountain Segment Operating Results | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Three Months Ended | Percentage | |||||||||
October 31, | Increase | |||||||||
2010 | 2009 | (Decrease) | ||||||||
Net Mountain revenue: | ||||||||||
  Lift tickets | $ | -- | $ | -- | -- | |||||
  Ski school | -- | -- | -- | |||||||
  Dining | 4,106 | 3,468 | 18.4 | % | ||||||
  Retail/rental | 22,053 | 21,538 | 2.4 | % | ||||||
  Other | 14,620 | 14,198 | 3.0 | % | ||||||
Total Mountain net revenue | $ | 40,779 | $ | 39,204 | 4.0 | % | ||||
Mountain operating expense: | ||||||||||
  Labor and labor-related benefits | $ | 24,682 | $ | 23,384 | 5.6 | % | ||||
  Retail cost of sales | 12,657 | 12,563 | 0.7 | % | ||||||
  General and administrative | 24,189 | 20,273 | 19.3 | % | ||||||
  Other | 21,608 | 20,248 | 6.7 | % | ||||||
Total Mountain operating expense | $ | 83,136 | $ | 76,468 | 8.7 | % | ||||
Mountain equity investment income, net | 780 | 254 | 207.1 | % | ||||||
Total Mountain Reported EBITDA | $ | (41,577) | $ | (37,010) | (12.3) | % | ||||
Vail Resorts, Inc. | ||||||||
Lodging Operating Results | ||||||||
(In thousands, except ADR and RevPAR) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | Percentage | |||||||
 October 31, | Increase | |||||||
2010 | 2009 | (Decrease) | ||||||
Lodging net revenue: | ||||||||
  Owned hotel rooms | $ | 11,753 | $ | 10,997 | 6.9 | % | ||
  Managed condominium rooms | 4,756 | 4,410 | 7.8 | % | ||||
  Dining | 9,956 | 8,946 | 11.3 | % | ||||
  Transportation | 1,754 | 1,787 | (1.8) | % | ||||
  Golf | 6,898 | 6,759 | 2.1 | % | ||||
  Other | 9,261 | 8,456 | 9.5 | % | ||||
Total Lodging net revenue | $ | 44,378 | $ | 41,355 | 7. 3 | % | ||
Lodging operating expense: | ||||||||
  Labor and labor-related benefits | $ | 21,866 | $ | 20,375 | 7.3 | % | ||
  General and administrative | 7,072 | 6,707 | 5.4 | % | ||||
  Other | 13,897 | 15,541 | (10.6) | % | ||||
Total Lodging operating expense | $ | 42,835 | $ | 42,623 | 0.5 | % | ||
Total Lodging Reported EBITDA | $ | 1,543 | $ | (1,268) | 221.7 | % | ||
Owned hotel statistics: | ||||||||
  ADR | $ | 179.52 | $ | 175.92 | 2.0 | % | ||
  RevPAR | $ | 107.49 | $ | 89.24 | 20.5 | % | ||
Managed condominium statistics: | ||||||||
  ADR | $ | 176.25 | $ | 176.07 | 0.1 | % | ||
  RevPAR | $ | 33.19 | $ | 26.46 | 25.4 | % | ||
Owned hotel and managed condominium statistics (combined): | ||||||||
  ADR | $ | 178.53 | $ | 175.96 | 1.5 | % | ||
  RevPAR | $ | 64.25 | $ | 53.08 | 21.0 | % | ||
Key Balance Sheet Data | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
As of October 31, | ||||||||
2010 | 2009 | |||||||
Real estate held for sale and investment | $ | 296,981 | $ | 366,748 | ||||
Total Vail Resorts, Inc. stockholders' equity | $ | 748,141 | $ | 726,597 | ||||
Long-term debt | $ | 513,007 | $ | 489,919 | ||||
Long-term debt due within one year | 1,958 | 1,862 | ||||||
Total debt | 514,965 | 491,781 | ||||||
Less: cash and cash equivalents | 19,578 | 13,019 | ||||||
Net debt | $ | 495,387 | $ | 478,762 | ||||
Reconciliation of Non-GAAP Financial Measures
Resort, Mountain and Lodging, and Real Estate Reported EBITDA have been presented herein as measures of our financial operating performance. Â Reported EBITDA and Net Debt are not measures of financial performance or liquidity under accounting principles generally accepted in
Presented below is a reconciliation of Total Reported EBITDA to net loss attributable to
(In thousands) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
October 31, | ||||||||
2010 | 2009 | |||||||
Mountain Reported EBITDA | $ | (41,577) | $ | (37,010) | ||||
Lodging Reported EBITDA | 1,543 | (1,268) | ||||||
Resort Reported EBITDA* | (40,034) | (38,278) | ||||||
Real Estate Reported EBITDA | 4,198 | 1,115 | ||||||
Total Reported EBITDA | (35,836) | (37,163) | ||||||
Depreciation and amortization | (27,732) | (27,184) | ||||||
Gain (loss) on disposal of fixed assets, net | 92 | (113) | ||||||
Investment income | 238 | 230 | ||||||
Interest expense, net | (7,936) | (4,835) | ||||||
Loss before benefit from income taxes | (71,174) | (69,065) | ||||||
Benefit from income taxes | 28,114 | 25,554 | ||||||
Net loss | $ | (43,060) | $ | (43,511) | ||||
Net loss attributable to noncontrolling interests | 37 | 2,338 | ||||||
Net loss attributable to Vail Resorts, Inc. | $ | (43,023) | $ | (41,173) | ||||
* Resort represents the sum of Mountain and Lodging | ||||||||
Presented below is a reconciliation of Total Reported EBITDA to net income attributable to
(In thousands) | |||||||
(Unaudited) | |||||||
Twelve | |||||||
Months Ended | |||||||
October 31, | |||||||
2010 | |||||||
Mountain Reported EBITDA | $ | 179,469 | |||||
Lodging Reported EBITDA | 5,202 | ||||||
Resort Reported EBITDA* | 184,671 | ||||||
Real Estate Reported EBITDA | (1,224) | ||||||
Total Reported EBITDA | 183,447 | ||||||
Depreciation and amortization | (111,186) | ||||||
Loss on disposal of fixed assets, net | (411) | ||||||
Investment income | 453 | ||||||
Interest expense, net | (20,616) | ||||||
Income before provision for income taxes | 51,687 | ||||||
Provision for income taxes | (15,462) | ||||||
Net income | $ | 36,225 | |||||
Net income attributable to noncontrolling interests | (7,690) | ||||||
Net income attributable to Vail Resorts, Inc | $ | 28,535 | |||||
* Resort represents the sum of Mountain and Lodging | |||||||
(In thousands) | |||||||
(Unaudited) | |||||||
As of October 31, 2010 | |||||||
Long-term debt | $ | 513,007 | |||||
Long-term debt due within one year | 1,958 | ||||||
Total debt | 514,965 | ||||||
Less: cash and cash equivalents | 19,578 | ||||||
Net debt | $ | 495,387 | |||||
Net debt to Total Reported EBITDA | 2.7 | x | |||||
SOURCE
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