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): March 11, 2009
Vail Resorts,
Inc.
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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001-09614
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51-0291762
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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390
Interlocken Crescent
Broomfield,
Colorado
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80021
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant's
telephone number, including area code:
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(303)
404-1800
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(Former
Name or Former Address, if Changed Since Last Report)
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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 March
11, 2009, Vail Resorts, Inc. issued a press release announcing its results for
the three and six months ended January 31, 2009. A copy of the press
release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K
and is incorporated herein by reference.
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.
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Vail
Resorts, Inc.
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Date:
March 11, 2009
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By:
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/s/
Jeffrey W. Jones
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Jeffrey
W. Jones
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Senior
Executive Vice President and
Chief
Financial Officer
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EXHIBIT
INDEX
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Exhibit No.
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Description
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99.1
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Press
Release, dated March 11, 2009, announcing fiscal 2009 second quarter
results.
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Exhibit 99.1
Vail
Resorts, Inc.
For
Immediate Release
News
Release
Vail
Resorts Contacts:
Investor
Relations: Michelle Lang, (303) 404-1819,
mlang@vailresorts.com
Media: Kelly
Ladyga, (303) 404-1862, kladyga@vailresorts.com
Vail Resorts Reports Fiscal
2009 Second Quarter Results
BROOMFIELD,
Colo. - March 11, 2009 - Vail Resorts, Inc. (NYSE: MTN) today
reported results for the second quarter of fiscal 2009 ended January 31, 2009,
as well as the Company’s ski season to date metrics through March 1, 2009, and
the Company’s calendar 2009 resort capital plan.
Second Quarter
Highlights
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·
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Resort
Reported EBITDA, which includes the Company’s Mountain and Lodging
segments, of $105.9 million in the second fiscal quarter decreased by $9.6
million, or 8.3%, from the prior year second fiscal
quarter.
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·
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Real
Estate Reported EBITDA of $29.6 million in the second fiscal quarter
increased by $27.9 million from the prior year second fiscal
quarter.
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·
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Net
income of $60.5 million in the second fiscal quarter increased by $9.2
million, or 18.0%, from the prior year second fiscal
quarter.
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·
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Net
Debt leverage ratio of 1.2 times trailing twelve months Total Reported
EBITDA, $139.2 million of cash and cash equivalents on hand as of January
31, 2009, and no revolver borrowings under the Company’s $400 million
senior credit facility.
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Commenting on
our second quarter fiscal 2009 results, Rob Katz, Chief Executive Officer said,
“Our second quarter Resort segment results, which encompass the first part of
the ski season, reflect the impact of the severe downturn in the
economy. The Company’s Mountain segment results were negatively
impacted by lower destination visitation, which drove lower lift revenue and to
a greater degree a decline in our ancillary business revenue, including ski
school, dining and retail/rental. This was partially offset by strong
season pass revenue and pass skier visitation including from our new Epic Season
Pass holders. The strong season pass sales enabled us to lock-in
sales from a large portion of our Colorado in-state guests as well as a portion
of our destination guests before the commencement of the major part of our ski
season. Total season pass sales (including the Epic Season Pass)
increased by $17.1 million, or 22.1%, as of January 31, 2009, for the 2008/2009
ski season over total season pass sales for the entire 2007/2008 ski
season. Our lodging bookings as of January 31, 2009, were down 14.9%
to the prior year, and reflect a much closer booking window experienced
throughout this winter ski season. In addition, our guests are
spending less on average during their stay, especially in the areas of private
ski school lessons, fine dining and retail. Lodging segment results
benefited from the acquisition of Colorado Mountain Express (“CME”) at the
beginning of the current year second quarter, the full period operations of the
Arrabelle compared to start-up and pre-opening expenses incurred in the prior
year and the renovation of the Lodge at Vail as part of the Vail Front Door real
estate project. Our Real Estate segment improved results reflect the
timing of closings and mix of units sold, including the current year second
quarter closings of six Lodge at Vail Chalets, one Arrabelle unit and three
Crystal Peak Lodge units compared to the number and type of closings in the
prior year. Overall, relative to the unprecedented environment we are
in, our results for the quarter reflect the strength of our assets, brands,
season pass programs and the passion of our employees in delivering the highest
quality experience to our guests. Very importantly in these times,
our balance sheet remains strong with net leverage of only 1.2 times trailing
twelve months Total Reported EBITDA, no borrowings under our revolver and
virtually no principal maturities due on any of our debt through
2013.”
Mountain
Segment
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·
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Mountain
segment revenue was $258.5 million in the second quarter of fiscal 2009
compared to $279.7 million in the second quarter of fiscal 2008, a decline
of 7.6%.
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·
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Mountain
Reported EBITDA was $103.5 million in the second quarter of fiscal 2009
compared to $117.5 million in the second quarter of fiscal 2008, a decline
of 11.9%.
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Lift ticket
revenue in the current year second fiscal quarter decreased $6.8 million, or
5.1%, from the prior year second fiscal quarter due primarily to a 19.3%
decrease in visits excluding season pass holders, partially offset by a 4.6%
increase in effective ticket price excluding season passes and an 18.2% increase
in season pass revenue, which included an 8.4% increase in effective pass
price. The significant increase in visits from season pass holders,
which partially caused the offsetting decline in other visits was primarily
driven by the introduction of the Epic Season Pass, with the increase in season
pass visits causing the overall decline in effective ticket price of
4.4%. Additionally, the mix of destination to in-state guest visits
was approximately 52% to 48%, respectively, in the current year quarter compared
to approximately 59% to 41%, respectively, in the prior year
quarter. Total skier visits increased 0.9% at the Company’s four
Colorado resorts, while total skier visits including Heavenly decreased
0.8%. The Company’s lift revenue and skier visit year-over-year
variance percentages were favorably impacted by the timing of the current year
second quarter end, which ended on a higher volume Saturday, compared to the
prior year quarter ending on a Thursday. Total skier visits and lift
revenue were down approximately 4.5% and 7.5%, respectively, when comparing the
season to date period ending Saturday, January 31, 2009, with the prior year
period ending Saturday, February 2, 2008.
Revenue
for the Company's ancillary business, ski school, dining and retail/rental
operations, were all impacted by the current downturn in the economic
environment and a resulting decrease in destination visitors and overall
spending per guest. Ski school revenue decreased $6.2 million,
or 17.6%. Dining revenue decreased $2.6 million, or 11.4%,
driven by the decline in total on-mountain food and beverage transactions and
lower check averages, coupled with a decrease in overall fine
dining. Retail/rental revenue decreased $7.5 million, or 11.3%, due
to lower sales and rental volumes at the Company’s mountain
locations. Ski school, dining and retail/rental revenues decreased by
approximately 20.1%, 15.5% and 13.9%, respectively, when comparing the current
year season to date period ending Saturday, January 31, 2009, with the prior
year period ending Saturday, February 2, 2008. Other revenue
increased $1.9 million, or 9.3%, due primarily to the opening of the Vail
Mountain Club.
Mountain
segment operating expenses decreased by $7.0 million, or 4.3%, attributable to a
decline in variable-based operating expenses, including U.S. Forest Service
fees; credit card fees; other resort fees; ski school and dining labor; dining
and retail/rental cost of sales as well as lower allocated corporate overhead
expense.
Lodging
Segment
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·
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Lodging
segment revenue was $41.2 million in the second quarter of fiscal 2009
compared to $34.8 million in the second quarter of fiscal 2008, an
increase of 18.2%, primarily due to the opening of the Arrabelle in
January 2008 and the acquisition of CME on November 1,
2008. Excluding the impact of the Arrabelle and CME, Lodging
segment revenue would have decreased
13.2%.
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·
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Second
quarter average daily rate (“ADR”) decreased 6.4% and revenue
per available room (“RevPAR”) decreased 15.1% at the Company’s owned
hotels and managed condominiums on a “same store” basis, excluding the
Arrabelle, compared to the prior year second
quarter.
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·
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Lodging
Reported EBITDA was $2.5 million in the second quarter of fiscal 2009
compared to a loss of $2.0 million in the second quarter of fiscal
2008. The prior year quarter included $2.2 million of
pre-opening and start-up expenses at the Arrabelle and the current year
second quarter included $7.9 million of revenue and $5.4 million of
expense from CME.
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During the
second quarter fiscal 2009, the Lodging segment results were impacted by similar
trends realized by the Mountain segment, including the decline in destination
visitation at our Mountain resorts as well as being impacted by a decline in
group room nights. During the quarter, the Company’s owned and
managed properties offered promotions and packages to attract guests to the
mountains, driving a decrease in ADR. Overall, the Lodging segment
experienced significantly less visibility with a much shorter booking window in
both peak and non-peak periods, while a mix shift occurred from group business
to transient business compared to the prior year quarter.
In
addition, the second quarter of fiscal 2009 included a full quarter of
operations from CME, which was acquired on November 1,
2008. Excluding the acquisition of CME and the operations of the
Arrabelle in the current year quarter and the Arrabelle’s expenses in the prior
year quarter, operating expenses would have decreased 12.5%, attributable to the
variable nature of a large part of Lodging segment expenses, which were reduced
commensurate with the similar revenue decrease excluding the Arrabelle and
CME.
During
the second quarter of fiscal 2009, the Company opened The Osprey at Beaver
Creek, a RockResort, formerly the Inn at Beaver Creek following a $7 million
renovation.
Resort Segment – Combination
of Mountain and Lodging Segments
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·
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Resort
revenue was $299.6 million in the second quarter of fiscal 2009 compared
to $314.5 million in the second quarter of fiscal 2008, a decrease of
4.7%.
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|
·
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Resort
Reported EBITDA was $105.9 million in the second quarter of fiscal 2009
compared to $115.5 million in the second quarter of fiscal 2008, a decline
of 8.3%.
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Real Estate
Segment
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·
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Real
estate revenue was $89.2 million in the second quarter of fiscal 2009
compared to $45.5 million in the second quarter of fiscal
2008.
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·
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Real
Estate Reported EBITDA was $29.6 million in the second quarter of fiscal
2009 compared to $1.8 million in the second quarter of fiscal
2008.
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In the
second quarter of fiscal 2009, the Company closed on six Lodge at Vail Chalets,
one Arrabelle unit and three Crystal Peak Lodge units. To date, the
Company has closed on 12 of 13 Lodge at Vail Chalets, with the remaining unit
anticipated to close in the spring of 2009, due to the extensive nature of the
buyer upgrades associated with this unit; all 66 Arrabelle units with the final
unit closing on March 9, 2009, and 42 of 45 Crystal Peak Lodge
units. To date, the Company has also closed on 384 Vail Mountain Club
memberships for total proceeds of $70.1 million, and has closed on 11
memberships for the newly introduced Arrabelle Club for total proceeds of $1.2
million.
Total
Performance
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·
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Total
revenue was $388.8 million in the second quarter of fiscal 2009 compared
to $360.0 million in the second quarter of fiscal 2008, an increase of
8.0%.
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·
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Net
income was $60.5 million, or $1.65 per diluted share, in the second
quarter of fiscal 2009 compared to net income of $51.3 million, or $1.31
per diluted share, in the second quarter of fiscal 2008. In
addition, included in the six month net income results in the prior year
was the receipt of the final cash settlement from Cheeca Holdings, LLC of
which $11.9 million (net of final attorney’s fees and on a pre-tax basis)
was included in contract dispute credit,
net.
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Balance
Sheet
At
January 31, 2009, the Company had cash and cash equivalents on hand of $139.2
million, Net Debt of 1.2 times trailing twelve months Total Reported EBITDA and
a $400 million senior credit facility, which matures in 2012, with no revolver
borrowings under the facility, currently priced at LIBOR plus 50 basis
points. The Company has approximately $3.0 million of principal
maturities due in total through 2013.
Stock Repurchase
Program
During
the second quarter of fiscal 2009, the Company repurchased 317,727 shares of
common stock at an average price of $23.48 for a total amount of approximately
$7.5 million in the quarter. Since the inception of this program in
fiscal 2006, the Company has repurchased 3,600,235 shares at an average price of
$38.98 for a total amount of approximately $140.3 million, with 2,399,765 shares
remaining available under the existing repurchase authorization. The
purchases under this program are reviewed by the Company’s Board quarterly and
are based on a number of factors to determine the appropriate uses of excess
cash, including the Company’s expected future financial performance, the
Company’s available cash resources and competing uses for cash that may arise in
the future, the restrictions in the Company’s credit facility and in the
indenture governing the outstanding 6.75% senior subordinated notes, prevailing
prices of the Company’s common stock and the number of shares that become
available for sale at prices that the Company believes are
attractive.
Calendar 2009 Resort Capital
Expenditure Announcement
Vail
Resorts is committed to offering our guests an exceptional guest
experience. Over the past four years, the Company has made
significant investments in resort assets to enhance the overall guest
experience. Highlighting several of these recent major discretionary
capital expenditures, the projects have included: the Keystone River
Run gondola; the Breckenridge gondola; two new high-speed chairlifts at Vail
(Chairs 10 and 14); Heavenly’s high-speed Olympic Express chairlift; Beaver
Creek’s Buckaroo Express gondola and the Ranch, a new children’s ski school
on-mountain check-in/dining building; the Osprey at Beaver Creek renovation and
new central reservations and web platform deployment. Additionally,
the Company has recently benefited from significant resort assets that have come
from the Company’s real estate development activity including the Arrabelle
(including the Arrabelle hotel, spa, private club, skier services and commercial
space) and Vail Front Door (including the Lodge at Vail spa and suite rooms, new
skier service area and Vail Mountain Club) projects. Over the past
three calendar years of 2006 through 2008, the Company has expended close to
$300 million in resort capital expenditures, excluding the resort assets that
have come from our real estate activities.
In
recognition of the current economic climate, and given the significant
investments that the Company has made in resort assets over the past several
years, the Company expects to spend approximately $50 million to $60 million of
resort capital expenditures in calendar 2009, including $32 million to $37
million for “maintenance” capital expenditures that the Company believes are
necessary to maintain the high quality appearance and level of service at the
Company’s five ski resorts and throughout its hotels. Highlights of
the “maintenance” capital expenditures include: snow-cat
replacements; lift upgrades; snowmaking equipment; lodging furniture, fixture
& equipment and rental equipment fleet capital. This year’s
discretionary projects will include: a skier bridge at Keystone following the
completion of the new Keystone gondola, enabling guests easier access to ski
across the river to the new base of the gondola and River Run Village; the
build-out of a new restaurant at Peak 7 in Breckenridge in conjunction with the
Crystal Peak Lodge real estate project; completion of a brand new online
planning and booking platform, offering guests a much more seamless and useful
way to make reservations at the Company's resorts; and a new tubing lift and
tubing hill expansion at Heavenly to generate both winter and summer
business.
Commenting
on the calendar 2009 resort capital expenditure announcement, Katz said, “Our
level of planned capital expenditures for calendar 2009, while responding to our
current economic environment, still underscores our commitment to the overall
guest experience and includes investments to maintain our current high quality
standards.”
Season to Date Metrics
through March 1, 2009
The
Company is providing an update on the ski season metrics for the comparative
periods from the beginning of the ski season through Sunday, March 1, 2009, and
for the similar prior year period through Sunday, March 2, 2008, which includes
interim period data and is subject to fiscal third quarter end review and
adjustments.
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·
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Season
to date total skier visits for the Company’s five mountain resorts were
down 5.1% for the season to date period through March 1, 2009, compared to
the prior year season to date period ending March 2,
2008.
|
|
·
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Season
to date total lift ticket revenue through March 1, 2009, including an
allocated portion of season pass revenue for each applicable period, was
down 8.0% compared to the prior year season to date period ending March 2,
2008.
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·
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Additionally,
the Company is providing the following update on
bookings.
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Ø
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Bookings
through the Company’s central reservations and directly at the Company’s
owned and managed properties as of February 28, 2009, were down 13.9% in
room nights compared to the same prior year period, inclusive of actual
guest stays season to date.
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Commenting on
the ski season metrics season to date, Rob Katz said, “Our season to date
metrics through Sunday, March 1, 2009, compared to the prior year period ending
Sunday, March 2, 2008, reflect similar trends in the areas of total visits, lift
revenue and ski school revenue as we saw through our first interim period
through January 4, 2009, compared to January 6, 2008, and then again for the
period through January 31, 2009, compared to February 2, 2008, despite a
worsening economic environment. Our dining and retail/rental revenue
trends, while having worsened during January, have stabilized and are consistent
with the trends for the period through January 31, 2009, compared to February 2,
2008. Our bookings trends have improved to down 13.9% from down 23.3%
announced in early December and from down 14.9% at January 31,
2009.”
Outlook
Commenting
on the Company’s outlook for the remainder of fiscal 2009, Katz said, “2009 has
been a challenging time for the entire travel industry and our Company has
certainly been impacted with negative trends in our resort
business. However, the Company remains in a strong position from a
capital structure and balance sheet perspective which we believe will enable us
to navigate through the current environment, even if prolonged, while still
delivering on our mission of extraordinary resorts, exceptional
experiences. We do expect that for the remainder of the fiscal year
the trend of our results to the prior year will worsen from the results realized
in the second quarter. This is due primarily to the third quarter
being a historically larger revenue quarter than the second quarter with the
continuing negative trends having a greater impact. In addition, our
real estate brokerage joint venture, included in Mountain segment results as
mountain equity investment income, net, was positively impacted in the first
half of the current fiscal year by project related closings with the remainder
of the fiscal year anticipated to experience a significant decline in brokerage
fees due to virtually no project closings and much lower residential
activity. In the fourth quarter of the prior fiscal year, there were
also some one-time favorable expense credits in the areas of workers’
compensation, property tax and health insurance costs, which are not expected to
reoccur in the fourth quarter of fiscal 2009. In our Real Estate
segment, minimal second half closings are anticipated as the vast majority of
the units are already closed through the first half of the current year on
projects now completed.”
Commenting
on the fiscal 2009 guidance, Katz continued, “Since we provided our initial
fiscal 2009 guidance in late September 2008, the overall macro economic
environment has continued to deteriorate, causing us to disclose at the time of
our first quarter fiscal 2009 release that results could fall below the lower
end of our original guidance range given the advance bookings we were seeing at
that time. Based on results to date and our current visibility into
March and April, we believe our earlier concerns were well founded and now
estimate that fiscal 2009 results will fall below the lower end of our initial
guidance range issued before the start of the season. Incorporated in
our new guidance range is an increase to our Real Estate Reported EBITDA
guidance of $6 million at the low end of the range and $4 million at the high
end of the range, which was favorably impacted by an improved contribution from
our Crystal Peak Lodge development and other reduced
costs.”
The
following table reflects our current forecasted guidance range for the Company’s
fiscal year ending July 31, 2009, for Reported EBITDA (after stock-based
compensation expense) and reconciles such Reported EBITDA guidance to net income
guidance for fiscal 2009.
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Current
Fiscal 2009 Guidance
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|||||||
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(In
thousands)
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|||||||
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For
the Year Ending
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|||||||
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July
31, 2009
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|||||||
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Low
End
Range
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High
End Range
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||||||
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Mountain
Reported EBITDA (1)
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$
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152,000
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$
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162,000
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|||
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Lodging
Reported EBITDA (2)
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9,000
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15,000
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|||||
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Resort
Reported EBITDA (3)
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164,000
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174,000
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|||||
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Real
Estate Reported EBITDA (4)
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40,000
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44,000
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|||||
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Total
Reported EBITDA
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204,000
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218,000
|
|||||
|
Depreciation
and amortization
|
(108,000
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)
|
(106,000
|
)
|
|||
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Loss
on disposal of fixed assets, net
|
(1,100
|
)
|
(1,000
|
)
|
|||
|
Investment
income
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1,800
|
1,900
|
|||||
|
Interest
expense, net
|
(28,400
|
)
|
(26,900
|
)
|
|||
|
Minority
interest in income of consolidated subsidiaries, net
|
(800
|
)
|
(2,000
|
)
|
|||
|
Income
before provision for income taxes
|
67,500
|
84,000
|
|||||
|
Provision
for income taxes
|
(26,500
|
)
|
(33,000
|
)
|
|||
|
Net
income
|
$
|
41,000
|
$
|
51,000
|
|||
|
(1)
|
Mountain
Reported EBITDA includes approximately $4 million of stock-based
compensation.
|
|
(2)
|
Lodging
Reported EBITDA guidance includes approximately $2 million of stock-based
compensation and includes CME contribution of approximately $5.0
million.
|
|
(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. 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
Reported EBITDA range.
|
|
(4)
|
Real
Estate Reported EBITDA includes approximately $4 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 11:00 am ET, available at www.vailresorts.com in the
Investor Relations section.
Vail
Resorts, Inc., through its subsidiaries, is the leading mountain resort operator
in the United States. The Company's subsidiaries operate the mountain resort
properties of Vail, Beaver Creek, Breckenridge and Keystone mountain resorts in
Colorado, the Heavenly Ski Resort in the Lake Tahoe area of 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 and the Caribbean. Vail
Resorts Development Company is the real estate planning, development and
construction subsidiary of Vail Resorts, Inc. Vail Resorts, Inc. 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: sustained downturn in general economic conditions, including
adverse effects on the overall travel and leisure related industries;
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; our ability to hire and
retain a sufficient seasonal workforce; our ability to successfully initiate
and/or complete real estate development projects and achieve the anticipated
financial benefits from such projects; adverse changes in real estate markets;
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. 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. Investors are also directed to other risks
discussed in documents filed by the Company with the Securities and Exchange
Commission.
The
Company uses the terms “Reported EBITDA” and “Net Debt” when reporting financial
results in accordance with Securities and Exchange Commission 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 and for the Real Estate segment plus gain on sale of real
property. The Company defines Net Debt as long-term debt plus
long-term debt due within one year less cash and cash equivalents.
|
Vail
Resorts, Inc.
|
|||||||||
|
Consolidated
Condensed Statements of Operations
|
|||||||||
|
(In
thousands, except per share amounts)
|
|||||||||
|
(Unaudited)
|
|||||||||
|
Three
Months Ended
|
|||||||||
|
January
31,
|
|||||||||
|
2009
|
2008
|
||||||||
|
Net
revenue:
|
|||||||||
|
Mountain
|
$
|
258,489
|
$
|
279,722
|
|||||
|
Lodging
|
41,150
|
34,827
|
|||||||
|
Real
estate
|
89,157
|
45,471
|
|||||||
|
Total
net revenue
|
388,796
|
360,020
|
|||||||
|
Segment
operating expense:
|
|||||||||
|
Mountain
|
156,188
|
163,188
|
|||||||
|
Lodging
|
38,697
|
36,782
|
|||||||
|
Real
estate
|
59,508
|
44,409
|
|||||||
|
Total
segment operating expense
|
254,393
|
244,379
|
|||||||
|
Other
operating income (expense):
|
|||||||||
|
Depreciation
and amortization
|
(27,438
|
)
|
(23,621
|
)
|
|||||
|
Gain
on sale of real property
|
--
|
709
|
|||||||
|
Loss
on disposal of fixed assets, net
|
(422
|
)
|
(157
|
)
|
|||||
|
Income
from operations
|
106,543
|
92,572
|
|||||||
|
Mountain
equity investment income, net
|
1,161
|
926
|
|||||||
|
Investment
income
|
336
|
2,019
|
|||||||
|
Interest
expense, net
|
(7,295
|
)
|
(7,535
|
)
|
|||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(3,788
|
)
|
(4,910
|
)
|
|||||
|
Income
before provision for income taxes
|
96,957
|
83,072
|
|||||||
|
Provision
for income taxes
|
(36,412
|
)
|
(31,753
|
)
|
|||||
|
Net
income
|
$
|
60,545
|
$
|
51,319
|
|||||
|
Per share
amounts:
|
|||||||||
|
Basic
net income per share
|
$
|
1.66
|
$
|
1.32
|
|||||
|
Diluted
net income per share
|
$
|
1.65
|
$
|
1.31
|
|||||
|
Weighted
average shares outstanding:
|
|||||||||
|
Basic
|
36,570
|
38,796
|
|||||||
|
Diluted
|
36,663
|
39,145
|
|||||||
|
Other
Data:
|
|||||||||
|
Mountain
Reported EBITDA
|
$
|
103,462
|
$
|
117,460
|
|||||
|
Lodging
Reported EBITDA
|
$
|
2,453
|
$
|
(1,955
|
)
|
||||
|
Resort
Reported EBITDA
|
$
|
105,915
|
$
|
115,505
|
|||||
|
Real
Estate Reported EBITDA
|
$
|
29,649
|
$
|
1,771
|
|||||
|
Total
Reported EBITDA
|
$
|
135,564
|
$
|
117,276
|
|||||
|
Mountain
stock-based compensation
|
$
|
1,128
|
$
|
750
|
||
|
Lodging
stock-based compensation
|
$
|
472
|
$
|
339
|
||
|
Resort
stock-based compensation
|
$
|
1,600
|
$
|
1,089
|
||
|
Real
Estate stock-based compensation
|
$
|
1,074
|
$
|
837
|
||
|
Total
stock-based compensation
|
$
|
2,674
|
$
|
1,926
|
|
Vail
Resorts, Inc.
|
|||||||||
|
Consolidated
Condensed Statements of Operations
|
|||||||||
|
(In
thousands, except per share amounts)
|
|||||||||
|
(Unaudited)
|
|||||||||
|
Six
Months Ended
|
|||||||||
|
January
31,
|
|||||||||
|
2009
|
2008
|
||||||||
|
Net
revenue:
|
|||||||||
|
Mountain
|
$
|
299,267
|
$
|
322,258
|
|||||
|
Lodging
|
86,403
|
78,144
|
|||||||
|
Real
estate
|
155,907
|
57,504
|
|||||||
|
Total
net revenue
|
541,577
|
457,906
|
|||||||
|
Segment
operating expense:
|
|||||||||
|
Mountain
|
237,411
|
244,136
|
|||||||
|
Lodging
|
83,595
|
78,018
|
|||||||
|
Real
estate
|
110,885
|
51,322
|
|||||||
|
Total
segment operating expense
|
431,891
|
373,476
|
|||||||
|
Other
operating income (expense):
|
|||||||||
|
Depreciation
and amortization
|
(52,516
|
)
|
(44,383
|
)
|
|||||
|
Gain
on sale of real property
|
--
|
709
|
|||||||
|
Loss
on disposal of fixed assets, net
|
(602
|
)
|
(391
|
)
|
|||||
|
Income
from operations
|
56,568
|
40,365
|
|||||||
|
Mountain
equity investment income, net
|
2,176
|
2,895
|
|||||||
|
Investment
income
|
979
|
5,237
|
|||||||
|
Interest
expense, net
|
(15,242
|
)
|
(15,179
|
)
|
|||||
|
Contract
dispute credit, net
|
--
|
11,920
|
|||||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(1,437
|
)
|
(2,847
|
)
|
|||||
|
Income
before provision for income taxes
|
43,044
|
42,391
|
|||||||
|
Provision
for income taxes
|
(17,003
|
)
|
(15,685
|
)
|
|||||
|
Net
income
|
$
|
26,041
|
$
|
26,706
|
|||||
|
Per share
amounts:
|
|||||||||
|
Basic
net income per share
|
$
|
0.71
|
$
|
0.69
|
|||||
|
Diluted
net income per share
|
$
|
0.71
|
$
|
0.68
|
|||||
|
Weighted
average shares outstanding:
|
|||||||||
|
Basic
|
36,728
|
38,883
|
|||||||
|
Diluted
|
36,912
|
39,271
|
|||||||
|
Other
Data:
|
|||||||||
|
Mountain
Reported EBITDA
|
$
|
64,032
|
$
|
81,017
|
|||||
|
Lodging
Reported EBITDA
|
$
|
2,808
|
$
|
126
|
|||||
|
Resort
Reported EBITDA
|
$
|
66,840
|
$
|
81,143
|
|||||
|
Real
Estate Reported EBITDA
|
$
|
45,022
|
$
|
6,891
|
|||||
|
Total
Reported EBITDA
|
$
|
111,862
|
$
|
88,034
|
|||||
|
Mountain
stock-based compensation
|
$
|
2,321
|
$
|
1,894
|
||
|
Lodging
stock-based compensation
|
$
|
901
|
$
|
599
|
||
|
Resort
stock-based compensation
|
$
|
3,222
|
$
|
2,493
|
||
|
Real
Estate stock-based compensation
|
$
|
2,019
|
$
|
1,407
|
||
|
Total
stock-based compensation
|
$
|
5,241
|
$
|
3,900
|
|
Vail
Resorts, Inc.
|
|||||||||||||||||||||||||||||
|
Resort
Revenue by Business Line and Skier Visits
|
|||||||||||||||||||||||||||||
|
(In
thousands, except Effective Ticket Price)
|
|||||||||||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||||||||||
|
Three
Months Ended
|
Percentage
|
Six
Months Ended
|
Percentage
|
||||||||||||||||||||||||||
|
January
31,
|
Increase
|
January
31,
|
Increase
|
||||||||||||||||||||||||||
|
2009
|
2008
|
(Decrease)
|
2009
|
2008
|
(Decrease)
|
||||||||||||||||||||||||
|
Business
Line
|
|||||||||||||||||||||||||||||
|
Lift
tickets
|
$
|
127,158
|
$
|
133,998
|
(5.1
|
)
|
%
|
$
|
127,158
|
$
|
133,998
|
(5.1
|
)
|
%
|
|||||||||||||||
|
Ski
school
|
28,962
|
35,155
|
(17.6
|
)
|
%
|
28,962
|
35,155
|
(17.6
|
)
|
%
|
|||||||||||||||||||
|
Dining
|
20,281
|
22,895
|
(11.4
|
)
|
%
|
24,210
|
27,658
|
(12.5
|
)
|
%
|
|||||||||||||||||||
|
Retail/rental
|
59,238
|
66,771
|
(11.3
|
)
|
%
|
81,664
|
90,311
|
(9.6
|
)
|
%
|
|||||||||||||||||||
|
Other
|
22,850
|
20,903
|
9.3
|
%
|
37,273
|
35,136
|
6.1
|
%
|
|||||||||||||||||||||
|
Total Mountain
Revenue
|
$
|
258,489
|
$
|
279,722
|
(7.6
|
)
|
%
|
$
|
299,267
|
$
|
322,258
|
(7.1
|
)
|
%
|
|||||||||||||||
|
Total
Lodging Revenue
|
$
|
41,150
|
$
|
34,827
|
18.2
|
%
|
$
|
86,403
|
$
|
78,144
|
10.6
|
%
|
|||||||||||||||||
|
Total
Resort Revenue
|
$
|
299,639
|
$
|
314,549
|
(4.7
|
)
|
%
|
$
|
385,670
|
$
|
400,402
|
(3.7
|
)
|
%
|
|||||||||||||||
|
Three
Months Ended
|
Percentage
|
Six
Months Ended
|
Percentage
|
||||||||||||||||||||||||||
|
January
31,
|
Increase
|
January
31,
|
Increase
|
||||||||||||||||||||||||||
|
2009
|
2008
|
(Decrease)
|
2009
|
2008
|
(Decrease)
|
||||||||||||||||||||||||
|
Skier
Visits
|
|||||||||||||||||||||||||||||
|
Vail
|
741
|
680
|
9.0
|
%
|
741
|
680
|
9.0
|
%
|
|||||||||||||||||||||
|
Breckenridge
|
730
|
743
|
(1.7
|
)
|
%
|
730
|
743
|
(1.7
|
)
|
%
|
|||||||||||||||||||
|
Keystone
|
515
|
571
|
(9.8
|
)
|
%
|
515
|
571
|
(9.8
|
)
|
%
|
|||||||||||||||||||
|
Heavenly
|
361
|
403
|
(10.4
|
)
|
%
|
361
|
403
|
(10.4
|
)
|
%
|
|||||||||||||||||||
|
Beaver
Creek
|
431
|
402
|
7.2
|
%
|
431
|
402
|
7.2
|
%
|
|||||||||||||||||||||
|
Total
Skier Visits
|
2,778
|
2,799
|
(0.8
|
)
|
%
|
2,778
|
2,799
|
(0.8
|
)
|
%
|
|||||||||||||||||||
|
Effective
Ticket Price
|
$
|
45.77
|
$
|
47.87
|
(4.4
|
)
|
%
|
$
|
45.77
|
$
|
47.87
|
(4.4
|
)
|
%
|
|||||||||||||||
|
Key
Balance Sheet Data
|
|||||||
|
(In
thousands)
|
|||||||
|
(Unaudited)
|
|||||||
|
As
of January 31,
|
|||||||
|
2009
|
2008
|
||||||
|
Real
estate held for sale and investment
|
$
|
247,329
|
$
|
381,379
|
|||
|
Total
stockholders' equity
|
$
|
743,882
|
$
|
720,884
|
|||
|
Long-term
debt
|
$
|
491,777
|
$
|
554,411
|
|||
|
Long-term
debt due within one year
|
304
|
100,710
|
|||||
|
Total
debt
|
492,081
|
655,121
|
|||||
|
Less:
cash and cash equivalents
|
139,172
|
274,433
|
|||||
|
Net
debt
|
$
|
352,909
|
$
|
380,688
|
|||
Reconciliation
of Non-GAAP Financial Measures
Resort,
Mountain and Lodging, and Real Estate Reported EBITDA have been presented herein
as measures of the Company's financial operating
performance. Reported EBITDA and Net Debt 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 and Net Debt 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, net change in cash and cash
equivalents or other financial statement data. 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 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 as it is an indicator of the Company’s ability to obtain additional
capital resources for its future cash needs.
Presented
below is a reconciliation of Total Reported EBITDA to net income for the Company
calculated in accordance with GAAP for the three and six months ended January
31, 2009 and 2008.
|
(In
thousands)
|
||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||||
|
January
31,
|
January
31,
|
|||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||||
|
Mountain
Reported EBITDA
|
$
|
103,462
|
$
|
117,460
|
$
|
64,032
|
$
|
81,017
|
||||||||||
|
Lodging
Reported EBITDA
|
2,453
|
(1,955
|
)
|
2,808
|
126
|
|||||||||||||
|
Resort
Reported EBITDA*
|
105,915
|
115,505
|
66,840
|
81,143
|
||||||||||||||
|
Real
Estate Reported EBITDA
|
29,649
|
1,771
|
45,022
|
6,891
|
||||||||||||||
|
Total
Reported EBITDA
|
135,564
|
117,276
|
111,862
|
88,034
|
||||||||||||||
|
Depreciation
and amortization
|
(27,438
|
)
|
(23,621
|
)
|
(52,516
|
)
|
(44,383
|
)
|
||||||||||
|
Loss
on disposal of fixed assets, net
|
(422
|
)
|
(157
|
)
|
(602
|
)
|
(391
|
)
|
||||||||||
|
Investment
income
|
336
|
2,019
|
979
|
5,237
|
||||||||||||||
|
Interest
expense, net
|
(7,295
|
)
|
(7,535
|
)
|
(15,242
|
)
|
(15,179
|
)
|
||||||||||
|
Contract
dispute credit, net
|
--
|
--
|
--
|
11,920
|
||||||||||||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(3,788)
|
(4,910
|
)
|
(1,437
|
)
|
(2,847
|
)
|
|||||||||||
|
Income
before provision for income taxes
|
96,957
|
83,072
|
43,044
|
42,391
|
||||||||||||||
|
Provision
for income taxes
|
(36,412
|
)
|
(31,753
|
)
|
(17,003
|
)
|
(15,685
|
)
|
||||||||||
|
Net
income
|
$
|
60,545
|
$
|
51,319
|
$
|
26,041
|
$
|
26,706
|
||||||||||
|
*
Resort represents the sum of Mountain and
Lodging
|
||||||||||||||||||
Presented
below is a reconciliation of Total Reported EBITDA to net income for the Company
calculated in accordance with GAAP for the twelve months ended January 31,
2009. Also presented is a reconciliation of Net Debt to Long-term
Debt and the calculation of Net Debt to Total Reported EBITDA for the twelve
months ended January 31, 2009.
|
(In
thousands)
|
||||||
|
Twelve
|
||||||
|
Months
Ended
|
||||||
|
January
31,
|
||||||
|
2009
|
||||||
|
Mountain
Reported EBITDA
|
$
|
203,576
|
||||
|
Lodging
Reported EBITDA
|
12,907
|
|||||
|
Resort
Reported EBITDA*
|
216,483
|
|||||
|
Real
Estate Reported EBITDA
|
84,068
|
|||||
|
Total
Reported EBITDA
|
300,551
|
|||||
|
Depreciation
and amortization
|
(101,927
|
)
|
||||
|
Loss
on disposal of fixed assets, net
|
(1,745
|
)
|
||||
|
Investment
income
|
4,027
|
|||||
|
Interest
expense, net
|
(30,730
|
)
|
||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(3,510
|
)
|
||||
|
Income
before provision for income taxes
|
166,666
|
|||||
|
Provision
for income taxes
|
(64,404
|
)
|
||||
|
Net
income
|
$
|
102,262
|
||||
|
*
Resort represents the sum of Mountain and Lodging
|
||||||
|
(In
thousands)
|
||||||
|
As
of
|
||||||
|
January
31,
|
||||||
|
2009
|
||||||
|
Long-term
debt
|
$
|
491,777
|
||||
|
Long-term
debt due within one year
|
304
|
|||||
|
Total
debt
|
492,081
|
|||||
|
Less:
cash and cash equivalents
|
139,172
|
|||||
|
Net
debt
|
$
|
352,909
|
||||
|
Net
debt to Total Reported EBITDA
|
1.2x
|
|||||