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): October 5, 2006
Vail
Resorts, Inc.
(Exact
Name of Registrant as Specified in Charter)
|
Delaware
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1-9614
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51-0291762
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||
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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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||
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390
Interlocken Crescent, Suite 1000,
Broomfield,
Colorado
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80021
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|||
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(Address
of Principal Executive Offices)
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(Zip
Code)
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|||
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Registrant's
telephone number, including area code:
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(303)
404-1800
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137
Benchmark Road, Avon, Colorado, 81620
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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
October 5, 2006, Vail Resorts, Inc. issued a press release announcing its
results for the three months and the year ended July 31, 2006. 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.
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|
Vail
Resorts, Inc.
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|
|
Date:
October 5, 2006
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By:
|
/s/
Jeffrey W. Jones
|
|
|
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Jeffrey
W. Jones
|
|
|
|
Senior
Executive Vice President and
Chief
Financial Officer
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EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
99.1
|
Press
Release, dated October 5, 2006, announcing fiscal fourth quarter and
fiscal 2006 year-end results.
|
Exhibit
99.1
VAIL
RESORTS, INC.
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 FISCAL FOURTH QUARTER AND FISCAL 2006 YEAR-END
RESULTS
| · |
Record
fiscal year net income of $45.8 million, 97.8% higher than last fiscal
year
|
| · |
Record
fiscal year Resort Reported EBITDA (excluding stock-based compensation)
of
$199.3 million, 18.8% higher than last fiscal year’s record
performance
|
| · |
Record
fiscal year Resort Revenue of $776.2 million, 5.3% higher than last
fiscal
year
|
BROOMFIELD,
Colo. - October 5, 2006 - Vail Resorts, Inc. (NYSE: MTN) today announced
financial results for the fiscal year ended July 31, 2006, including financial
results for the fiscal fourth quarter.
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 revenues less segment operating expenses plus
or
minus segment equity investment income or loss.
Effective
August 1, 2005, the Company adopted the fair value recognition provisions
of
SFAS 123R, Share-Based Payment, using the modified prospective method. As
a
result, the Company recorded total pre-tax stock-based compensation expense
of
$1.8 million in the three months ended July 31, 2006, as compared to $0.1
million under the provisions of APB 25, Accounting for Stock Issued to
Employees, for the three months ended July 31, 2005. The Company recorded
total
pre-tax stock-based compensation expense of $6.5 million in the twelve months
ended July 31, 2006, as compared to $0.4 million for the twelve months ended
July 31, 2005.
FISCAL
YEAR ENDED JULY 31, 2006
Mountain
revenue for the fiscal year ended July 31, 2006 was $620.4 million, a 14.7%
increase from $540.9 million for the 2005 fiscal year. Mountain expense
increased $51.2 million, or 13.1%, to $443.1 million. Excluding stock-based
compensation expense, Mountain expense increased $47.8 million, or 12.2%,
to
$439.4 million.
Lodging
revenue for the 2006 fiscal year decreased $40.5 million, or 20.6%, to $155.8
million compared to the 2005 fiscal year. Lodging expense decreased $34.8
million, or 19.6%, to $142.7 million. Excluding stock-based compensation
expense, Lodging expense decreased $36.0 million, or 20.3%, to $141.4 million.
In fiscal 2005, the Company sold the assets constituting the Vail Marriott
Mountain Resort & Spa (“Vail Marriott”) and The Lodge at Rancho Mirage
(“Rancho Mirage”). Additionally, in January 2006, the Company sold the assets
constituting the Snake River Lodge & Spa (“SRL&S”). For the fiscal year
ended July 31, 2005, the Lodging segment includes revenue of $51.6 million
and
operating expense of $44.8 million relating to these entities. For the fiscal
year ended July 31, 2006, Lodging revenue includes revenue of $5.2 million
and
operating expense of $4.8 million related to SRL&S prior to its sale in
January 2006. In addition, the Company retained management contracts for
all
three properties. Consequently, Lodging revenue includes incremental management
fee revenue of $1.6 million and $60,000 for these properties for the fiscal
years ended July 31, 2006 and 2005, respectively. Excluding the impact of
sales
of hotels and stock compensation expense, for the fiscal year ended July
31,
2006, Lodging revenue (including the incremental management fees) increased
$5.9
million, or 4.1%, compared to the prior year period while expense increased
$4.0
million, or 3.0%, compared to the prior year period.
Resort
revenue, the combination of Mountain and Lodging revenue, for the fiscal
year
rose $39.0 million, or 5.3%, to $776.2 million, and Resort expense increased
2.9% to $585.8 million, up $16.5 million. Excluding stock-based compensation
expense, Resort expense increased $11.8 million, or 2.1%, to $580.8 million.
Real
Estate revenue for the 2006 fiscal year decreased $10.2 million, or 14.0%,
to
$62.6 million, and Real Estate expense decreased $1.6 million, or 2.7%, to
$56.7
million. Excluding stock-based compensation expense, Real Estate expense
decreased $3.0 million, or 5.1%, to $55.2 million for fiscal year
2006.
Income
from operations for the 2006 fiscal year improved $17.0 million, or 19.3%,
to
$105.3 million compared to $88.3 million for the 2005 fiscal year.
Reported
EBITDA for the Mountain segment improved $29.9 million, or 19.8%, to $181.2
million compared to $151.3 million for the 2005 fiscal year. Reported EBITDA
excluding stock-based compensation for the Mountain segment increased $33.4
million, or 22.0%, to $184.9 million compared to $151.5 million for fiscal
2005.
Reported
EBITDA for the Lodging segment decreased from $16.2 million in fiscal 2005
to
$13.1 million in the current year, a decline of 19.1%. Reported EBITDA
excluding stock-based compensation for the Lodging segment decreased $1.8
million, or 11.3%, to $14.4 million compared to $16.3 million for the same
period last year. For the fiscal year ended July 31, 2005, Lodging Reported
EBITDA includes revenue of $51.6 million and operating expense of $44.8 million
related to the Vail Marriott, Rancho Mirage and SRL&S, as well as equity
investment loss of $2.7 million in fiscal 2005 related to the Company’s 49%
interest in the joint venture that owned The Ritz-Carlton, Bachelor Gulch,
prior
to its sale in December 2005. For the fiscal year ended July 31, 2006, Lodging
Reported EBITDA includes revenue of $5.2 million and operating expense of
$4.8
million related to the SRL&S prior to its sale in January 2006. Lodging
Reported EBITDA also includes incremental management fee revenue of $1.6
million
related to management contracts for the Vail Marriott, Rancho Mirage and
SRL&S for the fiscal year ended July 31, 2006.
Resort
Reported EBITDA rose $26.8 million to $194.3 million, a 16.0% improvement
over
last year. Resort Reported EBITDA excluding stock-based compensation was
$199.3
million, a $31.5 million, or 18.8%, improvement over the $167.8 million reported
in the last fiscal year.
Real
Estate Reported EBITDA for the 2006 fiscal year decreased $7.7 million to
$6.7
million as compared to $14.4 million in the last fiscal year. Real Estate
Reported EBITDA excluding stock-based compensation for the 2006 fiscal year
decreased $6.3 million to $8.2 million as compared to $14.5 million for the
2005
fiscal year.
The
Company reported net income for fiscal 2006 of $45.8 million, or $1.19 per
diluted share, compared to net income of $23.1 million, or $0.64 per diluted
share, for the 2005 fiscal year. Excluding stock-based compensation required
to
be recorded pursuant to the adoption of SFAS 123R in fiscal 2006, the Company’s
net income for fiscal 2006 would have been $49.8 million, or $1.29 per diluted
share compared to $23.4 million excluding stock-based compensation recorded
pursuant to APB 25, or $0.64 per diluted share, for the last fiscal
year.
FOURTH
QUARTER PERFORMANCE
Mountain
revenue for the fourth quarter of fiscal 2006 was $39.2 million, a 10.7%
increase from $35.4 million for the comparable period last year. Mountain
expense increased $8.1 million, or 12.8%, to $70.7 million. Excluding
stock-based compensation expense, Mountain expense increased $7.1 million,
or
11.3%, to $69.7 million.
Lodging
revenue for the quarter decreased by $8.7 million, or 17.0%, to $42.5 million.
Lodging expense decreased $8.5 million, or 17.0%, to $41.6 million. Excluding
stock-based compensation expense, Lodging expense decreased $8.9 million,
or
17.7%, to $41.3 million. For the fourth quarter of fiscal 2005, the Lodging
segment included revenue of $9.1 million and operating expense of $9.9 million
related to the Vail Marriott, Rancho Mirage and SRL&S. Lodging revenue also
includes incremental management fee revenue of $0.3 million related to retained
management contracts for these properties for the fourth quarter of fiscal
2006.
Excluding the impact of the sales of hotels and stock compensation expense,
Lodging revenue (including the incremental management fees) increased $0.4
million, or 0.9%, in the fourth quarter as compared to the prior year’s fourth
quarter while expenses increased $1.0 million, or 2.4% in the fourth quarter
as
compared to the prior year’s fourth quarter.
Resort
revenue decreased $4.9 million, or 5.7%, to $81.6 million. Resort expense
decreased 0.4% to $112.4 million, down $0.5 million. Excluding stock-based
compensation expense, Resort expense decreased $1.8 million, or 1.6%, to
$111.0
million.
Real
Estate revenue for the quarter increased 26.7% to $42.4 million, and Real
Estate
expense increased 29.8% to $32.9 million. Excluding stock-based compensation
expense, Real Estate expense increased $7.1 million, or 28.1%, to $32.4 million
for the quarter.
Loss
from
operations for the quarter increased $5.3 million, or 13.4%, to a loss of
$45.0
million compared to a loss of $39.7 million for the same period last
year.
Reported
EBITDA for the Mountain segment decreased $3.8 million, or 13.9%, to a loss
of
$30.8 million compared to a loss of $27.0 million for the comparable period
last
year. Reported EBITDA excluding stock-based compensation for the Mountain
segment decreased $2.8 million, or 10.3%, to a loss of $29.7 million compared
to
a loss of $27.0 million for the prior year’s fourth quarter.
Reported
EBITDA for the Lodging segment decreased $0.2 million, or 17.0%, from $1.0
million in the fourth quarter of the last fiscal year to $0.8 million in
the
current fiscal year fourth quarter. Reported EBITDA excluding stock-based
compensation for the Lodging segment increased $0.2 million, or 15.6%, to
$1.2
million compared to $1.0 million for the same period last year. As mentioned
previously, the results for the fourth quarter of fiscal 2006 do not reflect
the
operations of the sold assets constituting the Vail Marriott, Rancho Mirage
and
SRL&S. For the fourth quarter of fiscal 2005, Lodging Reported EBITDA
included revenue of $9.1 million and operating expense of $9.9 million relating
to the Vail Marriott, Rancho Mirage and SRL&S. Lodging Reported EBITDA also
includes incremental management fee revenue of $0.3 million related to retained
management contracts for the Vail Marriott, Rancho Mirage and SRL&S for the
fourth quarter of fiscal 2006.
Fourth
quarter Resort Reported EBITDA decreased $3.9 million to a loss of $29.9
million, a 15.2% decline over the comparable period last year. Resort Reported
EBITDA excluding stock-based compensation decreased $2.6 million, or 10.1%,
to a
loss of $28.5 million, as compared to a loss of $25.9 million reported in
the
fourth fiscal quarter of last year.
Real
Estate Reported EBITDA for the quarter increased $2.1 million, or 25.7%,
to
$10.2 million compared to $8.1 million in the comparable period last year.
Fourth quarter Real Estate Reported EBITDA excluding stock-based compensation
increased $2.5 million, or 30.8%, to $10.7 million from $8.2 million in the
comparable period last year.
The
Company reported a fourth quarter net loss of $31.3 million, or a loss of
$0.80
per diluted share, compared to a net loss of $36.4 million, or a loss of
$1.00
per diluted share, for the same period last year, an improvement of 14.2%.
Excluding stock-based compensation expense required to be recorded pursuant
to
the adoption of SFAS 123R in fiscal 2006, the Company’s net income for the
fourth quarter of fiscal 2006 would have been a loss of $30.1 million, or
a loss
of $0.78 per diluted share compared to a loss of $36.4 million excluding
stock-based compensation recorded pursuant to APB 25, or a loss of $1.00
per
diluted share, for the same period last year, an improvement of
17.2%.
Robert
Katz, Chief Executive Officer, commented “I am extremely pleased with our
results for fiscal 2006. In the fourth quarter our Mountain, Lodging and
Real
Estate segments performed at the upper end of our expectations. For the fiscal
year, we had record Resort Reported EBITDA results, which were realized
primarily due to an approximate 15% increase in Mountain revenues, a significant
portion of which flowed through to our bottom line. These revenue increases
were
caused by a combination of a 5.9% increase in skier visitation and a 6.4%
increase in our effective ticket price, which included a 12.3% increase in
season pass revenues. Additionally, our ancillary businesses including ski
school, dining and retail/rental, also had significant revenue increases.
While
our Lodging revenues and Reported EBITDA were down due to the strategic sale
of
several hotels, we were pleased with the results from our owned hotels on
a same
store basis, which experienced a 6.1% increase in occupancy, a 3.9% increase
in
our average daily rate and a 10.4% increase in revenue per available room.
As a
result of all of these very positive trends, our net income nearly doubled,
improving by 97.8% over our record results in the prior fiscal year, buoyed
by
an increase of 16% in Resort Reported EBITDA, or 18.8% excluding stock
compensation expense. Clearly a portion of our strong performance was due
to
good early season snowfall in Colorado. However, our performance in fiscal
2006
is the third consecutive record performance in Resort EBITDA for our Company.
We
believe these results are primarily due to the many improvements we have
made to
our resorts and the continuous focus by our employees on enhancing the guest
experience. Also, in the fourth quarter, we commenced repurchasing shares
under
the previously announced share repurchase program, resulting in the repurchase
of 315,100 shares at an average price of $34.37 for a total amount of $10.8
million.”
“While
we
certainly have enjoyed our results of the past year, we have been busy in
our
efforts to continue our success in fiscal 2007. We are well along on our
sales
of season passes, which last year comprised 23% of our total lift revenues.
To
date, season pass sales have increased 22% in units and 35% in sales dollars
over the same period last year. Additionally, we have launched our marketing
efforts for the 2006/2007 ski season and have been seeing a significantly
higher
level of activity to this point, with bookings through our central reservations
systems for our five mountain resorts up 24% in room nights and 32% in sales
dollars. While this is clearly very strong pre-season performance, we believe
that much of this strength represents earlier purchases, rather than incremental
purchases.”
Katz
added, “We have been making many capital improvements over the summer, including
installing the new gondola at Breckenridge that will connect one of the best
ski
towns in the country to Peaks 7 and 8 of the second most visited ski resort
in
the United States. We recently received approval from the USDA Forest Service
to
expand our terrain at Keystone, enabling us to offer an additional 278 skiable
acres of advanced and expert terrain this upcoming ski season. We are completing
a major renovation at the Village of Breckenridge hotel, and have otherwise
been
completing many other capital investments at all of our resorts, including
improvements to our on mountain dining and snowmaking capabilities. On the
real
estate front, we continue to make progress on our construction efforts for
the
Arrabelle at Vail Square, which remains on track for completion in the fall
of
2007. We began closing on one of the first major developments of Vail’s New
Dawn, Gore Creek Place, with six townhomes closed in fiscal 2006 and the
remaining ten townhomes to be closed in fiscal 2007. We also now have contracts
on 10 of the 13 Lodge at Vail chalets, at an average sales price of nearly
$2,400 per square foot, and construction is in full swing. We are still
anticipating a launch for our Peaks of Breckenridge development this ski
season,
and we anticipate making significant progress on our development plans for
West
Lionshead, including possibly launching our first project in the upcoming
year.”
Katz
concluded, ”We would like to take this opportunity to announce full year
guidance for fiscal 2007. Given our very strong performance in fiscal 2006,
we
are anticipating more modest growth in fiscal 2007. Based on our current
estimates, we expect full year Resort Reported EBITDA, the combination of
our
Mountain and Lodging segments, to range from $200 million to $210 million,
and
Resort Reported EBITDA excluding stock based compensation expense to range
from
$207 million to $217 million. The Resort guidance includes a range for Mountain
Reported EBITDA of $187 million to $197 million, and Mountain Reported EBITDA
excluding stock based compensation expense of $192 million to $202 million,
while we expect Lodging Reported EBITDA to range from $10 million to $17
million
and Lodging Reported EBITDA excluding stock based compensation expense to
range
from $12 million to $19 million. Fiscal 2007 for our Real Estate segment
will be
a construction year, with the major projects forecast to close in fiscal
2008
and beyond. As a result, our guidance is for Real Estate Reported EBITDA
to
range from $1 million to $5 million and Real Estate Reported EBITDA excluding
stock based compensation expense to range from $3 million to $7 million.
Finally, based on our current estimates, we expect net income to range from
$48
million to $57 million and net income excluding stock based compensation
expense
to range from $53 million to $63 million.”
CONFERENCE
CALL
For
further discussion of the contents of this press release, please listen to
our
live webcast today at 11:00 am EST, 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.
ANNUAL
REPORT ON FORM 10-K
The
Company today will file its Annual Report on Form 10-K for the fiscal year
ended
July 31, 2006 with the Securities and Exchange Commission which report will
be
made available on the Company’s website in the SEC Filings section under the
Investor Relations tab at www.vailresorts.com. Additionally, stockholders
may
receive a hard copy of the Annual Report on Form 10-K, which includes the
Company’s audited financial statements, free of charge upon request. Written
requests should be sent to the attention of the Corporate Secretary at Vail
Resorts Inc., 390 Interlocken Crescent, Suite 1000, Broomfield, Colorado
80021.
Vail
Resorts, Inc. is the premier mountain resort operator in North America. The
Company’s subsidiaries operate the mountain resorts of Vail, Beaver Creek,
Breckenridge and Keystone in Colorado, Heavenly Resort 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. The Vail Resorts corporate website is
www.vailresorts.com and the consumer websites are www.snow.com and
www.rockresorts.com. Vail Resorts, Inc. is a publicly held company traded
on the
New York Stock Exchange (NYSE: MTN).
***
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
|
||||||
|
July
31,
|
||||||
|
2006
|
2005
|
|||||
|
Net
revenue:
|
||||||
|
Mountain
|
$
|
39,163
|
$
|
35,371
|
||
|
Lodging
|
42,486
|
51,202
|
||||
|
Real
estate
|
42,378
|
33,452
|
||||
|
Total
net revenue
|
124,027
|
120,025
|
||||
|
Segment
operating expense:
|
||||||
|
Mountain
|
70,729
|
62,679
|
||||
|
Lodging
|
41,644
|
50,187
|
||||
|
Real
estate
|
32,853
|
25,315
|
||||
|
Total
segment operating expense
|
145,226
|
138,181
|
||||
|
Other
operating expense:
|
||||||
|
Depreciation
and amortization
|
(22,802
|
)
|
(20,580
|
)
|
||
|
Relocation
and separation charges
|
(1,317
|
)
|
--
|
|||
|
Asset
impairment charges
|
(75
|
)
|
(977
|
)
|
||
|
Mold
remediation credit
|
559
|
--
|
||||
|
Loss
on disposal of fixed assets, net
|
(200
|
)
|
(9
|
)
|
||
|
Loss
from operations
|
(45,034
|
)
|
(39,722
|
)
|
||
|
Mountain
equity investment income, net
|
792
|
300
|
||||
|
Real
estate equity investment income, net
|
711
|
5
|
||||
|
Investment
income, net
|
2,605
|
623
|
||||
|
Interest
expense, net
|
(8,690
|
)
|
(9,565
|
)
|
||
|
Loss
on sale of businesses, net
|
--
|
(13,043
|
)
|
|||
|
Contract
dispute charges
|
(2,467
|
)
|
--
|
|||
|
(Loss)
gain on put options, net
|
(1,133
|
)
|
417
|
|||
|
Minority
interest in loss of consolidated subsidiaries, net
|
1,966
|
1,742
|
||||
|
Loss
before benefit for income taxes
|
(51,250
|
)
|
(59,243
|
)
|
||
|
Benefit
for income taxes
|
19,987
|
22,808
|
||||
|
Net
loss
|
$
|
(31,263
|
)
|
$
|
(36,435
|
)
|
|
Per
share amounts:
|
||||||
|
Basic
net loss per share
|
$
|
(0.80
|
)
|
$
|
(1.00
|
)
|
|
Diluted
net loss per share
|
$
|
(0.80
|
)
|
$
|
(1.00
|
)
|
|
Other
Data:
|
||||||
|
Mountain
Reported EBITDA
|
$
|
(30,774
|
)
|
$
|
(27,008
|
)
|
|
Mountain
Reported EBITDA excluding stock-based compensation
|
$
|
(29,742
|
)
|
$
|
(26,958
|
)
|
|
Lodging
Reported EBITDA
|
$
|
842
|
$
|
1,015
|
||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
$
|
1,193
|
$
|
1,032
|
||
|
Resort
Reported EBITDA
|
$
|
(29,932
|
)
|
$
|
(25,993
|
)
|
|
Resort
Reported EBITDA excluding stock-based compensation
|
$
|
(28,549
|
)
|
$
|
(25,926
|
)
|
|
Real
Estate Reported EBITDA
|
$
|
10,236
|
$
|
8,142
|
||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
$
|
10,677
|
$
|
8,160
|
||
|
Vail
Resorts, Inc.
|
||||||
|
Consolidated
Condensed Statements of Operations
|
||||||
|
(In
thousands, except per share amounts)
|
||||||
|
(Unaudited)
|
||||||
|
Twelve
Months Ended
|
||||||
|
July
31,
|
||||||
|
2006
|
2005
|
|||||
|
Net
revenue:
|
||||||
|
Mountain
|
$
|
620,441
|
$
|
540,855
|
||
|
Lodging
|
155,807
|
196,351
|
||||
|
Real
estate
|
62,604
|
72,781
|
||||
|
Total
net revenue
|
838,852
|
809,987
|
||||
|
Segment
operating expense:
|
||||||
|
Mountain
|
443,116
|
391,889
|
||||
|
Lodging
|
142,693
|
177,469
|
||||
|
Real
estate
|
56,676
|
58,254
|
||||
|
Total
segment operating expense
|
642,485
|
627,612
|
||||
|
Other
operating (expense) income:
|
||||||
|
Depreciation
and amortization
|
(86,098
|
)
|
(89,968
|
)
|
||
|
Relocation
and separation charges
|
(5,096
|
)
|
--
|
|||
|
Asset
impairment charges
|
(210
|
)
|
(2,550
|
)
|
||
|
Mold
remediation credit
|
1,411
|
--
|
||||
|
Loss
on disposal of fixed assets, net
|
(1,035
|
)
|
(1,528
|
)
|
||
|
Income
from operations
|
105,339
|
88,329
|
||||
|
Mountain
equity investment income, net
|
3,876
|
2,303
|
||||
|
Lodging
equity investment loss, net
|
--
|
(2,679
|
)
|
|||
|
Real
estate equity investment income (loss), net
|
791
|
(102
|
)
|
|||
|
Investment
income, net
|
7,995
|
2,066
|
||||
|
Interest
expense, net
|
(36,478
|
)
|
(40,298
|
)
|
||
|
Loss
on extinguishment of debt
|
--
|
(612
|
)
|
|||
|
Gain
(loss) on sale of businesses, net
|
4,625
|
(7,353
|
)
|
|||
|
Contract
dispute charges
|
(3,282
|
)
|
--
|
|||
|
(Loss)
gain on put options, net
|
(1,212
|
)
|
1,158
|
|||
|
Other
income, net
|
50
|
50
|
||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(6,694
|
)
|
(5,239
|
)
|
||
|
Income
before provision for income taxes
|
75,010
|
37,623
|
||||
|
Provision
for income taxes
|
(29,254
|
)
|
(14,485
|
)
|
||
|
Net
income
|
$
|
45,756
|
$
|
23,138
|
||
|
Per
share amounts:
|
||||||
|
Basic
net income per share
|
$
|
1.21
|
$
|
0.65
|
||
|
Diluted
net income per share
|
$
|
1.19
|
$
|
0.64
|
||
|
Other
Data:
|
||||||
|
Mountain
Reported EBITDA
|
$
|
181,201
|
$
|
151,269
|
||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
$
|
184,886
|
$
|
151,523
|
||
|
Lodging
Reported EBITDA
|
$
|
13,114
|
$
|
16,203
|
||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
$
|
14,448
|
$
|
16,291
|
||
|
Resort
Reported EBITDA
|
$
|
194,315
|
$
|
167,472
|
||
|
Resort
Reported EBITDA excluding stock-based compensation
|
$
|
199,334
|
$
|
167,814
|
||
|
Real
Estate Reported EBITDA
|
$
|
6,719
|
$
|
14,425
|
||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
$
|
8,223
|
$
|
14,520
|
||
|
Vail
Resorts, Inc.
|
|||||||||||||||||||||
|
Resort
Revenue by Business Line and Skier Visits
|
|||||||||||||||||||||
|
(In
thousands)
|
|||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||
|
Three
Months Ended
|
Twelve
Months Ended
|
||||||||||||||||||||
|
July
31,
|
July
31,
|
||||||||||||||||||||
|
2006
|
2005
|
%
Change
|
2006
|
2005
|
%
Change
|
||||||||||||||||
|
Business
Line
|
|||||||||||||||||||||
|
Lift
tickets
|
$
|
--
|
$
|
145
|
(100.0
|
)
|
%
|
$
|
263,036
|
$
|
233,458
|
12.7
|
%
|
||||||||
|
Ski
school
|
--
|
73
|
(100.0
|
)
|
%
|
72,628
|
63,915
|
13.6
|
%
|
||||||||||||
|
Dining
|
3,912
|
4,335
|
(9.8
|
)
|
%
|
56,657
|
53,688
|
5.5
|
%
|
||||||||||||
|
Retail/rental
|
17,641
|
14,402
|
22.5
|
%
|
149,350
|
120,149
|
24.3
|
%
|
|||||||||||||
|
Other
|
17,610
|
16,416
|
7.3
|
%
|
78,770
|
69,645
|
13.1
|
%
|
|||||||||||||
|
Total
Mountain Revenue
|
$
|
39,163
|
$
|
35,371
|
10.7
|
%
|
$
|
620,441
|
$
|
540,855
|
14.7
|
%
|
|||||||||
|
Total
Lodging Revenue
|
$
|
42,486
|
$
|
51,202
|
(17.0
|
)
|
%
|
155,807
|
$
|
196,351
|
(20.6
|
)
|
%
|
||||||||
|
Total
Resort Revenue
|
$
|
81,649
|
$
|
86,573
|
(5.7
|
)
|
%
|
$
|
776,248
|
$
|
737,206
|
5.3
|
%
|
||||||||
|
Three
Months Ended
|
Twelve
Months Ended
|
||||||||||||||||||||
|
July
31,
|
July
31,
|
||||||||||||||||||||
|
2006
|
2005
|
%
Change
|
2006
|
2005
|
%
Change
|
||||||||||||||||
|
Skier
Visits
|
|||||||||||||||||||||
|
Vail
|
--
|
--
|
0.0
|
%
|
1,676
|
1,568
|
6.9
|
%
|
|||||||||||||
|
Breckenridge
|
--
|
--
|
0.0
|
%
|
1,620
|
1,471
|
10.1
|
%
|
|||||||||||||
|
Heavenly
|
--
|
7
|
(100.0
|
)
|
%
|
1,023
|
1,065
|
(3.9
|
)
|
%
|
|||||||||||
|
Keystone
|
--
|
--
|
0.0
|
%
|
1,094
|
1,021
|
7.1
|
%
|
|||||||||||||
|
Beaver
Creek
|
--
|
--
|
0.0
|
%
|
875
|
815
|
7.4
|
%
|
|||||||||||||
|
Total
Skier Visits
|
--
|
7
|
(100.0
|
)
|
%
|
6,288
|
5,940
|
5.9
|
%
|
||||||||||||
|
Note:
|
Certain
reclassifications have been made within Mountain revenue for the
three and
twelve months ended July 31, 2005 to conform to the current period
presentation.
|
||||||||||||||||||||
|
July
31,
|
||||||
|
(In
thousands)
|
2006
|
2005
|
||||
|
Key
Balance Sheet Data:
|
||||||
|
Real
estate held for sale and investment
|
$
|
259,384
|
$
|
154,874
|
||
|
Total
stockholders' equity
|
642,777
|
540,529
|
||||
|
Total
debt
|
531,228
|
521,710
|
||||
|
Less:
cash and cash equivalents
|
191,794
|
136,580
|
||||
|
Net
debt
|
$
|
339,434
|
$
|
385,130
|
||
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 and Reported EBITDA excluding stock-based compensation are
not
measures of financial performance under accounting principles generally accepted
in the United States of America ("GAAP"), and they might not be comparable
to
similarly titled measures. Reported EBITDA and Reported EBITDA excluding
stock-based compensation do not purport to represent cash provided by operating
activities and should not be considered in isolation or as a substitute for
measures of performance 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.
Additionally, the Company believes that Reported EBITDA excluding stock-based
compensation is an important measurement for comparability purposes as prior
periods do not reflect the impact of the adoption of SFAS 123R.
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 twelve months ended July 31, 2006 and 2005.
|
(In
thousands)
|
|||||||
|
Three
Months Ended
|
|||||||
|
July
31,
|
|||||||
|
(Unaudited)
|
|||||||
|
2006
|
2005
|
||||||
|
Mountain
revenue, net
|
$
|
39,163
|
$
|
35,371
|
|||
|
Mountain
operating expense excluding stock-based compensation
|
(69,697
|
)
|
(62,629
|
)
|
|||
|
Mountain
equity investment income, net
|
792
|
300
|
|||||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
(29,742
|
)
|
(26,958
|
)
|
|||
|
Mountain
stock-based compensation
|
(1,032
|
)
|
(50
|
)
|
|||
|
Mountain
Reported EBITDA
|
(30,774
|
)
|
(27,008
|
)
|
|||
|
Lodging
revenue, net
|
42,486
|
51,202
|
|||||
|
Lodging
operating expense excluding stock-based compensation
|
(41,293
|
)
|
(50,170
|
)
|
|||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
1,193
|
1,032
|
|||||
|
Lodging
stock-based compensation
|
(351
|
)
|
(17
|
)
|
|||
|
Lodging
Reported EBITDA
|
842
|
1,015
|
|||||
|
Resort
Reported EBITDA*
|
(29,932
|
)
|
(25,993
|
)
|
|||
|
Resort
Reported EBITDA excluding stock-based compensation*
|
(28,549
|
)
|
(25,926
|
)
|
|||
|
Real
Estate revenue, net
|
42,378
|
33,452
|
|||||
|
Real
Estate operating expense excluding stock-based
compensation
|
(32,412
|
)
|
(25,297
|
)
|
|||
|
Real
Estate equity investment income, net
|
711
|
5
|
|||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
10,677
|
8,160
|
|||||
|
Real
Estate stock-based compensation
|
(441
|
)
|
(18
|
)
|
|||
|
Real
Estate Reported EBITDA
|
10,236
|
8,142
|
|||||
|
Total
Reported EBITDA
|
(19,696
|
)
|
(17,851
|
)
|
|||
|
Depreciation
and amortization
|
(22,802
|
)
|
(20,580
|
)
|
|||
|
Relocation
and separation charges
|
(1,317
|
)
|
--
|
||||
|
Asset
impairment charges
|
(75
|
)
|
(977
|
)
|
|||
|
Mold
remediation credit
|
559
|
--
|
|||||
|
Loss
on disposal of fixed assets, net
|
(200
|
)
|
(9
|
)
|
|||
|
Investment
income, net
|
2,605
|
623
|
|||||
|
Interest
expense, net
|
(8,690
|
)
|
(9,565
|
)
|
|||
|
Loss
on sale of businesses, net
|
--
|
(13,043
|
)
|
||||
|
Contract
dispute charges
|
(2,467
|
)
|
--
|
||||
|
(Loss)
gain on put options, net
|
(1,133
|
)
|
417
|
||||
|
Minority
interest in loss of consolidated subsidiaries, net
|
1,966
|
1,742
|
|||||
|
Loss
before benefit for income taxes
|
(51,250
|
)
|
(59,243
|
)
|
|||
|
Benefit
for income taxes
|
19,987
|
22,808
|
|||||
|
Net
loss
|
$
|
(31,263
|
)
|
$
|
(36,435
|
)
|
|
*
Resort
represents the sum of Mountain and Lodging
|
(In
thousands)
|
|||||||
|
Twelve
Months Ended
|
|||||||
|
July
31,
|
|||||||
|
(Unaudited)
|
|||||||
|
2006
|
2005
|
||||||
|
Mountain
revenue, net
|
$
|
620,441
|
$
|
540,855
|
|||
|
Mountain
operating expense excluding stock-based compensation
|
(439,431
|
)
|
(391,635
|
)
|
|||
|
Mountain
equity investment income, net
|
3,876
|
2,303
|
|||||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
184,886
|
151,523
|
|||||
|
Mountain
stock-based compensation
|
(3,685
|
)
|
(254
|
)
|
|||
|
Mountain
Reported EBITDA
|
181,201
|
151,269
|
|||||
|
Lodging
revenue, net
|
155,807
|
196,351
|
|||||
|
Lodging
operating expense excluding stock-based compensation
|
(141,359
|
)
|
(177,381
|
)
|
|||
|
Lodging
equity investment loss, net
|
--
|
(2,679
|
)
|
||||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
14,448
|
16,291
|
|||||
|
Lodging
stock-based compensation
|
(1,334
|
)
|
(88
|
)
|
|||
|
Lodging
Reported EBITDA
|
13,114
|
16,203
|
|||||
|
Resort
Reported EBITDA*
|
194,315
|
167,472
|
|||||
|
Resort
Reported EBITDA excluding stock-based compensation*
|
199,334
|
167,814
|
|||||
|
Real
Estate revenue, net
|
62,604
|
72,781
|
|||||
|
Real
Estate operating expense excluding stock-based
compensation
|
(55,172
|
)
|
(58,159
|
)
|
|||
|
Real
Estate equity investment income (loss), net
|
791
|
(102
|
)
|
||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
8,223
|
14,520
|
|||||
|
Real
Estate stock-based compensation
|
(1,504
|
)
|
(95
|
)
|
|||
|
Real
Estate Reported EBITDA
|
6,719
|
14,425
|
|||||
|
Total
Reported EBITDA
|
201,034
|
181,897
|
|||||
|
Depreciation
and amortization
|
(86,098
|
)
|
(89,968
|
)
|
|||
|
Relocation
and separation charges
|
(5,096
|
)
|
--
|
||||
|
Asset
impairment charges
|
(210
|
)
|
(2,550
|
)
|
|||
|
Mold
remediation credit
|
1,411
|
--
|
|||||
|
Loss
on disposal of fixed assets, net
|
(1,035
|
)
|
(1,528
|
)
|
|||
|
Investment
income, net
|
7,995
|
2,066
|
|||||
|
Interest
expense, net
|
(36,478
|
)
|
(40,298
|
)
|
|||
|
Loss
on extinguishment of debt
|
--
|
(612
|
)
|
||||
|
Gain
(loss) on sale of businesses, net
|
4,625
|
(7,353
|
)
|
||||
|
Contract
dispute charges
|
(3,282
|
)
|
--
|
||||
|
(Loss)
gain on put options, net
|
(1,212
|
)
|
1,158
|
||||
|
Other
income, net
|
50
|
50
|
|||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(6,694
|
)
|
(5,239
|
)
|
|||
|
Income
before provision for income taxes
|
75,010
|
37,623
|
|||||
|
Provision
for income taxes
|
(29,254
|
)
|
(14,485
|
)
|
|||
|
Net
income
|
$
|
45,756
|
$
|
23,138
|
|||
*
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 twelve months ended July 31, 2006 and 2005. Also presented
is a
reconciliation of diluted net income per share excluding stock-based
compensation, tax effected, to diluted net income per share of the Company
calculated in accordance with GAAP for the three and twelve months ended
July
31, 2006 and 2005. The Company has presented these non-GAAP measures as it
believes that this presentation provides a more comparable measure of the
Company's results from ongoing operations for the three and twelve months
ended
July 31, 2006 compared to July 31, 2005.
|
Three
Months Ended
|
||||||||
|
July
31,
|
||||||||
|
(Unaudited)
|
||||||||
|
(In
thousands, except per share amounts)
|
2006
|
2005
|
||||||
|
Net
loss excluding stock-based compensation
|
$
|
(30,124
|
)
|
$
|
(36,382
|
)
|
||
|
Stock-based
compensation expense, before benefit from income taxes
|
(1,824
|
)
|
(85
|
)
|
||||
|
Adjustment
to benefit from income taxes
|
685
|
32
|
||||||
|
Net
loss
|
$
|
(31,263
|
)
|
$
|
(36,435
|
)
|
||
|
Diluted
loss per share excluding stock-based compensation
|
$
|
(0.78
|
)
|
$
|
(1.00
|
)
|
||
|
Stock-based
compensation expense per diluted share, before benefit from income
taxes
|
(0.04
|
)
|
(0.00
|
)
|
||||
|
Adjustment
to benefit from income taxes, per diluted share
|
0.02
|
0.00
|
||||||
|
Diluted
net loss per share
|
$
|
(0.80
|
)
|
$
|
(1.00
|
)
|
||
|
Twelve
Months Ended
|
||||||||
|
July
31,
|
||||||||
|
(Unaudited)
|
||||||||
|
(In
thousands, except per share amounts)
|
2006
|
2005
|
||||||
|
Net
income excluding stock-based compensation
|
$
|
49,829
|
$
|
23,411
|
||||
|
Stock-based
compensation expense, before benefit from income taxes
|
(6,523
|
)
|
(437
|
)
|
||||
|
Adjustment
to benefit from income taxes
|
2,450
|
164
|
||||||
|
Net
income
|
$
|
45,756
|
$
|
23,138
|
||||
|
Diluted
net income per share excluding stock-based compensation
|
$
|
1.29
|
$
|
0.64
|
||||
|
Stock-based
compensation expense per diluted share, before benefit from income
taxes
|
(0.17
|
)
|
(0.01
|
)
|
||||
|
Adjustment
to benefit from income taxes, per diluted share
|
0.07
|
0.01
|
||||||
|
Diluted
net income per share
|
$
|
1.19
|
$
|
0.64
|
||||
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(1)
|
High
End Range(1)
|
||||||
|
Resort
Reported EBITDA excluding stock-based compensation(2)
|
$
|
207,000
|
$
|
217,000
|
|||
|
Resort
segment stock-based compensation
|
(7,000
|
)
|
(7,000
|
)
|
|||
|
Resort
Reported EBITDA(2)
|
200,000
|
210,000
|
|||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
3,000
|
7,000
|
|||||
|
Real
Estate segment stock-based compensation
|
(2,000
|
)
|
(2,000
|
)
|
|||
|
Real
Estate Reported EBITDA
|
1,000
|
5,000
|
|||||
|
Total
Reported EBITDA
|
201,000
|
215,000
|
|||||
|
Depreciation
and amortization
|
(83,000
|
)
|
(83,000
|
)
|
|||
|
Relocation
and separation charges
|
(1,700
|
)
|
(1,300
|
)
|
|||
|
Loss
on disposal of fixed assets, net
|
(600
|
)
|
(600
|
)
|
|||
|
Investment
income
|
8,000
|
8,000
|
|||||
|
Interest
expense
|
(36,700
|
)
|
(36,700
|
)
|
|||
|
Minority
interest in income of consolidated subsidiaries, net
|
(7,900
|
)
|
(8,300
|
)
|
|||
|
Income
before provision for income taxes
|
79,100
|
93,100
|
|||||
|
Provision
for income taxes
|
(31,245
|
)
|
(35,844
|
)
|
|||
|
Net
income
|
$
|
47,855
|
$
|
57,256
|
|||
| (1) |
Does
not include any estimate for the Cheeca Lodge & Spa contract
dispute.
|
| (2) |
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.
|
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
|
$
|
53,300
|
$
|
62,791
|
|||
|
Stock-based
compensation expense, before benefit from income taxes
|
(9,000
|
)
|
(9,000
|
)
|
|||
|
Adjustment
to provision for income taxes
|
3,555
|
3,465
|
|||||
|
Net
income
|
$
|
47,855
|
$
|
57,256
|
|||