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): September 27, 2007
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, Suite 1000
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
September 27, 2007, Vail Resorts, Inc. issued a press release announcing its
results for the three months and year ended July 31, 2007. 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:
September 27, 2007
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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 September 27, 2007, announcing fiscal fourth quarter
and fiscal 2007 year-end results.
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Exhibit
99.1
Vail
Resorts, Inc.
For
Immediate Release
News
Release
Vail
Resorts Contacts:
Media: Kelly
Ladyga, (303) 404-1862, kladyga@vailresorts.com
Investor
Relations: Jeff Jones, CFO, (303) 404-1802,
jwjones@vailresorts.com
Vail
Resorts Announces Strong Fiscal 2007 Year-End Results
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●
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Net
income of $61.4 million for fiscal 2007, 34.2% higher than last
fiscal
year.
|
|
●
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Resort
Reported EBITDA of $225.9 million for fiscal 2007, 16.3% higher
than last
fiscal year.
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|
●
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Resort
Revenue of $827.8 million for fiscal 2007, 6.6% higher than last
fiscal
year.
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BROOMFIELD,
Colo. - September 27, 2007 - Vail Resorts, Inc. (NYSE: MTN) announced today
financial results for the fiscal year ended July 31, 2007, 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
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 or
loss.
FISCAL
YEAR 2007 PERFORMANCE
Mountain
Segment
Mountain
revenue grew $44.9 million, or 7.2%, for the twelve months ended July 31,
2007,
to $665.4 million from $620.4 million for the 2006 fiscal
year. Mountain expense increased $19.6 million, or 4.4%, to $462.7
million. Mountain Reported EBITDA in the 2007 fiscal year grew $26.5
million, or 14.6%, to $207.7 million compared to $181.2 million for the 2006
fiscal year.
Lodging
Segment
Lodging
revenue increased $6.6 million, or 4.3%, for the twelve months ended July
31,
2007, to $162.5 million from $155.8 million for the 2006 fiscal
year. Lodging expense increased $1.6 million, or 1.1%, to $144.3
million. For fiscal year 2006, the Lodging segment included revenue
of $5.2 million and operating expenses of $4.5 million related to Snake River
Lodge & Spa (“SRL&S”), which was sold in January
2006. Additionally, revenue for the twelve months ended July 31,
2007, included $5.4 million of fees primarily associated with the termination
of
the management agreements at The Equinox as a result of the sale of the hotel
by
the hotel owner and at The Lodge at Rancho Mirage in conjunction with the
closing of the hotel as part of a redevelopment plan by the current hotel
owner
(both pursuant to the terms of the management agreements). Lodging
Reported EBITDA in the 2007 fiscal year grew $5.1 million, or 38.8%, to $18.2
million compared to $13.1 million for the 2006 fiscal year.
Resort
– Combination of Mountain and Lodging Segments
Resort
revenue, the combination of Mountain and Lodging revenue, increased $51.6
million, or 6.6%, for the twelve months ended July 31, 2007, to $827.8 million
from $776.2 million for the 2006 fiscal year. Resort expense
increased $21.2 million, or 3.6%, to $607.0 million. Resort Reported
EBITDA in the 2007 fiscal year increased $31.6 million to $225.9 million,
a
16.3% increase over the 2006 fiscal year. Resort Reported EBITDA
excluding stock-based compensation increased $31.5 million, or 15.8%, to
$230.8
million.
Real
Estate Segment
Real
Estate revenue increased $50.1 million, or 80.0%, for the twelve months ended
July 31, 2007, to $112.7 million from $62.6 million for the 2006 fiscal
year. Real Estate expense increased 103.2% to $115.2
million. Real Estate Reported EBITDA in the 2007 fiscal year
decreased $9.2 million, or 136.9%, to a loss of $2.5 million compared to
a
profit of $6.7 million in the 2006 fiscal year.
Total
Performance – Fiscal Year
Total
revenue increased $101.7 million, or 12.1%, for the twelve months ended July
31,
2007, to $940.5 million from $838.9 million for the 2006 fiscal
year. Income from operations for the year increased $22.9 million, or
21.7%, to $128.2 million. The Company recorded total pre-tax
stock-based compensation expense of $7.0 million in the twelve months ended
July
31, 2007, compared to $6.5 million for the twelve months ended July 31,
2006.
The
Company reported net income of $61.4 million, or $1.56 per diluted share,
for
the 2007 fiscal year compared to net income of $45.8 million, or $1.19 per
diluted share, for the 2006 fiscal year. Excluding stock-based
compensation expense, the Company’s net income for the 2007 fiscal year would
have been $65.8 million, or $1.67 per diluted share, compared to net income
of
$49.8 million excluding stock-based compensation, or $1.29 per diluted share,
for the 2006 fiscal year.
FOURTH
QUARTER PERFORMANCE
Mountain
Segment
Mountain
revenue decreased $0.7 million, or 1.8%, in the fourth quarter of fiscal
2007 to
$38.5 million from $39.2 million for the comparable quarter last fiscal
year. Mountain expense decreased $0.4 million, or 0.5%, to $70.4
million. Mountain Reported EBITDA was flat at a loss of $30.8 million
compared to the comparable quarter last fiscal year.
Lodging
Segment
Lodging
revenue increased $3.1 million, or 7.3%, in the fourth quarter of fiscal
2007 to
$45.6 million from $42.5 million for the comparable quarter last fiscal
year. Lodging expense increased $4.4 million, or 10.5%, to $46.0
million. Lodging Reported EBITDA decreased $1.3 million, or 149.3%,
to a loss of $0.4 million compared to a profit of $0.8 million for the
comparable quarter last fiscal year.
Resort
– Combination of Mountain and Lodging Segments
Resort
revenue, the combination of Mountain and Lodging revenue, increased $2.4
million, or 3.0%, in the fourth quarter of fiscal 2007 to $84.1 million from
$81.6 million for the comparable quarter last fiscal year. Resort
expense increased $4.0 million, or 3.6%, to $116.4 million. Fourth
fiscal quarter Resort Reported EBITDA decreased $1.3 million to a loss of
$31.2
million, a 4.3% decrease over the comparable quarter last fiscal
year. Resort Reported EBITDA excluding stock-based compensation
decreased $1.7 million, or 5.9%, to $30.2 million.
Real
Estate Segment
Real
Estate revenue decreased $29.9 million, or 70.7%, in the fourth quarter of
fiscal 2007 to $12.4 million from $42.4 million for the comparable quarter
last
fiscal year. Real Estate expense decreased 59.2% to $13.4
million. Real Estate Reported EBITDA for the fourth quarter of fiscal
2007, decreased $11.2 million, or 109.6%, to a loss of $1.0 million compared
to
a profit of $10.2 million in the comparable quarter last fiscal
year.
Total
Performance – Fourth Quarter
Total
revenue decreased $27.5 million, or 22.2%, in the fourth quarter of fiscal
2007
to $96.5 million from $124.0 million for the comparable quarter last fiscal
year. Loss from operations for the quarter increased $9.8 million, or
21.8%, to $54.9 million. The Company recorded total pre-tax
stock-based compensation expense of $1.5 million in the three months ended
July
31, 2007, compared to $1.8 million for the three months ended July 31,
2006.
The
Company reported fourth quarter fiscal 2007 net loss of $34.3 million, or
$0.88
per diluted share, compared to net loss of $31.3 million, or $0.80 per diluted
share, for the same quarter last fiscal year. Excluding stock-based
compensation expense, the Company’s net loss for the fourth quarter of fiscal
2007 would have been $33.4 million, or $0.85 per diluted share, compared
to net
loss of $30.1 million excluding stock-based compensation, or $0.78 per diluted
share, for the same quarter last fiscal year.
Business
Commentary and Outlook
Robert
Katz, Chief Executive Officer, commented, “I am very pleased with our fiscal
2007 results. Our seasonally low fourth quarter results were clearly
in-line with our expectations and most importantly our full fiscal year 2007
results produced a 34.2% improvement in net income. This was
primarily achieved due to extremely strong Resort results with Resort Reported
EBITDA up 16.3% for the year. The favorable Resort results were
driven by a 7.0% increase in destination visitation at our Colorado mountain
resorts, a 10.3% increase in effective ticket price (“ETP”) for all of our
resorts, a 17.7% increase in season pass revenue, corresponding strong revenue
increases in our ancillary businesses including ski school, dining and
retail/rental and an 8.5% and 9.5% increase in average daily rates and revenue
per available room, respectively, at our lodging properties on a same store
basis and despite some challenging weather conditions, especially at our
Heavenly resort. Specifically in our Mountain segment, these metrics
helped produce a 7.2% increase in revenue and very strong flow through leading
to a 14.6% increase in EBITDA compared to the prior fiscal year. For
the 2006/2007 ski season, Breckenridge, Vail and Keystone were the three
most
visited ski resorts in the United States, and Heavenly and Beaver Creek also
were in the top ten. All five resorts also again finished in the top
20 Ski Magazine rankings. Our Company’s mission is Extraordinary
Resorts – Exceptional Experiences. The quality rankings are a
testament to our passionate employee base creating the top-notch service
levels
our guests enjoy, together with the iconic nature of our resorts
themselves. The resorts are further enhanced by our continuous
capital investments, including our significant base area improvements driven
by
our real estate development. The continuous growth in ETP is
certainly a strong indication that our guests see value in everything we
put
into the experience and the investments we make at our resorts. The
guest experience is also greatly enhanced by our Lodging segment. The
Lodging results for fiscal 2007, with Reported EBITDA up 38.8% were a reflection
of the strong performance from our owned or managed hotels and condominiums
at
the base of our Colorado resorts, which leveraged the positive destination
visitation trends in our Mountain segment. Our Lodging results also
included revenue associated with termination fees, reflective of the transition
of replacing a few previously managed lodging properties outside of our mountain
resorts with several recently announced new RockResorts luxury resorts in
truly
iconic locations.”
Katz
added, “While fiscal 2007 was certainly a success for Vail Resorts, we are
currently busy looking to make fiscal 2008 and beyond even more
successful. With our marketing activities in full force, we are well
underway on our sales of season passes, which in fiscal 2007 comprised
approximately 25% of our total lift revenue. Our season pass sales to
date for the 2007/2008 season have increased 4% in units and 16% in sales
dollars, over the same period last year. We believe that the increase
in season pass sales at this point in our selling process is in large part
due
to a higher number of earlier renewals, combined with an 11% increase in
effective pass price to date. In addition, bookings through our
central reservations systems for our five mountain resorts are up 3% in room
nights and 13% in sales dollars over the same time last year. Both of
these metrics are early performance indicators as we continue to build momentum
for the approaching winter season.”
Commenting
on what is new for the upcoming 2007/2008 ski season, Katz said, “We have also
been focused this summer on making significant capital investments in our
Resorts. This season, we open Beaver Creek’s Buckaroo Express
Gondola, the new children’s gondola, that will further enhance what is arguably
the premier children’s ski and snowboard school in North America; unveil Vail’s
two new high-speed quad chairlifts replacing chairs 10 and 14, which will
allow
more convenient and faster access to its Back Bowls, Blue Sky Basin and Two
Elk
Restaurant; and open Heavenly’s new high-speed Olympic Express chairlift, which
will provide access to hundreds of acres of tree and glades skiing in the
North
Bowl area and their new Heavenly Sky Flyer, which will take people on a
50-mile-an-hour zip line ride right into a spectacular view of Lake
Tahoe. With these and many other capital investment projects, we lead
the way in offering our guests a truly unique experience.”
Turning
to real estate, Katz said, “Our real estate development projects provide us with
an opportunity to reshape the landscape at the base of our mountain resorts
and
drive our guest experience. Fiscal 2008 will mark an exciting time
for our Company as we begin to transition from construction of our vertical
real
estate development projects to closing on these projects. Not only do
these developments expand the destination bed base for our mountain resorts,
they often include a number of amenities, which also benefit our
resorts. We have 100% of the units at both The Arrabelle and The
Lodge at Vail Chalets projects under contract; and in fiscal 2008, we expect
that we will close on all of The Arrabelle units and a portion of The Lodge
at
Vail Chalets, with the remainder of The Chalets closing in early fiscal
2009. January 2008 will mark the grand opening of The Arrabelle’s
hotel and commercial components. In addition to world class skiing
and snowboarding accessed via the gondola just steps away, lodging guests
at The
Arrabelle will experience the highest level of amenities and
services. The marketing of The Ritz-Carlton Residences, Vail
continues with 71 whole ownership two- to six-bedroom condominium units and
45
fractional ownership units. We currently have a total of 46 whole
ownership units and all 45 fractional units under contract, representing
66% of
total expected revenue. At our Crystal Peak Lodge development on Peak
7 in Breckenridge, we have 45 of the 46 units under contract and construction
is
underway. This winter, we plan to begin marketing the first building
of One Ski Hill Place at Breckenridge Peak 8, the first in a phased five
to six
building multi-use development, with the first building including 90
ski-in/ski-out residences ranging from studio to four-bedroom with approximately
102,000 saleable residential square feet.”
As
an
update on the Vail Mountain Club, Katz added, “The marketing of the Vail
Mountain Club, an exclusive private club steps from the Vista Bahn Express
lift,
is on-going with activity expected to intensify in the winter
months. To date, we have sold 110 full memberships, which include
parking privileges, and an additional 123 social memberships, which exclude
parking representing total sales commitments of $39.9 million of total proceeds
when paid in full.”
On
the
Company’s lodging business, Katz commented, “We are excited with the recent
announced expansions of our RockResorts luxury hotel portfolio including
the
addition of The Landings St. Lucia, located on Rodney Bay, St. Lucia, in
the
West Indies. RockResorts will manage the resort operations including
231 luxury suites ranging from 900 to 2,300 square feet, spa facilities and
restaurants as well as the resort's private yacht harbor and beach
club. The Landings St. Lucia will open in four phases, with phase one
scheduled to open in December 2007. We continue to seek select
opportunities to manage properties of distinction outside of our mountain
resorts not only in the United States, but also into the Caribbean and other
warm weather destinations, as we further diversify the incredible landscapes
and
experiences available within our collection of world-class
resorts.”
Katz
said, “We would like to take this opportunity to announce our guidance for
fiscal 2008. We expect to continue to drive year-over-year
performance and are very optimistic for the upcoming season as we conclude
another record fiscal year. Based on our current estimates, we expect
full year Resort Reported EBITDA, the combination of our Mountain and Lodging
segments, to range from $239 million to $249 million and Resort Reported
EBITDA
excluding stock-based compensation expense to range from $245 million to
$255
million. The Resort guidance includes a range for Mountain Reported
EBITDA of $228 million to $238 million and Mountain Reported EBITDA excluding
stock-based compensation expense of $233 million to $243 million, while we
expect Lodging Reported EBITDA to range from $8 million to $14 million and
Lodging Reported EBITDA excluding stock-based compensation expense expected
to
range from $9 million to $15 million. Real Estate Reported EBITDA is
expected to range from $54 million to $60 million and Real Estate Reported
EBITDA excluding stock-based compensation expense is expected to range from
$57
million to $63 million. Based on our current estimates, we expect net
income to range from $112 million to $122 million and net income excluding
stock-based compensation expense to range from $117 million to $127
million. This includes an assumption that we will receive payment of
the arbitration award in fiscal 2008 relating to the termination of RockResorts’
Cheeca Lodge & Spa management agreement. Katz concluded, “In August 2007, we
continued our previously announced share repurchase program, resulting in
the
repurchase of 232,504 shares at an average price of $50.31 for a total amount
of
$11.7 million. Since inception of this program in fiscal 2006, the
Company has repurchased 906,004 shares at an average price of $41.44 for
a total
amount of approximately $37.5 million, with 2,093,996 shares remaining available
under the existing repurchase authorization. Our purchases under this
program are reviewed with our Board quarterly and are based on a number of
factors as we evaluate the appropriate uses of our excess cash, including
but
not limited to the share repurchase program.”
CONFERENCE
CALL
For
further discussion of the contents of this press release, please listen to
our
live webcast today at 11:00 am EDT, available at www.vailresorts.com in the
Investor Relations section. In order to access the non-GAAP financial
information that will be referenced on the call, click on
www.vailresorts.com/investors.
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, 2007, with the Securities and Exchange Commission, which report
will be
made available on the Company’s website in the SEC Filings section in the
Investor Relations section of our website 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 leading mountain resort operator in the United
States. The Company's subsidiaries operate the mountain resorts of
Vail, Beaver Creek, Breckenridge and Keystone in Colorado, Heavenly in
California and Nevada and the Grand Teton Lodge Company in Jackson Hole,
Wyoming. The Company's subsidiary, RockResorts, a luxury resort hotel
company, manages casually elegant properties across the United States and
the
Caribbean. Vail Resorts Development Company is the real estate
planning, development and construction subsidiary of Vail Resorts,
Inc. Vail Resorts is a publicly held company traded on the New York
Stock Exchange (NYSE: MTN). The Vail Resorts company website is
www.vailresorts.com and consumer website is www.snow.com.
***
Statements
in this press release, other than statements of historical information, are
forward looking statements that are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to certain risks and uncertainties
that
could cause actual results to differ materially from those
projected. Readers are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date
hereof. Such risks and uncertainties include but are not limited to:
economic downturns; terrorist acts upon the United States; threat of or actual
war; unfavorable weather conditions; our ability to obtain financing on terms
acceptable to us to finance our real estate investments, capital expenditures
and growth strategy; our ability to continue to grow our resort and real
estate
operations; competition in our mountain and lodging businesses; 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; 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.
|
Vail
Resorts, Inc.
|
|||||||||
|
Consolidated
Condensed Statements of Operations
|
|||||||||
|
(In
thousands, except per share amounts)
|
|||||||||
|
(Unaudited)
|
|||||||||
|
Three
Months Ended
|
|||||||||
|
July
31,
|
|||||||||
|
2007
|
2006
|
||||||||
|
Net
revenue:
|
|||||||||
|
Mountain
|
$
|
38,475
|
$
|
39,163
|
|||||
|
Lodging
|
45,604
|
42,486
|
|||||||
|
Real
estate
|
12,436
|
42,378
|
|||||||
|
Total
net revenue
|
96,515
|
124,027
|
|||||||
|
Operating
expense:
|
|||||||||
|
Mountain
|
70,353
|
70,729
|
|||||||
|
Lodging
|
46,019
|
41,644
|
|||||||
|
Real
estate
|
13,420
|
32,853
|
|||||||
|
Total
segment operating expense
|
129,792
|
145,226
|
|||||||
|
Other
operating (expense) income:
|
|||||||||
|
Depreciation
and amortization
|
(20,807
|
)
|
(22,802
|
)
|
|||||
|
Relocation
and separation charges
|
(32
|
)
|
(1,317
|
)
|
|||||
|
Asset
impairment charge
|
--
|
(75
|
)
|
||||||
|
Mold
remediation credit
|
--
|
559
|
|||||||
|
Loss
on disposal of fixed assets, net
|
(751
|
)
|
(200
|
)
|
|||||
|
Loss
from operations
|
(54,867
|
)
|
(45,034
|
)
|
|||||
|
Mountain
equity investment income, net
|
1,068
|
792
|
|||||||
|
Real
estate equity investment loss
|
--
|
711
|
|||||||
|
Investment
income
|
3,588
|
2,605
|
|||||||
|
Interest
expense, net
|
(7,739
|
)
|
(8,690
|
)
|
|||||
|
Loss
on sale of business
|
(38
|
)
|
--
|
||||||
|
Contract
dispute charges
|
(181
|
)
|
(2,466
|
)
|
|||||
|
Loss
on put option, net
|
--
|
(1,133
|
)
|
||||||
|
Minority
interest in loss of consolidated subsidiaries, net
|
1,903
|
1,965
|
|||||||
|
Loss
before benefit for income taxes
|
(56,266
|
)
|
(51,250
|
)
|
|||||
|
Benefit
for income taxes
|
21,944
|
19,987
|
|||||||
|
Net
loss
|
$
|
(34,322
|
)
|
$
|
(31,263
|
)
|
|||
|
Per
share amounts:
|
|||||||||
|
Basic
net loss per share
|
$
|
(0.88
|
)
|
$
|
(0.80
|
)
|
|||
|
Diluted
net loss per share
|
$
|
(0.88
|
)
|
$
|
(0.80
|
)
|
|||
|
Other
Data:
|
|||||||||
|
Mountain
Reported EBITDA
|
$
|
(30,810
|
)
|
$
|
(30,774
|
)
|
|||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
$
|
(30,051
|
)
|
$
|
(29,742
|
)
|
|||
|
Lodging
Reported EBITDA
|
$
|
(415
|
)
|
$
|
842
|
||||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
$
|
(183
|
)
|
$
|
1,193
|
||||
|
Resort
Reported EBITDA
|
$
|
(31,225
|
)
|
$
|
(29,932
|
)
|
|||
|
Resort
Reported EBITDA excluding stock-based compensation
|
$
|
(30,234
|
)
|
$
|
(28,549
|
)
|
|||
|
Real
Estate Reported EBITDA
|
$
|
(984
|
)
|
$
|
10,236
|
||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
$
|
(451
|
)
|
$
|
10,677
|
||||
|
Vail
Resorts, Inc.
|
|||||||||
|
Consolidated
Condensed Statements of Operations
|
|||||||||
|
(In
thousands, except per share amounts)
|
|||||||||
|
(Unaudited)
|
|||||||||
|
Twelve
Months Ended
|
|||||||||
|
July
31,
|
|||||||||
|
2007
|
2006
|
||||||||
|
Net
revenue:
|
|||||||||
|
Mountain
|
$
|
665,377
|
$
|
620,441
|
|||||
|
Lodging
|
162,451
|
155,807
|
|||||||
|
Real
estate
|
112,708
|
62,604
|
|||||||
|
Total
net revenue
|
940,536
|
838,852
|
|||||||
|
Operating
expense:
|
|||||||||
|
Mountain
|
462,708
|
443,116
|
|||||||
|
Lodging
|
144,252
|
142,693
|
|||||||
|
Real
estate
|
115,190
|
56,676
|
|||||||
|
Total
segment operating expense
|
722,150
|
642,485
|
|||||||
|
Other
operating (expense) income:
|
|||||||||
|
Depreciation
and amortization
|
(87,664
|
)
|
(86,098
|
)
|
|||||
|
Relocation
and separation charges
|
(1,433
|
)
|
(5,096
|
)
|
|||||
|
Asset
impairment charges
|
--
|
(210
|
)
|
||||||
|
Mold
remediation credit
|
--
|
1,411
|
|||||||
|
Loss
on disposal of fixed assets, net
|
(1,083
|
)
|
(1,035
|
)
|
|||||
|
Income
from operations
|
128,206
|
105,339
|
|||||||
|
Mountain
equity investment income, net
|
5,059
|
3,876
|
|||||||
|
Real
estate equity investment income
|
--
|
791
|
|||||||
|
Investment
income
|
12,403
|
7,995
|
|||||||
|
Interest
expense, net
|
(32,625
|
)
|
(36,478
|
)
|
|||||
|
(Loss)
gain on sale of businesses, net
|
(639
|
)
|
4,625
|
||||||
|
Contract
dispute charges
|
(4,642
|
)
|
(3,282
|
)
|
|||||
|
Gain
(loss) on put options, net
|
690
|
(1,212
|
)
|
||||||
|
Other
income, net
|
--
|
50
|
|||||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(7,801
|
)
|
(6,694
|
)
|
|||||
|
Income
before provision for income taxes
|
100,651
|
75,010
|
|||||||
|
Provision
for income taxes
|
(39,254
|
)
|
(29,254
|
)
|
|||||
|
Net
income
|
$
|
61,397
|
$
|
45,756
|
|||||
|
Per
share amounts:
|
|||||||||
|
Basic
net income per share
|
$
|
1.58
|
$
|
1.21
|
|||||
|
Diluted
net income per share
|
$
|
1.56
|
$
|
1.19
|
|||||
|
Other
Data:
|
|||||||||
|
Mountain
Reported EBITDA
|
$
|
207,728
|
$
|
181,201
|
|||||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
$
|
211,552
|
$
|
184,886
|
|||||
|
Lodging
Reported EBITDA
|
$
|
18,199
|
$
|
13,114
|
|||||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
$
|
19,290
|
$
|
14,448
|
|||||
|
Resort
Reported EBITDA
|
$
|
225,927
|
$
|
194,315
|
|||||
|
Resort
Reported EBITDA excluding stock-based compensation
|
$
|
230,842
|
$
|
199,334
|
|||||
|
Real
Estate Reported EBITDA
|
$
|
(2,482
|
)
|
$
|
6,719
|
||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
$
|
(399
|
)
|
$
|
8,223
|
||||
|
Vail
Resorts, Inc.
|
|||||||||||||||||||||||||
|
Resort
Revenue by Business Line and Skier Visits
|
|||||||||||||||||||||||||
|
(In
thousands, except effective ticket price (“ETP”))
|
|||||||||||||||||||||||||
|
(Unaudited)
|
|||||||||||||||||||||||||
|
Three
Months Ended
|
Percentage
|
Twelve
Months Ended
|
|||||||||||||||||||||||
|
July
31,
|
Increase
|
July
31,
|
Percentage
|
||||||||||||||||||||||
|
2007
|
2006
|
(Decrease)
|
2007
|
2006
|
Increase
|
||||||||||||||||||||
|
Business
Line
|
|||||||||||||||||||||||||
|
Lift
tickets
|
$
|
--
|
$
|
--
|
na
|
$
|
286,997
|
$
|
263,036
|
9.1
|
%
|
||||||||||||||
|
Ski
school
|
--
|
--
|
na
|
78,848
|
72,628
|
8.6
|
%
|
||||||||||||||||||
|
Dining
|
4,675
|
3,912
|
19.5
|
%
|
59,653
|
56,657
|
5.3
|
%
|
|||||||||||||||||
|
Retail/rental
|
19,332
|
17,641
|
9.6
|
%
|
160,542
|
149,350
|
7.5
|
%
|
|||||||||||||||||
|
Other
|
14,468
|
17,610
|
(17.8
|
)
|
%
|
79,337
|
78,770
|
0.7
|
%
|
||||||||||||||||
|
Total Mountain
Revenue
|
$
|
38,475
|
$
|
39,163
|
(1.8
|
)
|
%
|
$
|
665,377
|
$
|
620,441
|
7.2
|
%
|
||||||||||||
|
Total
Lodging Revenue
|
$
|
45,604
|
$
|
42,486
|
7.3
|
%
|
$
|
162,451
|
$
|
155,807
|
4.3
|
%
|
|||||||||||||
|
Total
Resort Revenue
|
$
|
84,079
|
$
|
81,649
|
3.0
|
%
|
$
|
827,828
|
$
|
776,248
|
6.6
|
%
|
|||||||||||||
|
Twelve
Months Ended
|
Percentage
|
||||||||||
|
July
31,
|
Increase
|
||||||||||
|
2007
|
2006
|
(Decrease)
|
|||||||||
|
Skier
Visits
|
|||||||||||
|
Breckenridge
|
1,650
|
1,620
|
1.9
|
%
|
|||||||
|
Vail
|
1,608
|
1,676
|
(4.1
|
)
|
%
|
||||||
|
Keystone
|
1,171
|
1,094
|
7.0
|
%
|
|||||||
|
Heavenly
|
900
|
1,023
|
(12.0
|
)
|
%
|
||||||
|
Beaver
Creek
|
890
|
875
|
1.7
|
%
|
|||||||
|
Total
Skier Visits
|
6,219
|
6,288
|
(1.1
|
)
|
%
|
||||||
|
ETP
|
$
|
46.15
|
$
|
41.83
|
10.3
|
%
|
|||||
|
Key
Balance Sheet Data
|
|||||||
|
(In
thousands)
|
|||||||
|
(Unaudited)
|
|||||||
|
As
of July 31,
|
|||||||
|
2007
|
2006
|
||||||
|
Real
estate held for sale and investment
|
$
|
357,586
|
$
|
259,384
|
|||
|
Total
stockholders' equity
|
714,039
|
642,777
|
|||||
|
Long-term
debt
|
593,733
|
525,313
|
|||||
|
Long-term
debt due within one year
|
377
|
5,915
|
|||||
|
Total
debt
|
594,110
|
531,228
|
|||||
|
Less:
cash and cash equivalents
|
230,819
|
191,794
|
|||||
|
Net
debt
|
$
|
363,291
|
$
|
339,434
|
|||
Reconciliation
of Non-GAAP Financial Measures
Resort,
Mountain, Lodging and Real Estate Reported EBITDA and Resort, Mountain, Lodging
and Real Estate Reported EBITDA excluding stock-based compensation have been
presented herein as measures of the Company's financial operating
performance. Reported EBITDA, Reported EBITDA excluding stock-based
compensation and Net Debt (defined as long-term debt plus long-term debt
due
within one year less cash and cash equivalents) are not measures of financial
performance or liquidity under accounting principles generally accepted in
the
United States of America ("GAAP"), and they might not be comparable to similarly
titled measures of other companies. Reported EBITDA, Reported EBITDA
excluding stock-based compensation and Net Debt do not purport to represent
cash
flows generated by operating, investing or financing activities or other
financial statement data and should not be considered in isolation or as
a
substitute for measures of financial performance or liquidity prepared in
accordance with GAAP. The Company believes that Reported EBITDA and
Reported EBITDA excluding stock-based compensation are indicative measures
of
the Company's operating performance, and each similar to performance metrics
generally used by investors to evaluate companies in the resort and lodging
industries. The Company primarily uses Reported EBITDA excluding
stock-based compensation targets in determining management bonuses.
Presented
below is a reconciliation of Reported EBITDA and Reported EBITDA excluding
stock-based compensation to net income (loss) for the Company calculated
in
accordance with GAAP for the three and twelve months ended July 31, 2007
and
2006.
|
(In
thousands)
|
||||||||||
|
Three
Months Ended
|
||||||||||
|
July
31,
|
||||||||||
|
(Unaudited)
|
||||||||||
|
2007
|
2006
|
|||||||||
|
Mountain
revenue, net
|
$
|
38,475
|
$
|
39,163
|
||||||
|
Mountain
operating expense excluding stock-based compensation
|
(69,594
|
)
|
(69,697
|
)
|
||||||
|
Mountain
equity investment income, net
|
1,068
|
792
|
||||||||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
(30,051
|
)
|
(29,742
|
)
|
||||||
|
Mountain
stock-based compensation
|
(759
|
)
|
(1,032
|
)
|
||||||
|
Mountain
Reported EBITDA
|
(30,810
|
)
|
(30,774
|
)
|
||||||
|
Lodging
revenue, net
|
45,604
|
42,486
|
||||||||
|
Lodging
operating expense excluding stock-based compensation
|
(45,787
|
)
|
(41,293
|
)
|
||||||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
(183
|
)
|
1,193
|
|||||||
|
Lodging
stock-based compensation
|
(232
|
)
|
(351
|
)
|
||||||
|
Lodging
Reported EBITDA
|
(415
|
)
|
842
|
|||||||
|
Resort
Reported EBITDA excluding stock-based compensation*
|
(30,234
|
)
|
(28,549
|
)
|
||||||
|
Resort
Reported EBITDA*
|
(31,225
|
)
|
(29,932
|
)
|
||||||
|
Real
Estate revenue, net
|
12,436
|
42,378
|
||||||||
|
Real
Estate operating expense excluding stock-based
compensation
|
(12,887
|
)
|
(32,412
|
)
|
||||||
|
Real
Estate equity investment loss
|
--
|
711
|
||||||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
(451
|
)
|
10,677
|
|||||||
|
Real
Estate stock-based compensation
|
(533
|
)
|
(441
|
)
|
||||||
|
Real
Estate Reported EBITDA
|
(984
|
)
|
10,236
|
|||||||
|
Total
Reported EBITDA
|
(32,209
|
)
|
(19,696
|
)
|
||||||
|
Depreciation
and amortization
|
(20,807
|
)
|
(22,802
|
)
|
||||||
|
Relocation
and separation charges
|
(32
|
)
|
(1,317
|
)
|
||||||
|
Asset
impairment charge
|
--
|
(75
|
)
|
|||||||
|
Mold
remediation credit
|
--
|
559
|
||||||||
|
Loss
on disposal of fixed assets, net
|
(751
|
)
|
(200
|
)
|
||||||
|
Investment
income
|
3,588
|
2,605
|
||||||||
|
Interest
expense, net
|
(7,739
|
)
|
(8,690
|
)
|
||||||
|
Loss
on sale of business
|
(38
|
)
|
--
|
|||||||
|
Contract
dispute charges
|
(181
|
)
|
(2,466
|
)
|
||||||
|
Loss
on put option, net
|
--
|
(1,133
|
)
|
|||||||
|
Minority
interest in loss of consolidated subsidiaries, net
|
1,903
|
1,965
|
||||||||
|
Loss
before benefit for income taxes
|
(56,266
|
)
|
(51,250
|
)
|
||||||
|
Benefit
for income taxes
|
21,944
|
19,987
|
||||||||
|
Net
loss
|
$
|
(34,322
|
)
|
$
|
(31,263
|
)
|
||||
*
Resort
represents the sum of Mountain
and Lodging
|
(In
thousands)
|
||||||||||
|
Twelve
Months Ended
|
||||||||||
|
July
31,
|
||||||||||
|
(Unaudited)
|
||||||||||
|
2007
|
2006
|
|||||||||
|
Mountain
revenue, net
|
$
|
665,377
|
$
|
620,441
|
||||||
|
Mountain
operating expense excluding stock-based compensation
|
(458,884
|
)
|
(439,431
|
)
|
||||||
|
Mountain
equity investment income, net
|
5,059
|
3,876
|
||||||||
|
Mountain
Reported EBITDA excluding stock-based compensation
|
211,552
|
184,886
|
||||||||
|
Mountain
stock-based compensation
|
(3,824
|
)
|
(3,685
|
)
|
||||||
|
Mountain
Reported EBITDA
|
207,728
|
181,201
|
||||||||
|
Lodging
revenue, net
|
162,451
|
155,807
|
||||||||
|
Lodging
operating expense excluding stock-based compensation
|
(143,161
|
)
|
(141,359
|
)
|
||||||
|
Lodging
Reported EBITDA excluding stock-based compensation
|
19,290
|
14,448
|
||||||||
|
Lodging
stock-based compensation
|
(1,091
|
)
|
(1,334
|
)
|
||||||
|
Lodging
Reported EBITDA
|
18,199
|
13,114
|
||||||||
|
Resort
Reported EBITDA excluding stock-based compensation*
|
230,842
|
199,334
|
||||||||
|
Resort
Reported EBITDA*
|
225,927
|
194,315
|
||||||||
|
Real
Estate revenue, net
|
112,708
|
62,604
|
||||||||
|
Real
Estate operating expense excluding stock-based
compensation
|
(113,107
|
)
|
(55,172
|
)
|
||||||
|
Real
Estate equity investment income
|
--
|
791
|
||||||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
(399
|
)
|
8,223
|
|||||||
|
Real
Estate stock-based compensation
|
(2,083
|
)
|
(1,504
|
)
|
||||||
|
Real
Estate Reported EBITDA
|
(2,482
|
)
|
6,719
|
|||||||
|
Total
Reported EBITDA
|
223,445
|
201,034
|
||||||||
|
Depreciation
and amortization
|
(87,664
|
)
|
(86,098
|
)
|
||||||
|
Relocation
and separation charges
|
(1,433
|
)
|
(5,096
|
)
|
||||||
|
Asset
impairment charges
|
--
|
(210
|
)
|
|||||||
|
Mold
remediation credit
|
--
|
1,411
|
||||||||
|
Loss
on disposal of fixed assets, net
|
(1,083
|
)
|
(1,035
|
)
|
||||||
|
Investment
income
|
12,403
|
7,995
|
||||||||
|
Interest
expense, net
|
(32,625
|
)
|
(36,478
|
)
|
||||||
|
(Loss)
gain on sale of businesses, net
|
(639
|
)
|
4,625
|
|||||||
|
Contract
dispute charges
|
(4,642
|
)
|
(3,282
|
)
|
||||||
|
Gain
(loss) on put options, net
|
690
|
(1,212
|
)
|
|||||||
|
Other
income, net
|
--
|
50
|
||||||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(7,801
|
)
|
(6,694
|
)
|
||||||
|
Income
before provision for income taxes
|
100,651
|
75,010
|
||||||||
|
Provision
for income taxes
|
(39,254
|
)
|
(29,254
|
)
|
||||||
|
Net
income
|
$
|
61,397
|
$
|
45,756
|
||||||
*
Resort
represents the sum of
Mountain and Lodging
Presented
below is a reconciliation of net income (loss) excluding stock-based
compensation, tax effected, to net income (loss) of the Company calculated
in
accordance with GAAP for the three and twelve months ended July 31, 2007
and
2006. Also presented is a reconciliation of net income (loss) per
diluted share excluding stock-based compensation, tax effected, to net income
(loss) per diluted share of the Company calculated in accordance with GAAP
for
the three and twelve months ended July 31, 2007 and 2006. The Company
has presented these non-GAAP measures as it believes that this presentation
provides a more comparable measure of the Company's historical results from
ongoing operations for the three and twelve months ended July 31, 2007 and
July
31, 2006 to prior periods.
|
Three
Months Ended
|
|||||||||
|
July
31,
|
|||||||||
|
(Unaudited)
|
|||||||||
|
(In
thousands, except per share amounts)
|
2007
|
2006
|
|||||||
|
Net
loss excluding stock-based compensation
|
$
|
(33,370
|
)
|
$
|
(30,124
|
)
|
|||
|
Stock-based
compensation expense, before benefit from income taxes
|
(1,524
|
)
|
(1,824
|
)
|
|||||
|
Adjustment
for benefit from income taxes
|
572
|
685
|
|||||||
|
Net
loss
|
$
|
(34,322
|
)
|
$
|
(31,263
|
)
|
|||
|
Diluted
net loss per share excluding stock-based compensation
|
$
|
(0.85
|
)
|
$
|
(0.78
|
)
|
|||
|
Stock-based
compensation expense per diluted common share, before
benefit
|
|||||||||
|
from
income taxes
|
(0.04
|
)
|
(0.04
|
)
|
|||||
|
Adjustment
for benefit from income taxes, per diluted common share
|
0.01
|
0.02
|
|||||||
|
Diluted
net loss per share
|
$
|
(0.88
|
)
|
$
|
(0.80
|
)
|
|||
|
Twelve
Months Ended
|
|||||||||
|
July
31,
|
|||||||||
|
(Unaudited)
|
|||||||||
|
(In
thousands, except per share amounts)
|
2007
|
2006
|
|||||||
|
Net
income excluding stock-based compensation
|
$
|
65,767
|
$
|
49,829
|
|||||
|
Stock-based
compensation expense, before benefit from income taxes
|
(6,998
|
)
|
(6,523
|
)
|
|||||
|
Adjustment
for benefit from income taxes
|
2,628
|
2,450
|
|||||||
|
Net
income
|
$
|
61,397
|
$
|
45,756
|
|||||
|
Diluted
net income per share excluding stock-based compensation
|
$
|
1.67
|
$
|
1.29
|
|||||
|
Stock-based
compensation expense per diluted common share, before
benefit
|
|||||||||
|
from
income taxes
|
(0.18
|
)
|
(0.17
|
)
|
|||||
|
Adjustment
for benefit from income taxes, per diluted common share
|
0.07
|
0.07
|
|||||||
|
Diluted
net income per share
|
$
|
1.56
|
$
|
1.19
|
|||||
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, 2008 is presented below.
|
(In
thousands)
|
|||||||
|
For
the Year Ending
|
|||||||
|
July
31, 2008
|
|||||||
|
Low
End Range
|
High
End Range
|
||||||
|
Resort
Reported EBITDA excluding stock-based compensation(1)
|
$
|
245,000
|
$
|
255,000
|
|||
|
Resort
segment stock-based compensation
|
(6,000
|
)
|
(6,000
|
)
|
|||
|
Resort
Reported EBITDA(1)
|
239,000
|
249,000
|
|||||
|
Real
Estate Reported EBITDA excluding stock-based compensation
|
57,000
|
63,000
|
|||||
|
Real
Estate segment stock-based compensation
|
(3,000
|
)
|
(3,000
|
)
|
|||
|
Real
Estate Reported EBITDA
|
54,000
|
60,000
|
|||||
|
Total
Reported EBITDA
|
293,000
|
309,000
|
|||||
|
Depreciation
and amortization
|
(89,000
|
)
|
(88,000
|
)
|
|||
|
Loss
on disposal of fixed assets, net
|
(1,000
|
)
|
(1,000
|
)
|
|||
|
Investment
income
|
13,200
|
13,200
|
|||||
|
Interest
expense, net
|
(34,200
|
)
|
(33,800
|
)
|
|||
|
Contract
dispute credit, net(2)
|
8,500
|
8,500
|
|||||
|
Minority
interest in income of consolidated subsidiaries, net
|
(6,300
|
)
|
(7,100
|
)
|
|||
|
Income
before provision for income taxes
|
184,200
|
200,800
|
|||||
|
Provision
for income taxes
|
(72,200
|
)
|
(78,800
|
)
|
|||
|
Net
income
|
$
|
112,000
|
$
|
122,000
|
|||
|
(1)
|
Resort
represents the sum of Mountain and Lodging. The Company provides
Reported
EBITDA ranges for the Mountain and Lodging segments, as well as
for the
two combined. Readers are cautioned to recognize that the low
end of the expected ranges provided for the Lodging and Mountain
segments,
while possible, do not sum to the low end of the Resort Reported
EBITDA
range provided because we do not necessarily expect or assume that
we will
actually hit the low end of both ranges, as the actual Resort Reported
EBITDA will depend on the actual mix of the Lodging and Mountain
components. Similarly, the high end of the ranges for the
Lodging and Mountain segments do not sum to the high end of the
Resort
range.
|
|
(2)
|
Assumes
that the Company will receive payment of the arbitration award
relating to
the termination of RockResorts’ Cheeca Lodge & Spa management
agreement in fiscal 2008.
|
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, 2008 is presented below.
|
(In
thousands)
|
|||||||
|
For
the Year Ending
|
|||||||
|
July
31, 2008
|
|||||||
|
Low
End Range
|
High
End Range
|
||||||
|
Net
income excluding stock-based compensation
|
$
|
117,470
|
$
|
127,450
|
|||
|
Stock-based
compensation expense, before benefit from income taxes
|
(9,000
|
)
|
(9,000
|
)
|
|||
|
Adjustment
for benefit from income taxes
|
3,530
|
3,550
|
|||||
|
Net
income
|
$
|
112,000
|
$
|
122,000
|
|||