BROOMFIELD, Colo., Dec. 7, 2017 /CNW/ -- Vail Resorts, Inc. (NYSE:
MTN) today reported results for the first quarter of fiscal 2018
ended October 31, 2017 and provided
season pass sales results and certain early ski season
indicators.
Highlights
- Net loss attributable to Vail Resorts, Inc. was $28.4 million for the first fiscal quarter of
2018 compared to a net loss attributable to Vail Resorts, Inc. of
$62.6 million in the same period in
the prior year. Fiscal 2018 first quarter net loss included a tax
benefit of approximately $51.8
million (or $1.29 earnings per
diluted share) related to employee exercises of equity awards,
primarily attributable to the CEO's exercise of expiring stock
appreciation rights (SARs) during the quarter. This tax benefit is
recorded in net income (loss) as a result of the adoption of
revised accounting guidance related to employee stock
compensation.
- Resort Reported EBITDA loss was $54.1
million for the first fiscal quarter of 2018, which includes
$0.7 million of acquisition and
integration related costs and approximately $1.9 million of additional payroll taxes related
to the CEO's exercise of expiring SARs, compared to a Resort
Reported EBITDA loss of $53.3 million
in the same period in the prior year, which included $2.8 million of acquisition and integration
related expenses.
- Season pass sales through December 3, 2017 for the
upcoming 2017/2018 North American ski season increased
approximately 14% in units and 20% in sales dollars as compared to
the period in the prior year through December 4, 2016,
including Whistler Blackcomb and Stowe pass
sales in both periods, adjusted to eliminate the impact of foreign
currency by applying current period exchange rates to the prior
period.
- The Company reaffirmed its core operating guidance for fiscal
year 2018, with certain adjustments related to the CEO's exercise
of expiring SARs and currency fluctuations.
- The Company announced a transformational capital program at
Whistler Blackcomb, with a new state-of-the-art gondola and two new
high-speed chairlifts, and major improvements at Park City to the culinary experience and to
family and beginner terrain.
Commenting on the Company's fiscal 2018 first quarter results,
Rob Katz, Chief Executive Officer,
said, "Our first fiscal quarter historically operates at a loss
given that our North American mountain resorts are not open for ski
operations during the period. The quarter's results are primarily
driven by winter operating results from Perisher and our North
American resorts' summer activities, dining, retail/rental and
lodging operations, and administrative expenses. Perisher
performed very well in the first quarter with outstanding
conditions in September that led to strong visitation and revenue
growth across the business. Whistler Blackcomb's robust summer
business also performed well with strong performance in its world
class mountain biking operations, summer activities and
sightseeing. Our U.S. summer business was impacted, as expected, by
the same operational challenges we noted last quarter, including
the Heavenly Coaster closure due to damage from last winter and the
delayed launch of Epic Discovery at Breckenridge, all of which were included in
our fiscal 2018 guidance assumptions. Our lodging results for the
first fiscal quarter were encouraging with revenue per available
room ("RevPAR") increasing 8.5% compared to the same period in the
prior year. In particular, our properties in
Colorado benefited from increased visitation to our resort
communities and Grand Teton Lodge Company benefited from higher
ancillary yields and 6% growth in average daily rate ("ADR")."
Regarding Real Estate, Katz said, "Real Estate Reported EBITDA
was a loss of $1.1 million for the
first fiscal quarter, as compared to a gain of $5.1 million in the same period the prior year,
which included $6.5 million of Real
Estate Reported EBITDA related to the sale of a land parcel in
Breckenridge. We remain in discussions with developers on a
number of potential land sales at the base of our resorts."
Katz continued, "Our balance sheet at quarter end remains very
strong. We ended the quarter with $140.4 million of
cash on hand, $95.0 million of
borrowings under the revolver portion of our senior credit facility
and total long-term debt, net (including long-term debt due within
one year) of $1.3 billion. As of
October 31, 2017, we had available
borrowing capacity under the revolver component of
our senior credit facility of $234.0 million. In
addition, we had $127.1 million available under the
revolver component of our Whistler Blackcomb credit
facility. Our Net Debt was 2.0 times trailing twelve months Total
Reported EBITDA, which includes $330.2 million of
long-term capital lease obligations associated with the Canyons
transaction. I am also very pleased to announce that our Board of
Directors has declared a quarterly cash dividend on Vail
Resorts' common stock. The quarterly dividend will
be $1.053 per share of common stock and will be payable
on January 10, 2018 to shareholders of record
on December 27, 2017."
Moving on to early ski season indicators, Katz said, "Sales of
our season passes continue to deliver outstanding results. As
we approach the end of our selling period, season pass sales for
the North American ski season are up approximately 14% in units and
approximately 20% in sales dollars through December 3,
2017 compared to the prior year period ended December 4,
2016. Whistler Blackcomb pass sales are adjusted to eliminate
the impact of foreign currency by applying the current period
exchange rates to the prior period. This year, we have continued to
drive significant growth in our destination markets which represent
approximately 60% of our increase in pass units. We continue to see
strength across all geographies, with particularly strong
performance in Northern
California, the Pacific Northwest and the Northeast and
continued solid growth in Colorado
and British Columbia. We also saw
strong growth across our international markets, with particular
strength in Australia, the
United Kingdom, Brazil and Asia. It's clear that the
addition of Whistler Blackcomb and Stowe have further strengthened our network
and the appeal of our season pass to destination guests in
North America and around the
world, while our more sophisticated and more targeted marketing
efforts have been critical to driving the success of this program.
We expect our total season pass holders this year will exceed
740,000 (including Whistler Blackcomb products and Epic Australia
passes), representing an incredible group of highly loyal and
passionate guests and the most successful pass program in the
worldwide ski industry."
Katz continued, "Overall, lodging bookings for the season ahead
are trending slightly ahead of last year at our North American
resorts. Based on historical averages, less than 50% of the
bookings for the winter season have been made by this time. Our
early season results have been mixed across the network. Whistler
Blackcomb and Stowe have had a
strong start to the season with early snow and cold temperatures
conducive to snowmaking. Colorado
and Utah have been challenged with
limited early season terrain, though all of our U.S. resorts are
experiencing colder temperatures that have been more conducive to
snowmaking which we expect will allow us to expand our open terrain
very soon."
Operating Results
A more complete discussion of our operating results can be found
within the Management's Discussion and Analysis of Financial
Condition and Results of Operations section of the Company's Form
10-Q for the first fiscal quarter ended October 31, 2017, which was filed today with the
Securities and Exchange Commission. The following are segment
highlights:
Mountain Segment
- Mountain segment net revenue increased $37.4 million, or
33.7%, to $148.1 million for the three months
ended October 31, 2017 as compared to the same period in
the prior year, which was primarily attributable to incremental
revenue from Whistler Blackcomb and strong growth at Perisher.
- Mountain Reported EBITDA loss was $58.4 million for
the three months ended October 31, 2017, which represents
an incremental loss of $1.8 million, or 3.1%, as compared
to the Mountain Reported EBITDA loss for same period in prior
year.
Lodging Segment
- Lodging segment net revenue (excluding payroll cost
reimbursements) increased $4.5
million, or 6.9%, to $68.8
million for the three months ended October 31, 2017 as
compared to the same period in the prior year.
- Lodging Reported EBITDA was $4.4 million for the
three months ended October 31, 2017, which represents an
increase of $1.0 million, or
31.1%, as compared to the same period in the prior year.
Resort - Combination of Mountain and Lodging Segments
- Resort net revenue increased $42.0 million, or 23.6%,
to $220.2 million for the three months ended October
31, 2017 as compared to the same period in the prior year,
which was primarily attributable to incremental revenue from
Whistler Blackcomb and strong growth at Perisher.
- Resort Reported EBITDA loss was $54.1 million for the
three months ended October 31, 2017,
which includes $0.7 million of acquisition and
integration related expenses attributable to the acquisitions of
Whistler Blackcomb and Stowe and
approximately $1.9 million of payroll
taxes related to the CEO's exercise of expiring SARs. This compares
to a Resort Reported EBITDA loss of $53.3 million in the
same period in the prior year, which included $2.8 million of acquisition and integration
related expenses attributable to the acquisition of Whistler
Blackcomb.
Total Performance
- Total net revenue increased $42.6
million, or 23.9%, to $220.9
million for the three months ended October 31, 2017 as compared to the same period
in the prior year, which was primarily attributable to incremental
revenue from Whistler Blackcomb and strong growth at Perisher.
- Net loss attributable to Vail Resorts, Inc. was $28.4 million, or a loss of $0.71 per diluted share, for the first quarter of
fiscal 2018 compared to a net loss attributable to Vail Resorts,
Inc. of $62.6 million, or a loss of
$1.70 per diluted share, in the first
quarter of the prior year. Net loss for the first quarter of fiscal
2018 included a tax benefit of approximately $51.8 million (or $1.29 earnings per diluted share) related to
employee exercises of equity awards (primarily related to the CEO's
exercise of expiring SARs) which, beginning August 1, 2017, is recorded in net income (loss)
as a result of the adoption of revised accounting guidance related
to employee stock compensation.
Return of Capital
The Company declared a quarterly cash dividend of $1.053 per share of Vail Resorts common stock
that will be payable on January 10,
2018 to shareholders of record on December 27, 2017. Additionally, a Canadian
dollar equivalent dividend on the exchangeable shares of Whistler
Blackcomb Holdings Inc. will be payable on January 10, 2018 to shareholders of record on
December 27, 2017. The exchangeable
shares were issued to certain Canadian persons in connection with
our acquisition of Whistler Blackcomb Holdings Inc.
Capital Improvements
Commenting on the Company's new improvements for the 2017/2018
winter season, Katz said, "We are thrilled to welcome guests to all
of our resorts as the 2017/2018 ski season kicks off. Our
integration efforts at Whistler Blackcomb are largely complete, and
we are excited to now offer an enhanced experience for local,
regional and destination guests at North
America's largest resort. This year marks the first time in
our history that we had lift upgrades at all four Colorado resorts, with significant increases
to capacity. At Vail Mountain, we have improved lift capacity
at one of the resort's busiest chairlifts by upgrading the
Northwoods high-speed four-person chair (#11) to a new high-speed
six-person chairlift. At Breckenridge, we upgraded the Peak 10
Falcon Chair from a four-person high-speed chair to a six-person
high-speed chair, allowing more guests to experience some of the
best intermediate and advanced terrain on the mountain.
At Keystone, we invested significant capital to enhance the
experience at this outstanding family focused resort. We upgraded
the four-person Montezuma chair to a six-person
high-speed chair to improve circulation on the front side of the
mountain, and have renovated and significantly expanded mountain
dining capacity at Labonte's restaurant by adding 150 indoor seats
at the fourth most visited resort in
the U.S. At Beaver Creek, we upgraded the fixed grip
two-person Drink of Water chair (#5) to a four-person high-speed
chair, increasing the capacity for important beginner and
intermediate terrain. Including these most recent projects we have
invested over $115 million in
discretionary projects at our Colorado resorts over the past five years,
including 12 new or upgraded lifts, the addition or renovation of
four food and beverage locations, significant terrain expansions
and extensive additional investments including enhanced and
efficient snowmaking."
Regarding calendar year 2018 capital expenditures, Katz said,
"We remain committed to reinvesting in our resorts, creating an
experience of a lifetime for our guests and generating strong
returns for our shareholders. While we will announce our complete
capital plan for calendar year 2018 in March
2018, we are pleased to announce several signature
investments that we intend to construct in 2018 for the 2018/2019
ski season."
Katz continued, "We are very excited to announce a
transformational investment at Whistler Blackcomb to further
enhance the most visited mountain resort in North America and refocus the spirit of the
previously announced Renaissance project back to the guest
experience on the mountain. We plan to make a discretionary
investment of approximately $42
million (C$53 million) at
Whistler Blackcomb, as part of an approximate $52 million (C$66
million) total capital plan at the resort, the largest
annual capital investment in the resort's history. We believe this
plan will dramatically improve the on-mountain experience for our
guests with enhanced lift capacity, improved circulation and a
significantly elevated experience for skiers, riders and
sightseeing guests. The centerpiece of this investment will
be a new gondola running from the base to the top of Blackcomb
Mountain, replacing the Wizard and Solar four person chairs with a
single state-of-the-art gondola, providing an experience protected
from the elements, an expected 47% increase in uphill capacity and
a mid-station to allow guests to access and circulate around
Blackcomb Mountain. We also plan to upgrade the four-person
Emerald express chairlift to a high speed six-person chairlift,
providing increased capacity and reduced lift line wait times for
important beginner and intermediate terrain on Whistler Mountain.
Finally, we expect to upgrade the three-person fixed grip
Catskinner chairlift to a four-person high speed lift with an
improved lift alignment to provide increased capacity, better
access and improved circulation to critical teaching terrain and
terrain parks at the top of Blackcomb Mountain. Together,
these investments are expected to result in an approximate 43%
increase in lift capacity relative to the existing lifts that will
be replaced. We believe these transformational, mountain-focused
investments are the most significant improvements we can undertake
to support Whistler Blackcomb's long-term growth and our commitment
to pursue the most impactful projects to enhance the guest
experience. We expect these discretionary investments will drive
additional Resort Reported EBITDA of C$9
million to C$10 million for
the 2018/2019 ski season, incremental to the resort's typical
expected organic growth. Following this one-time signature
investment, we will continue to include Whistler Blackcomb in our
normal annual capital improvement plan. While we remain
intrigued by the water park that was previously proposed as part of
the Renaissance project, we intend to keep our focus on core
mountain improvements and will defer consideration of a water park
to our longer-term planning for the resort.
"At Park City, we will continue our transformational investments
with a focus on enhancing the family, food and service experience
for our guests from around the world. In the Canyons area of
Park City, we plan to upgrade the
fixed grip High Meadow chair to a four person high speed lift,
improve grading and expand snowmaking to create a world-class
beginner and family learning zone. We also plan to make two
significant investments in the dining experience at Park
City. We will expand Cloud Dine, a unique modern mountain
dining experience overlooking the resort, with 200 additional seats
and will be renovating and upgrading the Park City Mid-Mountain
Lodge to create a signature dining experience that will bring
fine-dine quality cuisine to what we expect will be one of the
premier fast-casual, on-mountain restaurants in the industry.
Each of these projects reinforces our commitment to Park City's position as the best resort for
families and culinary experiences and continues to build on the
significant improvements we've made at Park City over the last four years, including
the Quicksilver Gondola, the new Miner's Camp restaurant, the
expanded and upgraded Red Pine Lodge
and the renovated Summit House restaurant.
"At Heavenly, we plan to replace the Galaxy two-person chairlift
with a three-person chairlift to increase capacity and allow us to
re-open 400 acres of high quality intermediate terrain. At
Perisher, we plan to upgrade the Leichhardt T-bar to a four-person
chairlift and a significant upgrade to snowmaking, enabling better
beginner access and a reduction of crowding and wait times, as well
as the addition of new terrain. All of our resort projects are
subject to regulatory approval.
"We also plan to continue to invest in enhanced enterprise wide
technology improvements that support our increased scale, improve
the guest experience and continue to build our data-based marketing
efforts.
"We expect our capital plan for calendar 2018 will total
approximately $150 million excluding
the integration of Stowe and
summer investments. With the signature one-time discretionary
investment at Whistler Blackcomb of approximately US$42 million, we have reduced our spending
elsewhere in the network to accommodate the projects and expect to
return to our long-term capital guidance in calendar 2019, which,
without any new acquisitions or summer investments, would be
approximately $131 million. We
will be providing further detail on our calendar year 2018 capital
plan, including expected Stowe
integration and summer investments, in March
2018."
Outlook
Commenting on fiscal 2018 guidance, Katz continued, "Given our
first quarter results and the indicators we are seeing for the
upcoming season, we remain confident in our outlook for fiscal
2018, which remains predicated on a stable economic environment and
normal weather conditions for the key parts of the ski season at
our resorts. The ski season has just begun at our North American
resorts, with our primary earnings period still in front of
us. While we are reiterating our fiscal 2018 core operating
performance expectations included in our September earnings
release, we are updating our fiscal 2018 guidance to reflect a few
non-core adjustments, including: (i) approximately $1.9 million of lower Resort Reported EBITDA in
the first fiscal quarter results associated with payroll tax
expense related to the CEO's exercise of expiring SARs; (ii)
approximately $40 million of
incremental tax benefit recognized during the first fiscal quarter
2018 primarily related to the CEO's exercise of expiring SARs,
(iii) $4.0 million in lower Resort
Reported EBITDA and $1.0 million of
reduced depreciation and amortization expense to reflect a decline
in the Canadian Dollar from $0.81 to
$0.79 and a decline in the Australian
Dollar from $0.80 to $0.76, assuming that foreign exchange rates
remain at current levels for the remainder of fiscal 2018 and (iv)
the first fiscal quarter loss of $7.3
million on intercompany notes related to foreign exchange
movements. We now expect fiscal 2018 Resort Reported EBITDA
to be between $646 million and
$676 million and net income
attributable to Vail Resorts to be between $264 million and $300
million. Our guidance does not include any benefit to
our U.S. taxes from potential legislative changes being discussed
to the U.S. tax code."
The following table reflects the forecasted guidance range for
the Company's fiscal year ending July 31,
2018, for Reported EBITDA (after stock-based compensation
expense) and reconciles such Reported EBITDA guidance to net income
attributable to Vail Resorts, Inc. guidance for fiscal 2018.
|
|
|
Fiscal 2018
Guidance
|
|
(In
thousands)
|
|
For the Year
Ending
|
|
July 31, 2018
(6)
|
|
Low End
Range
|
|
High End
Range
|
Mountain Reported
EBITDA (1)
|
$
|
617,000
|
|
$
|
645,000
|
Lodging Reported
EBITDA (2)
|
26,000
|
|
34,000
|
Resort Reported
EBITDA (3)
|
646,000
|
|
676,000
|
Real Estate Reported
EBITDA
|
(8,000)
|
|
(2,000)
|
Total Reported
EBITDA
|
638,000
|
|
674,000
|
Depreciation and
amortization
|
(199,000)
|
|
(193,000)
|
Interest expense,
net
|
(60,000)
|
|
(56,000)
|
Other
(4)
|
(15,600)
|
|
(12,600)
|
Income before
provision for income taxes
|
363,400
|
|
412,400
|
Provision for income
taxes (5)
|
(77,400)
|
|
(94,400)
|
Net income
|
$
|
286,000
|
|
$
|
318,000
|
Net income
attributable to noncontrolling interests
|
(22,000)
|
|
(18,000)
|
Net income
attributable to Vail Resorts, Inc.
|
$
|
264,000
|
|
$
|
300,000
|
|
|
|
|
(1)
Mountain Reported EBITDA includes approximately $16 million of
stock-based compensation.
|
|
(2)
Lodging Reported EBITDA includes approximately $3 million of
stock-based compensation.
|
|
(3) The
Company provides Reported EBITDA ranges for the Mountain and
Lodging segments, as well as for the two combined. The low and high
of the expected ranges provided for the Mountain and Lodging
segments, while possible, do not sum to the high or low end of the
Resort Reported EBITDA range provided because we do not expect or
assume that we will hit the low or high end of both
ranges.
|
|
(4) Our
guidance includes certain known changes in the fair value of
contingent consideration based solely on the passage of time and
resulting impact on present value. Guidance excludes any
change based upon, among other things, financial projections
including long-term growth rates for Park City, which such change
may be material. Separately, the intercompany loan associated with
the Whistler Blackcomb transaction requires foreign currency
remeasurement to Canadian dollars, the functional currency of
Whistler Blackcomb. Our guidance excludes any forward-looking
change related to foreign currency gains or losses on the
intercompany loans, which such change may be material.
|
|
(5) As a
result of the adoption of revised accounting guidance related to
employee stock compensation during the first quarter of 2018, the
provision for income taxes may change materially based on our
closing stock price at the time stock compensation awards vest
or are exercised. Based on our current stock price, a
significant portion of our outstanding awards are significantly
in-the-money and, to the extent exercised, could reduce our
provision for income taxes, which is not reflected in our Fiscal
2018 guidance.
|
|
(6)
Guidance estimates are predicated on an exchange rate of $0.79
between the Canadian Dollar and U.S. Dollar, related to the
operations of Whistler Blackcomb in Canada and an exchange rate of
$0.76 between the Australian Dollar and U.S. Dollar, related to the
operations of Perisher in Australia.
|
|
Earnings Conference Call
The Company will conduct a conference call today at 11:30 a.m. eastern time to discuss the financial
results. The call will be webcast and can be accessed at
www.vailresorts.com in the Investor Relations section, or dial
(800) 289-0438 (U.S. and Canada)
or (323) 794-2423 (international). A replay of the conference call
will be available two hours following the conclusion of the
conference call through December 21,
2017, at 12:30 p.m. eastern
time. To access the replay, dial (888) 203-1112 (U.S. and
Canada) or (719) 457-0820
(international), pass code 8686839. The conference call will also
be archived at www.vailresorts.com.
About Vail Resorts, Inc. (NYSE: MTN)
Vail Resorts, Inc., through its subsidiaries, is the leading
global mountain resort operator. The Company's subsidiaries operate
eleven world-class mountain resorts and three urban ski areas,
including Vail, Beaver Creek, Breckenridge and Keystone in Colorado; Park
City in Utah; Heavenly,
Northstar and Kirkwood in the Lake
Tahoe area of California
and Nevada; Whistler Blackcomb in
British Columbia, Canada;
Stowe in Vermont; Perisher in New South Wales, Australia; Wilmot Mountain in Wisconsin; Afton Alps
in Minnesota and
Mt. Brighton in Michigan. Vail
Resorts owns and/or manages a collection of casually elegant
hotels under the RockResorts brand, as well as the Grand Teton
Lodge Company in Jackson Hole, Wyoming. Vail Resorts
Development Company is the real estate planning and
development 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.
Forward-Looking Statements
Certain statements discussed in this press release and on the
conference call, other than statements of historical information,
are forward-looking statements within the meaning of the federal
securities laws, including our expectations regarding our fiscal
2018 performance, including our expected Resort Reported EBITDA;
Resort EBITDA margin; Real Estate Reported EBITDA; Net Real Estate
Cash Flow and net income attributable to Vail Resorts, Inc.; our
expected calendar year 2018 capital expenditures at certain resorts
and the expected incremental Resort Reported EBITDA we anticipate
deriving from the Whistler Blackcomb investments; the payment of
dividends; and the expected final total season pass holders.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof.
All forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from those projected. Such risks and uncertainties include but are
not limited to prolonged weakness in general economic conditions,
including adverse effects on the overall travel and leisure related
industries; unfavorable weather conditions or the impact of natural
disasters; willingness of our guests to travel due to terrorism,
the uncertainty of military conflicts or outbreaks of contagious
diseases, the cost and availability of travel options and changing
consumer preferences; the seasonality of our business combined with
adverse events that occur during our peak operating periods;
competition in our mountain and lodging businesses; high fixed cost
structure of our business; our ability to fund resort capital
expenditures; our reliance on government permits or approvals for
our use of public land or to make operational and capital
improvements; risks related to a disruption in our water supply
that would impact our snowmaking capabilities and operations; risks
related to federal, state, local and foreign government laws, rules
and regulations; risks related to our reliance on information
technology, including our failure to maintain the integrity of our
customer or employee data; our ability to hire and retain a
sufficient seasonal workforce; risks related to our workforce,
including increased labor costs; loss of key personnel; adverse
consequences of current or future legal claims; a deterioration in
the quality or reputation of our brands, including our ability to
protect our intellectual property and the risk of accidents at our
mountain resorts; our ability to successfully integrate acquired
businesses or that acquired businesses may fail to perform in
accordance with expectations, including Whistler Blackcomb and
Stowe or future acquisitions; our
ability to satisfy the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002, with respect to acquired businesses;
risks associated with international operations; fluctuations in
foreign currency exchange rates, particularly the Canadian dollar
and Australian dollar; changes in accounting estimates and
judgments, accounting principles, policies or guidelines or adverse
determinations by taxing authorities; a materially adverse change
in our financial condition; and other risks detailed in the
Company's filings with the Securities and Exchange Commission,
including the "Risk Factors" section of the Company's Annual Report
on Form 10-K for the fiscal year ended July
31, 2017, which was filed on September 28, 2017.
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 whether as a result of new information,
future events or otherwise, except as may be required by law.
Statement Concerning Non-GAAP Financial Measures
When reporting financial results, we use the terms Resort
Reported EBITDA, Total Reported EBITDA, Resort EBITDA Margin, Net
Debt and Net Real Estate Cash Flow, which are not financial
measures under accounting principles generally accepted in
the United States of America
("GAAP"). Resort Reported EBITDA, Total Reported EBITDA, Resort
EBITDA Margin, Net Debt and Net Real Estate Cash Flow 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. In addition, we report segment Reported
EBITDA (i.e. Mountain, Lodging and Real Estate), the measure of
segment profit or loss required to be disclosed in accordance with
GAAP. Accordingly, these measures may not be comparable to
similarly-titled measures of other companies.
Reported EBITDA (and its counterpart for each of our segments)
has been presented herein as a measure of the Company's
performance. 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 other companies in the resort and lodging industries. The
Company defines Resort EBITDA Margin as Resort Reported EBITDA
divided by Resort net revenue. The Company believes Resort EBITDA
Margin is an important measurement of operating performance. The
Company believes that Net Debt is an important measurement of
liquidity as it is an indicator of the Company's ability to obtain
additional capital resources for its future cash needs.
Additionally, the Company believes Net Real Estate Cash Flow is
important as a cash flow indicator for its Real Estate segment. See
the tables provided in this release for reconciliations of our
measures of segment profitability and non-GAAP financial measures
to the most directly comparable GAAP financial measures.
|
|
Vail Resorts,
Inc.
|
Consolidated
Condensed Statements of Operations
|
(In thousands,
except per share amounts)
|
(Unaudited)
|
|
|
Three Months Ended
October 31,
|
|
2017
|
|
2016
(1)
|
Net
revenue:
|
|
|
|
Mountain and Lodging
services and other
|
$
|
143,348
|
|
$
|
114,686
|
Mountain and Lodging
retail and dining
|
76,866
|
|
63,483
|
Resort net
revenue
|
220,214
|
|
178,169
|
Real
Estate
|
636
|
|
96
|
Total net
revenue
|
220,850
|
|
178,265
|
Segment operating
expense:
|
|
|
|
Mountain and Lodging
operating expense
|
181,276
|
|
152,645
|
Mountain and Lodging
retail and dining cost of products sold
|
35,679
|
|
28,940
|
General and
administrative
|
57,863
|
|
50,748
|
Resort operating
expense
|
274,818
|
|
232,333
|
Real
Estate
|
1,691
|
|
1,485
|
Total segment
operating expense
|
276,509
|
|
233,818
|
Other operating
(expense) income:
|
|
|
|
Depreciation and
amortization
|
(48,624)
|
|
(40,581)
|
Gain on sale of real
property
|
—
|
|
6,466
|
Change in estimated
fair value of contingent consideration
|
—
|
|
(300)
|
Gain (loss) on
disposal of fixed assets, net
|
567
|
|
(550)
|
Loss from
operations
|
(103,716)
|
|
(90,518)
|
Mountain equity
investment income, net
|
522
|
|
832
|
Investment income and
other, net
|
383
|
|
4,523
|
Foreign currency loss
on intercompany loans
|
(7,346)
|
|
—
|
Interest expense,
net
|
(15,174)
|
|
(11,964)
|
Loss before benefit
from income taxes
|
(125,331)
|
|
(97,127)
|
Benefit from income
taxes
|
93,404
|
|
33,509
|
Net loss
|
(31,927)
|
|
(63,618)
|
Net loss attributable
to noncontrolling interests
|
3,542
|
|
1,031
|
Net loss attributable
to Vail Resorts, Inc.
|
$
|
(28,385)
|
|
$
|
(62,587)
|
Per share
amounts:
|
|
|
|
Basic loss per share
attributable to Vail Resorts, Inc.
|
$
|
(0.71)
|
|
$
|
(1.70)
|
Diluted net loss per
share attributable to Vail Resorts, Inc.
|
$
|
(0.71)
|
|
$
|
(1.70)
|
Cash dividends
declared per share
|
$
|
1.053
|
|
$
|
0.81
|
Weighted average
shares outstanding:
|
|
|
|
Basic
|
40,211
|
|
36,834
|
Diluted
|
40,211
|
|
36,834
|
|
(1)
The Consolidated Condensed Statement of Operations for the three
months ended October 31, 2016 has been revised to separately
disclose revenues and costs from retail and dining operations, as
well as general and administrative costs. Retail and dining
revenues were previously included within Mountain and Lodging
revenues, and the related costs were previously included in
Mountain and Lodging operating costs. Management considers the
change in presentation of our Consolidated Condensed Statement of
Operations to be immaterial. There is no change to previously
reported total net revenue, operating expense, income (loss) from
operations, net income (loss) attributable to Vail Resorts, Inc.,
per share amounts or segment results.
|
|
Vail Resorts,
Inc.
Consolidated
Condensed Statements of Operations - Other Data
(In
thousands)
(Unaudited)
|
|
Other
Data:
|
|
|
|
Mountain Reported
EBITDA
|
$
|
(58,437)
|
|
$
|
(56,654)
|
Lodging Reported
EBITDA
|
4,355
|
|
3,322
|
Resort Reported
EBITDA
|
(54,082)
|
|
(53,332)
|
Real Estate Reported
EBITDA
|
(1,055)
|
|
5,077
|
Total Reported
EBITDA
|
$
|
(55,137)
|
|
$
|
(48,255)
|
Mountain stock-based
compensation
|
$
|
3,762
|
|
$
|
3,856
|
Lodging stock-based
compensation
|
791
|
|
789
|
Resort stock-based
compensation
|
4,553
|
|
4,645
|
Real Estate
stock-based compensation
|
(32)
|
|
(68)
|
Total stock-based
compensation
|
$
|
4,521
|
|
$
|
4,577
|
|
|
|
Vail Resorts,
Inc.
|
Mountain Segment
Operating Results
|
(In thousands,
except Effective Ticket Price ("ETP"))
|
(Unaudited)
|
|
|
Three Months Ended
October 31,
|
|
Percentage
Increase
|
|
2017
|
|
2016
|
|
(Decrease)
|
Net Mountain
revenue:
|
|
|
|
Lift
|
$
|
25,468
|
|
$
|
21,426
|
|
18.9%
|
Ski school
|
4,438
|
|
3,851
|
|
15.2%
|
Dining
|
18,302
|
|
13,368
|
|
36.9%
|
Retail/rental
|
45,407
|
|
36,479
|
|
24.5%
|
Other
|
54,510
|
|
35,643
|
|
52.9%
|
Total Mountain net
revenue
|
148,125
|
|
110,767
|
|
33.7%
|
Mountain operating
expense:
|
|
|
|
Labor and
labor-related benefits
|
73,656
|
|
57,682
|
|
27.7%
|
Retail cost of
sales
|
22,941
|
|
18,404
|
|
24.7%
|
General and
administrative
|
49,324
|
|
41,984
|
|
17.5%
|
Other
|
61,163
|
|
50,183
|
|
21.9%
|
Total Mountain
operating expense
|
207,084
|
|
168,253
|
|
23.1%
|
Mountain equity
investment income, net
|
522
|
|
832
|
|
(37.3)%
|
Mountain Reported
EBITDA
|
$
|
(58,437)
|
|
$
|
(56,654)
|
|
(3.1)%
|
|
|
|
|
Total skier
visits
|
498
|
|
429
|
|
16.1%
|
ETP
|
$
|
51.14
|
|
$
|
49.94
|
|
2.4%
|
|
|
|
Vail Resorts,
Inc.
|
Lodging Operating
Results
|
(In thousands,
except Average Daily Rate ("ADR") and Revenue per Available Room
("RevPAR"))
|
(Unaudited)
|
|
|
Three Months Ended
October 31,
|
|
Percentage
Increase
|
|
2017
|
|
2016
|
|
(Decrease)
|
Lodging net
revenue:
|
|
|
|
Owned hotel
rooms
|
$
|
19,635
|
|
$
|
18,063
|
|
8.7%
|
Managed condominium
rooms
|
10,171
|
|
8,521
|
|
19.4%
|
Dining
|
15,880
|
|
15,337
|
|
3.5%
|
Transportation
|
2,553
|
|
2,473
|
|
3.2%
|
Golf
|
8,426
|
|
8,513
|
|
(1.0)%
|
Other
|
12,115
|
|
11,418
|
|
6.1%
|
|
68,780
|
|
64,325
|
|
6.9%
|
Payroll cost
reimbursements
|
3,309
|
|
3,077
|
|
7.5%
|
Total Lodging net
revenue
|
72,089
|
|
67,402
|
|
7.0%
|
Lodging operating
expense:
|
|
|
|
Labor and
labor-related benefits
|
32,092
|
|
29,877
|
|
7.4%
|
General and
administrative
|
8,539
|
|
8,764
|
|
(2.6)%
|
Other
|
23,794
|
|
22,362
|
|
6.4%
|
|
64,425
|
|
61,003
|
|
5.6%
|
Reimbursed payroll
costs
|
3,309
|
|
3,077
|
|
7.5%
|
Total Lodging
operating expense
|
67,734
|
|
64,080
|
|
5.7%
|
Lodging Reported
EBITDA
|
$
|
4,355
|
|
$
|
3,322
|
|
31.1%
|
|
|
|
|
Owned hotel
statistics:
|
|
|
|
ADR
|
$
|
228.10
|
|
$
|
214.83
|
|
6.2%
|
RevPAR
|
$
|
163.23
|
|
$
|
144.12
|
|
13.3%
|
Managed condominium
statistics:
|
|
|
|
ADR
|
$
|
190.61
|
|
$
|
196.78
|
|
(3.1)%
|
RevPAR
|
$
|
53.72
|
|
$
|
47.95
|
|
12.0%
|
Owned hotel and
managed condominium statistics (combined):
|
|
|
|
ADR
|
$
|
210.49
|
|
$
|
207.34
|
|
1.5%
|
RevPAR
|
$
|
87.38
|
|
$
|
80.53
|
|
8.5%
|
|
|
|
Key Balance Sheet
Data
|
(In
thousands)
|
(Unaudited)
|
|
|
As of October
31,
|
|
2017
|
|
2016
|
Real estate held for
sale and investment
|
$
|
102,697
|
|
$
|
116,852
|
Total Vail Resorts,
Inc. stockholders' equity
|
1,401,405
|
|
1,338,317
|
Long-term debt,
net
|
1,262,325
|
|
1,371,779
|
Long-term debt due
within one year
|
38,422
|
|
38,374
|
Total debt
|
1,300,747
|
|
1,410,153
|
Less: cash and cash
equivalents
|
140,397
|
|
106,751
|
Net debt
|
$
|
1,160,350
|
|
$
|
1,303,402
|
|
|
|
Reconciliation of
Measures of Segment Profitability and Non-GAAP Financial
Measures
|
|
Presented below is a
reconciliation of Reported EBITDA to net loss attributable to Vail
Resorts, Inc. for the three months ended October 31, 2017 and
2016.
|
|
|
(In thousands)
(Unaudited)
|
|
Three Months Ended
October 31,
|
|
2017
|
|
2016
|
Mountain Reported
EBITDA
|
$
|
(58,437)
|
|
$
|
(56,654)
|
Lodging Reported
EBITDA
|
4,355
|
|
3,322
|
Resort Reported
EBITDA*
|
(54,082)
|
|
(53,332)
|
Real Estate Reported
EBITDA
|
(1,055)
|
|
5,077
|
Total Reported
EBITDA
|
(55,137)
|
|
(48,255)
|
Depreciation and
amortization
|
(48,624)
|
|
(40,581)
|
Gain (loss) on
disposal of fixed assets, net
|
567
|
|
(550)
|
Change in estimated
fair value of contingent consideration
|
—
|
|
(300)
|
Investment income and
other, net
|
383
|
|
4,523
|
Foreign currency loss
on intercompany loans
|
(7,346)
|
|
—
|
Interest expense,
net
|
(15,174)
|
|
(11,964)
|
Loss before benefit
from income taxes
|
(125,331)
|
|
(97,127)
|
Benefit from income
taxes
|
93,404
|
|
33,509
|
Net loss
|
(31,927)
|
|
(63,618)
|
Net loss attributable
to noncontrolling interests
|
3,542
|
|
1,031
|
Net loss attributable
to Vail Resorts, Inc.
|
$
|
(28,385)
|
|
$
|
(62,587)
|
|
|
|
|
* Resort represents
the sum of Mountain and Lodging
|
|
|
|
|
|
|
Presented below is a
reconciliation of Total Reported EBITDA to net income attributable
to Vail Resorts, Inc. calculated in accordance with GAAP for the
twelve months ended October 31, 2017.
|
|
|
(In thousands)
(Unaudited)
|
|
Twelve Months
Ended October 31,
|
|
2017
|
Mountain Reported
EBITDA
|
$
|
564,555
|
Lodging Reported
EBITDA
|
28,120
|
Resort Reported
EBITDA*
|
592,675
|
Real Estate Reported
EBITDA
|
(6,531)
|
Total Reported
EBITDA
|
586,144
|
Depreciation and
amortization
|
(197,200)
|
Loss on disposal of
fixed assets and other, net
|
(5,313)
|
Change in estimated
fair value of contingent consideration
|
(16,000)
|
Investment income and
other, net
|
1,974
|
Foreign currency gain
on intercompany loans
|
7,938
|
Interest expense,
net
|
(57,298)
|
Income before
provision for income taxes
|
320,245
|
Provision for income
taxes
|
(56,836)
|
Net income
|
263,409
|
Net income
attributable to noncontrolling interests
|
(18,654)
|
Net income
attributable to Vail Resorts, Inc.
|
$
|
244,755
|
|
|
* Resort represents
the sum of Mountain and Lodging
|
|
|
|
|
The following table
reconciles Net Debt to long-term debt, net and the calculation of
Net Debt to Total Reported EBITDA for the twelve months ended
October 31, 2017.
|
|
|
In
thousands)
(Unaudited)
(As of October 31,
2017)
|
|
Long-term debt,
net
|
$
|
1,262,325
|
|
Long-term debt due
within one year
|
38,422
|
|
Total debt
|
1,300,747
|
|
Less: cash and cash
equivalents
|
140,397
|
|
Net debt
|
$
|
1,160,350
|
|
Net debt to Total
Reported EBITDA
|
2.0
|
x
|
|
|
|
The following table
reconciles Real Estate Reported EBITDA to Net Real Estate Cash Flow
for the three months ended October 31, 2017 and 2016.
|
|
|
(In thousands)
(Unaudited)
Three Months Ended
October 31,
|
|
2017
|
|
2016
|
Real Estate Reported
EBITDA
|
$
|
(1,055)
|
|
$
|
5,077
|
Non-cash Real Estate
cost of sales
|
479
|
|
—
|
Non-cash Real Estate
stock-based compensation
|
(32)
|
|
(68)
|
Change in real estate
deposits and recovery of previously incurred project costs/land
basis less investments in real estate
|
(110)
|
|
1,581
|
Net Real Estate Cash
Flow
|
$
|
(718)
|
|
$
|
6,590
|
|
|
|
The following table
reconciles Resort net revenue to Resort EBITDA Margin for fiscal
2018 guidance.
|
|
|
(In thousands)
(Unaudited)
Fiscal 2018
Guidance (2)
|
Resort net revenue
(1)
|
$
|
2,081,000
|
Resort Reported
EBITDA (1)
|
$
|
661,000
|
Resort EBITDA
margin
|
31.8%
|
|
|
(1) Resort
represents the sum of Mountain and Lodging
|
(2)
Represents the mid-point range of Guidance
|
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SOURCE Vail Resorts, Inc.