Peak Resorts, Inc. (NASDAQ:SKIS) (“Peak” or the “Company”), a
leading owner and operator of high-quality, individually branded
U.S. ski resorts, today reported financial results for its fiscal
2018 second quarter as summarized below:
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except per share data) |
|
Three months ended October 31, |
|
|
Six months ended October 31, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
8,838 |
|
|
$ |
8,475 |
|
|
$ |
16,358 |
|
$ |
15,601 |
|
Resort operating costs |
$ |
15,121 |
|
|
$ |
13,015 |
|
|
$ |
28,660 |
|
$ |
24,779 |
|
Loss from operations |
$ |
(11,776 |
) |
|
$ |
(10,136 |
) |
|
$ |
(23,225 |
) |
$ |
(20,253 |
) |
Net loss |
$ |
(8,914 |
) |
|
$ |
(7,982 |
) |
|
$ |
(17,509 |
) |
$ |
(15,886 |
) |
Loss per share (basic and diluted) |
$ |
(0.66 |
) |
|
$ |
(0.57 |
) |
|
$ |
(1.30 |
) |
$ |
(1.13 |
) |
Weighted average shares outstanding |
|
13,982 |
|
|
|
13,982 |
|
|
|
13,982 |
|
|
13,982 |
|
Vested restricted stock units |
|
60 |
|
|
|
29 |
|
|
|
55 |
|
|
34 |
|
Reported EBITDA* |
$ |
(8,622 |
) |
|
$ |
(6,920 |
) |
|
$ |
(16,926 |
) |
$ |
(13,820 |
) |
*See page
3 for Definitions of Non-GAAP Financial Measures |
|
Timothy D. Boyd, President and Chief Executive
Officer, commented, “As we closed out the first half of fiscal
2018, which is the seasonally slowest part of our fiscal year, Peak
Resorts delivered second quarter revenue growth of 4% and overall
results consistent with our expectations. In fiscal 2018 to-date,
we have succeeded with our expense management and strategic
investment initiatives to position the Company for what we believe
will be a very successful ski season and a strong second half of
our 2018 fiscal year. In particular, Peak Pass sales were running
approximately 9% higher on a unit and revenue basis over the prior
year through mid-October and we have seen further strength in sales
through November, including increased interest for the Drifter pass
for young adults, which remains available at pre-season pricing
through mid-December.
“More recently, the completion of our EB-5
funded West Lake snowmaking project enabled Mount Snow to open for
the 2017/2018 season on November 11, representing one of the
earliest openings on record for our flagship resort. The powerful
new snowmaking infrastructure in place at Mount Snow allowed our
team to welcome skiers with the most skiable terrain in the
Northeast and build on that initial opening capacity with more than
180 skiable acres for the Thanksgiving holiday weekend. Skier
interest at Mount Snow has been very strong, as has early
visitation at Hunter Mountain, Wildcat and Big Boulder, which
represents a very favorable start to the new ski season for our
Northeast resorts.
“Furthermore, we expect customer excitement at
Mount Snow to build throughout the season as skiers and
snowboarders experience the power of our expanded snowmaking
capacity to create great conditions and they see the progress we
are making on the Carinthia Ski Lodge, which remains on schedule to
open for the 2018/2019 ski season. Both the West Lake and Carinthia
base development projects highlight Peak’s ability to structure,
finance and execute facility enhancement projects that are expected
to drive increased patronage and revenue growth as well as provide
an attractive ROI.
“The recent federal approval of the Great North
Regional Center, our new privately-managed regional center,
positions Peak to leverage this new EB-5 investment sponsor for
additional Northeast region development projects. As a central
component of our long-term organic growth strategy, the Great North
Regional Center provides us with enhanced oversight and improved
flexibility for future EB-5 projects, including the upcoming phase
two of our Mount Snow development plan, which will include 104
ski-in/ski-out residential units centered on the Carinthia
base.”
Fiscal Second Quarter Results
ReviewFiscal 2018 second quarter revenue increased 4.3%
year over year to $8.8 million as the Company benefited from an
increase in other revenue. While the fiscal second quarter is
traditionally the Company’s slowest seasonal period, results in the
quarter were roughly in-line with expectations.
Resort operating expenses in the fiscal 2018
second quarter rose 16.2% year over year to $15.1 million as the
Company’s operating expense levels normalized versus the prior
year. Peak significantly reduced variable expenses in the prior
year period through employee furloughs and strict spending controls
to mitigate ongoing liquidity restraints driven by the negative
impact from unusually warm winter weather during the 2015/2016 ski
season which led to lower overall visitation levels. The liquidity
restraints which impacted the prior year period were also related
to the delay in the Company’s EB-5 escrow reimbursement. General
and administrative expenses remained flat at $1.5 million.
Reported EBITDA for the second fiscal quarter of
2018 was a loss of $8.6 million, compared to a loss of $6.9 million
in the year-ago quarter.
Balance Sheet UpdateAs of
October 31, 2017, the Company had cash and cash equivalents of
$13.0 million and total outstanding debt of $182.2 million,
including $12.4 million drawn against its revolving line of credit
and long-term debt of $164.9 million. During the 2018 fiscal second
quarter, the Company renewed its acquisition line of credit and
entered into a new revolving line of credit.
Christopher J. Bub, Chief Financial Officer,
added, “Our fiscal second quarter historically operates at a loss
as our resorts are not open for ski operations during the period.
However, the fiscal 2018 second quarter was a very productive
period for Peak Resorts and we are positioned for solid growth in
the second half of this fiscal year, dependent of course on the
expectation of normal seasonal weather.
“Capital spending of $9.5 million in the quarter
included $3.0 million of West Lake snowmaking project expenditures
and $2.7 million for the Carinthia Ski Lodge project, both of which
were EB-5 funded. The remaining $3.8 million of capital spending
included the widening of the Long John trail at Mount Snow, initial
spending on the Hunter Mountain expansion project and normal
maintenance capital spending to prepare our resorts for the
upcoming season. These capital projects are in keeping with our
long-term strategy of investing in our resorts to further improve
the guest experience and operating performance, which we believe
will result in yield improvements across our business and enhance
our resorts for the 2017/2018 ski season.
“More recently, we bolstered our liquidity
position, closing on a new $10 million revolving line of credit and
renewing our $15 million acquisition line of credit with Royal
Banks of Missouri. In all, Peak Resorts’ capital structure
positions the Company to pursue return-focused expansion at our
existing resorts and growth in our mountain portfolio while
returning capital to shareholders through our regular quarterly
cash dividend and enhancing long-term shareholder value.”
Investor Conference Call and
Webcast The Company will host an investor conference call
and webcast to discuss its fiscal 2018 second quarter results today
at 4:30 p.m. ET. Interested parties can access the conference call
by dialing (844) 526-1518 or, for international callers, by dialing
(647) 253-8644; the conference ID number is 9696728. A webcast of
the conference call can also be accessed live at ir.peakresorts.com
(select “Event Calendar”). Following the completion of the call, an
archived webcast will be available for replay at the same
location.
Definitions and Reconciliations of
Non-GAAP Financial MeasuresReported EBITDA is not a
measure of financial performance under U.S. generally accepted
accounting principles (“GAAP”). The Company defines Reported EBITDA
as net income before interest, income taxes, depreciation and
amortization, gain on sale/leaseback, other income or expense and
other non-recurring items. The following table includes a
reconciliation of Reported EBITDA to the GAAP related measure of
net loss:
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|
|
|
|
|
|
|
(dollars in thousands) |
Three months ended October 31, |
|
Six months ended October 31, |
|
2017 |
2016 |
|
2017 |
2016 |
Net loss |
$ |
(8,914 |
) |
$ |
(7,982 |
) |
|
$ |
(17,509 |
) |
$ |
(15,886 |
) |
Income tax benefit |
$ |
(5,941 |
) |
$ |
(5,226 |
) |
|
$ |
(11,668 |
) |
$ |
(10,402 |
) |
Interest expense, net |
$ |
3,196 |
|
$ |
3,156 |
|
|
$ |
6,207 |
|
$ |
6,204 |
|
Depreciation and amortization |
$ |
3,154 |
|
$ |
3,216 |
|
|
$ |
6,299 |
|
$ |
6,433 |
|
Investment income |
$ |
(34 |
) |
$ |
(1 |
) |
|
$ |
(89 |
) |
$ |
(3 |
) |
Gain on sale/leaseback |
$ |
(83 |
) |
$ |
(83 |
) |
|
$ |
(166 |
) |
$ |
(166 |
) |
Reported EBITDA* |
$ |
(8,622 |
) |
$ |
(6,920 |
) |
|
$ |
(16,926 |
) |
$ |
(13,820 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company has specifically chosen to include
Reported EBITDA as a measurement of its results of operations
because it considers this measurement to be a significant
indication of its financial performance and available capital
resources. Because of large depreciation and other charges relating
to the Company’s ski resorts operations, it is difficult for
management to fully and accurately evaluate financial performance
and available capital resources using net income alone. In
addition, the use of this non-U.S. GAAP measure provides an
indication of the Company’s ability to service debt, and management
considers it an appropriate measure to use because of the Company’s
highly leveraged position. Management believes that by providing
investors with Reported EBITDA, they will have a clearer
understanding of the Company’s financial performance and cash flows
because Reported EBITDA: (i) is widely used in the ski industry to
measure a company’s operating performance without regard to items
excluded from the calculation of such measure; (ii) helps investors
to more meaningfully evaluate and compare the results of the
Company’s operations from period to period by removing the effect
of its capital structure and asset base from operating results; and
(iii) is used by the Board of Directors, management and lenders for
various purposes, including as a measure of the Company’s operating
performance and as a basis for planning.
The items excluded from net income to arrive at
Reported EBITDA are significant components for understanding and
assessing the Company’s financial performance and liquidity.
Reported EBITDA should not be considered in isolation or as an
alternative to, or substitute for, net income, net change in cash
and cash equivalents or other financial statement data presented in
the Company’s condensed consolidated financial statements as
indicators of financial performance or liquidity. Because Reported
EBITDA is not a measurement determined in accordance with U.S. GAAP
and is susceptible to varying calculations, Reported EBITDA as
presented may not be comparable to other similarly titled measures
of other companies, limiting its usefulness as a comparative
measure.
About Peak ResortsHeadquartered
in Missouri, Peak Resorts is a leading owner and operator of
high-quality, individually branded ski resorts in the U.S. The
Company operates 14 ski resorts primarily located in the Northeast
and Midwest, 13 of which are Company owned.The majority of the
resorts are located within 100 miles of major metropolitan markets,
including New York City, Boston, Philadelphia, Cleveland and St.
Louis, enabling day and overnight drive accessibility. The resorts
under the Company's umbrella offer a breadth of activities,
services and amenities, including skiing, snowboarding, terrain
parks, tubing, dining, lodging, equipment rentals and sales, ski
and snowboard instruction and mountain biking and other summer
activities. To learn more, visit the Company’s website at
ir.peakresorts.com or follow Peak Resorts on Facebook for resort
updates.For further information, or to receive future Peak Resorts
news announcements via e-mail, please contact JCIR, at 212-835-8500
or skis@jcir.com.
Forward Looking StatementsThis
news release contains forward-looking statements regarding the
future outlook and performance of Peak Resorts, Inc., within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements are subject to a variety of risks and
uncertainties that could cause actual results to differ materially
from current expectations. These risks and uncertainties are
discussed under the caption “Risk Factors” in the Company’s Annual
Report on Form 10-K for the year ended April 30, 2017, filed with
the Securities and Exchange Commission (the “SEC”), and as updated
from time to time in the Company’s filings with the SEC. Peak
Resorts undertakes no obligation to release publicly the result of
any revisions to these forward-looking statements that may be made
to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Investor Contact:Norberto Aja,
Jim Leahy, Joseph JaffoniJCIR212-835-8500 or skis@jcir.com
|
Consolidated Statements of
Operations |
(in thousands, except share and per share
amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended October 31, |
|
|
Six months ended October 31, |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
$ |
8,838 |
|
|
$ |
8,475 |
|
|
$ |
16,358 |
|
|
$ |
15,601 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Resort
operating costs |
|
|
15,121 |
|
|
|
13,015 |
|
|
|
28,660 |
|
|
|
24,779 |
|
Depreciation and amortization |
|
|
3,154 |
|
|
|
3,216 |
|
|
|
6,299 |
|
|
|
6,433 |
|
General
and administrative |
|
|
1,529 |
|
|
|
1,517 |
|
|
|
2,777 |
|
|
|
2,889 |
|
Real
estate and other non-income taxes |
|
|
471 |
|
|
|
537 |
|
|
|
1,155 |
|
|
|
1,100 |
|
Land and
building rent |
|
|
339 |
|
|
|
326 |
|
|
|
692 |
|
|
|
653 |
|
|
|
|
20,614 |
|
|
|
18,611 |
|
|
|
39,583 |
|
|
|
35,854 |
|
Loss from
operations |
|
|
(11,776 |
) |
|
|
(10,136 |
) |
|
|
(23,225 |
) |
|
|
(20,253 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest,
net of amounts capitalized of $514 and $945 in 2017 and $398 and
$782 in 2016, respectively |
|
|
(3,196 |
) |
|
|
(3,156 |
) |
|
|
(6,207 |
) |
|
|
(6,204 |
) |
Gain on
sale/leaseback |
|
|
83 |
|
|
|
83 |
|
|
|
166 |
|
|
|
166 |
|
Other
income |
|
|
34 |
|
|
|
1 |
|
|
|
89 |
|
|
|
3 |
|
|
|
|
(3,079 |
) |
|
|
(3,072 |
) |
|
|
(5,952 |
) |
|
|
(6,035 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes |
|
|
(14,855 |
) |
|
|
(13,208 |
) |
|
|
(29,177 |
) |
|
|
(26,288 |
) |
Income tax benefit |
|
|
(5,941 |
) |
|
|
(5,226 |
) |
|
|
(11,668 |
) |
|
|
(10,402 |
) |
Net loss |
|
$ |
(8,914 |
) |
|
$ |
(7,982 |
) |
|
$ |
(17,509 |
) |
|
$ |
(15,886 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less declaration and
accretion of Series A preferred stock dividends |
|
|
(400 |
) |
|
|
- |
|
|
|
(800 |
) |
|
|
- |
|
Net loss attributable
to common shareholders |
|
$ |
(9,314 |
) |
|
$ |
(7,982 |
) |
|
$ |
(18,309 |
) |
|
$ |
(15,886 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted loss per common share |
|
$ |
(0.66 |
) |
|
$ |
(0.57 |
) |
|
$ |
(1.30 |
) |
|
$ |
(1.13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends declared per common share |
|
$ |
0.07 |
|
|
$ |
- |
|
|
$ |
0.14 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends declared per preferred share |
|
$ |
20.00 |
|
|
$ |
- |
|
|
$ |
20.00 |
|
|
$ |
- |
|
|
Consolidated Balance Sheets |
(dollars in thousands, except share and per
share amounts) |
|
|
|
|
|
|
|
|
|
|
|
October 31, |
|
|
April 30, |
|
|
|
2017 |
|
|
2017 |
Assets |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
12,962 |
|
|
$ |
33,665 |
|
Restricted cash |
|
|
1,339 |
|
|
|
11,113 |
|
Income
tax receivable |
|
|
11,668 |
|
|
|
- |
|
Accounts
receivable |
|
|
712 |
|
|
|
5,083 |
|
Inventory |
|
|
2,630 |
|
|
|
2,215 |
|
Deferred
income taxes |
|
|
591 |
|
|
|
591 |
|
Prepaid
expenses and deposits |
|
|
6,926 |
|
|
|
2,183 |
|
Total
current assets |
|
|
36,828 |
|
|
|
54,850 |
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
199,970 |
|
|
|
188,143 |
|
Land held for
development |
|
|
37,601 |
|
|
|
37,583 |
|
Restricted cash,
construction |
|
|
19,539 |
|
|
|
33,700 |
|
Goodwill |
|
|
4,825 |
|
|
|
4,825 |
|
Intangible assets,
net |
|
|
755 |
|
|
|
788 |
|
Other assets |
|
|
676 |
|
|
|
648 |
|
Total
assets |
|
$ |
300,194 |
|
|
$ |
320,537 |
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Revolving
lines of credit |
|
$ |
12,375 |
|
|
$ |
4,500 |
|
Accounts
payable and accrued expenses |
|
|
11,120 |
|
|
|
12,371 |
|
Accrued
salaries, wages and related taxes and benefits |
|
|
1,045 |
|
|
|
1,035 |
|
Unearned
revenue |
|
|
18,753 |
|
|
|
14,092 |
|
EB-5
investor funds in escrow |
|
|
- |
|
|
|
500 |
|
Current
portion of deferred gain on sale/leaseback |
|
|
333 |
|
|
|
333 |
|
Current
portion of long-term debt and capitalized lease obligation |
|
|
2,838 |
|
|
|
3,592 |
|
Total
current liabilities |
|
|
46,464 |
|
|
|
36,423 |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
164,881 |
|
|
|
174,785 |
|
Capitalized lease
obligations |
|
|
2,148 |
|
|
|
2,708 |
|
Deferred gain on
sale/leaseback |
|
|
2,679 |
|
|
|
2,845 |
|
Deferred income
taxes |
|
|
12,474 |
|
|
|
12,474 |
|
Other liabilities |
|
|
522 |
|
|
|
540 |
|
Total
liabilities |
|
|
229,168 |
|
|
|
229,775 |
|
|
|
|
|
|
|
|
Series A preferred
stock, $0.01 par value per share, $1,000 liquidation preference per
share, 40,000 shares authorized, 20,000 shares issued and
outstanding |
|
|
17,401 |
|
|
|
17,001 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
|
|
Common stock, $0.01 par
value per share, 20,000,000 shares authorized, 13,982,400 shares
issued and outstanding |
|
|
140 |
|
|
|
140 |
|
Additional paid-in capital |
|
|
86,529 |
|
|
|
86,372 |
|
Accumulated deficit |
|
|
(33,044 |
) |
|
|
(12,751 |
) |
Total
stockholders' equity |
|
|
53,625 |
|
|
|
73,761 |
|
Total
liabilities and stockholders' equity |
|
$ |
300,194 |
|
|
$ |
320,537 |
|
|
Supplemental Operating Data |
(dollars in thousands) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended October 31, |
|
Six months ended October 31, |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
Food and beverage |
$ |
2,735 |
|
$ |
2,728 |
|
$ |
5,565 |
$ |
5,215 |
Hotel/lodging |
$ |
2,014 |
|
$ |
2,052 |
|
$ |
3,855 |
$ |
3,860 |
Retail |
$ |
429 |
|
$ |
430 |
|
$ |
670 |
$ |
621 |
Summer activities |
$ |
2,578 |
|
$ |
2,570 |
|
$ |
4,459 |
$ |
4,549 |
Other |
$ |
1,082 |
|
$ |
695 |
|
$ |
1,809 |
$ |
1,356 |
Total |
$ |
8,838 |
|
$ |
8,475 |
|
$ |
16,358 |
$ |
15,601 |
|
|
|
|
|
|
|
|
|
|
|
Resort operating expenses: |
|
|
|
|
|
|
|
|
|
|
Labor and labor related expenses |
$ |
8,999 |
|
$ |
7,810 |
|
$ |
17,610 |
$ |
15,517 |
Retail and food and beverage cost of sales |
$ |
1,118 |
|
$ |
912 |
|
$ |
1,870 |
$ |
1,673 |
Power and utilities |
$ |
800 |
|
$ |
843 |
|
$ |
1,589 |
$ |
1,431 |
Other |
$ |
4,204 |
|
$ |
3,450 |
|
$ |
7,591 |
$ |
6,158 |
Total |
$ |
15,121 |
|
$ |
13,015 |
|
$ |
28,660 |
$ |
24,779 |
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