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
2019 first quarter as summarized below:
(in thousands, except per share data) |
|
Three months endedJuly 31, |
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
Revenues |
$ |
7,007 |
|
|
$ |
7,520 |
|
Resort operating costs |
$ |
14,271 |
|
|
$ |
13,539 |
|
Loss from operations |
$ |
(13,018 |
) |
|
$ |
(11,449 |
) |
Net loss |
$ |
(11,795 |
) |
|
$ |
(8,595 |
) |
Net loss available to common shareholders |
$ |
(12,195 |
) |
|
$ |
(8,995 |
) |
Loss per common share (basic and diluted) |
$ |
(0.87 |
) |
|
$ |
(0.64 |
) |
Weighted average common shares (basic and diluted) |
|
13,982,400 |
|
|
|
13,982,400 |
|
Vested restricted stock units |
|
103,203 |
|
|
|
49,818 |
|
Reported EBITDA* |
$ |
(9,543 |
) |
|
$ |
(8,304 |
) |
*See pages 2-3 for Definitions of Non-GAAP
Financial Measures
Timothy D. Boyd, President and Chief Executive
Officer, commented, “We made good progress during the fiscal 2019
first quarter in preparing our resorts for the upcoming 2018/2019
ski season while benefiting from a full slate of summer events.
Peak Resorts generated revenue of $7.0 million and continued
construction on major capital projects at Mount Snow and Hunter
Mountain. As we head into the fall, our entire team is eagerly
awaiting the start of snowmaking and the shift to winter when we
will welcome guests back to the mountains where we can show off our
new lodge and expanded terrain.
“Reported EBITDA loss in the fiscal 2019 first
quarter of $9.5 million was driven by increased labor and other
expenses offset by the removal of the Attitash Hotel from our
operating results as of May 1, 2018. As noted last quarter, wage
pressure continues in New York and Vermont which we will look to
offset with price increases this season. Our expenses were also
impacted by a number of normal summer season maintenance projects
completed in the fiscal 2019 first quarter instead of during the
second quarter to allow our teams to concentrate on completing our
major capital projects.
“At Mount Snow, we are nearing completion of our
new $22 million Carinthia Lodge which will add much needed modern
amenities at the base of the Carinthia face in time for the ski
season. Our crews are working non-stop to finish construction of a
42,000 square foot facility that will further enhance the guest
experience at our flagship resort. The facility’s new food and
beverage offerings as well as its retail shop and rental facilities
will greatly improve guest circulation across the mountain this
coming winter.
“Construction on the mountain at Hunter
continues at a brisk pace as we ready Hunter North for skiers and
riders. This key project is expanding skiable terrain by 80 acres
through the addition of five new trails and four new gladed areas
and will include a new high-speed six-person chair lift and a new
entrance to our resort. Our teams have completed the grading of our
trails and have now turned their attention to the installation of
the chair lift and automated snowmaking equipment. The views from
this new terrain are spectacular and they will change the way our
guests view Hunter Mountain.”
Fiscal First Quarter Results
ReviewFiscal 2019 first quarter revenue was $7.0 million
compared to $7.5 million in the prior year quarter as increased
summer festival, banquet and event revenue at Mount Snow and Hunter
Mountain partially offset the removal of the Attitash Hotel from
our operating results. Resort operating expenses in the fiscal 2019
first quarter rose 5.4% year over year to $14.3 million, driven by
higher wages, higher power and utilities expense, and higher other
expenses, offset by the removal of Attitash Hotel-related expenses
as of May 1, 2018. General and administrative expenses in the
fiscal 2019 first quarter were $1.3 million, essentially flat with
the prior year quarter.
Reported EBITDA for the first fiscal quarter of
2019 was a loss of $9.5 million, compared to a loss of $8.3 million
in the year-ago quarter. The increase in Reported EBITDA loss on a
year-over-year basis was driven by increased labor and other
expenses across the business, partially offset by the removal of
the Attitash Hotel from our operating results as of May 1, 2018.
The increase in other expenses was largely related to maintenance
projects undertaken during the seasonally slow summer months.
Balance Sheet UpdateAs of July
31, 2018, the Company had cash and cash equivalents of $10.1
million and total outstanding debt of $180.6 million, including
$12.4 million drawn against its revolving line of credit and
long-term debt of $165.8 million, net of debt issuance costs and
current portion.
Christopher J. Bub, Chief Financial Officer,
added, “We invested $8.5 million in capital improvements in the
fiscal 2019 first quarter, including $1.2 million in maintenance
capital, as we prepare for the upcoming skiing and riding season at
our 14 mountains in the Midwest and Northeast. Looking ahead, we
expect to benefit from our continued strategic investments and
efforts to enhance operating efficiencies across our existing
mountain portfolio this winter.”
Investor Conference Call and
Webcast The Company will host an investor conference call
and webcast to discuss its fiscal 2019 first quarter results today
at 9:00 a.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 6561818. 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 income (loss):
(dollars in thousands) |
Three months ended July 31, |
|
|
2018 |
|
|
2017 |
|
Net loss |
$ |
(11,795 |
) |
$ |
(8,595 |
) |
Income tax benefit |
|
(4,587 |
) |
|
(5,727 |
) |
Interest expense,
net |
|
3,479 |
|
|
3,011 |
|
Depreciation and
amortization |
|
3,298 |
|
|
3,145 |
|
Restructuring
charges |
|
177 |
|
|
- |
|
Investment income |
|
(32 |
) |
|
(55 |
) |
Gain on
sale/leaseback |
|
(83 |
) |
|
(83 |
) |
Reported
EBITDA* |
$ |
(9,543 |
) |
$ |
(8,304 |
) |
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 resort 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, 2018, 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
Condensed Consolidated Statements of
Operations |
(dollars in thousands, except per share
amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three months ended July 31, |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
|
$ |
7,007 |
|
|
$ |
7,520 |
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
Resort
operating costs |
|
|
14,271 |
|
|
|
13,539 |
|
Depreciation and amortization |
|
|
3,298 |
|
|
|
3,145 |
|
General
and administrative |
|
|
1,256 |
|
|
|
1,248 |
|
Real
estate and other non-income taxes |
|
|
687 |
|
|
|
684 |
|
Land and
building rent |
|
|
336 |
|
|
|
353 |
|
Restructuring charges |
|
|
177 |
|
|
|
- |
|
Loss from
operations |
|
|
(13,018 |
) |
|
|
(11,449 |
) |
|
|
|
|
|
|
|
Other (expense)
income: |
|
|
|
|
|
|
Interest,
net of amounts capitalized of $173 |
|
|
|
|
|
|
and $431
in 2018 and 2017, respectively |
|
|
(3,479 |
) |
|
|
(3,011 |
) |
Gain on
sale/leaseback |
|
|
83 |
|
|
|
83 |
|
Other
income |
|
|
32 |
|
|
|
55 |
|
|
|
|
(3,364 |
) |
|
|
(2,873 |
) |
|
|
|
|
|
|
|
Loss before income
taxes |
|
|
(16,382 |
) |
|
|
(14,322 |
) |
Income tax benefit |
|
|
(4,587 |
) |
|
|
(5,727 |
) |
Net loss |
|
$ |
(11,795 |
) |
|
$ |
(8,595 |
) |
|
|
|
|
|
|
|
Less declaration and
accretion of Series A preferred |
|
|
|
|
|
|
stock
dividends |
|
|
(400 |
) |
|
|
(400 |
) |
Net loss attributable
to common shareholders |
|
$ |
(12,195 |
) |
|
$ |
(8,995 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted loss per common share |
|
$ |
(0.87 |
) |
|
$ |
(0.64 |
) |
|
|
|
|
|
|
|
Cash
dividends declared per common share |
|
$ |
0.07 |
|
|
$ |
0.07 |
|
|
|
|
|
|
|
|
Cash
dividends declared per preferred share |
|
$ |
20.00 |
|
|
$ |
- |
|
Condensed Consolidated Balance
Sheets |
(dollars in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
July 31, |
|
|
April 30, |
|
|
|
|
2018 |
|
|
|
2018 |
|
|
Assets |
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
10,085 |
|
|
$ |
23,091 |
|
|
Restricted cash |
|
|
1,440 |
|
|
|
1,163 |
|
|
Income
tax receivable |
|
|
4,587 |
|
|
|
- |
|
|
Accounts
receivable |
|
|
2,872 |
|
|
|
8,560 |
|
|
Inventory |
|
|
2,097 |
|
|
|
1,971 |
|
|
Prepaid
expenses and deposits |
|
|
10,034 |
|
|
|
12,731 |
|
|
Total
current assets |
|
|
31,115 |
|
|
|
47,516 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
209,102 |
|
|
|
204,095 |
|
|
Land held for
development |
|
|
37,640 |
|
|
|
37,634 |
|
|
Restricted cash,
construction |
|
|
8,589 |
|
|
|
12,175 |
|
|
Goodwill |
|
|
4,382 |
|
|
|
4,382 |
|
|
Intangible assets,
net |
|
|
721 |
|
|
|
731 |
|
|
Other assets |
|
|
2,513 |
|
|
|
1,797 |
|
|
Total
assets |
|
$ |
294,062 |
|
|
$ |
308,330 |
|
|
|
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Revolving
lines of credit |
|
$ |
12,415 |
|
|
$ |
12,415 |
|
|
Current
maturities of long-term debt |
|
|
2,421 |
|
|
|
2,614 |
|
|
Accounts
payable and accrued expenses |
|
|
10,507 |
|
|
|
12,079 |
|
|
Accrued
salaries, wages and related taxes and benefits |
|
|
1,036 |
|
|
|
922 |
|
|
Unearned
revenue |
|
|
16,756 |
|
|
|
16,084 |
|
|
Current
portion of deferred gain on sale/leaseback |
|
|
333 |
|
|
|
333 |
|
|
Total
current liabilities |
|
|
43,468 |
|
|
|
44,447 |
|
|
|
|
|
|
|
|
|
|
Long-term debt, less
current maturities |
|
|
165,768 |
|
|
|
165,837 |
|
|
Deferred gain on
sale/leaseback |
|
|
2,429 |
|
|
|
2,512 |
|
|
Deferred income
taxes |
|
|
7,809 |
|
|
|
7,809 |
|
|
Other liabilities |
|
|
495 |
|
|
|
504 |
|
|
Total
liabilities |
|
|
219,969 |
|
|
|
221,109 |
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
17,401 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity: |
|
|
|
|
|
|
|
Common stock, $0.01 par
value per share, 40,000,000 shares |
|
|
|
|
|
|
|
authorized, 13,982,400 shares issued and outstanding |
|
|
140 |
|
|
|
140 |
|
|
Additional paid-in capital |
|
|
86,687 |
|
|
|
86,631 |
|
|
Accumulated deficit |
|
|
(30,135 |
) |
|
|
(16,951 |
) |
|
Total
stockholders' equity |
|
|
56,692 |
|
|
|
69,820 |
|
|
Total
liabilities and stockholders' equity |
|
$ |
294,062 |
|
|
$ |
308,330 |
|
|
Supplemental Operating Data |
(dollars in thousands) |
(Unaudited) |
|
|
|
|
Three months ended July 31, |
|
|
|
2018 |
|
|
2017 |
|
Revenues: |
|
|
|
|
|
|
Food and
beverage |
$ |
2,745 |
|
$ |
2,830 |
|
Hotel/lodging |
|
1,444 |
|
|
1,841 |
|
Retail |
|
212 |
|
|
241 |
|
Summer
activities |
|
1,909 |
|
|
1,881 |
|
Other |
|
697 |
|
|
727 |
|
Total |
$ |
7,007 |
|
$ |
7,520 |
|
|
|
|
|
|
|
|
Resort operating
expenses: |
|
|
|
|
|
|
Labor and labor
related expenses |
$ |
8,388 |
|
$ |
8,611 |
|
Retail and food
and beverage cost of sales |
|
894 |
|
|
752 |
|
Power and
utilities |
|
967 |
|
|
789 |
|
Other |
|
4,022 |
|
|
3,387 |
|
Total |
$ |
14,271 |
|
$ |
13,539 |
|
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