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 second quarter as summarized below:
(in thousands, except per share data) |
Three months ended October 31, |
Six months ended October 31, |
|
2018 |
2017 |
2018 |
2017 |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
7,984 |
|
|
$ |
8,838 |
|
|
$ |
14,991 |
|
$ |
16,358 |
|
Resort operating costs |
$ |
13,718 |
|
|
$ |
15,121 |
|
|
$ |
27,989 |
|
$ |
28,660 |
|
Loss from operations |
$ |
(12,025 |
) |
|
$ |
(11,776 |
) |
|
$ |
(25,043 |
) |
$ |
(23,225 |
) |
Net loss |
$ |
(11,003 |
) |
|
$ |
(8,914 |
) |
|
$ |
(22,798 |
) |
$ |
(17,509 |
) |
Net loss attributable to common shareholders |
$ |
(11,403 |
) |
|
$ |
(9,314 |
) |
|
$ |
(23,598 |
) |
$ |
(18,309 |
) |
Loss per share (basic and diluted) |
$ |
(0.81 |
) |
|
$ |
(0.66 |
) |
|
$ |
(1.67 |
) |
$ |
(1.30 |
) |
Weighted average shares (basic and diluted) |
|
14,103 |
|
|
|
14,043 |
|
|
|
14,095 |
|
|
14,037 |
|
Reported EBITDA* |
$ |
(8,247 |
) |
|
$ |
(8,622 |
) |
|
$ |
(17,790 |
) |
$ |
(16,926 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*See page 2 for Definitions of Non-GAAP
Financial Measures
Timothy D. Boyd, President and Chief Executive
Officer, commented, “Peak Resorts delivered fiscal 2019 second
quarter results consistent with the seasonality of our business as
a busy schedule of summer events partially offset the loss of
revenue associated with the termination of our operating contract
for the hotel at Attitash. Our operating teams continued
company-wide efforts to more efficiently manage expenses, leading
to a 9.3% decline in resort operating costs versus the prior year
period. In particular, labor and labor related expenses were down
20.1% despite ongoing wage pressure in New York and Vermont as we
benefited from the elimination of the costs associated with the
Attitash hotel, all while working across the company to manage
staffing levels by more closely tying seasonal hiring to visitation
levels.
“During the fiscal 2019 second quarter, we
announced our transformative acquisition of Snow Time. With the
transaction’s completion coming early in the fiscal third quarter,
Peak has added three attractive resorts to our Northeast and
Mid-Atlantic portfolio and expanded our geographic footprint into
the Baltimore and Washington D.C. metropolitan areas.
“The value and appeal of our unlimited Peak Pass
has never been greater, demonstrated by strong initial pass sales
and healthy upgrade activity by Snow Time pass holders. Despite the
recent encroachment of heavily marketed season pass offerings into
the Northeast, customers are choosing our Peak Pass in greater
numbers. Through mid-October, Peak Pass sales were up approximately
19% and 22% year over year on a unit and revenue basis,
respectively, and this momentum has continued through early
December. Snow Time season pass sales were also up 20% and 19% year
over year on a unit and revenue basis, respectively, through the
end of October. Notably, 27% of Snow Time pass holders took
advantage of the opportunity to upgrade to the Peak Pass as these
new customers see the value of our unlimited offering with access
to 10 attractive destinations across the Northeast and
Mid-Atlantic.
“As fall turns to winter, we are pleased to
report our earliest-ever start to a ski season as snowmaking
combined with healthy natural snowfall allowed us to open both
Mount Snow and Wildcat in late October and kick off the 2018/2019
ski season with a strong start. We are also excited to be putting
the finishing touches on two key capital projects, which we expect
will open ahead of the holidays. The two lower floors of the
Carinthia Ski Lodge at Mount Snow are now open and we expect to
finish work on the remaining areas of the facility in the coming
days, which will allow us to open it in its entirety before the
Christmas holiday. Initial guest feedback has been favorable and we
believe the lodge is a welcome addition to Mount Snow. At Hunter
Mountain, we are completing work on the six passenger lift serving
the Hunter North terrain expansion and we expect to have the new
parking area, lift and terrain open heading into Christmas. Both of
these projects represent significant additions to our on-mountain
amenities and we believe they will help attract added interest and
further differentiate Mount Snow, Hunter Mountain and the Peak Pass
from the competition.”
Fiscal Second Quarter Results
ReviewFiscal 2019 second quarter revenue was $8.0 million,
compared to $8.8 million in the prior year quarter, as increased
summer season revenue along with the late October season opening of
Mount Snow and Wildcat was offset by the termination of our
operating contract for the hotel at Attitash. Resort operating
expenses in the fiscal 2019 second quarter declined by 9.3% year
over year to $13.7 million as the Company benefited from cost
controls implemented across its operations as well as the
elimination of expenses related to the Attitash hotel. Offsetting
these declines were higher power and utility costs related to the
early snowmaking at Mount Snow and Wildcat and increased utility
costs at Jack Frost and Big Boulder. General and administrative
expenses in the fiscal 2019 second quarter were $1.9 million, up
roughly $0.4 million from the prior year quarter primarily related
to higher professional fees related principally to the Snow Time
transaction.
Reported EBITDA for the second fiscal quarter of
2019 was a loss of $8.2 million, compared to a loss of $8.6 million
in the year-ago quarter. The narrower Reported EBITDA loss was
driven by the Company’s lower resort operating costs, partially
offset by the decline in revenues. In particular, the lower
Reported EBITDA loss benefited from the elimination of the Attitash
Hotel from the Company’s operating results.
Balance Sheet UpdateAs of
October 31, 2018, the Company had cash and cash equivalents of $6.4
million and total outstanding debt of $180.3 million, including
$12.4 million drawn against its revolving line of credit and
long-term debt of $167.9 million.
Christopher J. Bub, Chief Financial Officer,
added, “While the fiscal second quarter is typically a slow period
for Peak Resorts, our teams were extremely active on a number of
fronts. Importantly, we invested $10.2 million towards capital
improvements across our resort portfolio in preparation for the
2018/2019 ski season and made further progress on two key
facilities projects, including $4.6 million spent on the Carinthia
Ski Lodge at Mount Snow and $2.5 million spent on the ongoing
Hunter North terrain expansion project at Hunter Mountain. We also
announced and, subsequent to the end of the quarter, completed our
acquisition of Snow Time, expanding our resort portfolio through
the addition of three properties in southern Pennsylvania.
“As the 2018/2019 ski season gets underway
across our Northeast and Midwest resorts, Peak Resorts remains
well-positioned to continue to invest in and improve our existing
operations while seeking further expansion through transactions
such as our recently completed acquisition of Snow Time. We are
confident that we have the capital flexibility we need to ensure
that the 2018/2019 ski season exceeds our customers’ high
expectations and we look forward to driving long-term value for our
shareholders in the coming quarters and years.”
Investor Conference Call and
Webcast The Company will host an investor conference call
and webcast to discuss its fiscal 2019 second quarter results today
at 10:00 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 7591318. 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:
(dollars in thousands) |
Three months ended October 31, |
|
Six months ended October 31, |
|
|
2018 |
|
|
2017 |
|
|
|
2018 |
|
|
2017 |
|
Net loss |
$ |
(11,003 |
) |
$ |
(8,914 |
) |
|
$ |
(22,798 |
) |
$ |
(17,509 |
) |
Income tax benefit |
|
(4,270 |
) |
|
(5,941 |
) |
|
|
(8,857 |
) |
|
(11,668 |
) |
Interest expense,
net |
|
3,346 |
|
|
3,196 |
|
|
|
6,825 |
|
|
6,207 |
|
Depreciation and
amortization |
|
3,434 |
|
|
3,154 |
|
|
|
6,732 |
|
|
6,299 |
|
Acquisition related
costs |
|
331 |
|
|
- |
|
|
|
331 |
|
|
- |
|
Restructuring
charges |
|
13 |
|
|
- |
|
|
|
190 |
|
|
- |
|
Other income |
|
(15 |
) |
|
(34 |
) |
|
|
(47 |
) |
|
(89 |
) |
Gain on
sale/leaseback |
|
(83 |
) |
|
(83 |
) |
|
|
(166 |
) |
|
(166 |
) |
Reported
EBITDA* |
$ |
(8,247 |
) |
$ |
(8,622 |
) |
|
$ |
(17,790 |
) |
$ |
(16,926 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 17 ski resorts primarily located in the Northeast,
Mid-Atlantic and Midwest, 16 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, Baltimore, Washington D.C., 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, golf 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.
The forward-looking statements contained in this news release
include, without limitation, statements related to: the expected
impact of the acquisition of Snow Time on the Company’s overall
business, operations and results of operations; expectations
regarding the sustained effect of the acquisition on the Company’s
season pass sales; and the realization of anticipated cost and
operating synergies. These and other forward-looking statements are
based on management's current views and assumptions and involve
risks and uncertainties that could significantly affect expected
results. Results may be materially affected by factors such as:
risks associated with acquisitions generally; failure to retain key
management and employees; issues or delays in the successful
integration of the Snow Time operations with those of the Company,
including incurring or experiencing unanticipated costs and/or
delays or difficulties; difficulties or delays in the successful
transition of the operations, systems and personnel of Snow Time;
future levels of revenues being lower than expected and costs being
higher than expected; failure or inability to implement growth
strategies in a timely manner; unfavorable reaction to the
acquisition by resort visitors, competitors, vendors and employees;
conditions affecting the industry generally; local and global
political and economic conditions; conditions in the securities
market that are less favorable than expected; and other risks
described in the Company’s filings with the Securities and Exchange
Commission, including the Company’s Annual Report on Form 10-K for
the year ended April 30, 2018. Actual results could
differ materially from those projected in the forward-looking
statements. The Company undertakes no obligation to update or
revise publicly any forward-looking statements, whether as a result
of new information, future events or otherwise, except as may be
required by law.
Investor Contact:Norberto Aja, Jim
Leahy, Joseph JaffoniJCIR212-835-8500 or skis@jcir.com
Condensed Consolidated Statements of
Operations(dollars in thousands, except share and
per share amounts)(Unaudited)
|
Three months ended October 31, |
|
Six months ended October 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue |
$ |
7,984 |
|
|
$ |
8,838 |
|
|
$ |
14,991 |
|
|
$ |
16,358 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Resort
operating costs |
|
13,718 |
|
|
|
15,121 |
|
|
|
27,989 |
|
|
|
28,660 |
|
Depreciation and amortization |
|
3,434 |
|
|
|
3,154 |
|
|
|
6,732 |
|
|
|
6,299 |
|
General
and administrative |
|
1,903 |
|
|
|
1,529 |
|
|
|
3,159 |
|
|
|
2,777 |
|
Real
estate and other non-income taxes |
|
605 |
|
|
|
471 |
|
|
|
1,292 |
|
|
|
1,155 |
|
Land and
building rent |
|
336 |
|
|
|
339 |
|
|
|
672 |
|
|
|
692 |
|
Restructuring charges |
|
13 |
|
|
|
- |
|
|
|
190 |
|
|
|
- |
|
Loss from
operations |
|
(12,025 |
) |
|
|
(11,776 |
) |
|
|
(25,043 |
) |
|
|
(23,225 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Other (expense)
income: |
|
|
|
|
|
|
|
|
|
|
|
Interest,
net of amounts capitalized of |
|
|
|
|
|
|
|
|
|
|
|
$325 and
$498 in 2018 and $514 and |
|
|
|
|
|
|
|
|
|
|
|
$945 in
2017, respectively |
|
(3,346 |
) |
|
|
(3,196 |
) |
|
|
(6,825 |
) |
|
|
(6,207 |
) |
Gain on
sale/leaseback |
|
83 |
|
|
|
83 |
|
|
|
166 |
|
|
|
166 |
|
Other
income |
|
15 |
|
|
|
34 |
|
|
|
47 |
|
|
|
89 |
|
|
|
(3,248 |
) |
|
|
(3,079 |
) |
|
|
(6,612 |
) |
|
|
(5,952 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes |
|
(15,273 |
) |
|
|
(14,855 |
) |
|
|
(31,655 |
) |
|
|
(29,177 |
) |
Income tax benefit |
|
(4,270 |
) |
|
|
(5,941 |
) |
|
|
(8,857 |
) |
|
|
(11,668 |
) |
Net loss |
$ |
(11,003 |
) |
|
$ |
(8,914 |
) |
|
$ |
(22,798 |
) |
|
$ |
(17,509 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Less declaration and
accretion of Series A preferred |
|
|
|
|
|
|
|
|
|
|
|
stock
dividends |
|
(400 |
) |
|
|
(400 |
) |
|
|
(800 |
) |
|
|
(800 |
) |
Net loss attributable
to common shareholders |
$ |
(11,403 |
) |
|
$ |
(9,314 |
) |
|
$ |
(23,598 |
) |
|
$ |
(18,309 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted loss per common share |
$ |
(0.81 |
) |
|
$ |
(0.66 |
) |
|
$ |
(1.67 |
) |
|
$ |
(1.30 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends declared per common share |
$ |
0.07 |
|
|
$ |
0.07 |
|
|
$ |
0.14 |
|
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
dividends declared per preferred share |
$ |
20.00 |
|
|
$ |
20.00 |
|
|
$ |
40.00 |
|
|
$ |
20.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance
Sheets(dollars in thousands)
|
|
October 31, |
|
|
April 30, |
|
|
2018 |
|
|
2018 |
Assets |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and
cash equivalents |
$ |
6,362 |
|
|
$ |
23,091 |
|
Restricted cash |
|
1,245 |
|
|
|
1,163 |
|
Income
tax receivable |
|
8,857 |
|
|
|
- |
|
Accounts
receivable |
|
764 |
|
|
|
8,560 |
|
Inventory |
|
3,356 |
|
|
|
1,971 |
|
Prepaid
expenses and deposits |
|
7,839 |
|
|
|
12,731 |
|
Total
current assets |
|
28,423 |
|
|
|
47,516 |
|
|
|
|
|
|
|
Property and equipment,
net |
|
217,266 |
|
|
|
204,095 |
|
Land held for
development |
|
37,646 |
|
|
|
37,634 |
|
Restricted cash,
construction |
|
3,006 |
|
|
|
12,175 |
|
Goodwill |
|
4,382 |
|
|
|
4,382 |
|
Intangible assets,
net |
|
702 |
|
|
|
731 |
|
Other assets |
|
2,206 |
|
|
|
1, 797 |
|
Total
assets |
$ |
293,631 |
|
|
$ |
308,330 |
|
|
|
|
|
|
|
Liabilities and
Stockholders' Equity |
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Revolving
lines of credit |
$ |
12,415 |
|
|
$ |
12,415 |
|
Current
maturities of long-term debt |
|
2,151 |
|
|
|
2,614 |
|
Accounts
payable and accrued expenses |
|
17,508 |
|
|
|
12,079 |
|
Accrued
salaries, wages and related taxes and benefits |
|
947 |
|
|
|
922 |
|
Unearned
revenue |
|
22,108 |
|
|
|
16,084 |
|
Current
portion of deferred gain on sale/leaseback |
|
333 |
|
|
|
333 |
|
Total
current liabilities |
|
55,462 |
|
|
|
44,447 |
|
|
|
|
|
|
|
Long-term debt, less
current maturities |
|
165,777 |
|
|
|
165,837 |
|
Deferred gain on
sale/leaseback |
|
2,346 |
|
|
|
2,512 |
|
Deferred income
taxes |
|
7,809 |
|
|
|
7,809 |
|
Other liabilities |
|
486 |
|
|
|
504 |
|
Total
liabilities |
|
231,880 |
|
|
|
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 |
|
86,738 |
|
|
|
86,631 |
|
Accumulated deficit |
|
(42,528 |
) |
|
|
(16,951 |
) |
Total
stockholders' equity |
|
44,350 |
|
|
|
69,820 |
|
Total
liabilities and stockholders' equity |
$ |
293,631 |
|
|
$ |
308,330 |
|
|
|
|
|
|
|
|
|
Supplemental Operating
Data(dollars in
thousands)(Unaudited)
|
Three months ended October 31, |
|
Six months ended October 31, |
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
Lift and
tubing tickets |
$ |
120 |
|
$ |
- |
|
$ |
120 |
$ |
- |
Food and
beverage |
|
2,647 |
|
|
2,735 |
|
|
5,392 |
|
5,565 |
Equipment
rental |
|
4 |
|
|
- |
|
|
4 |
|
- |
Ski
instruction |
|
27 |
|
|
- |
|
|
27 |
|
- |
Hotel/lodging |
|
1,444 |
|
|
2,014 |
|
|
2,888 |
|
3,855 |
Retail |
|
526 |
|
|
429 |
|
|
738 |
|
670 |
Summer
activities |
|
2,527 |
|
|
2,578 |
|
|
4,436 |
|
4,459 |
Other |
|
689 |
|
|
1,082 |
|
|
1,386 |
|
1,809 |
Total |
$ |
7,984 |
|
$ |
8,838 |
|
$ |
14,991 |
$ |
16,358 |
|
|
|
|
|
|
|
|
|
|
|
Resort operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Labor and
labor related expenses |
$ |
7,191 |
|
$ |
8,999 |
|
$ |
15,579 |
$ |
17,610 |
Retail
and food and beverage cost of sales |
|
1,163 |
|
|
1,118 |
|
|
2,057 |
|
1,870 |
Power and
utilities |
|
1,113 |
|
|
800 |
|
|
2,080 |
|
1,589 |
Other |
|
4,251 |
|
|
4,204 |
|
|
8,273 |
|
7,591 |
Total |
$ |
13,718 |
|
$ |
15,121 |
|
$ |
27,989 |
$ |
28,660 |
|
|
|
|
|
|
|
|
|
|
|
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