BROOMFIELD, Colo., March 18, 2020 /CNW/ -- Vail Resorts, Inc. (NYSE:
MTN) today provided updated commentary on its fiscal 2020 results
and the evolving impact of COVID-19 on its business and results of
operations.
Rob Katz, Chief Executive
Officer, said, "Given the escalating concerns surrounding the
global spread of COVID-19 and the potential impact that continuing
to operate our resorts would have on our community medical systems,
we made the difficult decision to suspend the operations at all of
our North American mountain resorts and retail stores beginning
Sunday, March 15, 2020. We
determined yesterday that these resorts will remain closed through
the remainder of the 2019/2020 North American ski season, and our
lodging properties and transportation business will close as
well. The Company will consider reopening Breckenridge Ski
Resort in Colorado, Heavenly
Mountain Resort in Lake Tahoe and
Whistler Blackcomb in British
Columbia in late April/early May, dependent on the situation
with COVID-19 as well as weather conditions. We knew this
decision would impact our employees, guests, and local communities
and would also have a significant negative impact on our financial
results. However, our top priority is the health and
wellbeing of all our constituents and stakeholders, and we believe
this decision was absolutely the right one.
"Given the closure of our operations as a result of COVID-19, we
anticipate that our operating results for March and April will have
a negative impact of $180 million to
$200 million compared to the Resort
Reported EBITDA expectation we had as of March 1, 2020. If we are able to reopen
certain resorts before the end of the season, we believe such a
decision will not have a material impact, positive or negative, on
our results for Fiscal 2020. We are currently expecting to be
fully operational for the North American summer and Australian ski
season for all of our businesses, however that will remain subject
to the ongoing situation with COVID-19. Additionally, even if
we are fully operational, we expect that our results in the fourth
quarter of fiscal 2020 will be negatively impacted by the current
economic and travel environment, but we are not able to fully
assess that impact at this time. Our primary revenue
generating businesses in the fourth fiscal quarter are our three
ski areas in Australia, the Grand
Teton Lodge Company in Wyoming and
our summer mountain and lodging operations at our North American
resorts.
"The Company went into this challenging time period with a
strong financial position with Net Debt of 2.4 times trailing
twelve months Total Reported EBITDA at the end of the second
quarter of fiscal 2020. We expect to have cushion on all of
our financial covenants related to our Eighth Amended and Restated
Credit Agreement throughout the remainder of fiscal 2020. We
also have significant liquidity through our cash on hand, our
$500 million U.S. revolver and our
C$300 million Canadian revolver
associated with Whistler Blackcomb. While we entered this
situation in a strong financial position, we believe the
potentially challenging economic environment ahead requires us to
review our previously announced calendar year 2020 capital plans
and our plans for returning capital to shareholders and will
provide updates on those plans as we finalize decisions.
"As we look further into the future, we believe the underlying
strengths of our business position us very well with our
outstanding network of destination, regional and local resorts, the
stability, loyalty and value offered through our advanced
commitment pass products and our new Epic Mountain Rewards program
that provides additional value to our guests who purchase their
pass products ahead of the season. Additionally, our
data-driven marketing efforts provide the ability to target and
personalize messages and value-based offers to our guests and our
effort to centralize our corporate functions across our resorts
allows us to be more sophisticated and efficient in how we support
our resort operations. We are grateful for the commitment of
our employees and community partners as we collectively work to
contain the spread of COVID-19 with a focus on the health and
safety of our employees, guests and communities. We are
confident that we will all navigate through this challenging
environment together."
About Vail Resorts, Inc. (NYSE: MTN)
Vail Resorts, Inc., through its subsidiaries, is the leading
global mountain resort operator. Vail Resorts' subsidiaries operate
37 world-class mountain resorts and urban ski areas, including
Vail, Beaver Creek, Breckenridge, Keystone and Crested
Butte 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;
Perisher, Falls Creek and Hotham
in Australia; Stowe, Mount
Snow, Okemo in Vermont;
Hunter Mountain in New York; Mount
Sunapee, Attitash, Wildcat and Crotched in New Hampshire; Stevens Pass in Washington; Liberty, Roundtop, Whitetail,
Jack Frost and Big Boulder in
Pennsylvania; Alpine Valley,
Boston Mills, Brandywine and Mad
River in Ohio; Hidden Valley and Snow Creek in Missouri; Wilmot in Wisconsin; Afton Alps in Minnesota; Mt. Brighton in Michigan; and Paoli Peaks in Indiana. 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, other than
statements of historical information, are forward-looking
statements within the meaning of the federal securities laws,
including our expectations regarding our fiscal 2020 performance
(and our assumptions related thereto), including the timing for
re-opening of our North American resorts; our expected Resort
Reported EBITDA for fiscal 2020, our expectations regarding the
fourth quarter of fiscal 2020; the ultimate effects of COVID-19 on
our business and results of operations; and our expectations
regarding our ability to comply with financial covenants under our
credit facilities. 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 the ultimate duration
of COVID-19 and its short-term and long-term impacts on consumer
behaviors, the economy generally and our business and results of
operations; prolonged weakness in general economic conditions,
including adverse effects on the overall travel and leisure related
industries; willingness or ability of our guests to travel due to
terrorism, the uncertainty of military conflicts or outbreaks of
contagious diseases (such as the current outbreak of COVID-19), and
the cost and availability of travel options and changing consumer
preferences; unfavorable weather conditions or the impact of
natural disasters; risks related to our reliance on information
technology, including our failure to maintain the integrity of our
customer or employee data and our ability to adapt to technological
developments or industry trends; risks related to cyber-attacks;
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; risks
related to a disruption in our water supply that would impact our
snowmaking capabilities and operations; our reliance on government
permits or approvals for our use of public land or to make
operational and capital improvements; risks associated with
obtaining governmental or third party approvals; risks related to
federal, state, local and foreign government laws, rules and
regulations; risks related to changes in security and privacy laws
and regulations which could increase our operating costs and
adversely affect our ability to market our products and services
effectively; risks related to our workforce, including increased
labor costs; loss of key personnel and our ability to hire and
retain a sufficient seasonal workforce; 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 Falls
Creek, Hotham, Peak Resorts 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 where the Company has foreign
currency exposure, primarily the Canadian and Australian dollars;
changes in accounting judgments and estimates, accounting
principles, policies or guidelines or adverse determinations by
taxing authorities as well as risks associated with uncertainty of
the impact of tax reform legislation in the United States; 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, 2019, which was filed on September 26, 2019.
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, and Net Debt, which are not
financial measures under accounting principles generally accepted
in the United States of America
("GAAP"). Resort Reported EBITDA, Total Reported EBITDA, and Net
Debt 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.
Additionally, with respect to discussion of impacts from currency,
the Company calculates the impact by applying current period
foreign exchange rates to the prior period results, as the Company
believes that comparing financial information using comparable
foreign exchange rates is a more objective and useful measure of
changes in operating performance.
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 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. See the tables provided in the release dated
March 9, 2019 for reconciliations of
our measures of segment profitability and non-GAAP financial
measures to the most directly comparable GAAP financial
measures.
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SOURCE Vail Resorts, Inc.