Vail Resorts today reported results for the first quarter of fiscal 2010 ended October 31, 2009, as well as certain early season indicators. Conditions have improved slightly, but market conditions still appear weak. Highlights include:
- Resort Reported EBITDA, which includes our Mountain and Lodging segments, for the first quarter improved from the prior year by $0.8 million, or 2.0%, due in part to the favorable impact of cost savings initiatives implemented subsequent to the prior year first quarter
- Total revenue and Real Estate Reported EBITDA declined and net loss was greater for the first quarter compared to the prior year due to the timing of real estate project closings.
- Net Debt leverage ratio of 2.4 times trailing twelve months Total
- Reported EBITDA and no revolver borrowings under the Company’s $400 million senior credit facility as of October 31, 2009.
- Season pass sales to date, including the Epic Season Pass, up approximately 11% in units and approximately 9% in sales dollars compared to the same time period in the prior year.
Commenting on the Company’s fiscal 2010 first quarter results, Rob Katz, Chief Executive Officer said,
Our first fiscal quarter is a seasonally low earnings period and historically a loss quarter, since our mountain resorts are not open for winter ski operations during the period. The first quarter Resort results are generally driven by the Company’s summer mountain operations, lodging operations including our summer seasonal business at Grand Teton Lodge Company (“GTLC”), golf operations and group business. The Company’s Mountain Reported EBITDA results in this year’s first quarter improved by $2.4 million, or 6.1%, compared to the prior year first quarter and benefited from the cost savings initiatives previously implemented in January and April of 2009, including wage reductions for our full-time and seasonal employees. Additionally, Mountain segment results were favorably impacted by improved retail/rental contribution due to higher gross margins, improved summer operations due in part to prior year construction impacts, higher fees and dues revenue from private club operations and the timing of marketing spend including a significant shift away from more traditional print media. Lodging segment results in the current year first fiscal quarter included Colorado Mountain Express (“CME”), which was acquired after the prior year first quarter on November 1, 2008, and negatively impacted year-over-year Lodging Reported EBITDA comparisons by $1 million in a seasonal loss first quarter. The Company’s Lodging segment results in the first fiscal quarter are historically impacted by group business, which was down as expected in the current year compared to the pre-recessionary period of the prior year. When combined with a similarly impacted drop-off in transient guest occupancy, hotel revenue per available room (“RevPAR”) declined by 11.7% at our owned hotels, which is a much smaller decline than that experienced by the luxury and the upper upscale segments of the lodging industry as a whole for the same period, which experienced estimated RevPAR declines of approximately 22% and 17%, respectively. Real Estate revenue and Real Estate Reported EBITDA was significantly decreased, as expected, due to the prior year closings of 39 Crystal Peak Lodge units and one Lodge at Vail Chalet unit, partially offset by the current year sale of a land parcel at the Arrowhead base area of the Beaver Creek Resort for $8.5 million, resulting in a gain on sale of $6.1 million (net of $2.4 million in related cost of sales). Despite the impacts of the back-to-back seasonally low fourth and first fiscal quarters as well as our continued investment in two real estate projects under construction, our balance sheet position remains solid with Net Debt leverage of 2.4 times trailing twelve months Total Reported EBITDA, no borrowings under our revolver at the end of the first quarter of fiscal 2010 and virtually no principal maturities due on any of our debt until 2014.
