Thursday, September 27, 2012

Vail Resorts Reports Fiscal 2012 Fourth Quarter and Full Year Results

Vail Resorts reported net income of $16.5 million in fiscal 2012, down from $34.5 million in 2011. But in a sign that last season’s snow drought has not dampened customer expectations, season pass sales for the upcoming season rose 17 percent in units, to about 178,000, and 21 percent in dollars through Sept. 23.
Commenting on the Company's Fiscal 2012 results, Rob Katz, Chief Executive Officer said, "I am very pleased with our fourth quarter and fiscal year results. In the fourth quarter, our Resort Reported EBITDA was improved compared to the prior year, reflecting enhanced summer guest visitation. For the full fiscal year, I am very proud of our results given that the 2011/ 2012 ski season was the most challenging winter in the history of the United States ski industry and our performance demonstrated the resiliency of our business model. In particular, the strength of our growing season pass business and the comprehensive and differentiated experience we provide at our resorts stabilized our revenues, in the face of very challenging weather".
Katz added, "In the Mountain Segment, net revenues actually increased 1.9% for Fiscal 2012 despite total skier visits declining 12.1% compared to Fiscal 2011. Several key factors contributed to our Mountain Segment results: the strength of season pass sales, which were up $15.8 million or 13.2% in revenue over a year ago; an increase in our effective ticket price, excluding season passes, of 9.3%; enhanced consumer spending resulting in double-digit growth in yield-per-skier visit in our ski school and dining operations and increased international visitation of approximately 2%. Each of these factors is a positive indicator as we look towards the upcoming season".
Regarding Lodging, Katz said, "Our Lodging business was also impacted by the decline in skier visitation during the season, but mitigated that impact through increased average daily rate ("ADR") and a higher mix of luxury room nights as well as strong summer operations, particularly at our Grand Teton Lodge Company operations, including the addition of the Flagg Ranch National Park concession, all resulting in an increase in total Lodging revenues (excluding payroll cost reimbursement related to managed hotel properties) of 1.1% compared to the prior fiscal year".
Katz added, "Resort Reported EBITDA declined 3.8% from Fiscal 2011 when adjusting for one time items (including the timing of the Northstar, Kirkwood and Skiinfo acquisitions and a prior year litigation settlement). We feel this modest decline is particularly noteworthy when considering that Fiscal 2011 was an all-time record snowfall year and Fiscal 2012 was the lowest snowfall season in our history".
Turning to Real Estate, Katz said, "Sales of units at The Ritz-Carlton Residences, Vail and One Ski Hill Place in Breckenridge continue to demonstrate strong momentum and met our expectations for the year. In the last quarter of Fiscal 2012, we closed on four units at The Ritz-Carlton Residences, Vail, and one unit at One Ski Hill Place in Breckenridge. For the entire fiscal year, we have closed on thirteen units at The Ritz-Carlton Residences, Vail, and seven units at One Ski Hill Place. Real Estate net revenue in Fiscal 2012 was $47.2 million".
Katz added, "Our balance sheet remains in a very strong position. In Fiscal 2012, we generated $185.4 million of operating cash flow and ended the fiscal year with $46.1 million of cash on hand. In the fourth quarter of fiscal 2012, in addition to paying out our quarterly dividend, we repurchased $22.5 million of stock at an average price of $46.78. As of July 31, 2012, Net Debt was 2.3 times trailing twelve months Total Reported EBITDA, and we had no borrowings under the revolver component of our senior credit facility. Additionally, we have virtually no principal payments due on debt until 2019".
Katz concluded, "I am pleased to announce that our Board of Directors has declared a quarterly cash dividend on Vail Resorts' common stock of $0.1875 per share, payable on October 25, 2012 to shareholders of record on October 10, 2012".

Mountain Segment:

  • Total Skier Visits for Fiscal 2012 were 6.1 million, versus 7.0 million in Fiscal 2011, a 12.1% decrease.
  • Mountain segment net revenue was $766.6 million for Fiscal 2012 compared to $752.2 million in the same period in the prior year, a 1.9% increase.
  • Mountain Reported EBITDA was $198.9 million for Fiscal 2012 compared to $213.2 million in the same period in the prior year, a 6.7% decrease. Excluding $3.1 million of Northstar Fiscal 2012 first quarter EBITDA losses and transition costs net of the prior year transaction costs, and $2.6 million of Kirkwood and Skiinfo acquisition timing and acquisition related costs, Mountain Reported EBITDA would reflect a 4.1% decrease from Fiscal 2011.
Despite the unprecedented adverse weather conditions, Fiscal 2012 Mountain revenue was stable due to increased season pass sales, higher pricing and increased average guest spend. Total Effective Ticket Price ("ETP") (calculated by dividing lift ticket revenue by total skier visits) for Fiscal 2012 increased 13.8% to $55.75 from $48.99 in Fiscal 2011, driven by price increases and a decline from Fiscal 2011 in visitation from season pass holders of approximately 1.2 days per pass. ETP excluding season passes increased by 9.3% and season pass revenue increased by 13.2%, including a 3% increase in units. Both ski school and dining revenues increased in Fiscal 2012 (0.6% and 0.5%, respectively) over the prior fiscal year, with retail/rental revenues increasing 4.3%. Fiscal 2012 fourth quarter results reflect strong momentum in summer revenues, with Mountain net revenues rising 11.3% to $46.4 million from $41.7 million in the same period of the prior year.
Vail Resorts is the leading mountain resort operator in the United States. Vail Resorts operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado, and Heavenly, Northstar and Kirkwood in the Lake Tahoe area of California and Nevada, and the GrandTeton Lodge Company in Jackson Hole, Wyoming. The Company's subsidiary, RockResorts, a luxury resorthotel company, manages casually elegant properties. Vail Resorts Development Company is the real estateplanning, development and construction subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly heldcompany traded on the New York Stock Exchange.

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