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Vail Resorts sees big jump in skier days compared to last season

Colorado as a whole also enjoys significant increase in skier days

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March 16, 2016, 9:59 am

Vail Resorts saw a year-over-year 12.5-percent jump in skier days for the quarter ending Jan. 31, according to a recent earnings release by the company that owns and operates Vail, Beaver Creek, Breckenridge and Keystone in Colorado. That big spike in skier days also includes its ski areas in Utah (Park City), California (Heavenly, Kirkwood and Northstar) and elsewhere around the country.

Vail Resorts logoThe rest of the ski areas in Colorado also saw an increase in skier days, jumping 3.8 percent year over year in the period from Jan. 1 to Feb. 29, which included a very dry and warm month of February. Clearly the plentiful snow in December and January drove bookings to the 21 Colorado ski resorts that make up Colorado Ski Country USA (Vail Resorts is not a member).

The following is a press release from Vail Resorts on its most recent quarterly earnings, followed by a press release from Colorado Ski Country USA:

Vail Resorts Reports Fiscal 2016 Second Quarter Results, Increases Fiscal 2016 Guidance and Increases Quarterly Dividend 30%

BROOMFIELD, Colo., March 10, 2016 /PRNewswire/ — Vail Resorts, Inc. (NYSE: MTN) today reported results for the second quarter of fiscal 2016 ended January 31, 2016, provided the Company’s ski season-to-date metrics through March 6, 2016 and updated full year fiscal 2016 guidance.

Highlights

  • Resort Reported EBITDA was $242.1 million for the second fiscal quarter of 2016, an increase of 21.2% compared to the same period in the prior year.
  • Net income attributable to Vail Resorts, Inc. was $117.0 million for the second fiscal quarter of 2016, representing a 1.1% increase compared to the same period in the prior year.  Excluding the tax benefit recorded in the prior year resulting from an IRS settlement, net income for the second fiscal quarter of 2016 increased 27.2%, as compared to the same period in the prior year.
  • The Company increased its fiscal 2016 guidance range and is now expecting Resort Reported EBITDA to be between $430 million and $445 million.
  • The Company’s Board of Directors approved a 30% increase in the quarterly cash dividend to $0.81 per share from $0.6225 per share beginning with the dividend payable on April 13, 2016 to stockholders of record as of March 29, 2016.

Commenting on the Company’s fiscal 2016 second quarter results, Rob Katz, Chief Executive Officer said, “Our results were very strong in the second quarter of fiscal 2016.  Total lift revenue increased 20.2%, driven by a 12.5% growth in visitation and a 6.8% increase in effective ticket price (“ETP”) compared to the prior year.  We continue to see robust spending trends that drove an 8.3% increase in ski school revenue, and a 15.8% increase in food and beverage revenue compared to the prior year. The Tahoe market has seen a significant rebound in visitation this year with outstanding conditions since opening and we are pleased with the double-digit visitation and revenue growth at Park City, following our transformational capital investments.  Our Colorado resorts continue to deliver outstanding results, with solid growth above our record prior year.  Our U.S. destination visitation has remained very strong throughout the year at all of our mountain resorts, as we saw the benefit of the appeal of our resorts to high-end leisure travelers, our sophisticated marketing efforts and the strong U.S. economy.  While we have continued to see a decline in international visitation, it has moderated since the Christmas holiday, in large part due to the strength of Australian visitation which is now up considerably over last year due to the success of the Epic Australia Pass. Visits from Mexico have been largely flat from last year though we are seeing declines from our UK, Canadian and Brazilian markets.”

Regarding Lodging, Katz said, “Our lodging results were strong for the second fiscal quarter with both occupancy and rate increases compared to the prior year. Revenue (excluding payroll cost reimbursements) increased 5.1% compared to the prior year and revenue per available room (“RevPAR”) increased 9.8% compared to the prior year. We are experiencing robust demand at our lodging properties across each of our geographies.”

Katz continued, “Resort Reported EBITDA was $242.1 million for the fiscal quarter, an increase of 21.2% over the prior year.  Our Resort EBITDA Margin for the fiscal quarter improved 240 basis points over the prior year as we continue to drive strong flow through from our revenue growth. Given our performance to date and assuming that conditions remain consistent through the remainder of the season, we now expect Resort Reported EBITDA for fiscal 2016 to be between $430 million and $445 million. Our updated guidance highlights the success of our efforts to drive destination visitation, grow season pass sales, enhance our network of resorts through strategic acquisitions and be disciplined in our investments to drive strong financial results.”

Regarding Real Estate, Katz said, “We continue to see momentum in our resort real estate markets including an increased interest by third party developers in our land parcels.  Net Real Estate Cash Flow for the second quarter of fiscal 2016 was $2.2 million.  During the fiscal quarter, we closed on one unit at The Ritz-Carlton Residences, Vail.”

Regarding capital allocation, Katz said, “Further demonstrating our continued commitment to return capital to our stockholders, we are pleased to announce that the Board of Directors has approved a 30% increase to our quarterly dividend and declared a quarterly cash dividend on Vail Resorts’ common stock of $0.81 per share, payable on April 13, 2016 to stockholders of record on March 29, 2016.  The increase in our dividend demonstrates our confidence in the stability of our business model and our consistent strong cash flow generation.”  Katz added, “Our balance sheet remains very strong. We ended the fiscal quarter with $45.4 million of cash on hand and our Net Debt, including the capitalized Canyons obligation, was 1.6 times trailing twelve months Total Reported EBITDA.”

The Company expects to invest approximately $100 million in its calendar year 2016 capital plan, excluding capital expenditures for summer related activities and the one-time transformational investments at Wilmot Mountain (“Wilmot”). The plan includes approximately $60 million of maintenance capital expenditures and a number of high-impact, high ROI discretionary investments.  Commenting on the capital plan, Katz said, “We plan to build a new 500-seat restaurant at the top of the Peak 7 chairlift at Breckenridge. This will improve the dining experience at the most visited ski resort in the United States with a modern restaurant located adjacent to the new Peak 6 terrain, which is not currently served by a major food and beverage venue. We are also upgrading the Sun Up chairlift at Vail Mountain (Chair 17), from a fixed grip triple to a high-speed four-passenger chairlift. This upgrade will increase capacity of the lift by approximately 40% and reduce the ride time to four minutes in a critical area for accessing Vail Mountain’s legendary Back Bowls. With this new addition, every major chairlift on Vail Mountain will be a high-speed chairlift and this will be Vail Mountain’s 9th new chairlift in the last ten years.  Our capital plan also includes the beginning of a two-year process to revamp our primary websites to a single ‘responsive’ desktop/mobile platform which will be integrated with our data-based and personalized marketing technology.  We will also be further upgrading our customer database, our call center technology, and remodeling the Pines Lodge at Beaver Creek.”

The Company also announced its plan to invest approximately $14 million in calendar year 2016 for Epic Discovery summer activities.  This capital will be focused on additional canopy tours, zip lines, climbing walls, hiking trails and nature education programming primarily at Breckenridge, with more modest spending at Vail and Heavenly.

Wilmot Acquisition

On January 19, 2016 the Company acquired Wilmot. Located approximately 65 miles north of Chicago, Illinois, Wilmot serves the Chicago area, which is one of Vail Resorts’ most important destination geographies with approximately 800,000 skiers and riders. The acquisition was completed for total cash consideration of approximately $20 million.

The Company is also announcing a plan to invest approximately $13 million in calendar year 2016 to dramatically enhance the guest experience at Wilmot. These investments will focus on modernized and expanded dining and entertainment offerings at the base area, the installation of three new lifts and other lift upgrades that will increase the area’s uphill capacity by 45%, a new children’s ski school facility, redesigned and updated terrain parks and upgrades to the snowmaking infrastructure that will nearly double snowmaking capacity to provide a more consistent experience throughout the ski season.  The Company expects the acquisition of Wilmot will contribute at least $4 million of incremental Resort Reported EBITDA in fiscal 2017.

Commenting on the acquisition and planned investment, Katz said, “The Wilmot acquisition and our planned capital investment represent an opportunity to meaningfully enhance the guest experience at the ski area, creating an incredible introduction to the sport for kids and adults, and building a stronger connection to our western resorts for skiers and riders in the Chicago area. We have achieved incredible success with our Urban strategy thus far and the Wilmot acquisition provides an opportunity for us to build on that success in one of our most important destination geographies.”

Operating Results

A complete Management’s Discussion and Analysis of Financial Condition and Results of Operations can be found in the Company’s Form 10-Q for the second fiscal quarter of 2016 ended January 31, 2016 filed today with the Securities and Exchange Commission.  The following are segment highlights:

Mountain Segment

  • Total lift revenue increased $48.4 million, or 20.2%, compared to the same period in the prior year, to $287.7 million for the three months ended January 31, 2016, driven by a $25.6 million, or 19.5%, increase in lift revenue excluding season pass revenue, as well as a $22.8 million, or 21.1%, increase in season pass revenue.
  • Ski school revenue increased by $4.7 million, or 8.3%, and dining revenue increased $6.1 million, or 15.8%, for the three months ended January 31, 2016 compared to the same period in the prior year, driven in particular by the strong results in Tahoe.  The increase in dining revenue was further bolstered by the opening of the new Miners’ Camp restaurant and the upgrade of the Red Pine Lodge and Summit House at Park City.
  • Retail/rental revenue increased $8.0 million, or 8.4%, for the three months ended January 31, 2016 compared to the same period in the prior year, primarily due to increases in retail sales and rental revenue in Tahoe.
  • Operating expense increased $27.3 million, or 10.1%, for the three months ended January 31, 2016 compared to the three months ended January 31, 2015, including incremental expenses of $4.2 million from Perisher.
  • Mountain Reported EBITDA increased $42.3 million, or 21.8%, for the fiscal quarter compared to the same period in the prior year.
  • Mountain Reported EBITDA includes $3.3 million of stock-based compensation expense for the three months ended January 31, 2016 compared to $3.0 million in the same period in the prior year.

Lodging Segment

  • Lodging segment net revenue (excluding payroll cost reimbursements) for the three months ended January 31, 2016 increased $2.9 million, or 5.1%, as compared to the same period in the prior year.
  • For the three months ended January 31, 2016, occupancy increased 3.9 percentage points and RevPAR increased 9.8% at the Company’s owned hotels and managed condominiums compared to the same period in the prior year.
  • Lodging Reported EBITDA for the three months ended January 31, 2016 increased slightly compared to the same period in the prior year.
  • Lodging Reported EBITDA includes $0.8 million of stock-based compensation expense for the three months ended January 31, 2016 as compared to $0.7 million in the same period in the prior year.

Resort – Combination of Mountain and Lodging Segments

  • Resort net revenue increased $73.3 million, or 14.0%, to $595.7 million for the three months ended January 31, 2016 as compared to the same period in the prior year.
  • Resort Reported EBITDA was $242.1 million for the three months ended January 31, 2016, an increase of $42.3 million, or 21.2%, compared to the same period in the prior year.

Real Estate Segment

  • Real Estate segment net revenue for the three months ended January 31, 2016 decreased $4.2 million, or 53.0%, as compared to the same period in the prior year.
  • Net Real Estate Cash Flow was $2.2 million for the three months ended January 31, 2016, a decrease of $2.1 million from the same period in the prior year.
  • Real Estate Reported EBITDA improved by $1.7 million, to a loss of $0.3 million for the three months ended January 31, 2016 as compared to the same period in the prior year.
  • Real Estate Reported EBITDA includes $0.2 million and $0.3 million of stock-based compensation expense for the three months ended January 31, 2016 and 2015, respectively.

Total Performance

  • Total net revenue increased $69.1 million, or 13.0%, to $599.4 million for the three months ended January 31, 2016 as compared to the same period in the prior year.
  • Net income attributable to Vail Resorts, Inc. was $117.0 million, or $3.14 per diluted share, for the second quarter of fiscal 2016 compared to net income attributable to Vail Resorts, Inc. of $115.8 million, or $3.10 per diluted share, in the second fiscal quarter of the prior year.  Excluding the tax benefit recorded in the prior year resulting from an IRS settlement, net income for the second quarter of fiscal 2016 increased 27.2%, as compared to the same period in the prior year.

Season-to-Date Metrics through March 6, 2016

The Company announced ski season-to-date metrics for the comparative periods from the beginning of the ski season through Sunday, March 6, 2016, and for the prior year period through Sunday, March 8, 2015. The reported ski season metrics are for our U.S. mountain resorts, excluding results from Perisher and the urban ski areas of Afton Alps, Mt. Brighton and Wilmot. The following data is interim period data and subject to fiscal quarter end review and adjustments.

  • Season-to-date total lift revenue at the Company’s U.S. mountain resorts, including an allocated portion of season pass revenue for each applicable period, was up 19.6% compared to the prior year season-to-date period.
  • Season-to-date ancillary spending increased over the prior year, with ski school revenue up 9.4% and dining revenue up 13.3% at the Company’s U.S. mountain resorts. Additionally, retail/rental revenue for resort store locations was up 8.7% compared to the prior year season-to-date period.
  • Season-to-date total skier visits for the Company’s U.S. mountain resorts were up 9.9% compared to the prior year season-to-date period.

Outlook

  • We have updated our estimated range of Resort Reported EBITDA for fiscal 2016 to $430 million to $445 million.
  • We expect Resort EBITDA Margin (defined as Resort Reported EBITDA divided by Resort net revenue) to be approximately 28.3% in fiscal 2016, at the midpoint of our updated guidance range. This is an estimated 270 basis point increase over fiscal 2015, excluding the non-cash gain on the Park City litigation settlement and Perisher EBITDA in the prior year.
  • Our fiscal 2016 Real Estate Reported EBITDA guidance is unchanged and expected to be negative $4 million to a positive $2 million.
  • Our Net Real Estate Cash Flow guidance is unchanged and is expected to be $13 million to $28 million.
  • Net income attributable to Vail Resorts, Inc. is now expected to be in a range of $132 million to $152 million in fiscal 2016.

Colorado Ski Country USA’s Mid-Season Skier Visits On the Rise

DENVER, Colo. – March 15, 2016 – Colorado Ski Country USA (CSCUSA) announced today that its 21 member resorts reported an increase in skier visitation through February. Skier visits at CSCUSA resorts were up by 3.8 percent during the second period of the 2015/16 season, defined as January 1, 2016 through February 29, 2016, compared to the same period of the prior year. The mid-season momentum has also pushed the industry ahead in season-to-date skier visit totals, defined as opening day through February 29, 2016, where visitation at CSCUSA resorts was up by 6.2 percent compared to the same point in time last year.

“We’re very pleased with the way the season is shaping up,” explained Melanie Mills, president and CEO, Colorado Ski Country USA. “While we would’ve liked to have seen more significant storms come through Colorado in January and February, the weather pattern was not unexpected given that this is an El Nino year. Resorts received enough snow to hold up their fantastic early season conditions and guests have been enjoying the sunny days and mild temperatures just the same.”

With beautiful spring skiing conditions around the state, resorts are welcoming spring break visitors and guests from all over the world. “There are about two months left in the season and snow is in the forecast for this week. We’re optimistic that this season’s positive momentum will continue and skiers and snowboarders will take advantage of the spring conditions, the Colorado sunshine and the outstanding hospitality for which our resorts are known,” said Mills.

Spring is a popular time for CSCUSA resorts and CSCUSA reminds people to ski and ride safely. Visitors should familiarize themselves with the nationally recognized Your Responsibility Code and conduct themselves accordingly. Visit http://www.coloradoski.com/page/ski-safety for helpful tips and slope safety best practices.

Final season visitation numbers will be announced at CSCUSA’s 53rd Annual Meeting in June. Skier visits are the metric used to track participation in skiing and snowboarding. A skier visit represents a person participating in the sport of skiing or snowboarding for any part of one day at a mountain resort.

 

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