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WILDWOOD, Mo., Sept. 06, 2017 -- Peak Resorts, Inc. (NASDAQ:SKIS), a leading owner and operator of high-quality, individually branded ski resorts in the U.S., today reported results for the first quarter of its 2018 fiscal year.
First-Quarter 2018 Highlights and Outlook:
- Revenue of $7.5 million, an increase of 6% over the prior year period
- Net loss was $8.6 million, or 64 cents per share (basic and diluted)
- Reported EBITDA* was ($8.3) million
- Cash and cash equivalents of $26.9 million
- Commitment for renewed $15 million acquisition and new $10 million working capital lines of credit
- West Lake Water project on track for 2017/2018 ski season opening
Timothy D. Boyd, president and chief executive officer, commented, “Fiscal year 2018 is off to a solid start. We achieved 6% revenue growth in our slowest season and continued to deliver on our promise to expand Mount Snow’s skiable acres and develop other important organic growth opportunities.”
Boyd continued, “I’m pleased to report that our EB-5 funded West Lake Water project at Mount Snow is running ahead of schedule and the new reservoir is expected to be completely filled by early November. With adequate weather, this project will enable us to open the resort with significantly more terrain than in previous seasons. Our Carinthia Ski Lodge project at Mount Snow also remains on track to be completed for the 2018/2019 ski season, and we are awaiting permits for our two latest projects – the Hunter Mountain expansion and the zip tour at Hidden Valley, which are expected to begin construction this fall.”
“In conjunction with our succession planning efforts, we recently announced the promotion of Chris Bub, chief accounting officer, to CFO, effective October 3. Steve Mueller, our long time CFO, will remain with the company and on the board, to assist with the transition and help with special projects and growth initiatives,” Boyd said.
First Quarter Operating Results
Stephen J. Mueller, Peak Resorts’ chief financial officer, noted, “We achieved organic revenue growth of 6% in the first quarter as a result of stronger food and beverage sales at summer concerts and conferences held at our resorts. Reported EBITDA* was down $1.4 million largely due to resort maintenance projects returning to historical levels. Comparability to fiscal year 2017 is skewed by strict cost control procedures implemented in fiscal 2017 as we were awaiting the release of our EB-5 escrow funds.”
*See page 3 for Definitions of Non-GAAP Financial Measures
| (dollars in thousands except per share data) | Three months ended July 31, | |||||||||
| 2017 | 2016 | |||||||||
| Revenues | $ | 7,520 | $ | 7,126 | ||||||
| Loss from operations | $ | (11,449 | ) | $ | (10,117 | ) | ||||
| Net loss | $ | (8,595 | ) | $ | (7,904 | ) | ||||
| Loss per share (basic and diluted) | $ | (0.64 | ) | $ | (0.56 | ) | ||||
| Weighted average shares outstanding | 13,982 | 13,982 | ||||||||
| Vested restricted stock units | 50 | 39 | ||||||||
| Reported EBITDA* | $ | (8,304 | ) | $ | (6,900 | ) | ||||
| (dollars in thousands) | Three months ended July 31, | |||||||||
| 2017 | 2016 | |||||||||
| Revenues: | ||||||||||
| Food and beverage | $ | 2,830 | $ | 2,487 | ||||||
| Hotel/lodging | $ | 1,841 | $ | 1,808 | ||||||
| Retail | $ | 241 | $ | 149 | ||||||
| Summer activities | $ | 1,881 | $ | 1,864 | ||||||
| Other | $ | 727 | $ | 818 | ||||||
| Total | $ | 7,520 | $ | 7,126 | ||||||
| (dollars in thousands) | Three months ended July 31, | |||||||||
| 2017 | 2016 | |||||||||
| Resort operating expenses: | ||||||||||
| Labor and labor related expenses | $ | 8,611 | $ | 7,707 | ||||||
| Retail and food and beverage cost of sales | $ | 752 | $ | 761 | ||||||
| Power and utilities | $ | 789 | $ | 588 | ||||||
| Other | $ | 3,387 | $ | 2,708 | ||||||
| Total | $ | 13,539 | $ | 11,764 | ||||||
Financial Position
Mueller continued, “As recently announced, we received a commitment from Royal Banks of Missouri, our primary banking partner, to renew our $15 million acquisition line of credit and enter into a new $10 million working capital line of credit that we intend to close this fall. We intend to roll all amounts currently outstanding under existing credit facilities with Royal Banks into the renewed acquisition line. These actions will bolster our strong liquidity position going into the 2017/2018 ski season and improve shareholder value.”
Quarterly Investor Call and Webcast
Peak Resorts will hold its first quarter fiscal 2018 investor conference call/webcast on Thursday, September 7, 2017 at 11 a.m. ET.
The call/webcast will be available via:
Webcast: ir.peakresorts.com on the Events page
Conference Call: 844-526-1518 (domestic) or 647-253-8644 (international)
A replay will be available on the Peak Resorts investor relations website (ir.peakresorts.com) after the call concludes.
Definitions of Non-GAAP Financial Measures
Reported 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:
| Three months ended | |||||||||
| July 31, | |||||||||
| 2017 | 2016 | ||||||||
| Net loss | $ | (8,595 | ) | $ | (7,904 | ) | |||
| Income tax benefit | (5,727 | ) | (5,176 | ) | |||||
| Interest expense, net | 3,011 | 3,048 | |||||||
| Depreciation and amortization | 3,145 | 3,217 | |||||||
| Other income | (55 | ) | (2 | ) | |||||
| Gain on sale/leaseback | (83 | ) | (83 | ) | |||||
| $ | (8,304 | ) | $ | (6,900 | ) | ||||
We have specifically chosen to include Reported EBITDA (which we define as net income before interest, income taxes, depreciation, amortization, gain on sale/leaseback, other income and expense and other non-recurring items) as a measurement of our results of operations because we consider this measurement to be a significant indication of our financial performance and available capital resources. Because of large depreciation and other charges relating to our ski resorts operations, it is difficult for management to fully and accurately evaluate our 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 our ability to service debt, and we consider it an appropriate measure to use because of our highly leveraged position. Management believes that by providing investors with Reported EBITDA, they will have a clearer understanding of our 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 our operations from period to period by removing the effect of our capital structure and asset base from our operating results; and (iii) is used by our board of directors, management and our lenders for various purposes, including as a measure of our operating performance and as a basis for planning.
Reported EBITDA is not a measure of performance defined by GAAP. The items we exclude from net income to arrive at Reported EBITDA are significant components for understanding and assessing our financial performance and liquidity. Reported EBITDA should not be considered in isolation or as 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 Resorts
Headquartered in Missouri, Peak Resorts, Inc. is a leading owner and operator of high-quality, individually branded ski resorts in the U.S. The company operates 14 ski resorts primarily located in the Northeast and Midwest, 13 of which are company owned.
The majority of the resorts are located within 100 miles of major metropolitan markets, including New York, Boston, Philadelphia, 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 and other summer activities. To learn more, visit the company’s website at ir.PeakResorts.com, or follow Peak Resorts on Facebook (https://www.facebook.com/skipeakresorts) for resort updates.
Forward Looking Statements
This news release contains forward-looking statements including statements regarding the future outlook and performance of Peak Resorts, Inc., and other statements based on current management expectations, estimates and projections. These statements are subject to a variety of risks and uncertainties, are not guarantees and are inherently subject to various risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties include, without limitation, those discussed under the caption “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended April 30, 2017, filed with the Securities and Exchange Commission, and as updated from time to time in the company’s filings with the SEC. The forward-looking statements included in this news release are only made as of the date of this release, and Peak Resorts disclaims any obligation to publicly update any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
| Consolidated Statements of Operations | ||||||||
| (in thousands, except share and per share amounts) | ||||||||
| (Unaudited) | ||||||||
| Three months ended July 31, | ||||||||
| 2017 | 2016 | |||||||
| Net revenue | $ | 7,520 | $ | 7,126 | ||||
| Operating expenses: | ||||||||
| Resort operating costs | 13,539 | 11,764 | ||||||
| Depreciation and amortization | 3,145 | 3,217 | ||||||
| General and administrative | 1,248 | 1,372 | ||||||
| Real estate and other non-income taxes | 684 | 563 | ||||||
| Land and building rent | 353 | 327 | ||||||
| Loss from Operations | (11,449 | ) | (10,117 | ) | ||||
| Other (expense) income: | ||||||||
| Interest, net of amounts capitalized of $431 and $384 in 2017 | ||||||||
| and 2016, respectively | (3,011 | ) | (3,048 | ) | ||||
| Gain on sale/leaseback | 83 | 83 | ||||||
| Other income | 55 | 2 | ||||||
| (2,873 | ) | (2,963 | ) | |||||
| Loss before income taxes | (14,322 | ) | (13,080 | ) | ||||
| Income tax benefit | (5,727 | ) | (5,176 | ) | ||||
| Net loss | $ | (8,595 | ) | $ | (7,904 | ) | ||
| Less accretion of Series A preferred stock dividends | (400 | ) | - | |||||
| Net loss attributable to common shareholders | $ | (8,995 | ) | $ | (7,904 | ) | ||
| Basic and diluted loss per common share | $ | (0.64 | ) | $ | (0.56 | ) | ||
| Cash dividends declared per common share | $ | 0.07 | $ | - | ||||
| Consolidated Balance Sheets | |||||||||
| (dollars in thousands, except share and per share amounts) | |||||||||
| July 31, | April 30, | ||||||||
| 2017 | 2017 | ||||||||
| Assets | (Unaudited) | ||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 26,869 | $ | 33,665 | |||||
| Restricted cash balances | 7,079 | 11,113 | |||||||
| Income tax receivable | 5,727 | - | |||||||
| Accounts receivable | 1,625 | 5,083 | |||||||
| Inventory | 2,395 | 2,215 | |||||||
| Deferred income taxes | 591 | 591 | |||||||
| Prepaid expenses and deposits | 2,541 | 2,183 | |||||||
| Total current assets | 46,827 | 54,850 | |||||||
| Property and equipment, net | 193,644 | 188,143 | |||||||
| Land held for development | 37,592 | 37,583 | |||||||
| Restricted cash, construction | 26,156 | 33,700 | |||||||
| Goodwill | 4,825 | 4,825 | |||||||
| Intangible assets, net | 774 | 788 | |||||||
| Other assets | 661 | 648 | |||||||
| Total assets | $ | 310,479 | $ | 320,537 | |||||
| Liabilities and Stockholders' Equity | |||||||||
| Current liabilities: | |||||||||
| Acquisition line of credit | $ | 2,750 | $ | 4,500 | |||||
| Accounts payable and accrued expenses | 13,842 | 12,371 | |||||||
| Accrued salaries, wages and related taxes and benefits | 1,092 | 1,035 | |||||||
| Unearned revenue | 14,762 | 14,092 | |||||||
| EB-5 investor funds in escrow | - | 500 | |||||||
| Current portion of deferred gain on sale/leaseback | 333 | 333 | |||||||
| Current portion of long-term debt and capitalized lease obligation | 3,622 | 3,592 | |||||||
| Total current liabilities | 36,401 | 36,423 | |||||||
| Long-term debt | 174,716 | 174,785 | |||||||
| Capitalized lease obligations | 2,343 | 2,708 | |||||||
| Deferred gain on sale/leaseback | 2,762 | 2,845 | |||||||
| Deferred income taxes | 12,474 | 12,474 | |||||||
| Other liabilities | 531 | 540 | |||||||
| Total liabilities | 229,227 | 229,775 | |||||||
| Series A preferred stock, $.01 par value per share, $1,000 liquidation | |||||||||
| preference per share, 40,000 shares authorized, 20,000 shares | |||||||||
| issued and outstanding | 17,401 | 17,001 | |||||||
| Commitments and contingencies | |||||||||
| Stockholders' equity: | |||||||||
| Common stock, $.01 par value per share, 20,000,000 shares | |||||||||
| authorized, 13,982,400 shares issued and outstanding | 140 | 140 | |||||||
| Additional paid-in capital | 86,435 | 86,372 | |||||||
| Accumulated deficit | (22,724 | ) | (12,751 | ) | |||||
| Total stockholders' equity | 63,851 | 73,761 | |||||||
| Total liabilities and stockholders' equity | $ | 310,479 | $ | 320,537 | |||||
For Further Information: Jennifer Childe, 312-690-6003 [email protected]
