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Peak Resorts Reports Results for Fourth-Quarter and Full-Year 2017; Declares Common Stock Dividend of $.07 Per Share

Company Release - 7/13/2017 10:06 AM ET

WILDWOOD, Mo., July 13, 2017 (GLOBE NEWSWIRE) -- 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 fourth quarter and full year of its 2017 fiscal year ended April 30, 2017.

Annual highlights include:

  • Revenue of $123.2 million, an increase of 29% over the prior year ending April 30, 2016
  • Net income increased to 3 cents per share (diluted) from a net loss of 23 cents per share (diluted) in the prior year
  • Reported EBITDA* increased 65% over the prior year to $26.8 million
  • Consolidated season pass unit sales and sales revenue increased 8.6% compared to the prior year
  • Permit application begun to add additional skiing terrain to Hunter Mountain and a zip tour to Hidden Valley Resort
  • Reinstated payment of common dividend in 3Q 2017

Timothy D. Boyd, president and chief executive officer, commented, “2017 was a solid year for Peak Resorts. We achieved solid revenue and reported EBITDA, continued to expand season pass sales and reinstated the payment of our quarterly dividend. We exited the year with a very strong cash position and the financial flexibility to continue our growth organically and through acquisition in the coming years.”

Boyd concluded, “In recent quarters, we focused on building value through investment in our current properties to elevate our customers’ on and offseason experiences. We began the permitting process for two projects that will offer our Northeast skiers and tubers more skiable acres, and our Midwest customers more opportunities to enjoy our resorts in the spring and summer. We are now moving forward applying for construction permits to increase our skiable acreage at Hunter Mountain by 25-30% which we expect to be completed for the 2018-2019 season, and to build a zip tour at our Hidden Valley resort which we expect to be completed for the 2018 spring and summer season. We also remain on schedule with our EB-5 funded West Lake Water and Carinthia Base Ski Lodge projects at Mount Snow, to be completed for the 2017-2018 season, and 2018-2019 season, respectively.

* See page 3 for Definitions of Non-GAAP Financial Measures

            
(dollars in thousands except per share data) Three months ended April 30,  Year ended April 30,
  2017  2016  2017  2016 
            
Revenues$ 51,263 $ 45,475 $ 123,249 $ 95,729 
Income (loss) from operations$ 17,607 $ 14,174 $ 14,069 $ 5,169 
Net income (loss)$ 8,962 $ 7,041 $ 1,241 $ (3,226)
Net income (loss) available to common shareholders for basic EPS$ 8,162 $ 7,041 $ 441 $ (3,226)
Net income (loss) available to common shareholders for diluted EPS$8,962 $7,041 $441 $(3.226)
Earnings (loss) per share (basic)$ 0.58 $ 0.50 $ 0.03 $ (0.23)
Weighted average shares outstanding (basic)  14,031   13,995   14,018   13,995 
Earnings (loss) per share (diluted)$0.52 $ 0.50 $ 0.03 $ (0.23)
Weighted average shares outstanding (diluted)  17,257  13,995   14,041   13,995 
Reported EBITDA*$ 20,678 $ 17,969 $ 26,782 $ 16,240 
             

Resort Operating Results
Stephen J. Mueller, Peak Resorts’ chief financial officer, noted, “We achieved solid levels of earnings and profitability despite the unusually warm weather we faced, particularly in the Midwest where our margins are the highest. Reported EBITDA grew 65% for the year, on a revenue increase of 29%."

            
(dollars in thousands) Three months ended April 30,  Year ended April 30,
  2017  2016  2017  2016
            
Revenues           
 Lift and tubing tickets$ 27,630 $ 24,824 $ 58,100 $ 45,541
 Food and beverage$ 8,917 $ 6,903 $ 23,078 $ 15,816
 Equipment rental$ 3,696 $ 3,682 $ 8,582 $ 7,036
 Ski instruction$ 3,879 $ 3,196 $ 8,562 $ 6,580
 Hotel/lodging$ 2,988 $ 3,117 $ 9,731 $ 7,972
 Retail$ 2,460 $ 1,972 $ 6,196 $ 4,560
 Summer activities$ - $ - $ 4,748 $ 4,302
  Other$ 1,693 $ 1,781 $ 4,252 $ 3,922
 Total$ 51,263 $ 45,475 $ 123,249 $ 95,729


            
(dollars in thousands) Three months ended April 30,  Year ended April 30,
  2017  2016  2017  2016
            
Resort operating expenses           
 Labor and labor related expenses$ 14,534 $ 12,920 $ 48,253 $ 39,331
 Retail and food and beverage cost of sales$ 4,271 $ 3,042 $ 10,820 $ 7,735
 Power and utilities$ 2,676 $ 3,114 $ 7,843 $ 6,839
 Other$ 7,390 $ 6,803 $ 20,403 $ 18,310
 Total$ 28,871 $ 25,879 $ 87,319 $ 72,215

Financial Position
“The organic investments in Hunter Mountain and Hidden Valley announced in June could boost our company wide annual EBITDA by $2-3 million on an investment of approximately $11.5 million, generating solid returns on our capital. In addition, we increased our cash balances by $28.3 million during the fiscal year.

“With $33.7 million of unrestricted cash on the balance sheet, we have the financial flexibility to continue to invest in acquiring new properties and growing organically, while returning capital to our shareholders. On July 12, 2017, our Board of Directors declared a second quarter fiscal 2018 cash dividend payable on August 11, 2017 to common shareholders of record on July 27, 2017 at a rate of $0.07 per share.

Quarterly Investor Call and Webcast
Peak Resorts will hold its year-end investor conference call/webcast on Thursday, July 13th, 2017 at 11 am 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:

          
(dollars in thousands) Three months ended
April 30,
 Year ended April 30,
 2017 2016  2017 2016 
Net income (loss)$ 8,962 $ 7,041  $ 1,241 $ (3,226)
Income tax expense (benefit)$ 5,805 $ 4,486  $ 749 $ (2,078)
Interest expense, net$ 2,980 $ 2,734  $ 12,473 $ 10,814 
Depreciation and amortization$ 3,071 $ 3,238  $ 12,713 $ 10,709 
Other income$ (57)$ (4) $ (61)$ (8)
Gain on sale/leaseback$ (83)$ (83) $ (333)$ (333)
Gain on involuntary conversion$ - $ -  $ - $ (195)
Insurance loss$ - $ 400  $ - $ 400 
Hunter Mountain season pass liability acquisition adjustment$ - $ 157  $ - $ 157 
Reported EBITDA*$ 20,678 $ 17,969  $ 26,782 $ 16,240 

We have chosen to specifically include reported EBITDA 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, it is difficult for management to fully and accurately evaluate our financial results and available capital resources using net income. Management believes that by providing investors with reported EBITDA, investors will have a clearer understanding of our financial performance and cash flow 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, which can vary by company primarily based upon the structure or existence of their financing; (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 structure; and (iii) is used by our management for various purposes, including as a measure of performance of our operating entities and as a basis for planning.

The Company has also provided an estimated range of EBITDA increases in connection with certain capital improvements on a forward-looking basis. The Company is unable to provide a full quantitative reconciliation of its forward-looking EBITDA estimation without unreasonable effort because of the uncertainty regarding, and potential variability of, the amounts of interest, income taxes, depreciation and amortization, gain on sale/leaseback, investment income, other income or expense and other non-recurring items that may be incurred in the future. 

Reported EBITDA is not a measure of performance defined by GAAP. Items excluded from reported EBITDA are significant components in understanding and assessing financial performance or liquidity. Reported EBITDA should not be considered in isolation or as alternative to, or substitute for, the GAAP related measure of net income, net change in cash and cash equivalents or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because reported EBITDA is not a measurement determined in accordance with GAAP and is susceptible to varying calculations, reported EBITDA as presented may not be comparable to other similarly titled measures of other companies.

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 now operates 14 ski resorts primarily located in the Northeast and Midwest, 13 of which are company owned, including Hunter Mountain, the Catskills’ premier winter resort destination.

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, 2016, 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 Income Statements
 (In thousands, except per share data) 
          
  Years ended April 30,
   2017   2016   2015 
          
Revenues $ 123,249  $ 95,729  $ 104,858 
Costs and expenses         
Resort operating expenses   87,319    72,215    72,670 
Depreciation and amortization   12,713    10,709    9,450 
General and administrative expenses   5,431    4,513    4,088 
Land and building rent   1,395    1,386    1,440 
Real estate and other taxes   2,322    1,932    1,828 
    109,180    90,755    89,476 
Other operating income         
Gain on settlement of lawsuit   -    -    2,100 
Gain on involuntary conversion   -    195    - 
          
Income from operations   14,069    5,169    17,482 
          
Other income (expense)         
Interest, net of interest capitalized of $1,545, $867, and $488 in 2017, 2016, and 2015 respectively   (12,473)   (10,814)   (15,458)
Defeasance fee paid with debt restructure   -    -    (5,000)
Gain on sale/leaseback   333    333    333 
Other income   61    8    11 
    (12,079)   (10,473)   (20,114)
          
Earnings (loss) before income tax expense (benefit)   1,990    (5,304)   (2,632)
Income tax expense (benefit)   749    (2,078)   (778)
Net earnings (loss) $ 1,241  $ (3,226) $ (1,854)
          
          
Basic earnings (loss) per share $ 0.03  $ (0.23) $ (0.22)
          
Diluted earnings (loss) per share $ 0.03  $ (0.23) $ (0.22)
          
Cash dividends declared per common share $ 0.1400  $ 0.4125  $ 0.2466 


 
Consolidated Balance Sheets
(dollars in thousands)
        
   April 30,  April 30, 
Assets  2017   2016  
Current assets       
Cash and cash equivalents $ 33,665  $ 5,396  
Restricted cash balances   11,113    61,099  
Accounts receivable   5,083    4,772  
Inventory   2,215    2,730  
Deferred income taxes   591    1,092  
Prepaid expenses and deposits   2,183    2,680  
    54,850    77,769  
Property and equipment-net   188,143    192,178  
Land held for development   37,583    37,542  
Restricted cash, construction   33,700    -  
Intangible assets, net   788    846  
Goodwill   4,825    5,009  
Other assets   648    619  
  $ 320,537  $ 313,963  
Liabilities and Stockholders' Equity       
Current liabilities       
Acquisition line of credit $ 4,500  $ 15,500  
Accounts payable and accrued expenses   12,371    18,696  
Accrued salaries, wages and related taxes and benefits   1,035    919  
Unearned revenue   14,092    13,233  
EB-5 investor funds in escrow   500    52,004  
Current portion of deferred gain on sale/leaseback   333    333  
Current portion of long-term debt and capitalized lease obligation   3,592    2,456  
    36,423    103,141  
Long-term debt   174,785    118,343  
Capitalized lease obligation   2,708    4,419  
Deferred gain on sale/leaseback   2,845    3,178  
Deferred income taxes   12,474    12,672  
Other liabilities   540    576  
        
Commitments and contingencies        
        
Preferred stock, $.01 par value per share, $1,000 liquidation preference per share,         
 40,000 shares authorized, 20,000 and 0 issued at April 30, 2017 and 2016, respectively   17,001    -  
        
Stockholders' Equity       
Common stock, $.01 par value per share, 20,000,000 shares authorized, 13,982,400 shares issued   140    140  
Additional paid-in capital   86,372    82,728  
Accumulated Deficit   (12,751)   (11,234) 
    73,761    71,634  
  $ 320,537  $ 313,963  
          
For Further Information:
Jennifer Childe, 312-690-6003
InvestorRelations@PeakResorts.com

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Source: Peak Resorts, Inc.