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Peak Resorts Reports Results for First-Quarter FY2018

Company Release - 9/6/2017 4:05 PM ET

WILDWOOD, Mo., Sept. 06, 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 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
InvestorRelations@PeakResorts.com

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Source: Peak Resorts, Inc.