American Skiing Company Reports Fiscal 2003 Second Quarter Results
PARK CITY, UTAH -- March 12, 2003 -- American Skiing Company (OTC: AESK) today
announced results for its second fiscal quarter and 26 weeks ended January 26,
2003. The Company reported that second quarter financial performance was
favorably impacted by improved early season weather conditions relative to the
comparable period in fiscal 2002.
"Better early season conditions nationwide set the stage for strong second
quarter resort operating results," said CEO B.J. Fair. "Following the stronger
early season results, we have witnessed some softening in visitation due
primarily to extremely cold weather in the northeast as well as ongoing concerns
about the economy and the threat of war with Iraq. More recently, the weather in
the northeast has moderated, our western resorts have received considerable
snowfall and our improvement continues over the prior year. Conditions at our
resorts are excellent and we expect that they will remain outstanding through
the remainder of the 2002/2003 ski season."
Fiscal 2003 Second Quarter Results
The net loss available to common shareholders for the second quarter of fiscal
2003 was $16.7 million, or $0.53 per basic and diluted share, compared with a
net loss of $43.7 million, or $1.38 per basic and diluted share for the second
fiscal quarter of 2002. Excluding other items(1) and results from Heavenly, the
net loss available to common shareholders for the second quarter of fiscal 2002
was $20.0 million, or $0.63 per basic and diluted share.
Total consolidated revenues were $100.3 million for the second quarter of fiscal
2003, compared with $100.1 million for the previous year's second quarter.
Resort revenue was $99.0 million for the quarter, compared with $88.0 million
for the second quarter of fiscal 2002. The increase in resort revenues primarily
reflects better early season ski conditions and higher visitation at Company
resorts. Real estate revenue from ongoing fractional ownership sales was $1.3
million, versus $12.1 million for the same period in fiscal 2002. The decline
reflects a $5.2 million decrease in closings of fractional ownership units at
Steamboat and The Canyons and the sell-out of our eastern hotel quartershare
inventory last year, which contributed $5.6 million in revenue during the second
quarter of fiscal 2002. The decrease in real estate revenues at Steamboat and
The Canyons relates to the impact of continuing disruptions related to the
Company's real estate restructuring effort, weakening economic conditions as
well as difficulty of some potential buyers in obtaining end-loan financing for
fractional real estate purchases.
The Company's total earnings before interest expense, income taxes, depreciation
and amortization ("EBITDA"), was $16.0 million in the second fiscal quarter of
2003, compared with $12.2 million in the same period in fiscal 2002. Resort
EBITDA for the quarter was $16.6 million versus $12.1 million for the previous
year's second quarter after excluding results from Sugarbush, again reflecting
improved fiscal 2003 early season operating results. Real estate EBITDA was a
loss of $0.6 million compared with earnings of $0.1 million in the second fiscal
quarter of 2002.
Fiscal 2003 Six Month Results
The net loss available to common shareholders for the six months ended January
26, 2003 was $55.8 million, or $1.76 per basic and diluted share, compared with
a loss of $109.2 million, or $3.47 per basic and diluted share, in the
corresponding period of fiscal 2002. Excluding other items and results from
Heavenly, the net loss available to common shareholders for the first six months
of fiscal 2002 was $62.5 million, or $1.98 per basic and diluted share.
Total consolidated revenues were $120.9 million for the first six months of
fiscal 2003, compared with $120.2 million for the first six months of fiscal
2002. Resort revenue was $115.9 million compared with $105.3 million in fiscal
2002 reflecting better early season conditions. Excluding results from
Sugarbush, resort revenue was $104.6 million for the first six months of fiscal
2002. Real estate revenue was $5.0 million, versus $14.9 million during the same
period last year reflecting the factors discussed earlier.
Total EBITDA for the first six months of fiscal 2003, was $0.6 million versus a
loss of $5.1 million, or a loss of $4.1 million excluding results from
Sugarbush, in the comparable period in fiscal 2002. Resort EBITDA was $1.0
million compared to a loss of $3.9 million last year. Excluding results from
Sugarbush, resort EBITDA was a loss of $2.9 million during the first six months
of fiscal 2002. Real estate EBITDA was a loss of $0.4 million compared to a loss
of $1.2 million in fiscal 2002.
(1) During the first six months of fiscal 2002, the Company recorded a number
of charges that impacted net income. These charges include; the cumulative
effect of an accounting change, restructuring charges, and an asset
impairment charge. For the purpose of this press release, the Company
refers to these items as "other items" in its discussion of net income. For
a more detailed discussion of these charges and the events that gave rise
to them, please refer to the Company's Form 10-K and Form 10-Q, dated March
7, 2003 and March 12, 2003, respectively, on file with the Securities and
Exchange Commission.
Sale of Heavenly and Sugarbush Resorts
As previously announced, on May 9, 2002, the Company closed on the sale of its
Heavenly ski resort in South Lake Tahoe, a key element of its restructuring
plan. In accordance with Statement of Financial Accounting Standards (SFAS) No.
144, the financial statements for the three and six month periods of fiscal 2002
present the operating results of Heavenly as discontinued operations. For
additional information, please refer to disclosures made in the Company's Form
10-K, dated March 7, 2003, on file with the Securities and Exchange Commission.
On October 1, 2001, the Company announced that it had completed the sale of
Sugarbush Ski Resort in Warren, Vermont. The sale was completed on September 28,
2001 and operating results of Sugarbush are included in the Company's financial
statements through that date.
Accounting Changes and Other Items
During the second quarter and first six months of fiscal 2002, the Company
incurred $0.9 million, and $2.5 million, respectively, in restructuring charges.
All of these restructuring charges relate to resort operations except for $0.2
million associated with real estate operations incurred during the second
quarter of fiscal 2002. During the second quarter of fiscal 2002, the Company
also incurred a $25.4 million impairment charge related to long-lived assets at
its Steamboat ski resort. During the first quarter of fiscal 2002, the Company
incurred an $18.7 million charge related to the impairment of goodwill resulting
from the adoption of Statement of Financial Accounting Standards No. 142.
Non-GAAP Financial Measurements
Resort and Real Estate EBITDA are not measurements calculated in accordance with
Generally Accepted Accounting Principles ("GAAP") and should not be considered
as alternatives to operating or net income as an indicator of operating
performance, cash flows as a measure of liquidity or any other GAAP determined
measurement. Management believes certain items excluded from Resort and/or Real
Estate EBITDA, such as non-cash charges for stock compensation awards, and
restructuring and asset impairment charges are significant components in
understanding and assessing the Company's financial performance. In addition,
the Company has excluded losses and earnings from Sugarbush Resort from EBITDA
in order to facilitate comparisons with previously announced operating results.
Other companies may define EBITDA differently, and as a result, such measures
may not be comparable to the Company's reported EBITDA. Management has included
information concerning Resort and Real Estate EBITDA because it believes that
EBITDA is an indicative measure of the Company's operating performance and is
generally used by other leisure and hospitality operators and investors to
evaluate companies in the resort industry.
About American Skiing Company
Headquartered in Park City, Utah, American Skiing Company is one of the largest
operators of alpine ski, snowboard and golf resorts in the United States. Its
resorts include Killington and Mount Snow in Vermont; Sunday River and
Sugarloaf/USA in Maine; Attitash Bear Peak in New Hampshire; Steamboat in
Colorado; and The Canyons in Utah. More information is available on the
Company's Web site, www.peaks.com.
This press release contains both historical and forward-looking statements. All
statements other than statements of historical facts are, or may be deemed to
be, forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). These
forward-looking statements are not based on historical facts, but rather reflect
American Skiing Company's current expectations concerning future results and
events. Similarly, statements that describe the Company's objectives, plans or
goals are or may be forward-looking statements. Such forward-looking statements
involve a number of risks and uncertainties. American Skiing Company has tried
wherever possible to identify such statements by using words such as
"anticipate," "assume," "believe," "expect," "intend," "plan," and words and
terms similar in substance in connection with any discussion of operating or
financial performance. In addition to factors discussed above, other factors
that could cause actual results, performances or achievements to differ
materially from those projected include, but are not limited to, the following:
the Company's substantial leverage; restrictions on the Company's ability to
access sources of capital; the Company's failure to meet its financial
covenants; changes in regional and national business and economic conditions
affecting both American Skiing Company's resort operating and real estate
segments; competition and pricing pressures; negative impact on the demand for
the Company's products resulting from terrorism and the availability of air
travel (including the effects of airline bankruptcies); the payment default
under the Company's real estate credit facilities and its effect on the results
and operations of the Company's real estate segment; the possibility of war and
its effect on the ski, resort, leisure and travel industries; adverse weather
conditions regionally and nationally; and other risk factors listed from
time-to-time in American Skiing Company's documents filed with the Securities
and Exchange Commission. This list is not exhaustive. The Company operates in a
changing business environment and new risks arise from time to time. The
forward-looking statements included in this press release are made only as of
the date of this press release and under section 27A of the Securities Act and
section 21E of the Exchange Act, American Skiing Company does not have or
undertake any obligation to publicly update any forward-looking statements to
reflect subsequent events or circumstances.
American Skiing Company and Subsidiaries
Condensed Consolidated Financial Statements
(in thousands of dollars except per share amounts)
Unaudited Unaudited
Three Months Ended (1) Six Months Ended (1)
January 26, 2003 January 27, 2002 January 26,2003 January 27, 2002
Net revenues: ---------------- ---------------- --------------- ----------------
Resort $ 98,961 $ 87,986 $ 115,872 $ 105,308
Real estate 1,325 12,080 5,039 14,871
------------------------------------------------------------------------
Total net revenues 100,286 100,066 120,911 120,179
------------------------------------------------------------------------
Operating expenses:
Resort 65,794 60,799 88,294 84,210
Real estate 1,898 11,953 5,474 16,062
Marketing, general and administrative 16,552 15,154 26,585 24,959
Restructuring and asset impairment charges (2) - 26,253 - 27,879
Depreciation and amortization 11,978 10,757 15,549 14,686
-----------------------------------------------------------------------
Total operating expenses 96,222 124,916 135,902 167,796
-----------------------------------------------------------------------
Loss from operations 4,064 (24,850) (14,991) (47,617)
Interest expense, net 11,513 13,106 22,632 26,817
-----------------------------------------------------------------------
Loss from continuing operations (7,449) (37,956) (37,623) (74,434)
Discontinued operations (3)
Income (Loss) from operations of Heavenly resort - 2,523 - (204)
-----------------------------------------------------------------------
Loss before cumulative effects of changes in (7,449) (35,433) (37,623) (74,638)
accounting principles
Cumulative effect of change in accounting principle - - - (18,658)
-----------------------------------------------------------------------
Loss before preferred stock dividends (7,449) (35,433) (37,623) (93,296)
Accretion of discount and dividends on
mandatorily redeemable preferred stock (9,243) (8,266) (18,174) (15,952)
-----------------------------------------------------------------------
Net loss available to common shareholders $ (16,692) $ (43,699) $ (55,797) $ (109,248)
=======================================================================
Basic and diluted loss per common share:
Loss from continuing operations before cumulative effects
of changes in accounting principles $ (0.53) $ (1.46) $ (1.76) $ (2.87)
Income (loss) from discontinued operations - 0.08 - (0.01)
Cumulative effect of change in
accounting principles, net of taxes - - - (0.59)
-----------------------------------------------------------------------
Net loss available to common shareholders $ (0.53) $ (1.38) $ (1.76) $ (3.47)
=======================================================================
Weighted average shares outstanding 31,724 31,718 31,724 31,541
=======================================================================
(1) The sale of Sugarbush was completed on September 28, 2001, results of
operations are included through that date.
(2) For more information, including a detailed discussion of significant
write-offs and charges, please refer to the Company's Form 10-Q, dated
March 12, 2003, on file with the Securities and Exchange Commission.
(3) Heavenly resort was sold on May 9, 2002.
American Skiing Company and Subsidiaries
Unaudited Consolidated Financial Statement Information
(in thousands of dollars)
Three Months Ended (1)(2) Six Months Ended (1)(2)
Reconciliation to Consolidated EBITDA January 26, 2003 January 27, 2002 January 26, 2003 January 27, 2002
------------------ ------------------ ------------------ -----------------
Loss from continuing operations $ (7,449) $ (37,956) $ (37,623) $ (74,434)
Interest expense, net 11,513 13,106 22,632 26,817
Depreciation and amortization 11,978 10,757 15,549 14,686
Restructuring and asset impairment charges (3) - 26,253 - 27,879
------------------ ------------------- ------------------- -------------------
Consolidated EBITDA 16,042 12,160 558 (5,052)
------------------ ------------------- ------------------- -------------------
Sugarbush Resort EBITDA loss - 21 - 923
------------------ ------------------- ------------------- -------------------
Consolidated EBITDA excluding Sugarbush $ 16,042 $ 12,181 $ 558 $ (4,129)
================== =================== =================== ===================
Reconciliation to Resort EBITDA
Loss from continuing resort operations $ (1,282) $ (33,243) $ (26,140) $ (63,302)
Interest expense, net 6,579 9,102 12,843 18,374
Depreciation and amortization 11,318 10,161 14,290 13,428
Restructuring and asset impairment charges (3) - 26,013 - 27,639
------------------ ------------------- ------------------- -------------------
Resort EBITDA 16,615 12,033 993 (3,861)
------------------ ------------------- ------------------- -------------------
Sugarbush Resort EBITDA Loss - 21 - 923
------------------ ------------------- ------------------- -------------------
Resort EBITDA excluding Sugarbush $ 16,615 $ 12,054 $ 993 $ (2,938)
================== =================== =================== ===================
Reconciliation to Real Estate EBITDA
Loss from continuing real estate operations $ (6,167) $ (4,713) $ (11,483) $ (11,132)
Interest expense, net 4,934 4,004 9,789 8,443
Depreciation and amortization 660 596 1,259 1,258
Restructuring charges (3) - 240 - 240
------------------ ------------------- ------------------- -------------------
Real Estate EBITDA $ (573) $ 127 $ (435) $ (1,191)
================== =================== =================== ===================
(1) The sale of Sugarbush was completed on September 28, 2001, results of
operations are included through that date.
(2) Excludes operating results from Heavenly which was sold on May 9, 2002.
(3) For more information, including a detailed discussion of significant
write-offs and charges, please refer to the Company's Form 10-Q, dated
March 12, 2003, on file with the Securities and Exchange Commission.
American Skiing Company and Subsidiaries
Unaudited Balance Sheet Data - January 26, 2003
(in thousands of dollars)
Real estate developed for sale $ 48,217
Total assets 528,367
Total resort debt 206,693
Total real estate debt 105,607
------------------
Total debt 312,300
Less: cash and cash equivalents 14,446
------------------
Net debt 297,854
Unaudited Supplemental Revenue Data
(in thousands of dollars)
For the three months ended
-----------------------------------------
January 26, 2003 January 27, 2002 % Change
Resort revenues (1)(2)
Lift Tickets $ 49,931 $ 43,230 16%
Food and beverage 13,225 11,523 15%
Retail sales 11,746 10,648 10%
Skier Development 8,869 7,515 18%
Golf, summer activities 10 40 -75%
Lodging and Property 11,440 10,998 4%
Miscellaneous Revenue 3,740 4,032 -7%
----------------------------------------------------
Total resort revenues $ 98,961 87,986 12%
====================================================
American Skiing Company and Subsidiaries
Unaudited Supplemental Revenue Data
(in thousands of dollars)
Excluding Sugarbush
For the six months ended (1)(2) For the six months ended (2)
----------------------------------------- ---------------------------------------
January 26, 2003 January 27, 2002 % Change January 26, 2003 January 27, 2002 % Change
Resort revenues
Lift Tickets $ 50,051 $ 43,269 16% $ 50,051 $ 43,161 16%
Food and beverage 16,921 15,133 12% 16,921 15,133 12%
Retail sales 12,632 11,675 8% 12,632 11,673 8%
Skier Development 8,950 7,608 18% 8,950 7,608 18%
Golf, summer activities 3,623 3,817 -5% 3,623 3,522 3%
Lodging and Property 17,347 16,664 4% 17,347 16,385 6%
Miscellaneous Revenue 6,348 7,142 -11% 6,348 7,128 -11%
-------------------------------------------------- -------------------------------------------------
Total resort revenues $ 115,872 $ 105,308 10% $ 115,872 $ 104,610 11%
================================================== =================================================
Season to Date
-----------------------------------------
Unaudited Skier Visits January 26, 2003 January 27, 2002
- ----------------------
Attitash 73,360 68,078
The Canyons 149,287 122,812
Killington 482,384 414,616
Mount Snow 257,332 196,215
Sugarloaf 133,993 121,685
Sunday River 202,488 204,437
Steamboat 418,878 402,897
-----------------------------------------
Total Skier Visits 1,717,722 1,530,740
=========================================
(1) The sale of Sugarbush was completed on September 28, 2001, results of
operations are included through that date.
(2) Excludes operating results from Heavenly which was sold on May 9, 2002.