American Skiing Company Reports Fiscal 2003 Third Quarter Results
Company Reports Improved Year-to-Date Resort Financial Performance
PARK CITY, UTAH - June 11, 2003 -- American Skiing Company (OTC: AESK) today
announced results for its third fiscal quarter and 39 weeks ended April 27,
2003. The Company reported that third quarter resort financial performance
benefited from an extended season in the East, and improved results at The
Canyons Resort in Park City, Utah, which helped offset the impact of a weak
economy, weather challenges and travel concerns created by the war in Iraq.
"Our resort operations posted solid third quarter results despite facing the
combined threat of the war in Iraq, ongoing concerns about the economy and
challenging weather conditions," said CEO B.J. Fair. "Excellent snow depths at
our Eastern resorts resulted in a longer season, which allowed us to regain some
ground lost to extremely cold mid-season weather. In the west, The Canyons
shrugged off a poor snow year and posted record skier visits for the season
continuing on its growth trajectory. Overall, our resort financial performance
continues to benefit from aggressive cost control efforts and more effective
marketing which are driving visitation in a difficult operating environment."
Fiscal 2003 Third Quarter Results
On a GAAP basis, net income available to common shareholders for the third
quarter of fiscal 2003 was $13.0 million, or $0.18 per diluted share, compared
with net income of $26.2 million, or $0.39 per diluted share for the third
fiscal quarter of 2002. Excluding other items1 from both periods and results
from Heavenly resort which was sold in May 2002, net income available to common
shareholders for the third quarter of fiscal 2003 was $15.6 million, compared to
net income of $16.3 million in fiscal 2002.
Total consolidated revenue was $127.7 million for the third quarter of fiscal
2003, compared with $131.6 million for the previous year's third quarter. Resort
revenue was $122.1 million for the quarter, compared with $124.0 million for the
third quarter of fiscal 2002. The moderate decline in resort revenues reflects
the impact of the war in Iraq and economic weakness on destination visits which
was partially offset by modest improvements at The Canyons and an extended
season in the East. Real estate revenue from ongoing fractional ownership sales
was $5.6 million, versus $7.6 million for the same period in fiscal 2002. As
previously reported, the decrease in real estate revenue at Steamboat and The
Canyons resulted from the impact of continuing disruptions related to the
Company's real estate restructuring effort, weakening economic conditions and
the difficulty some potential buyers experienced in obtaining end-loan financing
for fractional real estate purchases. As of June 1, 2003, the Steamboat Grand
and Canyons Grand Summit Hotels were 54% and 77% sold out, respectively.
The Company's consolidated income from continuing operations was $22.5 million
in the third fiscal quarter of 2003, compared with $24.6 million in the same
period in fiscal 2002. Excluding other items(1), consolidated income from
(1) During the first nine months of fiscal 2003 and fiscal 2002, the Company
recorded a number of charges that impacted net income and income from continuing
operations. These charges include: the cumulative effect of an accounting
change, the write-off of deferred financing costs, restructuring charges, and
asset impairment charges. For the purpose of this press release, the Company
refers to these items as "other items" in its discussion of net income and
income from continuing operations. 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 June 11, 2003, respectively, on
file with the Securities and Exchange Commission.
continuing operations was $25.1 million in the third quarter of fiscal 2003.
Other items did not impact income from continuing operations in the third
quarter of fiscal 2002. Resort income from continuing operations was $27.3
million, or $30.1 million excluding other items, versus $29.7 million for the
previous year's third quarter. The real estate loss from continuing operations
was $4.8 million, or $4.9 million excluding other items, compared with a loss of
$5.0 million in the third quarter of fiscal 2002.
Fiscal 2003 Nine Month Results
On a GAAP basis, the net loss available to common shareholders for the nine
months ended April 27, 2003 was $42.8 million, or $1.35 per basic and diluted
share, compared with a loss of $83.1 million, or $2.62 per basic and diluted
share, for the corresponding period of fiscal 2002. Excluding other items from
both periods and results from Heavenly, the net loss available to common
shareholders for the first nine months of fiscal 2003 was $40.2 million versus a
net loss of $46.2 million for the comparable period in fiscal 2002.
Total consolidated revenue was $248.7 million for the first nine months of
fiscal 2003, compared with $251.8 million for the first nine months of fiscal
2002. Resort revenue was $238.0 million for the first nine months of fiscal
2003, compared with $229.4 million for the comparable period in fiscal 2002,
primarily reflecting better early season conditions and a longer season in the
East coupled with continued growth at The Canyons. Real estate revenue was $10.7
million for the first nine months of fiscal 2003 versus $22.5 million for the
same period last year reflecting the factors discussed earlier. Real estate
revenue in fiscal 2002 included $4.3 million from the auction of remaining
quartershare units at Attitash Bear Peak resort in New Hampshire.
The Company's consolidated loss from continuing operations for the first nine
months of fiscal 2003, was $15.1 million versus $49.8 million in the comparable
period in fiscal 2002. Excluding other items from both periods, and results from
Sugarbush in fiscal 2002, the consolidated loss from continuing operations was
$12.5 for the first nine months of fiscal 2003 compared to $21.0 million in
fiscal 2002. Resort income from continuing operations was $1.2 million for the
first nine months of fiscal 2003 compared to a loss of $33.7 million for the
comparable period last year. Excluding other items from both periods, and
results from Sugarbush in fiscal 2002, resort income from operations was $3.9
million during the first nine months of fiscal 2003 versus a loss of $5.1
million for the comparable period in fiscal 2002, primarily reflecting the
factors discussed earlier. The real estate loss from continuing operations was
$16.3 million for the first nine months of fiscal 2003 compared to a loss of
$16.2 million for the comparable period in fiscal 2002. Excluding other items
from both periods, the real estate loss from continuing operations was $16.4
million for the first nine months of fiscal 2003 versus a loss of $15.9 million
for the comparable period in fiscal 2002.
Use of Non-GAAP Financial Information
The Company uses both GAAP and non-GAAP metrics to measure its financial
results. Management believes that non-GAAP financial measures which exclude
other items provide useful information to investors regarding the Company's
ongoing financial condition and results of operations. In addition, management
believes these non-GAAP metrics are useful to investors because they remove
unusual items that occur in the affected periods and provide a basis for
measuring the Company's financial condition against other quarters. Since the
Company has historically reported non-GAAP results to the investment community,
management also believes the inclusion of non-GAAP measures provides consistency
in its financial reporting. However, non-GAAP financial measures should not be
considered in isolation from, or as a substitute for, financial information
prepared in accordance with GAAP. In addition to the information contained in
this press release, investors should also review information contained in the
Company's Form 10-K and Form 10-Q, dated March 7, 2003 and June 11, 2003,
respectively, on file with the Securities and Exchange Commission when assessing
the Company's financial condition and results of operations. The Company has
provided a reconciliation from GAAP financial measures to non-GAAP financial
measures in the tables following this discussion.
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
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) Nine Months Ended (1)
Net revenues: April 27, 2003 April 28, 2002 April 27, 2003 April 28, 2002
--------------- --------------- --------------- --------------
Resort $ 122,129 $ 124,049 $ 238,001 $ 229,357
Real estate 5,614 7,592 10,653 22,463
----------------------------------------------------------------------------------
Total net revenues 127,743 131,641 248,654 251,820
----------------------------------------------------------------------------------
Operating expenses:
Resort 60,903 62,530 149,197 146,740
Real estate 4,941 8,340 10,415 24,402
Marketing, general and administrative 13,600 13,520 40,185 38,479
Restructuring and asset impairment charges (2) (160) - (160) 27,879
Write-off of deferred financing costs (2) 2,761 - 2,761 -
Depreciation and amortization 12,066 11,518 27,615 26,204
----------------------------------------------------------------------------------
Total operating expenses 94,111 95,908 230,013 263,704
----------------------------------------------------------------------------------
Income (loss) from operations 33,632 35,733 18,641 (11,884)
Interest expense, net 11,094 11,101 33,726 37,918
----------------------------------------------------------------------------------
Income (loss) from continuing operations 22,538 24,632 (15,085) (49,802)
Discontinued operations (3)
Income from operations of Heavenly resort - 9,853 - 9,649
----------------------------------------------------------------------------------
Income (loss) before cumulative effect of a change 22,538 34,485 (15,085) (40,153)
in accounting principle
Cumulative effect of a change in accounting principle - - - (18,658)
----------------------------------------------------------------------------------
Net income (loss) 22,538 34,485 (15,085) (58,811)
Accretion of discount and dividends on
mandatorily redeemable preferred stock (9,567) (8,305) (27,741) (24,257)
----------------------------------------------------------------------------------
Net income (loss) available to common shareholders$ 12,971 $ 26,180 $ (42,826) $ (83,068)
==================================================================================
Basic earnings (loss) per common share:
Income (loss) from continuing operations before cumulative effect
of a change in accounting principle $ 0.41 $ .51 $ (1.35) $ (2.34)
Income (loss) from discontinued operations - 0.31 - 0.31
Cumulative effect of a change in accounting principle - - - (0.59)
----------------------------------------------------------------------------------
Net income (loss) available to common shareholders$ 0.41 $ .82 $ (1.35) $ (2.62)
==================================================================================
Weighted average shares outstanding 31,724 31,718 31,724 31,597
==================================================================================
Diluted earnings (loss) per common share:
Income (loss) from continuing operations before cumulative effect
of a change in accounting principle $ 0.18 $ 0.24 $ (1.35) $ (2.34)
Income (loss) from discontinued operations - 0.15 - 0.31
Cumulative effect of a change in accounting principle - - - (0.59)
----------------------------------------------------------------------------------
Net income (loss) available to common shareholders$ 0.18 $ 0.39 $ (1.35) $ (2.62)
==================================================================================
Weighted average shares outstanding 73,213 65,347 31,724 31,597
==================================================================================
(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 June
11, 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)
Unaudited Unaudited
Three Months Ended (1) Nine Months Ended (1)
April 27, 2003 April 28, 2002 April 27, 2003 April 28, 2002
--------------- --------------- --------------- --------------
Net income (loss) available to common shareholders $ 12,971 $ 26,180 $ (42,826) $ (83,068)
Restructuring and asset impairment charges (2) (160) - (160) 27,879
Write-off of deferred financing costs (2) 2,761 - 2,761 -
Income from discontinued operations of Heavenly
resort (3) - (9,853) - (9,649)
Cumulative effect of a change in accounting principle - - - 18,658
------------------------------------------------------------------------------
Net income (loss) excluding other items $ 15,572 16,327 (40,225) (46,180)
==============================================================================
Unaudited Unaudited
Three Months Ended (1) Nine Months Ended (1)
April 27, 2003 April 28, 2002 April 27, 2003 April 28, 2002
--------------- --------------- --------------- --------------
Consolidated income (loss) from continuing
operations $ 22,538 $ 24,632 $ (15,085) $ (49,802)
Restructuring and asset impairment charges (2) (160) - (160) 27,879
Write-off of deferred financing costs (2) 2,761 - 2,761 -
Sugarbush loss from continuing operations - - - 955
Consolidated income (loss) from continuing ------------------------------------------------------------------------------
operations excluding other items $ 25,139 24,632 (12,484) (20,968)
==============================================================================
Income (loss) from continuing resort operations $ 27,319 $ 29,652 $ 1,179 $ (33,650)
Restructuring and asset impairment charges (2) - - - 27,639
Write-off of deferred financing costs (2) 2,761 - 2,761 -
Sugarbush loss from continuing operations - - - 955
Income (loss) from continuing resort operations ------------------------------------------------------------------------------
excluding other items $ 30,080 $ 29,652 $ 3,940 $ (5,056)
==============================================================================
Loss from real estate operations $ (4,781) $ (5,020) $ (16,264) $ (16,152)
Restructuring and asset impairment charges (2) (160) - (160) 240
------------------------------------------------------------------------------
Loss from real estate operations excluding other
items $ (4,941) (5,020) (16,424) (15,912)
==============================================================================
(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 June
11, 2003, on file with the Securities and Exchange Commission.
(3) Heavenly resort was sold on May 9, 2002.
American Skiing Company and Subsidiaries
Unaudited Balance Sheet Data - April 27, 2003
(in thousands of dollars)
Real estate developed for sale $ 48,143
Total assets 487,908
Total resort debt 207,840
Total real estate debt 105,393
--------------------
Total debt 313,233
Less: cash and cash equivalents 11,504
--------------------
Net debt 301,729
American Skiing Company and Subsidiaries
Unaudited Supplemental Revenue Data
(in thousands of dollars)
For the three months ended
-------------------------------------------
April 27, 2003 April 28, 2002 % Change
Resort revenues (1)(2)
- ----------------------
Lift tickets $ 60,917 $ 61,134 0%
Food and beverage 16,849 16,979 -1%
Retail sales 12,752 13,039 -2%
Skier development 12,064 12,239 -1%
Golf, summer activities 73 87 -16%
Lodging and property 14,289 14,809 -4%
Miscellaneous revenue 5,185 5,762 -10%
-------------------------------------------
Total resort revenues $ 122,129 $ 124,049 -2%
===========================================
American Skiing Company and Subsidiaries
Unaudited Supplemental Revenue Data
(in thousands of dollars)
Excluding Sugarbush
For the nine months ended (1)(2) For the nine months ended (2)
------------------------------------------- -----------------------------------------
April 27, 2003 April 28, 2002 % Change April 27, 2003 April 28, 2002 % Change
Resort revenues
- ---------------
Lift tickets $ 110,967 $ 104,295 6% $ 110,967 $ 104,295 6%
Food and beverage 33,770 32,220 5% 33,770 32,112 5%
Retail sales 25,384 24,714 3% 25,384 24,712 3%
Skier development 21,015 19,847 6% 21,015 19,847 6%
Golf, summer activities 3,696 3,904 -5% 3,696 3,610 2%
Lodging and property 31,636 31,473 1% 31,636 31,194 1%
Miscellaneous revenue 11,533 12,904 -11% 11,533 12,890 -11%
------------------------------------------- -----------------------------------------
Total resort revenues $ 238,001 $ 229,357 4% $ 238,001 $ 228,660 4%
=========================================== =========================================
Total Skier Visits
-------------------------------------------
Unaudited Skier Visits Fiscal 2003 Fiscal 2002 % Change
- ----------------------
Attitash 196,023 190,123 3%
The Canyons 333,738 287,843 16%
Killington 1,044,640 952,997 10%
Mount Snow 546,304 471,628 16%
Sugarloaf 354,634 331,279 7%
Sunday River 500,790 521,080 -4%
Steamboat 1,001,020 1,001,003 0%
-------------------------------------------
Total Skier Visits 3,977,149 3,755,953 6%
===========================================
(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.