American Skiing Company Announces
Fiscal 2003 Year End and Fourth Quarter Results
Company Reports Improved Year-Over-Year Resort Financial Performance
PARK CITY, UTAH - October 27, 2003 -- American Skiing Company (OTC: AESK) today
announced its financial results for the 2003 fiscal year and fourth quarter
ended July 27, 2003. The Company reported that its fiscal 2003 resort operating
results were favorably impacted by effective targeted marketing and cost control
measures that helped mitigate the combined challenges of the war in Iraq, a soft
economy and adverse weather conditions.
"Our management team overcame a number of significant obstacles in fiscal 2003
and we posted a solid improvement in resort financial performance," said CEO
B.J. Fair. "We continue to benefit from ongoing operational improvements and
cost containment at all of our resorts. More recently, we have made significant
changes to our sales and marketing organization and have already begun realizing
some of the benefits from a more coordinated and tactical marketing approach.
These changes provide added flexibility to respond quickly to changing market
conditions and customer demand and should enhance our financial performance in
the coming ski season and beyond."
Fiscal 2003 Fourth Quarter Results
On a GAAP basis, net loss available to common shareholders for the fourth
quarter of fiscal 2003 was $39.2 million, or $1.24 per basic and diluted share,
compared with a net loss of $123.6 million, or $3.90 per basic and diluted share
for the fourth quarter of fiscal 2002. Excluding other items(1)
- --------
1 During fiscal 2003 and fiscal 2002, the Company recorded a number of charges
that impacted net loss and loss from continuing operations. These charges
include, but are not limited to: the cumulative effect of an accounting change,
the write-off of deferred financing costs, restructuring charges, income from
discontinued operations, loss from operations of Sugarbush resort 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 loss and loss 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, dated
October 27, 2003, as well as other filings on file with the Securities and
Exchange Commission.
from both periods and results from Heavenly resort which was sold in May 2002,
the net loss available to common shareholders for the fourth quarter of fiscal
2003 was $37.6 million, compared to a net loss of $39.2 million for the fourth
quarter of fiscal 2002.
Total consolidated revenue was $15.9 million for the fourth quarter of fiscal
2003, compared with $20.3 million for the fourth quarter of fiscal 2002. Resort
revenue was $13.6 million for the quarter, compared with $14.5 million for the
fourth quarter of fiscal 2002. The moderate decline in resort revenues reflects
the continued effect of a soft economy on conference business coupled with poor
weather in the East that impacted golf and summer business. Real estate revenue
from ongoing fractional ownership sales was $2.3 million, versus $5.8 million
for the comparable period in fiscal 2002. As previously reported, the decrease
in real estate revenue resulted from the impact of continuing disruptions
related to the Company's restructuring of its real estate senior credit
facilities and weak economic conditions.
The Company's consolidated loss from continuing operations was $29.3 million for
the fourth quarter of fiscal 2003, compared with a loss of $117.8 million for
the comparable period in fiscal 2002. Excluding other items, the consolidated
loss from continuing operations was $27.7 million for the fourth quarter of
fiscal 2003 versus a loss of $30.7 million for the comparable period in fiscal
2002. The loss from continuing resort operations was $24.5 million versus a loss
of $48.8 million for the fourth quarter of fiscal 2002. Excluding other items,
the loss from continuing resort operations was $22.9 for the fourth quarter of
fiscal 2003 compared to a loss of $25.2 million for the comparable quarter of
fiscal 2002. The narrower loss resulted primarily from the Company's cost
reduction effort that helped mitigate the impact of lower business volume. The
loss from continuing real estate operations was $4.8 million, compared with a
loss of $68.9 million, or $5.5 million excluding other items, for the fourth
quarter of fiscal 2002. Other items did not impact real estate operations in the
fourth quarter of fiscal 2003. The Company has provided reconciliations from
GAAP financial measures to non-GAAP financial measures in the tables following
this discussion.
Fiscal 2003 Year End Results
On a GAAP basis, the net loss available to common shareholders for the fiscal
year ended July 27, 2003 was $82.0 million, or $2.59 per basic and diluted
share, compared with a net loss of $206.7 million, or $6.54 per basic and
diluted share, for fiscal 2002. Excluding other items from both years, and
results from Heavenly resort, the net loss available to common shareholders for
fiscal 2003 was $77.8 million versus a net loss of $85.4 million for fiscal
2002.
Total consolidated revenue was $264.5 million in fiscal 2003, compared with
$272.1 million in fiscal 2002. Resort revenue was $251.6 million in fiscal 2003,
compared with $243.8 million for fiscal 2002, primarily reflecting higher skier
visits in the east and record skier visits at The Canyons. Real estate revenue
was $12.9 million in fiscal 2003 versus $28.3 million in fiscal 2002, reflecting
the factors discussed earlier. In addition, real estate revenue in fiscal 2002
included $7.9 million from the sell-out of eastern quartershare inventory.
The Company's consolidated loss from continuing operations for fiscal 2003 was
$44.4 million versus $167.6 million for fiscal 2002. Excluding other items from
both years, and results from Sugarbush in fiscal 2002, the consolidated loss
from continuing operations was $40.2 million in fiscal 2003 compared to $51.7
million in fiscal 2002. The loss from continuing resort operations was $23.3
million for fiscal 2003 compared to a loss of $82.5 million for fiscal 2002.
Excluding other items from both years, and results from Sugarbush in fiscal
2002, the loss from continuing resort operations was $18.9 million for fiscal
2003 versus a loss of $30.3 million for fiscal 2002, primarily due to higher
business volume and aggressive cost containment efforts. The loss from
continuing real estate operations was $21.1 million for fiscal 2003 compared to
a loss of $85.1 million for fiscal 2002. Excluding other items from both years,
the loss from continuing real estate operations was $21.2 million for fiscal
2003 versus a loss of $21.4 million for fiscal 2002. The Company has provided
reconciliations from GAAP financial measures to non-GAAP financial measures in
the tables following this discussion.
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
certain items that occur in the affected periods and provide a basis for
measuring the Company's financial condition against other periods. 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, dated October 27, 2003, as well as other filings on file
with the Securities and Exchange Commission when assessing the Company's
financial condition and results of operations. The Company has provided
reconciliations 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
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. Such forward-looking statements involve a number of risks
and uncertainties. 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: changes in
regional and national business and economic conditions affecting both our resort
operating and real estate segments; competition and pricing pressures; negative
impact on demand for our products resulting from terrorism and availability of
air travel (including the effect of airline bankruptcies); the payment defaults
under our real estate credit facilities and their respective effects on the
results and operations of our real estate segment; any requirement to redeem our
Series A Preferred Stock; failure to maintain improvements to resort operating
performance at the covenant levels required by our resort senior credit
facility; the possibility of domestic terrorist activities and their respective
effects on the ski, golf, resort, leisure and travel industries; failure of
on-mountain improvements and other capital expenditures to generate incremental
revenue; adverse weather conditions regionally and nationally; seasonal business
activity; changes to federal, state and local regulations affecting both our
resort operating and real estate segments; failure to renew land leases and
forest service permits; disruptions in water supply that would impact snowmaking
operations; the loss of any of our executive officers or key operating
personnel; and other factors listed from time to time in our documents we have
filed with the Securities and Exchange Commission. The Company cautions the
reader that 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
Unaudited Condensed Consolidated Financial Statements
(in thousands of dollars except per share amounts)
Quarter Ended Year Ended (1)
Net revenues: July 27, 2003 July 28, 2002 July 27, 2003 July 28, 2002
--------------- -------------- -------------- -------------
Resort $ 13,637 $ 14,485 $ 251,638 $ 243,842
Real estate 2,245 5,811 12,898 28,274
--------------- -------------- -------------- -------------
Total net revenues 15,882 20,296 264,536 272,116
--------------- -------------- -------------- -------------
Operating expenses:
Resort 18,813 20,228 168,010 166,968
Real estate 1,751 5,689 12,166 30,091
Marketing, general and administrative 9,460 8,220 49,645 46,699
Restructuring and asset impairment charges (2) 1,611 83,729 1,451 111,608
Write-off of deferred financing costs (2) - 3,338 2,761 3,338
Depreciation and amortization 2,312 3,729 27,513 26,238
--------------- --------------- -------------- -------------
Total operating expenses 33,947 124,933 261,546 384,942
--------------- --------------- -------------- -------------
Income (loss) from operations (18,065) (104,637) 2,990 (112,826)
Interest expense, net 11,224 13,139 47,364 54,752
--------------- --------------- -------------- -------------
Loss from continuing operations (29,289) (117,776) (44,374) (167,578)
Discontinued operations (3)
Income from discontinued operations of
Heavenly resort - 2,668 - 12,317
--------------- --------------- --------------- -------------
Loss before cumulative effects of change (29,289) (115,108) (44,374) (155,261)
in accounting principle
Cumulative effects of a change in accounting
principle - - - (18,658)
--------------- --------------- --------------- -------------
Net loss (29,289) (115,108) (44,374) (173,919)
Accretion of discount and dividends on
mandatorily redeemable preferred stock (9,903) (8,534) (37,644) (32,791)
--------------- --------------- ---------------- -------------
Net loss available to common shareholders $ (39,192) $ (123,642) $ (82,018) $ (206,710)
=============== =============== ================ =============
Basic and diluted loss per common share:
Loss from continuing operations before cumulative effects
of change in accounting principle $ (1.24) $ (3.98) $ (2.59) $ (6.34)
Income from discontinued operations - 0.08 - 0.39
Cumulative effects of change in accounting principle - - - (0.59)
--------------- ---------------- ---------------- -------------
Net loss available to common shareholders $ (1.24) $ (3.90) $ (2.59) $ (6.54)
=============== ================ ================ =============
Weighted average common shares outstanding 31,725 31,719 31,724 31,628
=============== ================ ================ =============
(1) The sale of Sugarbush resort was completed on September 28, 2001, results
of operations are included through that date.
(2) For more information, please refer to the Company's Form 10-K, dated
October 27, 2003, on file with the Securities and Exchange Commission.
(3) Heavenly resort was sold on May 9, 2002.
American Skiing Company and Subsidiaries
Unaudited Reconciliation of GAAP to Non-GAAP Metrics
(in thousands of dollars)
Quarter Ended Year Ended (1)
July 27, 2003 July 28, 2002 July 27, 2003 July 28, 2002
--------------- -------------- --------------- --------------
Net loss available to common shareholders $ (39,192) $ (123,642) $ (82,018) $ (206,710)
Restructuring and asset impairment charges (2) 1,611 83,729 1,451 111,608
Write-off of deferred financing costs (2) - 3,338 2,761 3,338
Income from discontinued operations of Heavenly resort (3) - (2,668) - (12,317)
Cumulative effect of a change in accounting principle - - - 18,658
--------------- --------------- -------------- ---------------
Net loss available to common shareholders excluding other items $ (37,581) $ (39,243) $ (77,806) $ (85,423)
=============== =============== ============== ===============
Quarter Ended Year Ended (1)
July 27, 2003 July 28, 2002 July 27, 2003 July 28, 2002
--------------- -------------- --------------- --------------
Consolidated loss from continuing operations $ (29,289) $ (117,776) $ (44,374) $ (167,578)
Restructuring and asset impairment charges (2) 1,611 83,729 1,451 111,608
Write-off of deferred financing costs (2) - 3,338 2,761 3,338
Sugarbush loss from continuing operations - - - 955
Consolidated loss from continuing operations
excluding other items
--------------- --------------- -------------- ---------------
$ (27,678) $ (30,709) $ (40,162) $ (51,677)
=============== =============== ============== ===============
Loss from continuing resort operations $ (24,498) $ (48,844) $ (23,319) $ (82,494)
Restructuring and asset impairment charges (2) 1,611 20,273 1,611 47,912
Write-off of deferred financing costs (2) - 3,338 2,761 3,338
Sugarbush loss from continuing operations - - - 955
Loss from continuing resort operations
excluding other items
--------------- --------------- -------------- ---------------
$ (22,887) $ (25,233) $ (18,947) $ (30,289)
=============== =============== ============== ===============
Loss from continuing real estate operations $ (4,791) $ (68,932) $ (21,055) $ (85,084)
Restructuring and asset impairment charges (2) - 63,456 (160) 63,696
--------------- --------------- -------------- ----------------
Loss from continuing real estate operations excluding $ (4,791) $ (5,476) $ (21,215) $ (21,388)
=============== =============== ============== ================
(1) The sale of Sugarbush resort was completed on September 28, 2001, results
of operations are included through that date.
(2) For more information, please refer to the Company's Form 10-K, dated
October 27, 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 - July 27, 2003
(in thousands of dollars)
Real estate developed for sale $ 48,234
------------------
Total assets 475,305
------------------
Total resort debt 234,109
Total real estate debt 106,240
------------------
Total debt 340,349
Less: cash and cash equivalents 6,596
------------------
Net debt $333,753
==================
American Skiing Company and Subsidiaries
Unaudited Supplemental Revenue Data
(in thousands of dollars)
Excluding Sugarbush
For the year ended (1) (2) For the year ended (2)
------------------------------------------- ------------------------------------------
July 27, 2003 July 28, 2002 % Change July 27, 2003 July 28, 2002 % Change
Resort revenues
Lift tickets $ 111,234 $ 104,430 7% $ 111,234 $ 104,430 7%
Food and beverage 36,716 35,579 3% 36,716 35,471 4%
Retail sales 25,716 25,087 3% 25,716 25,085 3%
Skier development 21,118 20,075 5% 21,118 20,075 5%
Golf, summer activities 6,367 6,990 -9% 6,367 6,696 -5%
Lodging and property 36,531 37,556 -3% 36,531 37,262 -2%
Miscellaneous revenue 13,956 14,125 -1% 13,956 14,110 -1%
------------------------------------------ ----------------------------------------
Total resort revenues $ 251,638 $ 243,842 3% $ 251,638 $ 243,129 3%
========================================== ========================================
(1) The sale of Sugarbush resort was completed on September 28, 2001, results
of operations are included through that date.
(2) Excludes operating results from Heavenly resort which was sold on May 9,
2002.
Total Skier Visits
-------------------------------------------
-------------------------------------------
Unaudited Skier Visits Fiscal 2003 Fiscal 2002 % Change
- ----------------------
Attitash Bear Peak 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/USA 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%
==========================================