American Skiing Company Announces Fiscal 2004 First Quarter Results
Company Reports Significant Growth in Season Pass Sales
and Excellent Early Season Conditions
PARK CITY, UTAH - December 10, 2003 -- American Skiing Company (OTC: AESK) today
announced its financial results for the first quarter of fiscal 2004. The
Company reported a significant increase in season pass sales as well as
excellent early season skiing and riding conditions at all of its resorts.
"We continue to benefit from restructuring initiatives in every area of our
resort business and we are excited about our prospects for the 2003/2004-ski
season," said CEO B.J. Fair. "The realignment of our marketing and sales
organization has driven a solid increase in season pass sales that foreshadows
higher visitation. We have enjoyed abundant early season snowfall in the West
and conditions in the East have steadily improved, with excellent snowmaking
temperatures and significant natural snowfall this past weekend. We remain
cautiously optimistic given a number of positive indicators as we approach the
heart of the season"
Season Pass Sales and Reservation Activity
The Company reported that through November 30, 2003, year-to-date season pass
sales were 27.4% higher than at the same time in fiscal 2003. The increase has
been driven primarily by the successful introduction of a combined Attitash Bear
Peak/Sunday River season pass. As a result, year-to-date season pass sales for
both resorts increased more than 100% through November 30, 2003. Season pass
sales for all five eastern resorts were 38.6% higher than at the same time last
year, with every resort posting double-digit increases. Season pass sales at
western resorts were 5.2% higher year-to-date, through November 30, 2003. The
Company further reported that it continues to witness a general trend toward
last minute booking patterns in line with the experience of other companies in
the leisure industry.
Early Season Results
The Company has enjoyed excellent early season skiing and riding conditions at
its western resorts. The Canyons Resort, in Park City, Utah, opened a week
earlier than planned, following a series of storms that left more than six and a
half feet of natural snowfall. Conditions in Utah continued to improve and by
Thanksgiving Day, The Canyons had received more than eight feet of natural snow.
As a result, the resort recorded a significant increase is skier visits during
Thanksgiving weekend relative to the comparable period in fiscal 2003. Early
season conditions at Steamboat were also superb, with more than six feet of
natural snow waiting for skiers and riders when the resort opened on November
26th. Steamboat posted a modest decline in year-over-year skier visits during
Thanksgiving weekend compared to exceptional early season results in fiscal
2003.
In the East, early season conditions were less favorable than in fiscal 2003
when the Company enjoyed excellent weather and strong Thanksgiving weekend
visitation. All of The Company's eastern resorts were open by November 28th, but
with significantly less available terrain than during the prior year. As a
result, eastern skier visits during Thanksgiving weekend declined over the
comparable period in fiscal 2003. Since Thanksgiving, the Company has enjoyed
optimal snowmaking temperatures as well as significant natural snowfall setting
the stage for excellent conditions during the peak holiday season.
Adoption of New Accounting Standard
Effective July 28, 2003, the Company adopted Statement of Financial Accounting
Standards No. 150, "Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity" (SFAS No. 150). SFAS No. 150
establishes standards for how financial instruments with characteristics of both
liabilities and equity should be measured and classified and requires that an
issuer classify a financial instrument that is within its scope as a liability.
All public entities are required to adopt SFAS No. 150. As a result of adopting
SFAS No. 150, approximately $298.7 million of mezzanine-level securities were
reclassified to liabilities in the Company's consolidated balance sheet in the
first quarter of fiscal 2004. This represents the carrying value of all of the
classes of mandatorily redeemable preferred stock. In addition, approximately
$43.1 million of accretion of discount and dividends on the preferred stock in
fiscal 2004 will be included in interest expense, whereas previously it was
reported as accretion of discount and dividends on mandatorily redeemable
preferred stock. For the 13 weeks ended October 26, 2003, approximately $10.2
million of accretion of discount and dividends on the preferred stock was
included in interest expense. For the 13 weeks ended October 27, 2002,
approximately $8.9 million of accretion of discount and dividends on the
preferred stock was included in accretion of discount and dividends on
mandatorily redeemable preferred stock.
Fiscal 2004 First Quarter Results
On a GAAP basis, net loss available to common shareholders for the first quarter
of fiscal 2004 was $41.3 million, or $1.30 per basic and diluted share, compared
with a net loss of $39.1 million, or $1.23 per basic and diluted share for the
first quarter of fiscal 2003. The net loss in the first quarter of fiscal 2004
included a $0.1 million restructuring charge. The Company did not incur
restructuring charges during the first quarter of fiscal 2003.
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Total consolidated revenue was $18.5 million for the first quarter of fiscal
2004, compared with $20.6 million for the first quarter of fiscal 2003. Resort
revenue was $16.1 million for the quarter, compared with $16.9 million for the
first quarter of fiscal 2003. The slight decline in resort revenues reflects the
continued effect of a soft economy on conference business and poor weather in
the East that impacted golf and summer business. Real estate revenue from
ongoing fractional ownership sales was $2.3 million, versus $3.7 million for the
comparable period in fiscal 2003. The decrease in real estate revenue resulted
from the impacts of continuing disruptions related to the Company's efforts to
restructure its real estate senior credit facilities and weak economic
conditions.
The Company's consolidated loss from continuing operations was $41.3 million for
the first quarter of fiscal 2004, compared with a consolidated loss from
continuing operations of $30.2 million for the comparable period in fiscal 2003.
Excluding the restructuring charge and the accretion of preferred stock
dividends, the consolidated loss from continuing operations was $30.9 million
for the first quarter of fiscal 2004. The loss from continuing resort operations
was $35.9 million for the first fiscal quarter of 2004 versus a loss of $24.9
million for the first quarter of fiscal 2003. Excluding the restructuring
charges and the accretion of preferred stock dividends, the loss from continuing
resort operations was $25.5 million for the first quarter of fiscal 2004
compared to a loss of $24.9 million for the comparable quarter of fiscal 2003.
The wider resort loss was driven almost entirely by lower revenues. Resort
operating expenses were essentially flat year-over-year as a result of
aggressive cost control efforts which helped mitigate increases in insurance and
other costs that could not be as easily controlled. The loss from continuing
real estate operations was $5.4 million for the first fiscal quarter of 2004,
compared with a loss of $5.3 million for the first quarter of fiscal 2003. 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 (such as the Company's
restructuring charge and the reclassification into liabilities of all its
mandatorily redeemable preferred stock following its adoption of SFAS No. 150 in
the first quarter of fiscal 2004) 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-Q and Form 10-K, dated December 10, 2003 and October 27, 2003,
respectively, as well as other filings 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.
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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.
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American Skiing Company and Subsidiaries
Unaudited Condensed Consolidated Financial Statement Information
(in thousands of dollars except per share amounts)
Quarter Ended
Net revenues: October 26, 2003 October 27, 2002
------------------ -----------------
Resort $16,128 $16,911
Real estate 2,345 3,714
----------------- ------------------
Total net revenues 18,473 20,625
----------------- ------------------
Operating expenses:
Resort 22,525 22,500
Real estate 1,658 3,576
Marketing, general and administrative 10,280 10,033
Restructuring charges (1) 137 -
Depreciation and amortization 2,303 2,416
----------------- ------------------
Total operating expenses 36,903 38,525
----------------- ------------------
Loss from operations (18,430) (17,900)
Interest expense, net (1) 22,828 12,274
----------------- ------------------
Loss from continuing operations (41,258) (30,174)
Accretion of discount and dividends on
mandatorily redeemable preferred stock (1) - (8,931)
----------------- ------------------
Net loss available to common shareholders $(41,258) $(39,105)
================= ==================
Basic and diluted loss per common share:
Net loss available to common shareholders $(1.30) $(1.23)
================= ==================
Weighted average common shares outstanding 31,738 31,724
================= ==================
(1) For more information, please refer to the Company's Form 10-Q, dated
December 10, 2003, on file with the Securities and Exchange Commission.
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American Skiing Company and Subsidiaries
Unaudited Reconciliation of GAAP to Non-GAAP Metrics
(in thousands of dollars)
Quarter Ended
October 26, 2003 October 27, 2002
--------------- ---------------
Net loss available to common shareholders $ (41,258) $ (39,105)
Restructuring charges (1) 137 -
--------------- ---------------
Net loss available to common shareholders excluding restructuring charges $ (41,121) $ (39,105)
=============== ===============
Quarter Ended
October 26, 2003 October 27, 2002
--------------- ---------------
Consolidated loss from continuing operations $ (41,258) $ (30,174)
Restructuring charges (1) 137 -
--------------- ---------------
Consolidated loss from continuing operations excluding restructuring
charges (41,121) (30,174)
Accretion of discount and dividends on preferred stock (1) 10,248 -
Loss from continuing resort operations excluding restructuring
charges and accretion of discount and dividend on preferred stock $ (30,873) $ (30,174)
=============== ===============
Loss from continuing resort operations $ (35,872) $ (24,858)
Restructuring charges (1) 137 -
--------------- ---------------
Loss from continuing resort operations excluding restructuring charges (35,735) (24,858)
Accretion of discount and dividends on preferred stock (1) 10,248 -
Loss from continuing resort operations excluding restructuring charges
and accretion of discount and dividend on preferred stock $ (25,487) $ (24,858)
=============== ===============
Loss from continuing real estate operations $ (5,386) $ (5,316)
=============== ===============
(1) For more information, please refer to the Company's Form 10-Q, dated
December 10, 2003, on file with the Securities and Exchange Commission.
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American Skiing Company and Subsidiaries
Unaudited Balance Sheet Data - October 26, 2003
(in thousands of dollars)
Real estate developed for sale $ 47,509
------------------
Total assets $ 479,581
==================
Total resort debt (1) $ 548,257
Total real estate debt 107,009
------------------
Total debt (1) 655,266
Less: cash and cash equivalents 6,104
------------------
Net debt (2) $ 649,162
==================
(1) Includes preferred stock as a result of the adoption of SFAS No. 150
(2) Includes preferred stock as a result of the adoption of SFAS No. 150.
Excluding preferred stock, net debt would be $340,215.
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