American Skiing Company Announces Record High Revenues in
Fiscal 2006 Second Quarter
o Excellent conditions and visitation levels in the West and strong
holiday results despite January weather difficulties in the East.
o Record high resort revenues for the second fiscal quarter and fiscal
year to date (on a same-resort basis).
PARK CITY, UTAH - March 15, 2006 - American Skiing Company (OTCBB: AESK) today
announced its financial results for the second quarter of fiscal 2006. The
Company reported strong results in its Christmas/New Years and Presidents' Day
holiday periods, and slightly lower skier visits than in the prior fiscal year
in the East in January (excluding New Years') due principally to weather related
difficulties at its eastern resorts. At Steamboat and The Canyons in the West,
the Company recorded a 12% increase in skier visits for the winter operating
season to date thru January 29, 2006, due to strong booking patterns and
favorable weather creating excellent skiing and riding conditions. The company's
eastern resorts were negatively impacted by rain events in January, and recorded
a 3% decrease in skier visits for the winter operating season to date thru
January 29, 2006.
Despite these challenges, the company achieved a record high level of resort
revenues on a same-resort basis for each of the second quarter (an increase of
6% over the prior fiscal year quarter) and first six months of fiscal 2006.
Other highlights included a fiscal 2006 year to date increase in cash provided
by operating activities of nearly 9% over the 27 weeks ended January 30, 2005.
"I am extremely pleased with our record second quarter revenues. This impressive
growth, despite marginal weather in the East, is a reflection of the progress
we've made as a company in recent years," commented B.J. Fair, President and
CEO. "Boosted by a fantastic season at Steamboat and The Canyons and a strong
backlog of season pass sales, we remain committed to growing American Skiing
Company, even in periods of weather related difficulties such as those in the
East this year. This will be remembered as a truly remarkable winter season in
the West, with Steamboat nearing record amounts of its renowned Champagne
Powder(R)," added Fair.
Fiscal 2006 Second Quarter Results
On a GAAP basis, net loss attributable to common shareholders for the second
quarter of fiscal 2006 was $11.3 million, or $0.36 per basic and diluted common
share, compared with a net loss attributable to common shareholders of $22.1
million, or $0.70 per basic and diluted common share for the second quarter of
fiscal 2005. Total consolidated revenue was $112.5 million for the second
quarter of fiscal 2006, compared with $106.1 million for the second quarter of
fiscal 2005. Revenue from resort operations was $109.9 million for the second
quarter of fiscal 2006 compared with $103.4 million for the second quarter of
fiscal 2005. The $109.9 million in resort revenues represents a record level on
a same-resort basis, since the sale of the Heavenly and Sugarbush resorts in
fiscal 2002. The increase in resort revenues reflects higher business volumes in
December of fiscal 2006 relative to the prior fiscal year. Revenue from real
estate operations was $2.6 million for the quarter versus $2.7 million for the
comparable period in fiscal 2005. Excluding other items (for a reconciliation of
other items, please see the tables following this discussion), the net loss was
$11.3 million, compared to a net loss of $16.2 million for the second quarter of
fiscal 2005.
The loss from resort operations was $9.6 million for the second fiscal quarter
of 2006 versus a loss of $21.4 million for the second quarter of fiscal 2005.
The decreased loss was associated with a $6.5 million increase in resort
revenues, a $1.2 million decrease in depreciation expense, a $6.0 million
decrease in write-off of deferred financing costs and loss on extinguishment of
senior subordinated notes and a $0.3 million increase in the fair value of the
interest rate swap agreement; partially offset by a $1.7 million increase in
marketing, general and administrative expenses and a $0.5 million increase in
net interest expense. Cost of resort operations did not increase over the second
quarter of fiscal 2005, due to the fact that the second quarter of fiscal 2006
contained one less weekly operating period than the second quarter of fiscal
2005. Operating costs for this corresponding period (week ended October 31,
2004) in fiscal 2005 were approximately $2.1 million. Resort revenues for the
same period were only $0.4 million. Excluding other items, the loss from resort
operations was $9.6 million, compared to a loss of $15.4 million in the second
quarter of fiscal 2005.
The loss from real estate operations was $1.7 million for the second fiscal
quarter of 2006 compared with a loss of $0.7 million for the comparable quarter
in fiscal 2005. The increased loss was associated with a $0.1 million decrease
in revenues, a $1.3 million increase in cost of real estate operations due in
part to a $0.8 million provision for a probable settlement related to real
estate development obligations at The Canyons, partially offset by a $0.2
million decrease in depreciation and amortization expense and a $0.2 million
decrease in interest costs due to lower construction loan balances relative to
the prior fiscal year.
Fiscal 2006 to Date Results
On a GAAP basis, net loss attributable to common shareholders for the 26 weeks
ended January 29, 2006 was $53.5 million, or $1.69 per basic and diluted common
share, compared with a net loss attributable to common shareholders of $59.9
million, or $1.89 per basic and diluted common share for the 27 weeks ended
January 30, 2005. Total consolidated revenue was $132.6 million for the 26 weeks
ended January 29, 2006, compared with $125.6 million for the 27 weeks ended
January 30, 2005. Revenue from resort operations was $127.0 million for the 26
weeks ended January 29, 2006 compared with $121.2 million for the 27 weeks ended
January 30, 2005. The increase in resort revenues reflects higher business
volumes in December of fiscal 2006 relative to the prior fiscal year. Revenue
from real estate operations was $5.6 million for the 26 weeks ended January 29,
2006 versus $4.4 million for the 27 weeks ended January 30, 2005. Excluding
other items, the net loss was $52.2 million for the 26 weeks ended January 29,
2006, compared to a net loss of $53.9 million for the 27 weeks ended January 30,
2005.
The loss from resort operations was $50.4 million for the 26 weeks ended January
29, 2006 versus a loss of $58.5 million for the 27 weeks ended January 30, 2005.
The decreased loss was associated with a $5.8 million increase in resort
revenues, a $0.3 million decrease in depreciation expense, a $0.1 million
increase in net gain on sale of property, a $6.0 million decrease in write-off
of deferred financing costs and loss on extinguishment of senior subordinated
notes and a $1.0 million increase in the fair value of the interest rate swap
agreement; partially offset by a $0.3 million increase in resort operations
costs, a $2.4 million increase in marketing, general and administrative expenses
and a $2.4 million increase in net interest expense. Resort operations costs
increased by only $0.3 million over the prior year, due to the fact that the
fiscal 2006 period contained one less weekly operating period. Operating costs
for this corresponding additional period (week ended August 1, 2004) in the
previous fiscal year were approximately $1.7 million. Revenues for the same
period were approximately $1.6 million. Excluding other items, the loss from
resort operations was $50.6 million for the 26 weeks ended January 29, 2006,
compared to a loss of $52.6 million for the 27 weeks ended January 30, 2005.
The loss from real estate operations was $3.1 million for the 26 weeks ended
January 29, 2006 compared with a loss of $1.3 million for the 27 weeks ended
January 30, 2005. The increased loss was associated with a $2.1 million increase
in cost of operations, due in part to a $0.8 million provision for a probable
settlement related to real estate development obligations at The Canyons and a
$1.5 million impairment loss on the sale of retail commercial property at the
Steamboat Grand Hotel; partially offset by a $1.2 million increase in real
estate revenues, a $0.3 million decrease in depreciation and amortization
expense and a $0.3 million decrease in interest costs due to lower construction
loan balances relative to the prior fiscal year. Excluding other items, the loss
from real estate operations was $1.6 million for the 26 weeks ended January 29,
2006, compared to a loss of $1.3 million for the 27 weeks ended January 30,
2005.
For the 26 fiscal weeks ended January 29, 2006 total skier visits at ASC's
eastern resorts decreased by approximately 3% compared to the 27 fiscal weeks
ended January 30, 2005, reflecting weather difficulties in January, partially
offset by year over year increases in business volumes in the Christmas/New
Years holiday period. Total skier visits at the Company's western resorts
increased by 12% compared to the 27 fiscal weeks ended January 30, 2005,
reflecting generally positive operating conditions throughout the winter
operating season to date. Although the 2005 fiscal year includes an extra week
of operations due to its 52-53 week fiscal year policy, the winter operating
season of fiscal 2005 includes only one additional calendar day of winter
operations relative to fiscal 2006.
Beginning in fiscal 2006, the Company revised the methodology used to estimate
skier visitation at its eastern resorts. The Company now uses scanning of
certain lift ticket products to estimate skier visitation and believes this
methodology to be a more accurate reflection of skier visitation levels. While
this methodology has changed, the Company believes that any discrepancies in
such methods in comparison with prior years are immaterial to total skier
visitation levels reported.
Recent Trends
Despite record second fiscal quarter revenues, the Company expects some negative
financial impact to its third fiscal quarter revenues as a result of adverse
weather at its eastern resorts in February. The Company also expects this
negative impact to be partially offset by generally favorable operating
conditions and skier visitation levels at its western resorts.
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
certain items provide useful information to investors regarding the company's
ongoing financial condition and results of operations. In particular, the
company has excluded gain on sale of property, impairment loss on property sold
and write-off of deferred financing costs and loss on extinguishment of Senior
Subordinated Notes from net income or loss, income or loss from resort
operations and income or loss from real estate operations, where applicable.
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 results of operations and 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 March 15, 2006 and October 31, 2005, 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.
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, Pico and Mount Snow in Vermont; Sunday River and
Sugarloaf/USA in Maine; Attitash in New Hampshire; Steamboat in Colorado; and
The Canyons in Utah. More information is available on the Company's web site,
www.peaks.com.
Certain statements contained in this press release constitute 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 our current expectations
concerning future results and events. Similarly, statements that describe our
objectives, plans or goals are or may be forward-looking statements. We have
tried, wherever possible, to identify such statements by using words such as
"anticipate", "assume", "believe", "expect", "intend", "plan", and words and
terms of similar 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 operating segments; competition and pricing pressures;
adverse weather conditions regionally and nationally; changes in weather
patterns resulting from global warming; seasonal business activity; increased
gas and energy prices; 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. We caution the reader
that this list is not exhaustive. We operate 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 document and under
Section 27A of the Securities Act and Section 21E of the Exchange Act, we do 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 Statement Information
(in thousands except per share amounts)
13 Weeks Ended 14 Weeks Ended 26 Weeks Ended 27 Weeks Ended
January 29, 2006 January 30, 2005 January 29, 2006 January 30, 2005
Net Revenues: ---------------- ---------------- ---------------- ----------------
Resort $ 109,887 $ 103,411 $ 127,034 $ 121,231
Real estate 2,612 2,663 5,581 4,389
---------------- ---------------- ---------------- ----------------
Total net revenues 112,499 106,074 132,615 125,620
---------------- ---------------- ---------------- ----------------
Operating expenses:
Resort 67,766 67,786 91,729 91,395
Real estate 3,443 2,155 5,385 3,263
Marketing, general and administrative 17,885 16,210 29,453 27,027
Depreciation and amortization 13,061 14,400 15,971 16,679
Gain on sale of property - - (169) -
Impairment loss on property sold - - 1,533 -
---------------- ---------------- ---------------- ----------------
Total operating expenses 102,155 100,551 143,902 138,364
---------------- ---------------- ---------------- ----------------
Income (loss) from operations 10,344 5,523 (11,287) (12,744)
Interest expense and other, net 22,015 21,684 43,269 41,137
Write-off of deferred financing costs and
loss on extinguishment of senior
subordinated notes - 5,983 - 5,983
Increase in fair value of interest rate
swap agreement (350) - (1,036) -
---------------- ---------------- ---------------- ----------------
Net loss $ (11,321) $ (22,144) $ (53,520) $ (59,864)
================ ================ ================ ================
Basic and diluted net loss per common
share:
Net loss $ (0.36) $ (0.70) $ (1.69) $ (1.89)
================ ================ ================ ================
Weighted average common shares
outstanding - basic and diluted 31,738 31,738 31,738 31,738
================ ================ ================ ================
For more information, please refer to the Company's Form 10-Q, filed on March
15, 2006, with the Securities and Exchange Commission.
American Skiing Company and Subsidiaries
Unaudited Segment Information and Reconciliation of GAAP to Non-GAAP Metrics
(in thousands of dollars)
13 Weeks Ended 14 Weeks Ended 26 Weeks Ended 27 Weeks Ended
January 29, 2006 January 30, 2005 January 29, 2006 January 30, 2005
----------------- ----------------- ----------------- -----------------
Loss from resort operations $ (9,601) $ (21,426) $ (50,397) $ (58,548)
Loss from real estate operations (1,720) (718) (3,123) (1,316)
----------------- ----------------- ----------------- -----------------
Net loss $ (11,321) $ (22,144) $ (53,520) $ (59,864)
================= ================= ================= =================
Net loss $ (11,321) $ (22,144) $ (53,520) $ (59,864)
Gain on sale of property - - 169 -
Impairment loss on property sold - - (1,533) -
Write-off of deferred financing costs
and loss on extinguishment of
senior subordinated notes - (5,983) - (5,983)
----------------- ----------------- ----------------- -----------------
Net loss excluding gain on sale of
property, impairment loss on property
sold and write-off of deferred financing
costs and loss on extinguishment of
senior subordinated notes $ (11,321) $ (16,161) $ (52,156) $ (53,881)
================= ================= ================= =================
Loss from resort operations $ (9,601) $ (21,426) $ (50,397) $ (58,548)
Gain on sale of property - - 169 -
Write-off of deferred financing costs
and loss on extinguishment of
senior subordinated notes - (5,983) - (5,983)
----------------- ----------------- ----------------- -----------------
Loss from resort operations excluding
gain on sale of property and write-off
of deferred financing costs and loss on
extinguishment of senior subordinated
notes $ (9,601) $ (15,443) $ (50,566) $ (52,565)
================= ================= ================= =================
Loss from real estate operations $ (1,720) $ (718) $ (3,123) $ (1,316)
Impairment loss on property sold - - (1,533) -
----------------- ----------------- ----------------- -----------------
Loss from real estate operations excluding
impairment loss on property sold $ (1,720) $ (718) $ (1,590) $ (1,316)
================= ================= ================= =================
American Skiing Company and Subsidiaries
Unaudited Balance Sheet Data - January 29, 2006
(in thousands of dollars)
Real estate developed for sale $ 20,421
============
Total assets $ 437,531
============
Total resort debt (1) $ 654,012
Total real estate debt
19,672
------------
Total debt (1) $ 673,684
============
(1) Includes preferred stock of $333,256 as a result of the adoption of SFAS No.
150.
Excluding preferred stock, total resort debt would be $320,756 and total
debt would be $340,428.
For more information, please refer to the Company's Form 10-Q, filed on March
15, 2006, with the Securities and Exchange Commission.
American Skiing Company and Subsidiaries
Unaudited Supplemental Revenue Data
(in thousands of dollars)
13 Weeks Ended 14 Weeks Ended 26 Weeks Ended 27 Weeks Ended
January 29, 2006 January 30, 2005(1) % Change January 29, 2006 January 30, 2005(1) % Change
----------------- ----------------- ---------- ----------------- ----------------- -----------
Resort revenues
Lift tickets $ 55,712 $ 52,871 5.4% $ 55,764 $ 52,914 5.4%
Food and beverage 14,332 13,429 6.7% 18,636 17,914 4.0%
Retail sales 11,524 11,447 0.7% 12,114 12,146 (0.3%)
Skier development 10,729 9,772 9.8% 10,829 9,868 9.7%
Golf and summer activities 20 23 (13.6%) 2,884 3,530 (18.3%)
Lodging and property 13,873 12,675 9.5% 20,608 19,271 6.9%
Miscellaneous revenue 3,697 3,194 15.8% 6,199 5,588 10.9%
------------------------------------- -------------------------------------
Total resort revenues $ 109,887 $ 103,411 6.3% $ 127,034 $ 121,231 4.8%
===================================== =====================================
(1) Includes an additional fiscal week of operations relative to fiscal 2006.