MTN - Earnings call transcript Q3 2018

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Operator

Good day, everyone. And welcome to the Vail Resorts Third Quarter Fiscal 2018 Earnings Conference. Today's call is being recorded. And now, I'd like to turn the call over to Rob Katz, Chief Executive Officer. Please go ahead, sir.

Rob Katz

you. Thank everyone. morning, Good fiscal XXXX our conference third to earnings quarter call. Welcome

morning on Barkin, the me is call Joining Officer. this Michael Financial our Chief

we risks include and may remind during Before and SEC are based me filings some a assumptions as let provided number vary described to information our of on you certain results this uncertainties statements materially. actual forward-looking that may future subject that and are call begin, in

with on with press X, Today's along release them on our issued Relations undertake Forward-looking Web SEC our statements the financial our along www.vailresorts.com. as press June remarks of events remarks section XX-Q, call are Form morning, and today, on no in our non-GAAP certain XXXX those morning measures. made measures are release, unfold. our quarterly include are with as included provided actual with update report Investor this filed of tables this in Reconciliations we also this were available the at duty also which of to and site the

So, with turn that quarter our results. said, fiscal XXXX third let’s to

the the North the performance are the weather XXXX-XXXX We quarter particularly American challenging season. Western across given and ski our the conditions U.S. full for season, of for pleased in with much

passes. network, season the the our importance our performance provided advanced business resort products, of geographically resiliency including diverse and Our by of demonstrates model, the our stability purchase increased

and in as X.X% revenue year ski third prior of of lift to of our season once quarter growing for conditions, quarter Stowe our across Our year for revenue high-end of record the the season Total inclusion improved conditions period. results result sales in for Whistler partially American increased strong third U.S. achieved same lower with X.X%, by to quarter the fiscal excellent fiscal lift Mountain the compared Blackcomb third Western the the vacation the results. North including revenue another grew the primarily Stowe, X.X% at offset period compared network. non-pass the underscore experienced a the fiscal ski season resorts. pass for XXXX-XXXX consumers demand also visitation, strength prior improved and

highlight the the overall ski our the we the across skier of pass efforts. despite our guest very in conditions winter believe despite We year this Western continued provide the U.S. visits and prior sharply diversification improved our season. of half at the at our results outstanding the U.S. us, remaining total experience pleased the the our significantly challenging success in resorts. geographic importance of of resorts. that conditions many our second Western focused rebounded half are we delivered over the As With season, long-term network average season The growth season behind marketing in of first resort below and year-to-date snowfall strategy

to marketing capabilities significant continue from marketing also past personalize and capture years. several to we guests, improved our investment ability and have in benefit data-driven the from the messages data over We made to resulting target our

call our the talk our outlook, over this our to results, acquisition turn further Now, to and Michael I would like week. to announcement about

Michael Barkin

Thanks, everyone. Rob morning, and good

for the was fiscal conditions quarter, $X.XX EBITDA our $X.XX fiscal of season. net for X.X% the an Resort compared million Inc. diluted third an $XXX.X quarter, Results for of third Resorts, reduction Resort reform. As prior to resulting third of share diluted the the compared reported tax quarter year. in U.S. our $XXX.X the quarter income of the of performance prior Western we third taxes, $XXX.X to stability for income fiscal period our prior was quarter XXXX revenue much or from pleased million Net across year. Rob to for provision results increase per the of the as income third include compared was resorts are the and attributable face per mentioned, in million or U.S. challenging fiscal in the same a net with year. increase XXXX million of of Vail share in X.X% in the to $XXX.X our

was on announce remains the pleased that months’ to $X.XX XXXX. our XXXX a July XX, balance strong. trailing Directors hand share per sheet I'm payable Our on of also Vail Resorts’ reported our very quarter Board with stock million dividend net XX declared quarterly to June common on XX, shareholders ended and of total We $XXX.X of fiscal EBITDA. cash times debt has cash on X.X record of

Mountain an in Ski closing, certain certain State Colorado. price from pay affiliate the of Okemo share Estate. Resort to price of transactions are Crested LLC New close purchase Peaks third of Pass to $XX that Resorts purchase new Real In million this announce Holdings Ski to receipt Triple to subject we to will average transaction, we Resort summer, in price resorts all will subject million pay very Washington Sunapee separate expected of of Mueller subject week, three this for adjustments the million repurchased an Resort Mountain Butte in into Company of pleased the from Holdings U.S. during fiscal $XX.X of an the Resort permits into LLC have family company from for entered adjustments. XXXX, to company cash at parent The at that special quarter to The use purchase to and a million Stevens Mount to agreement were purchase a Resort and the simultaneously totaling Hampshire, the LLC, Oz LLC, $XX also off $XXX leases Triple Vermont, cash a Additionally, with acquire Earlier the in entered we agreement Peaks $XXX.XX. shares an

skiing choice will and New the across in pass access enhance Hampshire. ending Mountain and around iconic our destination a regional northeast, The Vermont review generate significantly New Hampshire offering the Crested products, Crested historic providing and U.S. seeking be Mount acquisitions in as great Each more Resort, will year to these a Colorado and Pass will to fiscal and Forest million and experience. consent strategic annual resorts expand complement as XXXX. in of pass of guests of in season collectively addition skiers Stevens Resort network Service states Sunapee the Vail Okemo to world. holders July an expected our Resorts' are and Butte our to excess an is our Stowe. the in for is to destination offerings our four and Colorado XX, Vermont well incredible skiers from town for Butte incremental important that administrative in EBITDA $XX and

the outstanding is skiing, capital to transactions million a Finally, guest Whistler Seattle. we of to resorts. Stevens invest great two over the skiers to and to incremental Northwest continue Pass a rate Subsequent to Pacific normal drive the our from plan two of elevate the for just expenditures, addition our $XX following closing the Blackcomb years to hour experience across two with four

aggregate annual addition, support In of addition ongoing to $X resorts. the expected four are these the increase by capital to million expenditures in

of an this resort estimated acquisitions, expenses between reported an Peaks Whistler integration-related million Given year, the Triple XXXX of we year million will fiscal and our the estimated specific includes and finish EBITDA expenses our and which $XXX Stevens and expect $X.X specific acquisition $X Pass million, integration-related $XXX Stowe. of to-date million to and to performance Blackcomb

remain for outlook to as and fiscal occur closing, updated Pass Our costs estimate results Stevens does of summer. subject XXXX include Peaks not transactions and the for year any is the operating to which expected closing Triple this

fiscal and related our X, call the Pass guidance fiscal end back acquisition would in impact expenses range Peaks on Triple resort I'll quarter. with now the as over integration the at XXXX the be the EBITDA for issued of of the transactions, and results to strong our turn associated of a Stevens our Rob. high result March XXXX Excluding reported year third

Rob Katz

Michael. Thanks

We with pass season results are our very to-date. pleased the sales of

Epic increased approximately dollars XXXX North upcoming Excluding sales period units XX% sales XX, compared for May XX% ski through in and XXXX. pass pass through prior our Military as year the XX, sales approximately in season May the products, to XXXX-XXXX American of

markets our U.S. internationally. among and included Our nearly spring all strong pass continued sales strong guests the performance in with destination across growth

We those regions. in have Whistler market regional Tahoe solid and Colorado season Blackcomb's experienced sales in particularly growth the despite in pass the with throughout strong challenging conditions

products As premium of our our the the and a Epic Pass result pass fastest year. growing into, of the this new strength network all resort our entered of we been product among has partnerships

well past of Forces. military season previously military our Pass Epic addition huge guests as sales current We purchased our pass sales these enthusiasm engagement from Epic the we significant one results, new members of Pass strong very who to new all as of to to saw guests products. and also with Armed had saw and In of

which ongoing holders X, the of as June We the epic weekend, and snowboarders. option long-term the June are information on includes year, prior Whistler XXXX- to sales North It skiers current prior on end sales included current foreign Hakuba and rates Blackcomb period ski still off with applying Valley purchased XX, by the units prior is addition pleased the those and both passes pass under extremely that up and process which currency fall. Perisher's to in Pass, pass June American impact period. this our season fall. very in in to compared last be exchange pass growth an are XXXX, military verifying popular year are eliminate new Japan products XXXX ski of we’ll XX% season of is Australia kicks the with in through who a through releasing are a XXXX of in from of spring our the the note pass XXXX Epic adjusted period we important results to alliance, X, additional XXXX benefiting Australian and portion

projects summer the to commitment experience experience of completing remains our important capacity elevate plan, integration priorities. and highest U.S. guest and resorts $XXX of the increase This our investments investments capital capital related network one as we and with in expenditures, reimbursement. associated activities, for be our fall of strategic will excluding reinvesting resorts across and to third-party related part million one-time summer previously anticipated capital our announced capital Our

chair area beginner and products the $XX mountain be be significantly will continue gondola, We experience focused Blackcomb transformational and wide X% includes experience improving dining galaxy high the our for several and snowmaking improved the speed with enterprise a technology important chair heavenly, with two along with our Heavenly enhance our resorts. projects lift guest plan, high-speed to upgrade Park new along on high-speed Catskinner. new at upgrades. family These restaurant efforts the million the emerald Whistler new signature we the improvements the across city, new with X% a Blackcomb on which and At the completing will

As guests over experiences all their the results to dedication our happy operations, to now we creating season; a want lifetime. without summer this to for challenging moment to Operator, ski take hard to during of questions. employees XXXX-XXXX work our North not I season for transition our and memorable thank are American of experience providing an answer passion be would we a their in possible

Operator

first we Instructions] go Shaun at America. will [Operator Kelley to And Bank of

Shaun Kelley

and pass things seen results. early little the improving maybe play year? that strong -- of how to have things of little the you’re little past, believe In bit, sales seasons give trajectory last you, going expectation the sales I you’ve bit to on slowed where the actually a balance through bit. us the for a flat actually a year, thinking out results your Rob, were pass of Could are were some sense the Congratulations the

your through type everything expectations mix on So and the now, the of as move selling the of what's seen period? you’ve we just based balance right

Rob Katz

that we into good in are very first we and are think spring forward is reflected is our a in about as been spring the have years. we we're on. pass it rate commitment earlier purchased who of also possible, I impact be that think, goal pass about say which as to pull has growth so as that we do rate, results other repeating of in growth certainly acquisitions, year, military think for then pass selling past spring and bears sales back to focused season, how that's the our all, is people includes now, strong And as a early purchases going. really sales, one and previously I have to we I'd it the to we'll headwind also these feel season from new get This sales be something going new passes, military on well. obviously good focused feel which the the potential our as unit

And lot I for we to have full the the going season. different rate specific it. provide we're impacting, growth on So not this of guidance point, do a at factors think,

Shaun Kelley

hoping color of out The elaborate on any last thing sort that get spring the some that just called to Understood. that holders on what little on how you you one might we’re comment passes was sold growth, a fall. some that in material color be? pass on release the is specifically including bit and more from Could

Rob Katz

have dynamic actually that single We every year.

So are just we buy it they that's to even earlier period. every really earlier but our if to get people right pass pass, are pulling year, and season a core one buying constantly in people to strategies buy selling not of season the is

folks fall. who in people spring year and have our rate part in from that's bought growth of the we the reflected last year, every so And

go year. before growth Pass you -- had we to right folks and sales, that of but new then sales with who the as something have some we again, new Epic headwind acquisitions. also year have into also the a that's the we bought year, Again, for obviously, which obviously, this last address full military rate have So were

good. right says of we But we of I full little of feel given around little would at this in A the a but is said total, about good what where good feel dynamics we I about now, these did selling give a be repetition feel and spring, for bit tough growth a play. what that pretty earlier, – in period. are the to our all we that say again how So think I to precision lot rate

Shaun Kelley

spread end color one well. analysis, pricing a a terms lot be to higher in largely shift Canada that the and mix a that were versus we anything that said other as given weighted what would just passes end there of price your high U.S. as of is to you saw people is can expecting probably average Last In or is us, X. X-point Understood. you we to Pass like the provide Any increase you X of closer because I on the Epic your likely maybe spread reflection at think in probably is know on the

Rob Katz

kind which between than -- a mix over that’s to performances of than definitely product. strength include you which the obviously the military of math absolutely, priced lower, side, revenue. said pass-to-pass because don't largely growth now you attributed right Epic -- think, see Pass and on of the those from rates I shift, as the the yes obviously year, obviously can this increase, Epic years. seen lower we’ve can do the is you was just spread units one last our number of And on which Pass either is strongest And the the -- the the

course go and although, So revenue would both of certainly if down, growth factored you actually would -- rate and unit that that up. come the spread

Shaun Kelley

switching just to would for the me question be Last gears Understood. acquisitions.

two adds America North lot left market transactions highest just visitors I today. ton of mean, thing the couple Pass. then know really has there’s Stevens overall of what of markets a is a four still struggled didn’t this about and are a that tell just opportunity guys is So targeted a you like Mountains, of you these there a kind base proper? at of within I one is of community work, what like have do we others opportunities and couple the with have think think clearly, lot maybe it Could investment And of in more like America? level, North doing to you us the separate

need start resorts to or affiliate increasing to you So affiliate to other or network specifically, And sense? operators? yourself with need as call it do ski successful let’s be the large, pass to people what’s product

Rob Katz

now is for compared to ability very size point. huge I of think, us necessarily even America. the that is acquisition us think is cost at benefit to powerful that to the answer I believe we the that the right say targeted not to if there be unique, select something I in our the are company overall of can first And the this that the think is add question, absolutely I network, quite opportunities would for North

So resorts as at guest And I the that. think actually in and important truly about to very, goes that very with the identify everything that different, perceives are very good that's don’t ability we obviously, feel it how we something on, of terms acquisitions. terms we -- assets in time of look to differentiated overlap that have how already are

And we’ve I to seen we America. at America we outcomes those impacts to North have point. can there outside that selective, same be think even North other those of about have think that in are corresponding so some this And we’ve opportunities I talked more start

think is success going is very It we opportunity their powerful and for the resorts within is we our of resorts part where the communities. that this that marketing a doesn't best and network, formula opportunities, mean can the certainly a more think alignment And it's driving our do weather I of industry. are part being company have opportunity do by positive into we alone for are larger different really in there increased standalone other for ski benefits aligning pass maybe in to and like of feel I also choices an a benefits are there to I resort stand is with with challenges that resorts industry benefits volatility product. to being certainly. us. a but being this that think think there with a bring provided everybody, There phase I sophisticated with feel geographic opportunities and forward lot like diversity becoming to

Operator

at next Deutsche Chris Bank. Woronka go to We’ll

Chris Woronka

And you Peaks follow-up if that the bought the customer northeastern deal. I And access how to I acquisitions. it's of you’ll small the skier? tell that data similar know more positions maybe us on access was Whistler, know I numbers, big Triple you on want capture and Stevens a really getting ask Pass you Can just to you to here? get but

Rob Katz

detail and I our the think But sophistication the acquisitions, than though in put Absolutely, of certain that has the important that part data one an data it, the of ability think increase each parts that is are even our amount these it. I that that’s of of we transaction. important to of of certain capture, resorts systems as more a

only the it's the had that the capture that capture over years, So data over come years. last it's five the might not five next have data will in

And so Blackcomb that's with as -- Whistler true I think, that's certainly well.

with acquisitions there certainly so more we for just our we that about, priority certain guests And and be a how to it that for wasn't data. we've was much can terms in these one-to-one. much So really them amount is talk truly necessarily allows personalized bigger But of us conversations it forward. as more communicate a direct, going for us to opportunity as each talked them of us. provides And have of really

Chris Woronka

ask on upcoming investment just this plan going to side labor season. any you can incremental as to be tell of the at want us there ski I anything housing or Is for in terms you point?

Rob Katz

after the for in to that go working be, that number we got make real employee of what responsibility projects based to regulatory very the developments. investments. because the those And see on we've housing focused through affordable lot tell think housing upon resorts a process to huge into estate our market timing with shortages of of are proposition costs We community. same that in value works, improve and will increasing traditional a hard the and I our us we we is as have of a the of some it's continuing

And go the have those, still talking us And do something year. been last continue a couple huge we've we for next employee priority that's of and about that's to but think inflation. years. compensation And wages see than that think growing for we'll I so through to faster I

operate that operate means success. own are in, into news we markets good investments and seeing that the incredible lot that And that to think communities our both resort employees. we put regional that the increase and I us our local we also our and markets some for investments strength in, the our is have of own

Chris Woronka

could acquisitions. and that a is or final $XX fully recent year? up EBITDA you Is synergies just next the expense of on is if that for baked million One for 'XX, of find -- your revenue follow an might fiscal number vision that initial with

Rob Katz

think I the is much very a characterize year we would way one EBITDA.

acquisitions, of resort. one prior to million incremental of process with As through experience about capital things announced elevate we'll this the is we've opportunities of with we deal, invest in we that that the $XX a seen go the guest across investing

we'll place. returns systems data from marketing we expect as Rob be suggested, overtime. that get our and So And would to collecting in putting and

want one we what do So from there. and it is take provide we'll number, to year a

Operator

And Powell Please next Barclays. to we'll Anthony ahead. go go at

Anthony Powell

of replicated how a from Could you be could talk you partnership about And process Okemo to that got process the of owners deal? with the future with the partnerships?

Rob Katz

pass industry, these owners think to consider And partner In to the in are together we that this a about looking discussions, Triple relationships were those we I understanding case both for. establish a and deal. do for are we've think, out into various strategic were full years what able to March. of and opportunity to able we talked like deals, relationship, are about Peaks, -- building opportunity the that and partnership, in build as announce which transformed through I

deal case, us benefits of are of full to I quite products guests. being being significant on offer think for this unlimited in our experience integrate, our doing an terms fully pass the able in able the for

transaction full those our week. we of we in us doing think So benefit are all a definitely and this for announced that guests big the pieces

it cases, it pass it other into circumstance, in to But And be probably don't particular your in think with partnerships, this parties. to I that's go both we intention. relates replicated. unlikely as many out worked that for

Anthony Powell

idea and three Mercer, the was this in parties? since Did always anything both the months change or

Rob Katz

details say the that which comment how transaction discussions was relationship of part and on but strategic to it the unfolded, absolutely going we of with that family. it the Mueller have not am I the

Anthony Powell

seem And the that [indiscernible] to a deal. the times situation? achieve in all multiple attractive that Is and relative loan going forward, say what is or the at you special pricing, for in EBITDA deals that, this Whistler can deal

Rob Katz

I wound where think Stowe deal. quite to up million when that just we close actually EBITDA price It’s No, $X on you each plus the independently. negotiated million $XX is final took our purchase over in expected of on deal of

is -- I we negotiated each So like sides think felt independently. We get deal that have certainly to to it get was obviously a and both wanted deal done there.

Operator

at to And move next we’ll Ryan Blair. Sundby William

Ryan Sundby

the look you anymore on you so color when are not these a Rob, from? holders coming And maybe at standpoint. this from talking much growth so XX% where geographic Can unit I'm far year. provide

But and some not always Are skies so know to or new big Epic partners, a the so resorts on they the skiers season are, year? pass there’s holders? driver for who from picture, I former are the Are stand color added there offerings? give a you’ve growth. passes? skiers big color just any is new on competing out any who more this they over they appreciated. you’re at that they group going two But perspective if of to being specific. any the So these Are coming

Rob Katz

path our know somebody any last they on don’t certainly detail, joins pass, precision or when were somebody whether not or year. We else’s with

the are they’re season tickets out what is folks, We our goals are to every upon lift products that the go And a resorts there that move we time. between research back don't of program samplers our and who call resort there lot both one skiers and marketing know of for there those do planning up to who from picking visits our sometimes the to who what general one to based in have upcoming of understanding people resorts. trips to of same forth season. like We incremental passes the go from incremental

bit so hard day-in I no doubt we when pass component day-out And so season little from a sales. there of get to growth, again is think that that pass is see results our our a and that

look we are who who I years, broadly, us. considering already These us. lift important last market year are And therefore a think when purchasers, to be ticket is couple been really would prior highest is very that might of resorts. folks the people pass one were the of seeing a that for for of obviously probability our we either -- have what

year. are is piece the truly And seeing is in folks those. people to the yes, new had like last of who I might path who new we And a is component. are more year, prospect a prior additions I And keeping lot program. or have still that's then have think there think also which that's an growth, what two the year the we're of I all on left and seeing somebody growth last before, pass call we think honestly news we important years just another were pass good over

talked growth to rate, who think including drive year, the people of I last were so minimizing all to So rate, of there lapse those in that factors that speak, folks who moving last we -- have were is combined earlier, holders and also at about looking part fall. the a purchased but obviously, pass spring, year, the of you're growth when as just

So all growth. contribute things of our drive how those to we

Ryan Sundby

at I guess, for that testing Is a season that a point interrupted we've towards pass industry? that or point just point, does monthly One retention. doing with something some or about not talk seen on moving guys other talked be it’s industries ski would the last to membership is there. and and you help companies thing offer

Rob Katz

season us differences we make before largely begin. Well, think season some is important are our final -- I the for very there us. In that that, what's pass sales to we

the our given of that at think our resorts it consider travel. season -- itself, providing So points. all of values best I the don't I monthly this whole all the pass access payment I the think this that point, price can value. is mean, because incredible the And we think you one would is goal season products, in I that are over a plan we really

oriented that, offering think We we're it really all in people have seen And on results is their terrific very a folks thought think November. that you spring payment But that ensuring do those commitment. people become payment about on we’ve we this make we plan could to begins. commitment extent to of that the the but the make allows during the want I we and to manageable make whether $XX so And final until season a actually passholders. spring that way monthly a commitment, ultimately the from down, before because

pass. a we bit the tuned have only making of we -- and during putting amount couple So facet other they’re a fine final before would to I that going we're like aren't a spring, to don't point, really season. Doesn’t moving use this potentially is monthly payment consider months September, in go over of little then down a to to us about this which the thinking the feel think that it, ways that at small there but payment people mean plan

Ryan Sundby

it skiing rebound revenues year, the unit a just any But last would visits a great? and then me, on And light. there Any skier this was growth, of mountain a there nice lodging is from in I little be guess of late saw just in mix we of what or quarter. question thoughts I function think thoughts

Rob Katz

is business geographically. lodging Our more concentrated

So throughout there the for has tailwinds certainly like in Blackcomb Stowe, Whistler more it the and but did were in places rebound, a year. We continued us strength Colorado. certainly concentration, good particularly see

significant businesses the the of And not the business. the mountain as lodging rest as so of diversification is

Operator

Markets. next to Andress Brett we’ll And KeyBanc move Capital at

Brett Andress

think $XXX recently new on as that expected, month, price earlier I now many took the as yours. is priced last So up product and above product their pass by competitor your than

that play development later some create this competitive standpoint, room I’m because into future from in so from additional also a for year a your theory, years, curious, and you the standpoint? strategy for in will industry pricing pricing but broader And

Rob Katz

the critical. is -- again not the really would values this I have really time per spend like the in lot on And comment say know that that I’m se. a travel we certainly going say them is best that we would studying pricing we pass analyzing feel skiing, one I but to of best holders. our of connection value to having future in and

relationship own market part ensuring do to And go attention dialogue do. that on other based our really the that best so course we’re competitors we from on what products we our so pass focused right spot. large our critical of value and doing and But I’d is potential more retain information it's ensure just holders. they're in that how very proposition. with own the on to pass And to holders we our communication got we Obviously, and that the standpoint, say and we just of that pay

of so key And keep necessarily we off we to move would we’ll we’re that the long-time. say but to as eyes forward go what's continue unlikely to strategies on our I have as open going for

Brett Andress

a after you -- to sense maybe capital, Can color trying return million? it you capital? on a Is that just Is following the up more of the plan gave. maintenance over next the two underinvestment, growth on profile some $XX of capital question years catch-up earlier of put $XX to lastly to little get answer the you And more years? recent type in provide this bit that million acquisitions

Rob Katz

of to years, more as the and closing, get detail think for to the early I each that, about think sized that. start we through And those and closer resorts we next still couple four get the say I mean provide evaluation would on for resorts. to appropriately, at as plans of opportunities of we of we’ll improve experience have we’re the we across capital kinds in the we that.

Operator

session. And sir. turn you will that the back I’ll over to Katz, things Mr. conclude question-and-answer

Rob Katz

quarter concludes further everyone free me directly have third This on should to you. or time contact Michael XXXX to and our call you the Please Thank this feel Thanks today. us bye. any morning, questions. call. for who earnings good you joined fiscal Thank your

Operator

and thank once conclude ladies I gentlemen, joining that And today. conference. would Again, everyone like for us today’s does to again,

Vail Resorts (MTN) 7 Jun 182018 Q3 Earnings call transcript