Vail Resorts' acquisition of Perisher ski resort, Australia's largest, is helping to drive the company's growth. (file photo: Perisher Resort)

Vail Resorts Results Beat Wall Street Expectations

Broomfield, CO – Vail Resorts, Inc. (NYSE: MTN), the nation’s largest ski and snowboard resort operator, announced its fiscal year and fourth quarter results ending July 31, 2015 on Monday, with both fourth quarter revenue growth and season pass sales exceeding analysts’ expectations.

“We achieved another year of record-breaking resort revenue and resort reported EBITDA,” commented Vail Resorts CEO Rob Katz, “despite the impact of challenging conditions in Tahoe throughout the season and in Utah this spring.”

The company owns and operates 11 ski and snowboard resorts, including Vail, Beaver Creek, Breckenridge and Keystone in Colorado, Park City in Utah, Perisher in Australia, Afton Alps in Minnesota, Mt. Brighton in Michigan, and Northstar, Kirkwood and Heavenly, all in California. Vail Resorts’ fiscal 2015 resort reported EBITDA, excluding the non-cash gain on the Park City litigation settlement, was $349.4 million. This includes incremental EBITDA of $7.4 million from Perisher Resort in Australia, that country’s largest, which Vail Resorts acquired in a $135 million deal announced in March, and $5.5 million of litigation, transaction and integration related expenses associated with the company’s Park City Mountain Resort acquisition in Utah. Net income attributable to Vail Resorts, Inc. was $114.8 million for fiscal 2015.

The company reported a fourth quarter loss of $70.1 million, or $1.92 per share, versus a loss of $75.4 million, or $2.08 per share, in fiscal year 2014. Like most ski resort operators, Vail Resorts posts an off-season loss annually, a trend that the company is looking to reverse through its Epic Discovery plan for summertime amenities and attractions at its mountain resorts.

Vail Resorts' acquisition of Perisher ski resort, Australia's largest, is helping to drive the company's growth. (file photo: Perisher Resort)
Vail Resorts’ acquisition of Perisher ski resort, Australia’s largest, is helping to drive the company’s growth. (file photo: Perisher Resort)

“We are excited to head into fiscal 2016 with an even stronger network of world-class resorts and very attractive growth opportunities,” Katz said. “In September 2014, we announced the acquisition of Park City and subsequently integrated the resort for the 2014-15 ski season and outlined the $50 million transformational capital plan to connect Park City and Canyons for the 2015-16 ski season. This transformational plan, one of the most ambitious and impactful investments in U.S. ski industry history, is on schedule and on budget and we are excited to welcome guests to the new Park City this winter, now the largest ski resort in the United States. On June 30, 2015, we closed on the acquisition of Perisher in Australia, our first international mountain resort. We have been thrilled with the in-season integration with the Perisher team and strong season to date results. Due to the timing of the closing, our results only include one month of peak season operating results from Perisher, which generated resort reported EBITDA from operations of AU$17.7 million (US$13.1 million excluding US$5.7 million of transaction, duties and transition costs). As we noted on our last earnings call, we saw very strong season pass growth of 68% heading into the season at Perisher and continue to see strong demand for the Epic Australia Pass since launching sales on August 14, 2015 for the 2016 Perisher season.”

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Sales of season passes through September 20, 2015 for the upcoming 2015-16 ski and snowboard season (excluding Perisher pass sales) increased approximately 16% in units and 20.9% in sales dollars versus the comparable period in the prior year, despite a modest increase in pricing.

“Our season pass program continued to drive growth, customer loyalty and financial stability with season pass revenue, excluding Perisher, increasing 20.9% compared to the prior year,” Katz continued. “We experienced another outstanding year in Colorado with strong growth in effective ticket price (“ETP”) and guest spending in our ancillary businesses. Our summer business continues to grow as we build out Epic Discovery activities at Vail, Breckenridge and Heavenly and tap into the strong existing summer tourism in those markets. Finally, disciplined cost control played a critical part in achieving fiscal 2015’s strong results and increasing resort EBITDA margin by 330 basis points from fiscal 2014 to 25.6% in fiscal 2015, excluding the non-cash gain on the Park City litigation settlement and Perisher EBITDA.”

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For fiscal year 2015, the company’s total mountain segment net revenue increased 14.6% to $1.1 billion. Excluding the one month of Perisher results, total skier visits increased 6.5%, driven by the addition of Park City and strong Colorado visitation, particularly at Breckenridge, partially offset by the 16.4% decline in Tahoe visits and challenging unseasonably warm weather this past spring at Canyons. Total effective lift ticket price increased 10.1%, excluding Perisher, driven largely by season pass and lift ticket price increases across Vail Resorts along with the migration of guests to the company’s proprietary online advanced purchase channels. Vail Resorts’ ancillary businesses also saw strong growth with ski school, dining and retail/rental revenue, excluding Perisher, up 12.9%, 10.2% and 3.2%, respectively, compared to the prior year.

“Fiscal 2015 was very strong for our lodging business with net revenue growing 5.1% and lodging reported EBITDA increasing 29.6% compared to fiscal 2014,” Katz added. “These improvements were primarily driven by a 250 basis point improvement in occupancy and a 5.3% growth in average daily rate, resulting in a 12.0% improvement in revenue per available room compared to the prior year.”

Vail Resorts generated $28.9 million of net real estate cash flow in fiscal 2015, as during the year the company closed on 14 One Ski Hill Place units in Breckenridge and five units in Vail Mountain’s Ritz-Carlton Residences, as well as a property in Breckenridge that will be developed into a Marriott Residence Inn and a development land parcel in Vail.

Vail Resorts issued its fiscal 2016 guidance range, including a full year of Perisher results, with resort reported EBITDA expected to be between $405 million and $430 million, with resulting net income of between $118 million and $144 million.

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