Whistler Blackcomb (file photo: Mitch Winton/coastphoto.com)

Vail Resorts Reports Second Quarter Results

Broomfield, CO – Ski resort operator Vail Resorts, Inc. on Friday reported results for the second quarter of fiscal 2017 ended January 31, 2017, and provided the company’s ski season-to-date metrics through March 5, 2017.

Net income attributable to Vail Resorts, Inc. was $149.2 million for the second fiscal quarter of 2017, an increase of 27.5% compared to net income of $117.0 million for the second fiscal quarter of 2016. Resort Reported EBITDA was $305.2 million for the second fiscal quarter of 2017, which includes the operations of Whistler Blackcomb and $2.1 million of transaction, transition and integration costs associated with the company’s Whistler Blackcomb acquisition. Excluding Whistler Blackcomb operations and transaction, transition and integration costs, Resort Reported EBITDA increased 6.5% compared to the same period in the prior year.

As a result, Vail Resorts updated its fiscal 2017 guidance range and is now expecting Resort Reported EBITDA to be between $577 million and $597 million, including estimated operating results from Whistler Blackcomb as well as an estimated $9 million of related transaction, transition and integration costs.

“We are very pleased with our results for the quarter. We had strong results during the holidays and the month of January despite a slower start to the season at our U.S. resorts resulting from below average early season conditions,” commented Rob Katz, Chief Executive Officer of Vail Resorts. “Including results from Whistler Blackcomb in the second quarter of fiscal 2017, total lift revenue increased 24.5%, driven by a 15.7% growth in visitation and a 7.7% increase in effective ticket price in the second quarter compared to the prior year. We continue to see robust destination guest spending trends which, along with the addition of Whistler Blackcomb, drove a 25.9% increase in ski school revenue and a 21.5% increase in food and beverage revenue compared to the prior year.”

Whistler Blackcomb (file photo: Mitch Winton/coastphoto.com)
Whistler Blackcomb (file photo: Mitch Winton/coastphoto.com)

Katz explained that results from Whistler Blackcomb in the second quarter were better than expected, offsetting a slow start at the company’s resorts in the U.S. The Canadian dollar has remained at an exchange rate very favorable to American visitors. Total lift revenue increased $70.6 million, or 24.5%, compared to the same period in the prior year, to $358.2 million for the three months ended January 31. If you back out Whistler Blackcomb, total lift revenue at Vail-owned resorts increased 7.3% year-on-year, and Katz said that Park City is showing the strongest growth among the firm’s U.S. resorts.

“Park City continues to deliver the strongest growth among our U.S. resorts, with increasing visitation and yields in our second season following the transformational investments to combine Park City and Canyons,” Katz explained. “Our Colorado resorts delivered results that were in line with their record prior year performance despite the slower start to the season, benefiting from robust guest spending and growth in season pass sales. The Tahoe resorts benefited from significant snow storms that, while creating outstanding conditions for the rest of the season, led to road and resort closures during the month of January, primarily during off-peak periods.”

Ski school revenue increased $16.1 million, or 25.9%, for the three months ended January 31, compared to the same period in the prior year, primarily as a result of incremental Whistler Blackcomb revenue. Excluding Whistler Blackcomb, ski school revenue increased 1.3%.

Dining revenue increased $9.6 million, or 21.5%, for the three months ended January 31, compared to the three months ended January 31, 2016, due to incremental revenue from Whistler Blackcomb. Excluding Whistler Blackcomb, dining revenue decreased 2.5% as a result of delays in the opening of certain on-mountain dining venues at the company’s U.S. resorts which were impacted by poor early ski season conditions.

Retail/rental revenue increased $20.3 million, or 19.7%, for the three months ended January 31, compared to the same period in the prior year. That, too, was due primarily to incremental retail sales and rental revenue from Whistler Blackcomb. Excluding Whistler Blackcomb, retail/rental revenue decreased 2.0%. The decrease in retail/rental revenue was primarily attributable to lower sales volumes at stores proximate to the company’s Tahoe resorts and in the San Francisco Bay Area as a result of inclement weather and poor early season conditions in the region.

Katz added that visitation from foreign travelers, especially Mexicans, was down. ” While U.S. destination visitation was robust, international visitation to our U.S. resorts was down in the second quarter compared to the prior year impacted by the strong U.S. dollar and a notable decline in Mexican visitation,” Katz added. “Whistler Blackcomb continues to see strong international visitation. Our results in the second quarter demonstrate the benefit of our growing geographic diversification and the success of our season pass and destination guest focused marketing strategies.”

Results from the company’s Lodging segments showed a 4.0% increase year-over-year, primarily driven by the addition of Whistler Blackcomb to the Vail Resorts portfolio. Although occupancy decreased 2.3 percentage points, the average daily rate increased 11.8% at the company’s owned hotels and managed condominiums compared to the same period in the prior year.

In its Real Estate segment, the company closed on one condo at The Ritz-Carlton Residences, Vail, and the final two available units at One Ski Hill Place in Breckenridge, which translates to an increase of $1.5 million, or 41.6%, as compared to the same period in the prior year. Two more Ritz-Carlton Residences in Vail have been sold since January 31, and only one still remains available.

In response to the results, the company’s Board of Directors approved a 30% increase in its quarterly dividend to $1.053 per share of common stock. “Our balance sheet remains very strong,” Katz asserted. “We ended the fiscal quarter with $140.9 million of cash on hand and our net debt, including the capitalized Canyons obligation, was 2.2 times trailing twelve months Total Reported EBITDA, though it is important to note that while this ratio includes our outstanding debt as of January 31, 2017, it only includes Whistler Blackcomb’s EBITDA results from the date of acquisition.”

Vail Resorts expects to invest roughly $103 million in capital investments for 2017, including planned upgrades at Whistler Blackcomb, developing Epic Discovery summer activities at its U.S. resorts (primarily at Breckenridge, and less so at Vail and Heavenly), and one-time integration capital expenditures at Whistler Blackcomb. $65 million of that plan is for maintenance expenditures.

“At Vail Mountain, we will continue to improve lift capacity at one of the resort’s busiest chairlifts by upgrading the Northwoods high speed four person chair (#11) to a new high speed six person chairlift,” Katz offered. “At Breckenridge, we will be upgrading the Peak 10 Falcon Chair from a four person high speed chair to a six person high speed chair, allowing more guests to experience some of the best intermediate and advanced terrain on the mountain. At Keystone, we will be investing significant capital to continue to enhance the experience at this outstanding family focused resort. We will be upgrading the four person Montezuma chair to a six person high speed chair to improve circulation on the front side of the mountain, and we will be renovating and expanding Labonte’s restaurant by 150 indoor seats to increase mountain dining capacity at the fourth most visited resort in the U.S. At Beaver Creek, we will be upgrading the fixed grip two-person Drink of Water chair (#5) to a four person high speed chair, increasing the capacity for important beginner and intermediate terrain and, upon completion, all primary chairlifts on Beaver Creek will be high speed.”


As previously announced on February 21, Vail Resorts entered into an agreement to acquire the mountain operations of Stowe Mountain Resort in Stowe, Vt. from Mt. Mansfield Company, Inc., a wholly owned subsidiary of insured American International Group, Inc. (AIG), for a cash purchase price of $50 million, subject to certain adjustments. Company officials expect Stowe Mountain Resort to generate incremental annual EBITDA in excess of $5 million in Vail Resorts’ fiscal year ending July 31, 2018. The transaction remains subject to Vermont administrative review, and the company expects the purchase to be finalized in late spring.

Also, Whistler Blackcomb’s Master Development Agreements with the Province of British Columbia have been renewed for a 60-year term and the associated Master Plans have also been approved by the Province.

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