Peak's First Quarter

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Peak Resorts Reports Fiscal 2019 First Quarter Results

Peak Resorts, Inc. reported financial results for its fiscal 2019 first quarter.

Timothy D. Boyd, President and Chief Executive Officer, commented, “We made good progress during the fiscal 2019 first quarter in preparing our resorts for the upcoming 2018/2019 ski season while benefiting from a full slate of summer events. Peak Resorts generated revenue of $7.0 million and continued construction on major capital projects at Mount Snow and Hunter Mountain. As we head into the fall, our entire team is eagerly awaiting the start of snowmaking and the shift to winter when we will welcome guests back to the mountains where we can show off our new lodge and expanded terrain.

“Reported EBITDA loss in the fiscal 2019 first quarter of $9.5 million was driven by increased labor and other expenses offset by the removal of the Attitash Hotel from our operating results as of May 1, 2018. As noted last quarter, wage pressure continues in New York and Vermont which we will look to offset with price increases this season. Our expenses were also impacted by a number of normal summer season maintenance projects completed in the fiscal 2019 first quarter instead of during the second quarter to allow our teams to concentrate on completing our major capital projects.

“At Mount Snow, we are nearing completion of our new $22 million Carinthia Lodge which will add much needed modern amenities at the base of the Carinthia face in time for the ski season. Our crews are working non-stop to finish construction of a 42,000 square foot facility that will further enhance the guest experience at our flagship resort. The facility’s new food and beverage offerings as well as its retail shop and rental facilities will greatly improve guest circulation across the mountain this coming winter.

“Construction on the mountain at Hunter continues at a brisk pace as we ready Hunter North for skiers and riders. This key project is expanding skiable terrain by 80 acres through the addition of five new trails and four new gladed areas and will include a new high-speed six-person chair lift and a new entrance to our resort. Our teams have completed the grading of our trails and have now turned their attention to the installation of the chair lift and automated snowmaking equipment. The views from this new terrain are spectacular and they will change the way our guests view Hunter Mountain.”

Fiscal First Quarter Results Review

Fiscal 2019 first quarter revenue was $7.0 million compared to $7.5 million in the prior year quarter as increased summer festival, banquet and event revenue at Mount Snow and Hunter Mountain partially offset the removal of the Attitash Hotel from our operating results. Resort operating expenses in the fiscal 2019 first quarter rose 5.4% year over year to $14.3 million, driven by higher wages, higher power and utilities expense, and higher other expenses, offset by the removal of Attitash Hotel-related expenses as of May 1, 2018. General and administrative expenses in the fiscal 2019 first quarter were $1.3 million, essentially flat with the prior year quarter.

Reported EBITDA for the first fiscal quarter of 2019 was a loss of $9.5 million, compared to a loss of $8.3 million in the year-ago quarter. The increase in Reported EBITDA loss on a year-over-year basis was driven by increased labor and other expenses across the business, partially offset by the removal of the Attitash Hotel from our operating results as of May 1, 2018. The increase in other expenses was largely related to maintenance projects undertaken during the seasonally slow summer months.

Balance Sheet Update

As of July 31, 2018, the Company had cash and cash equivalents of $10.1 million and total outstanding debt of $180.6 million, including $12.4 million drawn against its revolving line of credit and long-term debt of $165.8 million, net of debt issuance costs and current portion.

Christopher J. Bub, Chief Financial Officer, added, “We invested $8.5 million in capital improvements in the fiscal 2019 first quarter, including $1.2 million in maintenance capital, as we prepare for the upcoming skiing and riding season at our 14 mountains in the Midwest and Northeast. Looking ahead, we expect to benefit from our continued strategic investments and efforts to enhance operating efficiencies across our existing mountain portfolio this winter.”

Comments

  • Is this good or bad?
  • I'm no expert on ski area balance sheets and income statements, but what jumps out at me is $10.1 million in cash on-hand, while losing $9.5MM in Q1. While a significant part of that loss is probably non-cash, i.e. depreciation, still, what this suggests is that the cash on-hand is really low. They may have an available line of credit that they can further draw down that can produce an additional $X in cash. But still, I would think they would need/want to have a bigger cash cushion in the event that they hit financial bumps when the season starts (i.e. bad weather leading to lower revenue generation). Maybe this is all normal, but from the limited information provided here (and I haven't bothered to go online to look at their financial statements), it seems like they have a lot of debt (primarily long-term, but long-term debt needs to be serviced), not a strong cash position at the moment, and not a big cushion. There could be good reasons for this too, by the way, so that this is in effect planned given the recent acquisition binge, and is to be expected, thus reflecting a moment in time rather than a normal state of affairs.

    I hope for their sake that this is in fact the reflection of a moment in time following an acquisition binge and major expenditures, rather than they're on thin ice.
  • > @joshua_segal said:
    > Is this good or bad?

    It's not great news, but it is not bad bad bad like the reports for Q1 a couple years back when things were starting to spiral before the EB-5 money arrived. They really need some more cash on hand just to have it, but they are in expansion mode right now, spend spend spend baby! That Hunter work was done very fast aka expensively plus the new 6 pack is far from cheap. Carinthia is EB-5 money but I'm sure they have so kind of a plan. What is a little concerning is that you would think they would have a little bit of that season pass money in the coffers still.
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