BROOMFIELD, Colo., Dec. 7, 2023
/PRNewswire/ -- Vail Resorts, Inc. (NYSE: MTN) today reported
results for the first quarter of fiscal 2024 ended October 31, 2023, provided season pass sales
results, reaffirmed its guidance for fiscal 2024, provided
additional detail on its calendar year 2024 capital plan, declared
a dividend payable in January 2024,
and announced share repurchases completed during the first
quarter.
Highlights
- Net loss attributable to Vail Resorts, Inc. was $175.5 million for the first quarter of fiscal
2024 compared to a net loss attributable to Vail Resorts, Inc. of
$137.0 million in the same period in
the prior year.
- Resort Reported EBITDA loss was $139.8
million for the first quarter of fiscal 2024, compared to a
Resort Reported EBITDA loss of $96.5
million for the first quarter of fiscal 2023.
- Pass product sales through December 4,
2023 for the upcoming 2023/2024 North American ski season
increased approximately 4% in units and approximately 11% in sales
dollars as compared to the period in the prior year through
December 5, 2022. Pass product sales
are adjusted to eliminate the impact of changes in foreign currency
exchange rates by applying current U.S. dollar exchange rates to
both current period and prior period sales for Whistler
Blackcomb.
- The Company reaffirmed its guidance for fiscal year 2024 of
$316 million to $394 million of net income attributable to Vail
Resorts, Inc. and $912 million to
$968 million of Resort Reported
EBITDA.
- The Company declared a quarterly cash dividend of $2.06 per share of Vail Resorts' common stock
that will be payable on January 9,
2024 to shareholders of record as of December 26, 2023 and repurchased approximately
0.2 million shares during the quarter at an average price of
approximately $211 for a total of
$50 million.
- On November 30, 2023, the Company
announced it had entered into an agreement to acquire Crans-Montana
Mountain Resort in Switzerland,
the Company's second ski resort in Europe. The Company expects the acquisition to
close during the 2023/2024 ski and ride season.
Commenting on the Company's fiscal 2023 first quarter results,
Kirsten Lynch, Chief Executive
Officer, said, "Our first fiscal quarter historically operates at a
loss, given that our North American and European mountain resorts
are generally not open for ski season operations during the period.
The quarter's results are primarily driven by winter operating
results from our Australian resorts and our North American resorts'
summer activities, dining, retail/rental and lodging operations,
and administrative expenses.
"We are pleased with our results for the quarter, which exceeded
our expectations due to the timing of expenses, primarily related
to season ramp-up activities. As we expected, Resort Reported
EBITDA declined compared to the prior year period primarily driven
by cost inflation, including a $7
million impact of our fiscal 2023 employee investment which
went into effect in October 2022,
$14 million lower EBITDA from our
Australian resorts due to normalized results following record
demand and favorable conditions in the prior fiscal year as well as
from current year weather related challenges that impacted terrain,
$4 million lower EBITDA from our
North America summer operations
from lower demand for summer mountain travel and weather related
challenges, and $4 million negative
impact from foreign exchange rates."
Turning to season pass results, Lynch said, "We are pleased with
the results of our season pass sales, which continue to demonstrate
the compelling value proposition of our pass products, our network
of mountain resorts, the strong guest experience created at each
mountain resort and our commitment to continually invest in the
guest experience. Pass product sales for the North American ski
season increased approximately 4% in units and approximately 11% in
sales dollars through December 4,
2023 as compared to the period in the prior year through
December 5, 2022. Pass product sales
are adjusted to eliminate the impact of foreign currency by
applying an exchange rate of $0.74
between the Canadian dollar and U.S. dollar in both periods for
Whistler Blackcomb pass sales. We expect to have approximately 2.4
million guests committed to our 41 North American, Australian, and
European resorts in advance of the season in non-refundable advance
commitment products this year, which are expected to generate over
$900 million of revenue and over 73%
of all skier visits (excluding complimentary visits).
"The results of our North American pass sales demonstrate strong
loyalty among our pass holders, with particularly strong pass sales
growth from renewing pass holders, and also from guests in our
database who previously purchased passes but did not buy a pass in
the prior season. The Company successfully grew units across
destination, international and local geographies, with the largest
unit growth in destination markets, including in the Northeast. The
business also achieved growth in the Midwest and Mid-Atlantic,
which after challenging conditions last season, highlights the
stability of our advance commitment program, loyalty of our guests,
and significant opportunity to drive pass penetration in the East.
Pass sales grew across all major pass product segments, with the
strongest product growth in regional pass products and Epic Day
Pass products as lower frequency guests and local Northeast guests
continue to be attracted by the strong value proposition of these
products. The pass unit growth rate moderated relative to our
September 2023 growth rate as we
successfully moved purchasers earlier in the selling cycle,
including guests who purchased our newer product offerings in the
prior year period. Pass sales dollars benefited from the 8% price
increase relative to the 2022/2023 season and new pass holders
coming into the program in higher priced products relative to the
sales results in the prior year period, partially offset by the mix
impact from the growth of regional and Epic Day Pass products."
Lynch continued, "Heading into the 2023/2024 North American and
European ski season, we are pleased with our significant base of
committed guests that provide meaningful stability for our Company,
especially during economic uncertainty. Our Rockies resorts and
Whistler Blackcomb have opened with typical conditions for this
time of year, and Andermatt-Sedrun has had particularly strong
conditions to start the season. Tahoe's early season has been more
challenging with limited snowfall and warm temperatures to date,
and our resorts in the East have experienced typical seasonal
variability for this point in the season. Lodging booking trends
for the upcoming season are generally consistent with prior year
levels, though it is important to note that our lodging bookings
represent a small portion of the overall lodging inventory around
our resorts. While our mountain resorts are continuing to hire for
the winter season, we are on track with our staffing plans and
encouraged by the strong return rate of employees from the prior
season."
Crans-Montana Acquisition
As previously announced on November 30,
2023, the Company entered into an agreement to acquire a
majority stake in Crans-Montana Mountain Resort ("Crans-Montana")
in Switzerland, the Company's
second ski resort in Europe.
Crans-Montana is an iconic ski
destination in the heart of the Swiss Alps, with a unique heritage,
incredible terrain, passionate team, and a community dedicated to
the success of the region. This acquisition aligns to the Company's
growth strategy of expanding its resort network in Europe, creating even more value for pass
holders and guests around the world. Much like Andermatt-Sedrun,
the Company believes Crans-Montana has a unique opportunity for
future growth.
Upon the closing of the acquisition, the Company will acquire an
84% ownership stake in Remontées Mécaniques Crans Montana Aminona
SA, which controls and operates all the resort's lifts and
supporting mountain operations, an 80% ownership stake in SportLife
AG, which operates one of the ski schools located at the resort,
and 100% of 11 restaurants located on and around the mountain.
Subject to closing adjustments, the enterprise value of the resort
operations is expected to be CHF 118.5
million, including approximately CHF
7 million of debt that will remain in place. The Company
expects to fund the purchase price for the acquired ownership
interest of the resort operations through cash on hand. Vail
Resorts anticipates that the resort will generate approximately
CHF 5 million of EBITDA in its fiscal
year ending July 31, 2025, the first
full year of operations following the expected closing later in
fiscal 2024. Vail Resorts anticipates EBITDA growth over time from
the inclusion of the resort on the Epic Pass products and
investments in the guest experience. Subject to the timing of
capital project approvals and completion, Vail Resorts is planning
to invest approximately CHF 30
million over the next five years in one-time capital
spending to elevate the guest experience, and the resort is
expected to generate over CHF 15
million of annual EBITDA following these investments and
including the impact from incremental Epic Pass sales. This initial
phase of growth of the resort is expected to be primarily driven by
operating and marketing initiatives along with capital investments
focused on maximizing gastronomy efficiencies and improving and
expanding snowmaking capabilities.
After closing the transaction, normal annual maintenance capital
expenditures for Crans-Montana Mountain Resort are expected to be
approximately CHF 3 million. The
transaction is expected to close during the 2023/2024 ski and ride
season, subject to certain third-party consents. Operations at
Crans-Montana Mountain Resort for the 2023/2024 winter season will
continue in the ordinary course of business. Vail Resorts plans to
include access to Crans-Montana Mountain Resort on select Epic Pass
products for the 2024/2025 ski and ride season. Crans-Montana
Mountain Resort will not be included on the Epic Pass for any
remaining part of the 2023/2024 ski and ride season after the deal
closes.
Operating Results
A more complete discussion of our operating results can be found
within the Management's Discussion and Analysis of Financial
Condition and Results of Operations section of the Company's Form
10-Q for the first fiscal quarter ended October 31, 2023, which was filed today with the
Securities and Exchange Commission. The following are segment
highlights:
Mountain Segment
- Mountain segment net revenue decreased $29.3 million, or 14.5%, to $172.5 million for the three months ended
October 31, 2023 as compared to the
same period in the prior year, primarily driven by our Australian
ski areas, which experienced weather-related challenges that
impacted terrain in the current year, compared to record visitation
and favorable snow conditions in the prior year.
- Mountain Reported EBITDA loss was $139.5
million for the three months ended October 31, 2023, which represents a decrease of
$47.4 million, or 51.4%, as compared
to Mountain Reported EBITDA loss for the same period in the prior
year, primarily driven by decreases in Mountain segment net
revenue, as well as increases in expenses at our North American
resorts, including increased labor costs and general and
administrative expenses (which includes the incremental impact of
our prior year investments in employee wages), increases in repairs
and maintenance expense and professional services expense
(including costs associated with our workforce management planning
tools implementation), and the impacts of inflation.
Lodging Segment
- Lodging segment net revenue (excluding payroll cost
reimbursements) increased $4.4
million, or 6.0%, to $78.4
million for the three months ended October 31, 2023 as compared to the same period
in the prior year, primarily driven by positive weather conditions
in the Grand Teton region, which enabled increased room pricing and
drove increases in owned hotel rooms revenue and ancillary product
sales.
- Lodging Reported EBITDA loss was $0.2
million for the three months ended October 31, 2023, which represents an increase of
$4.1 million, or 94.6%, as compared
to Lodging Reported EBITDA for the same period in the prior year,
primarily as a result of increases in Lodging segment net
revenue.
Resort - Combination of Mountain and Lodging Segments
- Resort net revenue was $254.3
million for the three months ended October 31, 2023, a decrease of $25.0 million as compared to Resort net revenue
of $279.3 million for the same period
in the prior year.
- Resort Reported EBITDA loss was $139.8
million for the three months ended October 31, 2023, a decrease of $43.3 million as compared to Resort Reported
EBITDA loss of $96.5 million for the
same period in the prior year.
Total Performance
- Total net revenue decreased $20.9
million, or 7.5%, to $258.6
million for the three months ended October 31, 2023 as compared to the same period
in the prior year.
- Net loss attributable to Vail Resorts, Inc. was $175.5 million, or a loss of $4.60 per diluted share, for the first quarter of
fiscal 2024 compared to a net loss attributable to Vail Resorts,
Inc. of $137.0 million, or a loss of
$3.40 per diluted share, in the prior
year.
Return of Capital
Commenting on capital allocation, Lynch said, "Our balance sheet
remains strong, and the business continues to generate robust cash
flow. Our total cash and revolver availability as of October 31, 2023 was approximately $1.4 billion, with $729
million of cash on hand, $420
million of U.S. revolver availability under the Vail
Holdings Credit Agreement and $214
million of revolver availability under the Whistler Credit
Agreement. As of October 31, 2023,
our Net Debt was 2.6 times trailing twelve months Total Reported
EBITDA. The Company declared a quarterly cash dividend of
$2.06 per share of Vail Resorts'
common stock that will be payable on January
9, 2024 to shareholders of record on December 26, 2023. During the quarter, the
Company repurchased approximately 0.2 million shares of common
stock at an average price of approximately $211 for a total of $50.0
million. We remain committed to returning capital to
shareholders and intend to maintain an opportunistic approach to
future share repurchases. We will continue to be disciplined
stewards of our capital and remain committed to prioritizing
investments in our guest and employee experience, high-return
capital projects, strategic acquisition opportunities, and
returning capital to our shareholders through our quarterly
dividend and share repurchase program."
Capital Investments
Commenting on the Company's capital investments for the
2023/2024 North American ski season, Lynch said, "We are pleased to
welcome guests to all of our resorts as the 2023/2024 North
American and European ski seasons kick off with significant
investments in the guest experience. At Keystone, this includes the transformational
lift-served terrain expansion project in Bergman Bowl, increasing
lift-served terrain by 555 acres with the addition of a new
six-person high speed lift. At Breckenridge, this includes the upgrades to
the Peak 8 base area, enhancing the beginner and children's
experience and increasing uphill capacity from this popular base
area, including a new four-person high speed 5-Chair to replace the
existing two-person fixed-grip lift, new teaching terrain, and a
transport carpet from the base, to make the beginner experience
more accessible. At Whistler Blackcomb, this includes the
replacement of the four-person high speed Fitzsimmons lift with a
new eight-person high speed lift. At Stevens Pass, this includes
replacing the two-person fixed-grip Kehr's Chair lift with a new
four-person lift, which is designed to improve out-of-base capacity
and guest experience. At Attitash, this includes the replacement of
the three-person fixed-grip Summit Triple lift with a new
four-person high speed lift to increase uphill capacity and reduce
guests' time on the longest lift at the resort.
"The Company is also piloting My Epic Gear at Vail, Beaver
Creek, Breckenridge, and
Keystone for a limited number of
pass holders during the 2023/2024 North American ski season, which
will introduce a new gear membership program that provides the best
benefits of gear ownership but with more choice, lower cost, and no
hassle. My Epic Gear provides its members with the ability to
choose the gear they want, for the full season or for the day, from
a selection of the most popular and latest ski and snowboard
models, and have it delivered to them when and where they want it,
including slopeside pick up and drop off every day. In addition to
offering the best skis and snowboards, My Epic Gear will also offer
name brand, high-quality ski and snowboard boots with customized
insoles and boot fit scanning technology. The entire My Epic Gear
membership, from gear selection to boot fit to personalized
recommendations to delivery, will be at the members' fingertips
through the new My Epic app. My Epic Gear is expected to officially
launch for the 2024/2025 winter season at Vail, Beaver
Creek, Breckenridge,
Keystone, Whistler Blackcomb,
Park City, Crested Butte, Heavenly, Northstar, Stowe,
Okemo, and Mount Snow, and further expansions are expected in
future years.
"The Company is also introducing new technology for the
2023/2024 ski season at its U.S. resorts that will allow guests to
store their pass product or lift ticket directly on their phone and
scan at lifts hands-free, eliminating the need for carrying plastic
cards, visiting the ticket window or waiting to receive a pass or
lift ticket in the mail. Once loaded on their phones, guests can
store their phone in their pocket, and get scanned hands free in
the lift line using Bluetooth® Low Energy technology, which is
designed for low energy usage to minimize the impact on a phone's
battery life. In addition to the significant enhancement of the
guest experience, this technology will also ultimately reduce waste
of printing plastic cards for pass products and lift tickets, and
RFID chips, as a part of the Company's sustainability efforts and
Commitment to Zero. For the first year of launch, to ensure a
smooth transition, the Company will provide plastic cards for
passes and lift tickets to all guests, and in future years plastic
cards will be available to any guests who cannot or do not want to
use their phone to store their pass product or lift ticket. We are
also excited to announce the launch of our new My Epic app, which
includes Mobile Pass and Mobile Lift Tickets, interactive trail
maps, real-time and predictive lift line wait times, personalized
stats, My Epic Gear, and other relevant information to support the
guest experience. The Company is also investing in network-wide
scalable technology that will enhance our analytics, e-commerce and
guest engagement tools to improve our ability to target our guest
outreach, personalize messages and improve conversion."
Regarding calendar year 2024 capital expenditures, Lynch said,
"In addition to this year's significant investments across new
lifts, expanded terrain and enhanced guest-facing technology, we
are pleased to announce additional details of our calendar year
2024 capital plan, which support the Company's strategies to grow
the subscription model, unlock ancillary growth, drive resource
efficiency, and further differentiate the guest experience. We
expect our capital plan for calendar year 2024 to be approximately
$189 million to $194 million, excluding $13 million of incremental capital investments in
premium fleet and fulfillment infrastructure to support the
official launch of My Epic Gear for the 2024/2025 winter season at
12 destination and regional resorts across North America, $11
million of growth capital investments at Andermatt-Sedrun
and $1 million of reimbursable
capital. Including My Epic Gear premium fleet and fulfillment
infrastructure capital and one-time investments, our total capital
plan for calendar year 2024 is expected to be approximately
$214 million to $219 million. This excludes any capital
expenditures associated with the Crans-Montana acquisition, which
remains subject to closing.
"As announced in September, at Whistler Blackcomb, the Company
plans to replace the four-person high speed Jersey Cream lift with
a new six-person high speed lift. This lift is expected to provide
a meaningful increase to uphill capacity and better distribute
guests at a central part of the resort. At Hunter Mountain, we plan
to replace the four-person fixed-grip Broadway lift with a new
six-person high speed lift and plan to relocate the existing
Broadway lift to replace the two-person fixed-grip E lift,
providing a meaningful increase in uphill capacity and improved
access to terrain that is key to the progressive learning
experience for our guests. At Park
City, we are in the planning process to support the
replacement of the Sunrise lift with a new 10-person gondola in
partnership with the Canyons Village Management Association in
calendar year 2025, which will provide improved access and enhanced
guest experience for existing and future developments within
Canyons Village. These projects remain subject to approvals.
"In addition to the projects announced in September, at
Park City and Hunter Mountain
beyond the planned lift investments we plan to enhance snowmaking
systems to improve the experience for key terrain, increase early
season terrain consistency, and improve the efficiency through the
installation of automated and energy-efficient snowguns. We also
plan to further support the Company's Commitment to Zero by
investing in waste reduction projects across our resorts to achieve
the goal of zero waste to landfill by 2030. At Afton Alps, we plan
to install a 10-lane tubing experience and renovate the existing
Alpine Building to create a 200 seat restaurant to further enhance
the guest experience. At Seven Springs, we plan to add 390 new
parking spaces to increase capacity for peak demand periods. At
Perisher, in advance of the 2025 winter season in Australia, we plan to replace the Mt Perisher
Double and Triple Chairs with a new six person high speed lift,
with capital spending commencing in calendar year 2024 and
continuing into calendar year 2025. These projects remain subject
to approvals.
"In addition, we are continuing to invest in innovative
technology to enhance the guest experience. In the coming year, we
are investing in new functionality for the My Epic App to better
communicate with and personalize the experience for our guests.
Across our resorts, we plan to pilot new technologies at select
restaurants to make it both easier and faster for guests to dine at
our resorts. In addition, in order to support the launch of My Epic
Gear, we plan to invest in logistics and technology infrastructure
to help deliver a transformational improvement to the gear rental
experience for our guests.
"The Company is planning to launch My Epic Gear for the
2024/2025 winter season at 12 destination and regional resorts
across North America, including
kids gear, and we will be limiting membership to 60,000 to 80,000
members. To support the initial year of this new business, in
calendar year 2024 the Company plans to invest $13 million beyond our typical annual capital
plan in incremental premium gear fleet and fulfillment
infrastructure to support the anticipated growth of this business.
We plan to provide additional updates on My Epic Gear and the
on-going capital needs of the business after the year one
launch.
"At Andermatt-Sedrun, we are pleased to announce plans to invest
approximately $11 million in
high-impact growth capital projects as part of a multi-year
strategic growth investment plan to enhance the guest experience on
the mountain, which will be funded by the CHF 110 million capital that was invested as part
of the purchase of our majority stake in Andermatt-Sedrun. As part
of the calendar year 2024 investments, we are planning to upgrade
and replace snowmaking infrastructure at the Sedrun-Milez area on
the eastern side of the resort to enhance the guest experience for
key beginner and intermediate terrain and significantly improve
energy efficiency. In addition, we plan to invest in the
on-mountain dining experience with improvements to the Milez and
Natschen restaurants. These investments are expected to be
completed ahead of the 2024/2025 European ski season and remain
subject to regulatory approvals."
Sustainability Update
Commenting on the Company's industry leading sustainability
efforts, Lynch said, "In 2017 Vail Resorts announced an ambitious
plan to take action to address our direct impact on the environment
with a commitment to achieve zero net operating footprint by 2030,
including zero net emissions, zero waste to landfill, and zero net
operating impact on forests and habitat. We continue to be on track
to achieve a zero net operating footprint by 2030. In fiscal 2023,
we achieved 100% renewable electricity across North American
operations for the second year in a row, and we achieved our 15%
energy efficiency goal early, driven by over $10 million in energy-savings investments since
fiscal 2018. Additionally, we achieved a 36% overall reduction in
waste to landfill, diverting nearly 12 million pounds of waste from
landfills. With this progress, the Company is ahead of schedule to
meet its emissions goals, and is on track to reach zero waste to
landfill and zero net operating impact on forests and habitats to
achieve a zero net operating footprint by 2030.
"In addition to protecting the environment, we continue to
expand our youth access program and promote diversity, equity and
inclusion. During the 2022/2023 winter season, Vail
Resorts hosted more than 11,000 youth through our multi-day
Epic for Everyone youth access program, which aims to remove
barriers to entry and create a more inclusive sport by providing
gear, lessons, mentorship, and access for youth around our resorts.
We remain dedicated to doing our part as responsible stewards of
the great outdoors and the future of the ski industry, and
committed partners to our communities. More information about our
Commitment to Zero and efforts towards sustainability can be found
at EpicPromise.com, and we expect our fiscal 2023 progress report
to be released in the coming weeks."
Outlook
Commenting on fiscal 2024 guidance, Lynch said, "Given the
indicators for the upcoming season, we are reaffirming our fiscal
2024 net income attributable to Vail Resorts, Inc. guidance of
$316 million to $394 million and Resort Reported EBITDA guidance
of $912 million to $968 million that was included in our September
earnings release based on the assumptions incorporated at that
time, including foreign currency exchange rates, a continuation of
the current economic environment and normal weather conditions for
the 2023/2024 North American and European ski season and the 2024
Australian ski season. Our fiscal 2024 guidance excludes
the impact associated with Crans-Montana, which remains subject to
closing. Heading into the 2023/2024 North American and European ski
season, we are encouraged by staffing levels on track to deliver an
outstanding guest experience and the strength of our pass sales,
though it is important to note that our growth in pass sales is
expected to be partially offset by reduced lift ticket sales as we
continue to successfully convert guests from lift tickets to pass
products. In addition, there continues to be uncertainty around the
economic outlook and the impact that may have on travel and
consumer behavior as we head into our primary operating
season."
Earnings Conference Call
The Company will conduct a conference call today at 5:00 p.m. eastern time to discuss the financial
results. The call will be webcast and can be accessed at
www.vailresorts.com in the Investor Relations section, or dial
(800) 267-6316 (U.S. and Canada)
or +1 (203) 518-9783 (international). The conference ID is MTNQ124.
A replay of the conference call will be available two hours
following the conclusion of the conference call through
December 14, 2023, at 8:00 p.m. eastern time. To access the replay,
dial (888) 225-1540 (U.S. and Canada) or +1 (402) 220-4973 (international).
The conference call will also be archived at
www.vailresorts.com.
About Vail Resorts, Inc. (NYSE: MTN)
Vail Resorts is a network of the best destination and
close-to-home ski resorts in the world including Vail Mountain,
Breckenridge, Park City Mountain,
Whistler Blackcomb, Stowe, and 32 additional resorts across
North America; Andermatt-Sedrun in
Switzerland; and Perisher, Hotham,
and Falls Creek in Australia. We
are passionate about providing an Experience of a Lifetime to our
team members and guests, and our EpicPromise is to reach a zero net
operating footprint by 2030, support our employees and communities,
and broaden engagement in our sport. Our company owns and/or
manages a collection of elegant hotels under the RockResorts brand,
a portfolio of vacation rentals, condominiums and branded hotels
located in close proximity to our mountain destinations, as well as
the Grand Teton Lodge Company in Jackson
Hole, Wyo. Vail Resorts Retail operates more than 250 retail
and rental locations across North
America. Learn more about our company at
www.VailResorts.com, or discover our resorts and pass options at
www.EpicPass.com.
Forward-Looking Statements
Certain statements discussed in this press release and on the
conference call, other than statements of historical information,
are forward-looking statements within the meaning of the federal
securities laws, including the statements regarding fiscal 2024
performance (including the assumptions related thereto), including
our expected net income and Resort Reported EBITDA; our
expectations regarding our liquidity; our expectations related to
our season pass products; our expectations regarding our ancillary
lines of business; our expectations related to the launch and
adoption of new products, technology, services and programs; our
expectations regarding the acquisition of the Crans-Montana
Mountain Resort; and the payment of dividends. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. All
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially
from those projected. Such risks and uncertainties include but are
not limited to the economy generally, and our business and results
of operations, including the ultimate amount of refunds that we
would be required to refund to our pass product holders for
qualifying circumstances under our Epic Coverage program; prolonged
weakness in general economic conditions, including adverse effects
on the overall travel and leisure related industries; risks
associated with the effects of high or prolonged inflation, rising
interest rates and financial institution disruptions; unfavorable
weather conditions or the impact of natural disasters or other
unexpected events; the willingness or ability of our guests to
travel due to terrorism, the uncertainty of military conflicts or
public health emergencies, and the cost and availability of travel
options and changing consumer preferences, discretionary spending
habits or willingness to travel; risks related to travel and
airline disruptions, and other adverse impacts on the ability of
our guests to travel; risks related to interruptions or disruptions
of our information technology systems, data security or
cyberattacks; risks related to our reliance on information
technology, including our failure to maintain the integrity of our
customer or employee data and our ability to adapt to technological
developments or industry trends; our ability to acquire, develop
and implement relevant technology offerings for customers and
partners, including effectively implementing our My Epic
application; the seasonality of our business combined with adverse
events that may occur during our peak operating periods;
competition in our mountain and lodging businesses or with other
recreational and leisure activities; risks related to the high
fixed cost structure of our business; our ability to fund resort
capital expenditures; risks related to a disruption in our water
supply that would impact our snowmaking capabilities and
operations; our reliance on government permits or approvals for our
use of public land or to make operational and capital improvements;
risks related to federal, state, local and foreign government laws,
rules and regulations, including environmental and health and
safety laws and regulations; risks related to changes in security
and privacy laws and regulations which could increase our operating
costs and adversely affect our ability to market our products,
properties and services effectively; potential failure to adapt to
technological developments or industry trends regarding information
technology; risks related to our workforce, including increased
labor costs, loss of key personnel and our ability to maintain
adequate staffing, including hiring and retaining a sufficient
seasonal workforce; a deterioration in the quality or reputation of
our brands, including our ability to protect our intellectual
property and the risk of accidents at our mountain resorts; risks
related to scrutiny and changing expectations regarding our
environmental, social and governance practices and reporting; our
ability to successfully integrate acquired businesses, including
their integration into our internal controls and infrastructure;
our ability to successfully navigate new markets, including
Europe; or that acquired
businesses may fail to perform in accordance with expectations;
risks associated with international operations; fluctuations in
foreign currency exchange rates where the Company has foreign
currency exposure, primarily the Canadian and Australian dollars
and the Swiss franc, as compared to the U.S. dollar; changes in tax
laws, regulations or interpretations, or adverse determinations by
taxing authorities; risks related to our indebtedness and our
ability to satisfy our debt service requirements under our
outstanding debt including our unsecured senior notes, which could
reduce our ability to use our cash flow to fund our operations,
capital expenditures, future business opportunities and other
purposes; a materially adverse change in our financial condition;
adverse consequences of current or future litigation and legal
claims; changes in accounting judgments and estimates, accounting
principles, policies or guidelines; and other risks detailed in the
Company's filings with the Securities and Exchange Commission,
including the "Risk Factors" section of the Company's Annual Report
on Form 10-K for the fiscal year ended July
31, 2023, which was filed on September 28, 2023.
All forward-looking statements attributable to us or any persons
acting on our behalf are expressly qualified in their entirety by
these cautionary statements. All guidance and forward-looking
statements in this press release are made as of the date hereof and
we do not undertake any obligation to update any forecast or
forward-looking statements whether as a result of new information,
future events or otherwise, except as may be required by law.
Statement Concerning Non-GAAP Financial Measures
When reporting financial results, we use the terms Resort
Reported EBITDA, Total Reported EBITDA, Net Debt and Net Real
Estate Cash Flow, which are not financial measures under accounting
principles generally accepted in the
United States of America ("GAAP"). Resort Reported EBITDA,
Total Reported EBITDA, Net Debt and Net Real Estate Cash Flow
should not be considered in isolation or as an alternative to, or
substitute for, measures of financial performance or liquidity
prepared in accordance with GAAP. In addition, we report segment
Reported EBITDA (i.e. Mountain, Lodging and Real Estate), the
measure of segment profit or loss required to be disclosed in
accordance with GAAP. Accordingly, these measures may not be
comparable to similarly-titled measures of other companies.
Additionally, with respect to discussion of impacts from currency,
the Company calculates the impact by applying current period
foreign exchange rates to the prior period results, as the Company
believes that comparing financial information using comparable
foreign exchange rates is a more objective and useful measure of
changes in operating performance.
Reported EBITDA (and its counterpart for each of our segments)
has been presented herein as a measure of the Company's
performance. The Company believes that Reported EBITDA is an
indicative measurement of the Company's operating performance, and
is similar to performance metrics generally used by investors to
evaluate other companies in the resort and lodging industries. The
Company believes that Net Debt is an important measurement of
liquidity as it is an indicator of the Company's ability to obtain
additional capital resources for its future cash needs.
Additionally, the Company believes Net Real Estate Cash Flow is
important as a cash flow indicator for its Real Estate segment. See
the tables provided in this release for reconciliations of our
measures of segment profitability and non-GAAP financial measures
to the most directly comparable GAAP financial measures.
Vail Resorts,
Inc.
Consolidated
Condensed Statements of Operations
(In thousands,
except per share amounts)
(Unaudited)
|
|
|
|
Three Months Ended
October 31,
|
|
|
2023
|
|
2022
|
Net revenue:
|
|
|
|
|
Mountain and Lodging
services and other
|
|
$
182,834
|
|
$
210,386
|
Mountain and Lodging
retail and dining
|
|
71,442
|
|
68,948
|
Resort net
revenue
|
|
254,276
|
|
279,334
|
Real Estate
|
|
4,289
|
|
113
|
Total net
revenue
|
|
258,565
|
|
279,447
|
Segment operating
expense:
|
|
|
|
|
Mountain and Lodging
operating expense
|
|
255,576
|
|
242,286
|
Mountain and Lodging
retail and dining cost of products sold
|
|
31,295
|
|
35,085
|
General and
administrative
|
|
108,025
|
|
98,799
|
Resort operating
expense
|
|
394,896
|
|
376,170
|
Real Estate operating
expense
|
|
5,181
|
|
1,382
|
Total segment
operating expense
|
|
400,077
|
|
377,552
|
Other operating
(expense) income:
|
|
|
|
|
Depreciation and
amortization
|
|
(66,728)
|
|
(64,614)
|
Gain on sale of real
property
|
|
6,285
|
|
—
|
Change in estimated
fair value of contingent consideration
|
|
(3,057)
|
|
(636)
|
Loss on disposal of
fixed assets and other, net
|
|
(2,043)
|
|
(6)
|
Loss from
operations
|
|
(207,055)
|
|
(163,361)
|
Mountain equity
investment income, net
|
|
859
|
|
346
|
Investment income and
other, net
|
|
3,684
|
|
2,886
|
Foreign currency loss
on intercompany loans
|
|
(4,965)
|
|
(6,135)
|
Interest expense,
net
|
|
(40,730)
|
|
(35,302)
|
Loss before benefit
from income taxes
|
|
(248,207)
|
|
(201,566)
|
Benefit from income
taxes
|
|
65,160
|
|
58,006
|
Net loss
|
|
(183,047)
|
|
(143,560)
|
Net loss attributable
to noncontrolling interests
|
|
7,535
|
|
6,589
|
Net loss attributable
to Vail Resorts, Inc.
|
|
$ (175,512)
|
|
$ (136,971)
|
Per share
amounts:
|
|
|
|
|
Basic net loss per
share attributable to Vail Resorts, Inc.
|
|
$
(4.60)
|
|
$
(3.40)
|
Diluted net loss per
share attributable to Vail Resorts, Inc.
|
|
$
(4.60)
|
|
$
(3.40)
|
Cash dividends
declared per share
|
|
$
2.06
|
|
$
1.91
|
Weighted average
shares outstanding:
|
|
|
|
|
Basic
|
|
38,117
|
|
40,298
|
Diluted
|
|
38,117
|
|
40,298
|
Vail Resorts,
Inc.
Consolidated
Condensed Statements of Operations - Other Data
(In
thousands)
(Unaudited)
|
|
|
Three Months Ended
October 31,
|
|
|
2023
|
|
2022
|
Other
Data:
|
|
|
|
|
Mountain Reported
EBITDA
|
|
$ (139,525)
|
|
$
(92,133)
|
Lodging Reported
EBITDA
|
|
(236)
|
|
(4,357)
|
Resort Reported
EBITDA
|
|
(139,761)
|
|
(96,490)
|
Real Estate Reported
EBITDA
|
|
5,393
|
|
(1,269)
|
Total Reported
EBITDA
|
|
$ (134,368)
|
|
$
(97,759)
|
Mountain stock-based
compensation
|
|
$
5,848
|
|
$
5,347
|
Lodging stock-based
compensation
|
|
896
|
|
950
|
Resort stock-based
compensation
|
|
6,744
|
|
6,297
|
Real Estate stock-based
compensation
|
|
52
|
|
48
|
Total stock-based
compensation
|
|
$
6,796
|
|
$
6,345
|
Vail Resorts,
Inc.
Mountain Segment
Operating Results
(In thousands,
except ETP)
(Unaudited)
|
|
|
|
Three Months Ended
October 31,
|
|
Percentage
Increase
|
|
|
2023
|
|
2022
|
|
(Decrease)
|
Net Mountain
revenue:
|
|
|
|
|
|
|
Lift
|
|
$
45,390
|
|
$
59,540
|
|
(23.8) %
|
Ski school
|
|
7,178
|
|
8,927
|
|
(19.6) %
|
Dining
|
|
18,077
|
|
19,442
|
|
(7.0) %
|
Retail/rental
|
|
33,474
|
|
40,344
|
|
(17.0) %
|
Other
|
|
68,336
|
|
73,464
|
|
(7.0) %
|
Total Mountain net
revenue
|
|
172,455
|
|
201,717
|
|
(14.5) %
|
Mountain operating
expense:
|
|
|
|
|
|
|
Labor and
labor-related benefits
|
|
112,049
|
|
108,045
|
|
3.7 %
|
Retail cost of
sales
|
|
17,821
|
|
20,741
|
|
(14.1) %
|
General and
administrative
|
|
93,168
|
|
83,289
|
|
11.9 %
|
Other
|
|
89,801
|
|
82,121
|
|
9.4 %
|
Total Mountain
operating expense
|
|
312,839
|
|
294,196
|
|
6.3 %
|
Mountain equity
investment income, net
|
|
859
|
|
346
|
|
148.3 %
|
Mountain Reported
EBITDA
|
|
$ (139,525)
|
|
$
(92,133)
|
|
(51.4) %
|
|
|
|
|
|
|
|
Total skier
visits
|
|
658
|
|
993
|
|
(33.7) %
|
ETP
|
|
$
68.98
|
|
$
59.96
|
|
15.0 %
|
Vail Resorts,
Inc.
Lodging Operating
Results
(In thousands,
except Average Daily Rate ("ADR") and Revenue per Available Room
("RevPAR"))
(Unaudited)
|
|
|
|
Three Months Ended
October 31,
|
|
Percentage
Increase
|
|
|
2023
|
|
2022
|
|
(Decrease)
|
Lodging net
revenue:
|
|
|
|
|
|
|
Owned hotel
rooms
|
|
$
25,177
|
|
$
23,565
|
|
6.8 %
|
Managed condominium
rooms
|
|
12,003
|
|
12,859
|
|
(6.7) %
|
Dining
|
|
18,083
|
|
16,829
|
|
7.5 %
|
Golf
|
|
6,376
|
|
5,890
|
|
8.3 %
|
Other
|
|
16,723
|
|
14,797
|
|
13.0 %
|
|
|
78,362
|
|
73,940
|
|
6.0 %
|
Payroll cost
reimbursements
|
|
3,459
|
|
3,677
|
|
(5.9) %
|
Total Lodging net
revenue
|
|
81,821
|
|
77,617
|
|
5.4 %
|
Lodging operating
expense:
|
|
|
|
|
|
|
Labor and
labor-related benefits
|
|
37,475
|
|
36,915
|
|
1.5 %
|
General and
administrative
|
|
14,857
|
|
15,510
|
|
(4.2) %
|
Other
|
|
26,266
|
|
25,872
|
|
1.5 %
|
|
|
78,598
|
|
78,297
|
|
0.4 %
|
Reimbursed payroll
costs
|
|
3,459
|
|
3,677
|
|
(5.9) %
|
Total Lodging operating
expense
|
|
82,057
|
|
81,974
|
|
0.1 %
|
Lodging Reported
EBITDA
|
|
$
(236)
|
|
$
(4,357)
|
|
94.6 %
|
|
|
|
|
|
|
|
Owned hotel
statistics:
|
|
|
|
|
|
|
ADR
|
|
$
304.03
|
|
$
277.25
|
|
9.7 %
|
RevPAR
|
|
$
158.97
|
|
$
155.03
|
|
2.5 %
|
Managed condominium
statistics:
|
|
|
|
|
|
|
ADR
|
|
$
233.92
|
|
$
240.08
|
|
(2.6) %
|
RevPAR
|
|
$
50.78
|
|
$
52.90
|
|
(4.0) %
|
Owned hotel and managed
condominium statistics (combined):
|
|
|
|
|
|
|
ADR
|
|
$
269.31
|
|
$
258.48
|
|
4.2 %
|
RevPAR
|
|
$
82.95
|
|
$
81.36
|
|
2.0 %
|
Key Balance Sheet
Data
(In
thousands)
(Unaudited)
|
|
|
As of October
31,
|
|
2023
|
|
2022
|
Total Vail Resorts,
Inc. stockholders' equity
|
$
633,031
|
|
$ 1,264,879
|
Long-term debt,
net
|
$ 2,732,037
|
|
$ 2,769,698
|
Long-term debt due
within one year
|
69,659
|
|
67,811
|
Total debt
|
2,801,696
|
|
2,837,509
|
Less: cash and cash
equivalents
|
728,859
|
|
1,180,942
|
Net debt
|
$ 2,072,837
|
|
$ 1,656,567
|
Reconciliation of Measures of Segment Profitability and
Non-GAAP Financial Measures
Presented below is a reconciliation of net loss attributable to
Vail Resorts, Inc. to Total Reported EBITDA for the three months
ended October 31, 2023 and 2022.
|
|
(In thousands)
(Unaudited)
|
|
|
Three Months Ended
October 31,
|
|
|
2023
|
|
2022
|
Net loss attributable
to Vail Resorts, Inc.
|
|
$
(175,512)
|
|
$
(136,971)
|
Net loss attributable
to noncontrolling interests
|
|
(7,535)
|
|
(6,589)
|
Net loss
|
|
(183,047)
|
|
(143,560)
|
Benefit from income
taxes
|
|
(65,160)
|
|
(58,006)
|
Loss before benefit
from income taxes
|
|
(248,207)
|
|
(201,566)
|
Depreciation and
amortization
|
|
66,728
|
|
64,614
|
Loss on disposal of
fixed assets and other, net
|
|
2,043
|
|
6
|
Change in fair value of
contingent consideration
|
|
3,057
|
|
636
|
Investment income and
other, net
|
|
(3,684)
|
|
(2,886)
|
Foreign currency loss
on intercompany loans
|
|
4,965
|
|
6,135
|
Interest expense,
net
|
|
40,730
|
|
35,302
|
Total Reported
EBITDA
|
|
$
(134,368)
|
|
$
(97,759)
|
|
|
|
|
|
Mountain Reported
EBITDA
|
|
$
(139,525)
|
|
$
(92,133)
|
Lodging Reported
EBITDA
|
|
(236)
|
|
(4,357)
|
Resort Reported
EBITDA*
|
|
(139,761)
|
|
(96,490)
|
Real Estate Reported
EBITDA
|
|
5,393
|
|
(1,269)
|
Total Reported
EBITDA
|
|
$
(134,368)
|
|
$
(97,759)
|
|
|
|
|
|
* Resort represents the
sum of Mountain and Lodging
|
|
|
|
|
Presented below is a reconciliation of net income attributable
to Vail Resorts, Inc. to Total Reported EBITDA calculated in
accordance with GAAP for the twelve months ended October 31, 2023.
|
(In thousands)
(Unaudited)
|
|
Twelve Months
Ended
|
|
October 31,
2023
|
Net income attributable
to Vail Resorts, Inc.
|
$
229,607
|
Net income attributable
to noncontrolling interests
|
16,009
|
Net income
|
245,616
|
Provision for income
taxes
|
81,260
|
Income before
provision for income taxes
|
326,876
|
Depreciation and
amortization
|
270,615
|
Loss on disposal of
fixed assets and other, net
|
11,107
|
Change in fair value of
contingent consideration
|
52,257
|
Investment income and
other, net
|
(24,542)
|
Foreign currency loss
on intercompany loans
|
1,737
|
Interest expense,
net
|
158,450
|
Total Reported
EBITDA
|
$
796,500
|
|
|
Mountain Reported
EBITDA
|
$
775,178
|
Lodging Reported
EBITDA
|
16,388
|
Resort Reported
EBITDA*
|
791,566
|
Real Estate Reported
EBITDA
|
4,934
|
Total Reported
EBITDA
|
$
796,500
|
|
|
* Resort represents the
sum of Mountain and Lodging
|
|
The following table reconciles long-term debt, net to Net Debt
and the calculation of Net Debt to Total Reported EBITDA for the
twelve months ended October 31, 2023.
|
(In
thousands)
(Unaudited)
|
|
As of October 31,
2023
|
Long-term debt,
net
|
$
2,732,037
|
Long-term debt due
within one year
|
69,659
|
Total debt
|
2,801,696
|
Less: cash and cash
equivalents
|
728,859
|
Net debt
|
$
2,072,837
|
Net debt to Total
Reported EBITDA
|
2.6x
|
The following table reconciles Real Estate Reported EBITDA to
Net Real Estate Cash Flow for the three months ended
October 31, 2023 and 2022.
|
(In thousands)
(Unaudited)
|
|
Three Months Ended
October 31,
|
|
2023
|
|
2022
|
Real Estate Reported
EBITDA
|
$
5,393
|
|
$
(1,269)
|
Non-cash Real Estate
cost of sales
|
3,607
|
|
—
|
Non-cash Real Estate
stock-based compensation
|
52
|
|
48
|
Change in real estate
deposits and recovery of previously incurred project costs/land
basis
less investments in
real estate
|
206
|
|
(46)
|
Net Real Estate Cash
Flow
|
$
9,258
|
|
$
(1,267)
|
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SOURCE Vail Resorts, Inc.