Resort revenue (which excludes revenue from real estate operations) for the quarter ended January 31, 1999, increased 15% to $156.1 million from $136.3 million in the comparable period last year. Total revenue for the quarter (which includes revenue from real estate operations) was $160.0 million compared to the $187.5 million reported in the same period in 1998.
Earnings from resort operations before interest, income taxes, depreciation and amortization (Resort EBITDA) for the second quarter declined 4% to $50.5 million compared to $52.7 million in the same
quarter last year. As previously reported, the decline in resort EBITDA in part reflects the overall weakness in the Colorado ski industry due to unfavorable weather conditions prior to and during the Christmas holiday.
As anticipated, real estate revenues in the second quarter declined year over year because real estate revenues in last year’s second quarter included the one-time sale of home-site lots in Bachelor Gulch at the Company’s Beaver Creek ski area. As a result, real estate revenues were $3.8 million for the second quarter compared to $51.2 million in the same period last year.
Net income for the quarter was $16.5 million, or $0.47 per diluted share, compared to $25.9 million, or $0.75 per diluted share, in the same period last year.
The growth in resort revenue was driven by higher volumes in the Company’s non-lift ticket businesses, primarily its hospitality and retail operations. Total non-lift ticket revenues accounted for 62% of total resort revenue compared to 53% in last year’s second quarter.
Resort revenue for the six months ended January 31, 1999, increased 24% to $191.1 million from $154.1 million in the same period last year. Total revenue was $208.5 million compared to $216.0 million in the first half of fiscal 1998.
Resort EBITDA for the six month period was $25.5 million compared to $33.2 million in 1998.
The net loss in the first half of fiscal 1999 was $3.9 million, or $0.11 per diluted share, compared to net income of $5.2 million, or $0.15 per diluted share, for the same period last year.
In the second quarter of fiscal 1999, revenue per skier day grew to $75.36 versus $64.24, up 17% from the comparable period last year. Total skier days for the first half of 1999, which includes the Christmas and New Year holidays, were 2.1 million, down 3% from the prior year.
Adam Aron, Chairman and Chief Executive Officer, commented, “Our results for the second quarter are consistent with the announcement we made in early January. Vail Resorts experienced aberrant weather patterns which caused much of our skiing terrain to be closed during the Christmas and New Year holidays. Although snow conditions have improved, and are now in fact quite good, skier days for the second quarter continue to be affected by the slow start of the season.”
Mr. Aron added, “Despite these challenges, our Company had major successes this quarter. We are pleased with the solid performance of our non-lift ticket businesses, particularly our hospitality and retail operations. In February, Vail and Beaver Creek received significant international exposure during the 1999 World Alpine Skiing Championships. More recently, we announced the strategic acquisition of the Grand Teton Lodge Company’s resorts in Jackson Hole, Wyoming. The transaction includes three premier destination resort properties within Grand Teton National Park, along with a Robert Trent Jones, Jr. re-designed golf course and thirty acres of developable land outside of the park in Jackson Hole. This acquisition adds to our current portfolio of premium-quality assets and complements our winter operations with its business peaking in the summer season.”
Mr. Aronn concluded, “This has been a challenging year for our Company, beginning with the unfortunate fires on Vail Mountain and continuing with the almost unprecedented weather patterns we have seen during this ski season. In the near term, we expect to see a continuation of the trends we experienced in the second quarter. As a result, we anticipate that resort EBITDA may be modestly below last year’s level for the third quarter. Looking further ahead, we continue to be highly optimistic about our Company’s prospects for growth. We are continuing to build on our strong brand franchises by executing our proven strategy of improving the overall resort experience for our guests, diversifying our revenue mix, leveraging our financial strength, and adding premium assets to our portfolio.”
Vail Resorts, Inc. is the premier mountain resort operator in North America. The Company operates the Colorado mountain resorts of Vail, Breckenridge, Keystone, and Beaver Creek.
Statements in this press release, other than statements of historical information, are forward looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date hereof. Such risks and uncertainties include, but are not limited to, general business and economic conditions; competitive factors in the ski and resort industry; and the weather. Investors are also directed to other risks discussed in documents filed by the Company with the Securities and Exchange Commission.