ASC Releases Quarterly, Year Fiscal Update

PARK CITY, UTAH, March 7 /PRNewswire-FirstCall/ — American Skiing Company (OTC: AESKE) today announced that the previously announced re-audit of the Company’s fiscal 2001 and 2000 financial statements has been completed and that its Annual Report on Form 10-K for the fiscal year ended July 28, 2002 and its Quarterly Report on Form 10-Q for the quarter ended October 27, 2002, have been filed with the Securities and Exchange Commission.  This press release provides summary financial information.  For more detailed information, please refer to the Company’s Annual Report on Form 10-K and its Quarterly Report on Form 10-Q.

“As we entered the 2002/2003 ski season, our resort operations were in a stronger position than at any other time in recent history,” said CEO B.J. Fair.  “During the last year, we improved our cost structure and significantly reduced resort debt through the sales of Heavenly and Sugarbush resorts.  In addition, the recent refinancing of our resort credit facility provides even greater operating flexibility as we move through the current ski season and beyond.”

Early Season Results 

“Favorable weather conditions in the east and significant snowfall in Colorado set the stage for a much better start to the ski season,” said Fair. “Almost all of our resorts generated increases in early season visitation over last year when we were hampered by poor weather in the east, the impact of the Olympics on the Utah market and reduced destination travel resulting from the 9/11 event.  Through the end of our second fiscal quarter, our eastern resorts generated a 14% increase in year-to-date skier visits with The Canyons showing growth of more than 20% and Steamboat posting a modest 4% increase.”

Thanksgiving 

Thanksgiving results at eastern resorts improved sharply as a result of favorable weather conditions which allowed the Company’s snowmaking operations to open substantially more terrain than in the prior year.  All of the Company’s eastern resorts were open by November 29th with much better skiing and riding conditions than in the 2001/2002 ski season.  Killington resort set an all time record for skier visits during Thanksgiving weekend and other eastern resorts recorded sharply higher visitation compared to the prior year.

In the west, The Canyons has capitalized on the worldwide attention generated by the 2002 Winter Olympic Games and NBC’s Today Show, which made its home at the resort during the games.  As a result, The Canyons reported a significant increase in visitation and, despite less than favorable snow conditions, performed close to plan.

Holiday Season 

Early season momentum continued through the two week Christmas and New Year’s Holiday period with the Company posting an 8% increase in skier visits. In the east, skier visits for the two week holiday period were 8% higher than last year with Killington and Mount Snow reporting a 6% and a 39% increase, respectively.  In the west, The Canyons enjoyed a 39% increase in visits during the holiday period, despite less than optimal snow conditions.  Skier visits at Steamboat increased moderately over the same period in the 2001/2002 ski season.

By the close of the holiday period, year-to-date skier visits for the Company were more than 22% higher than at the same time last season with eastern resorts showing a 29% improvement.  Total skier visits for The Canyons and Steamboat were up 18% and 7% year-over-year, respectively.

Season Pass Sales and Reservation Activity 

As of January 26, 2003, the Company reported that as a result of more effective planning and marketing, season pass sales increased approximately 7% year-over-year with The Canyons posting a 58% increase.  The Company’s online multi-day ticket product, mEticket, continues to grow in popularity among the Company’s loyal customer base of skiers and riders with sales more than 14% higher year-over-year.

Resort Operations Recent Trends

Although the Company’s operating results from July 29, 2002 through January 26, 2003 were stronger than the comparable period of the prior year, the Company has experienced significant softening in skier visits, call volume and reservation activity in subsequent weeks which may be attributable to extreme cold temperatures in the east, the soft economy, as well as concerns about the potential for war in the Middle East and terrorist activity in the United States.  This recent trend has partially offset early season improvements in operating results.  Furthermore, consumers continue to book their reservations closer to the actual date of travel making it increasingly difficult for the Company to forecast future performance.

Real Estate Update 

The Company reported that it is continuing negotiations with the lenders under its senior secured credit facility for its primary real estate development subsidiary, American Skiing Company Resort Properties (“ASCRP”), as part of the Company’s ongoing effort to restructure ASCRP’s real estate debt.  As previously reported, ASCRP has been in payment default under its senior secured credit facility since May 2002.  Management believes that it is close to finalizing an agreement with the lenders that entails the formation of a new company to hold ASCRP’s real estate development assets.  The equity in the new company is expected to be held by lenders under the senior secured credit facility, and ASCRP.

The ASCRP senior secured credit facility, as previously reported, remains in default pending completion of these negotiations.  There can be no assurance that negotiations will be successfully completed, or that the payment defaults pending under the facility can be satisfactorily resolved, if at all.  For more detail, please refer to the Company’s Form 10-K and Form 10- Q, each filed with the Securities and Exchange Commission on March 7, 2003.

Real Estate Operations Recent Trends 

Over the past several months, the Company has seen a reduction in sales volume and sales leads at its Grand Summit properties at Steamboat and The Canyons.  These reduced sales volumes are below the Company’s anticipated levels for this period.  The Company believes that this is primarily the result of continuing disruptions related to its real estate restructuring efforts, which have impacted real estate sales interest at both resorts, as well as weakening economic conditions and difficulty of some potential buyers in obtaining end loan financing for fractional real estate purchases. Management is monitoring developing economic conditions and implementing new and re-energized sales and marketing programs to take advantage of visitation during the remaining ski season.

Non-GAAP Financial Measurements 

Resort and Real Estate earnings before interest expense, income taxes, depreciation and amortization (“EBITDA”) are not measurements calculated in accordance with Generally Accepted Accounting Principles (“GAAP”) and should not be considered as alternatives to operating or net income as an indicator of operating performance, cash flows as a measure of liquidity or any other GAAP determined measurement.  Management believes certain items excluded from Resort and/or Real Estate EBITDA, such as the write-off of deferred financing costs, non-cash charges for stock compensation awards, and merger, restructuring and asset impairment charges are significant components in understanding and assessing the Company’s financial performance.  In addition, the Company has excluded other items from EBITDA in order to facilitate comparisons with previously announced operating results.  These items include hotel pre-opening costs associated with the Steamboat Grand Hotel, EBITDA losses and earnings from Sugarbush Resort, the loss on the sale of development rights for the Heavenly Grand Summit quartershare hotel and the loss on the settlement of a contract dispute with the general contractor at The Canyons. Other companies may define EBITDA differently, and as a result, such measures may not be comparable to the Company’s reported EBITDA.  Management has included information concerning Resort and Real Estate EBITDA because it believes that EBITDA is an indicative measure of the Company’s operating performance and is generally used by other leisure and hospitality operators and investors to evaluate companies in the resort industry.

About American Skiing Company 

Headquartered in Park City, Utah, American Skiing Company is one of the largest operators of alpine ski, snowboard and golf resorts in the United States.  Its resorts include Killington and Mount Snow in Vermont; Sunday River and Sugarloaf/USA in Maine; Attitash Bear Peak in New Hampshire; Steamboat in Colorado; and The Canyons in Utah.  More information is available on the Company’s Web site, www.peaks.com.

This press release contains both historical and forward-looking statements.  All statements other than statements of historical facts are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  These forward-looking statements are not based on historical facts, but rather reflect American Skiing Company’s current expectations concerning future results and events.  Similarly, statements that describe the Company’s objectives, plans or goals are or may be forward-looking statements.  Such forward-looking statements involve a number of risks and uncertainties. American Skiing Company has tried wherever possible to identify such statements by using words such as “anticipate,” “assume,” “believe,” “expect,” “intend,” “plan,” and words and terms similar in substance in connection with any discussion of operating or financial performance.  In addition to factors discussed above, other factors that could cause actual results, performances or achievements to differ materially from those projected include, but are not limited to, the following: the Company’s substantial leverage; restrictions on the Company’s ability to access sources of capital; changes in regional and national business and economic conditions affecting both American Skiing Company’s resort operating and real estate segments; competition and pricing pressures; negative impact on the demand for the Company’s products resulting from terrorism and the availability of air travel (including the effects of airline bankruptcies); the Company’s inability to complete its restructuring plan; the payment default under the Company’s real estate credit facilities and its effect on the results and operations of the Company’s real estate segment; the Company’s failure to improve its operations to meet financial covenants; the loss of the Company’s executive officers or key operating personnel; the possibility of war and its effect on the ski, resort, leisure and travel industries; adverse weather conditions regionally and nationally; seasonal business activity; changes to federal, state and local regulations affecting both the Company’s resort operating and real estate segments; failure to renew land leases and forest service permits; disruptions in water supply that would impact snowmaking operations; and other risk factors listed from time-to-time in American Skiing Company’s documents filed with the Securities and Exchange Commission.  

This list is not exhaustive.  The Company operates in a changing business environment and new risks arise from time to time.  The forward looking statements included in this press release are made only as of the date of this press release and under section 27A of the Securities Act and section 21E of the Exchange Act, American Skiing Company does not have or undertake any obligation to publicly update any forward- looking statements to reflect subsequent events or circums at The Canyons. Other companies may define EBITDA differently, and as a result, such measures may not be comparable to the Company’s reported EBITDA.  Management has included information concerning Resort and Real Estate EBITDA because it believes that EBITDA is an indicative measure of the Company’s operating performance and is generally used by other leisure and hospitality operators and investors to evaluate companies in the resort industry.

About American Skiing Company 

Headquartered in Park City, Utah, American Skiing Company is one of the largest operators of alpine ski, snowboard and golf resorts in the United States.  Its resorts include Killington and Mount Snow in Vermont; Sunday River and Sugarloaf/USA in Maine; Attitash Bear Peak in New Hampshire; Steamboat in Colorado; and The Canyons in Utah.  More information is available on the Company’s Web site, www.peaks.com.

This press release contains both historical and forward-looking statements.  All statements other than statements of historical facts are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  These forward-looking statements are not based on historical facts, but rather reflect American Skiing Company’s current expectations concerning future results and events.  Similarly, statements that describe the Company’s objectives, plans or goals are or may be forward-looking statements.  Such forward-looking statements involve a number of risks and uncertainties. American Skiing Company has tried wherever possible to identify such statements by using words such as “anticipate,” “assume,” “believe,” “expect,” “intend,” “plan,” and words and terms similar in substance in connection with any discussion of operating or financial performance.  In addition to factors discussed above, other factors that could cause actual results, performances or achievements to differ materially from those projected include, but are not limited to, the following: the Company’s substantial leverage; restrictions on the Company’s ability to access sources of capital; changes in regional and national business and economic conditions affecting both American Skiing Company’s resort operating and real estate segments; competition and pricing pressures; negative impact on the demand for the Company’s products resulting from terrorism and the availability of air travel (including the effects of airline bankruptcies); the Company’s inability to complete its restructuring plan; the payment default under the Company’s real estate credit facilities and its effect on the results and operations of the Company’s real estate segment; the Company’s failure to improve its operations to meet financial covenants; the loss of the Company’s executive officers or key operating personnel; the possibility of war and its effect on the ski, resort, leisure and travel industries; adverse weather conditions regionally and nationally; seasonal business activity; changes to federal, state and local regulations affecting both the Company’s resort operating and real estate segments; failure to renew land leases and forest service permits; disruptions in water supply that would impact snowmaking operations; and other risk factors listed from time-to-time in American Skiing Company’s documents filed with the Securities and Exchange Commission.  

This list is not exhaustive.  The Company operates in a changing business environment and new risks arise from time to time.  The forward looking statements included in this press release are made only as of the date of this press release and under section 27A of the Securities Act and section 21E of the Exchange Act, American Skiing Company does not have or undertake any obligation to publicly update any forward- looking statements to reflect subsequent events or circumstances. Contact:  Erik Preusse  Director of Strategic Planning & Corporate Communications  435-615-0380  e-mail:  investinfo@ascresorts.com (1) Season pass revenues are recognized ratably over the 2nd and 3rd  quarters. American Skiing Company and Subsidiaries  Consolidated Unaudited Financial Statements  (in thousands of dollars except per share amounts) Three Months Ended (1)  October 27, 2002October 28, 2001 Net revenues:  Resort                                          $16,911        $17,322  Real estate                                       3,714          2,791  Total net revenues                              20,625         20,113 Operating expenses:  Resort                                           22,500         23,411  Real estate                                       3,576          4,109  Marketing, general and administrative            10,033          9,805  Restructuring charges (2)                             –          1,626  Depreciation and amortization                     3,571          3,929  Total operating expenses                        39,680         42,880 Loss from operations                            (19,055)       (22,767) Interest expense, net                             11,119         13,711 Loss from continuing operations                 (30,174)       (36,478) Discontinued operations (3)  Loss from operations of Heavenly resort               –        (2,727) Loss before accounting changes                  (30,174)       (39,205) Cumulative effect of change in accounting  principle                                             –         18,658 Net loss before preferred stock dividends       (30,174)       (57,863) Accretion of discount and dividends accrued on  mandatorily redeemable preferred stock            8,931          7,686 Net loss available to common shareholders      $(39,105)      $(65,549) Basic and diluted loss per common share: Loss from continuing operations                  $(1.23)        $(1.40)  Loss from discontinued operations                      –         (0.09)  Cumulative effect of change in accounting  principle                                             –         (0.60)  Net loss available to common shareholders        $(1.23)        $(2.09)  Weighted average common shares outstanding        31,724         31,344 (1) The sale of Sugarbush was completed on September 28, 2001, results of  operations are included through that date. (2) For a more detailed discussion of restructuring charges and the events  that gave rise to them, please refer to the Company’s Form 10-K and  Form 10-Q, each dated March 7, 2003, on file with the Securities and  Exchange Commission. (3) Heavenly resort was sold on May 9, 2002. American Skiing Company and Subsidiaries  Consolidated Unaudited Financial Statements  (in thousands of dollars except per share amounts) Three Months Ended (1)(2)  October 27, 2002October 28, 2001 Reconciliation to Consolidated EBITDA  Loss from continuing operations                $(30,174)      $(36,478)  Interest Expense, net                             11,119         13,711  Depreciation and amortization                      3,571          3,929  Restructuring charges                                  –          1,626  Consolidated EBITDA                             (15,484)       (17,212)  Sugarbush EBITDA Loss                                               902  Total EBITDA excluding other items             $(15,484)      $(16,310) Reconciliation to Resort EBITDA  Loss from continuing resort operations         $(24,858)      $(30,059)  Interest expense, net                              6,264          9,272  Depreciation and amortization                      2,972          3,267  Restructuring charges                                  –          1,626  Resort EBITDA                                   (15,622)       (15,894)  Sugarbush EBITDA Loss                                  –            902  Resort EBITDA excluding other items            $(15,622)      $(14,992) Reconci