Booth Creek Ski Holdings, Inc. Reports Fiscal 2003 Fourth-Quarter and Year-End Results
VAIL, Colo.--Jan. 28, 2004--Booth Creek Ski Holdings, Inc. ("Booth Creek" or the "Company") announced today results for the fourth fiscal quarter and year ended Oct. 31, 2003.Fourth Quarter Ended Oct. 31, 2003
Booth Creek's fourth quarter is an off-peak period. The Company offers summer activities at some of its resorts, including golf, mountain biking, lodging, conference facilities, food and beverage offerings and certain other recreational amenities.
Resort operations revenues were $4,449,000 for the fiscal quarter ended Oct. 31, 2003, compared with $4,085,000 for the fiscal quarter ended Nov. 1, 2002.
Cost of sales and selling, general and administrative expense applicable to the resort segment totaled $11,642,000 for the fiscal quarter ended Oct. 31, 2003, an increase of $445,000, or 4 percent, from the corresponding period in 2002, due principally to normal inflationary factors.
Operating loss for the resort segment for the fiscal quarter ended Oct. 31, 2003, was $11,362,000, compared to an operating loss of $11,589,000 for the corresponding period in 2002. Resort operations incurred an EBITDA loss (as defined below) of $6,843,000 for the fiscal quarter ended Oct. 31, 2003, compared with an EBITDA loss of $7,112,000 for the corresponding period in 2002.
Revenues from real estate operations for the fiscal quarter ended Oct. 31, 2003, were $9,184,000 due to the sale of 12 lots within the Unit 7A subdivision at Northstar, which consists of 15 ski-in/ski-out single family lots. The Company sold the remaining three lots in December 2003 for total proceeds of $2,798,000. There were no real estate sales during the fourth quarter of fiscal 2002. Timber operations at Northstar contributed revenues of $238,000 and $230,000 during the fiscal quarters ended Oct. 31, 2003, and Nov. 1, 2002, respectively.
Cost of sales, depletion and selling, general and administrative expense for the real estate and other segment totaled $5,628,000 for the fiscal quarter ended Oct. 31, 2003, as compared to $829,000 for the corresponding period in 2002. The results for the fiscal quarter ended Oct. 31, 2003, included noncash cost of real estate sales (as defined below) of $4,294,000 and commissions and closing costs of $735,000 related to the lot sales within the Unit 7A development at Northstar.
Operating income for the real estate and other segment was $3,794,000 for the fiscal quarter ended Oct. 31, 2003, as compared to an operating loss of $599,000 for the corresponding period in 2002. Real estate and other operations generated EBITDA (excluding noncash cost of real estate sales) (as defined below) of $8,208,000 during the fiscal quarter ended Oct. 31, 2003, compared with an EBITDA loss of $502,000 for the corresponding period in 2002.
Interest expense was $2,969,000 for the fiscal quarter ended Oct. 31, 2003, a decrease of $667,000, or 18 percent, from the Company's interest expense of $3,636,000 for the corresponding period in 2002, as a result of reduced borrowings and lower average interest rates.
The Company's net loss for the fiscal quarter ended Oct. 31, 2003, was $10,921,000, a reduction of $6,709,000 from the Company's net loss of $17,630,000 for the fiscal quarter ended Nov. 1, 2002, primarily as a result of (i) the real estate sales in the fiscal 2003 quarter, and (ii) a loss on discontinued operations of $1,446,000 during the fiscal 2002 quarter relating to the Bear Mountain resort, which was sold on October 10, 2002.
Year Ended Oct. 31, 2003
Resort operations revenues for the fiscal year ended Oct. 31, 2003, were $104,963,000, a reduction of $3,864,000, or 4 percent, from the level of revenues generated during the fiscal year ended Nov. 1, 2002. Skier visits for fiscal 2003 declined by 201,000 visits, or 9 percent, from fiscal 2002, primarily due to unusual weather conditions which negatively impacted operations during the 2002/03 ski season for the Company's Summit resort in Washington. Increased sales of season passes, which rose 31 percent to $19,772,000 for fiscal 2003, as well as improved revenue per skier visit yields, partially offset the impact of reduced skier visitation.
Cost of sales and selling, general and administrative expense applicable to the resort segment totaled $84,661,000 for the fiscal year ended Oct. 31, 2003, an increase of $124,000 from the corresponding period in 2002.
Operating income for the resort segment for the fiscal year ended Oct. 31, 2003, was $4,663,000, as compared to $7,398,000 for the corresponding period in 2002. Resort operations contributed EBITDA (as defined below) of $20,652,000 for the fiscal year ended Oct. 31, 2003, as compared to $24,290,000 for the corresponding period in 2002.
Revenues from real estate operations for the fiscal year ended Oct. 31, 2003, were $9,830,000, which was due to (i) the sale of the final lot within the Unit 7 subdivision at Northstar for $646,000, and (ii) the sale of 12 lots within the Unit 7A subdivision at Northstar for $9,184,000. Revenues from real estate sales during the fiscal year ended Nov. 1, 2002, were $11,300,000, which was due to the sale of 25 lots within the Unit 7 subdivision at Northstar. Timber operations at Northstar contributed revenues of $254,000 and $405,000 during the fiscal years ended Oct. 31, 2003, and Nov. 1, 2002, respectively.
Cost of sales, depletion and selling, general and administrative expense for the real estate and other segment totaled $6,942,000 for the fiscal year ended Oct. 31, 2003, as compared to $4,336,000 for the corresponding period in 2002. The results for fiscal 2003 and fiscal 2002 included noncash cost of real estate sales (as defined below) of $4,484,000 and $2,478,000, respectively.
Operating income for the real estate and other segment was $3,142,000 for the fiscal year ended Oct. 31, 2003, as compared to operating income of $7,369,000 for the corresponding period in 2002. Real estate and other operations generated EBITDA (excluding noncash cost of real estate sales) (as defined below) of $7,753,000 for fiscal 2003 as compared to EBITDA of $10,049,000 for fiscal 2002.
Interest expense was $12,492,000 for the fiscal year ended Oct. 31, 2003, a decrease of $2,789,000, or 18 percent, from the Company's interest expense of $15,281,000 for the fiscal year ended Nov. 1, 2002, as a result of reduced borrowings and lower average interest rates.
The Company recognized gains on the early retirement of debt of $506,000 and $2,761,000 for the fiscal years ended Oct. 31, 2003, and Nov. 1, 2002, respectively, relating to repurchases of $16,000,000 and $29,325,000 aggregate principal amount of its 12.5 percent senior notes due 2007 (the "Senior Notes").
The Company realized income from discontinued operations of $549,000 during the fiscal year ended Nov. 1, 2002, relating to the former operations of the Bear Mountain resort, which was offset by a $3,235,000 loss on the disposal of the resort.
The Company's net loss for the fiscal year ended Oct. 3, 20031, 2003, was $5,361,000, an increase of $3,491,000 from the net loss of $1,870,000 for the corresponding period in 2002, primarily as a result of the factors discussed above.
Recent Trends and Outlook
Recent trends affecting the Company's early season results for the 2003/04 ski season include the following:
-- The opening dates for the Company's resorts for the 2003/04 and 2002/03 ski seasons were as follows:
2003/04 Season 2002/03 Season
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Northstar Nov. 22, 2003 Nov. 22, 2002
Sierra Nov. 14, 2003 Dec. 16, 2002
Waterville Valley Nov. 22, 2003 Nov. 22, 2002
Mt. Cranmore Dec. 13, 2003 Nov. 29, 2002
Loon Mountain Nov. 26, 2003 Nov. 15, 2002
The Summit Nov. 29, 2003 Dec. 27, 2002
-- As a result of improved early season snowfall, Sierra experienced a much earlier opening for the 2003/04 season. However, business volumes at Northstar and Sierra were negatively impacted for several days during the later portion of the Christmas holidays due to two major storms that hit the Lake Tahoe region. Although total skier visitation at the Company's Lake Tahoe resorts through late-Jan. 2004 was generally consistent with the corresponding period of the 2002/03 season, these resorts have experienced a meaningful shift in the mix of skier visits from paid visitors to season pass visitors. This trend will likely result in lower lift ticket revenues in the current season.
-- From Nov. 2003 through late-Jan. 2004, the northeastern United States has experienced relatively inconsistent weather patterns, including, at varying times, major snowstorms, warm temperatures, periods of heavy rainfall, and, most recently, extended periods of bitterly cold temperatures. Due to the weather volatility, business volumes at the Company's New Hampshire resorts through late-Jan. 2004 have declined measurably from the level of skier visitation during the comparable period of the 2002/03 season.
-- Due to a return to more normal weather patterns, for the early part of the 2003/04 season the Company has experienced a significant rebound in skier visitation at its Summit resort in Washington.
-- A meaningful portion of the Company's customer base is comprised of committed season pass holders. Through late-Jan. 2004, the Company's 2003/04 season pass sales were approximately 10 percent higher than the total level of season passes sold for the 2002/03 ski season. A portion of the increase is attributable to the introduction of new pass products which could reduce sales of other lift ticket products.
Booth Creek consists of six resorts across North America, including Northstar-at-Tahoe and Sierra-at-Tahoe in the Lake Tahoe region of Northern California; Waterville Valley, Mt. Cranmore Mountain Resort and Loon Mountain in New Hampshire; and the Summit at Snoqualmie near Seattle, Washington. Booth Creek is the fourth-largest ski resort owner in the country (www.boothcreek.com).
Except for historical matters, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's current views and assumptions and involve risks and uncertainties that could significantly affect expected results. The Company wishes to caution the reader that certain factors could significantly and materially affect the Company's actual results, causing results to differ materially from those in any forward-looking statement. Please refer to "Risk Factors" and "Forward-Looking Statements" included in the Company's Form 10-K for the fiscal year ended Oct. 31, 2003, on file with the Securities and Exchange Commission.
Booth Creek Ski Holdings, Inc.
Consolidated Condensed Financial and Operating Information
(Dollars in thousands, except revenue per skier visit)
(Unaudited)
Three Months Ended Year Ended
------------------ ------------------
Oct. 31, Nov. 1, Oct. 31, Nov. 1,
2003 2002 2003 2002
---- ---- ---- ----
Statement of Operations
Data: (a)
Revenue:
Resort Operations $4,449 $4,085 $104,963 $108,827
Real Estate and Other 9,422 230 10,084 11,705
------- ------- ------- -------
13,871 4,315 115,047 120,532
Operating Expenses:
Cost of Sales - Resort
Operations 7,403 6,869 63,969 63,137
Cost of Sales - Real Estate
and Other 5,215 183 5,444 2,920
Depreciation and Depletion 4,289 4,588 15,766 17,094
Selling, General and
Administrative Expense 4,532 4,863 22,063 22,614
------- ------- ------- -------
Operating Income (Loss) (7,568) (12,188) 7,805 14,767
Other Income (Expense):
Interest Expense (2,969) (3,636) (12,492) (15,281)
Amortization of Deferred
Financing Costs (301) (309) (1,140) (1,126)
Gain on Early Retirement of
Debt - - 506 2,761
Other Income (Expense) (83) (51) (40) (105)
------- ------- ------- -------
Other Income (Expense),
Net (3,353) (3,996) (13,166) (13,751)
------- ------- ------- -------
Income (Loss) from
Continuing Operations
Before Change in
Accounting Principle (10,921) (16,184) (5,361) 1,016
Discontinued Operations:
Income (Loss) from
Discontinued Operations of
Bear Mountain Resort - (1,411) - 549
Loss on Sale of Bear
Mountain Resort - (35) - (3,235)
------- ------- ------- -------
Loss on Discontinued
Operations - (1,446) - (2,686)
------- ------- ------- -------
Loss Before Change in
Accounting Principle (10,921) (17,630) (5,361) (1,670)
Change in Accounting
Principle for Goodwill - - - (200)
------- ------- ------- -------
Net Loss $(10,921) $(17,630) $(5,361) $(1,870)
======= ======= ======= =======
Other Financial and
Operating Data:
Total Skier Visits (b) - - 1,953,000 2,154,000
Revenue per Skier Visit (c) NM NM $53.74 $50.52
Capital Expenditures for
Property and Equipment $2,287 $5,001 $6,445 $11,638
Net Cash Provided By (Used
In):
Operating Activities $4,459 $(5,325) $13,684 $23,523
Investing Activities (d) $(3,365) $6,536 $(8,787) $(782)
Financing Activities $(1,090) $(1,260) $(4,752) $(22,535)
Total EBITDA $(2,929) $(7,600) $23,921 $31,861
Noncash Cost of Real Estate
Sales $4,294 $(14) $4,484 $2,478
Total EBITDA (Excluding
Noncash Cost of Real Estate
Sales) $1,365 $(7,614) $28,405 $34,339
Resort Operations EBITDA $(6,843) $(7,112) $20,652 $24,290
Real Estate and Other EBITDA
(Excluding the Noncash Cost
of Real Estate Sales) $8,208 $(502) $7,753 $10,049
As of
----------------------------
Oct. 31, 2003 Nov. 1, 2002
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Balance Sheet Data:
Working Capital (Deficit),
Including Revolving Credit
Facility Borrowings $(52,233) $(35,935)
Total Assets $154,866 $166,600
Long-term Debt $98,382 $120,195
Total Debt (e) $122,561 $127,157
Common Shareholder's Equity
(Deficit) $(2,798) $2,563
Notes to Consolidated Financial and Operating Information:
NM - Not meaningful.
(a) Pursuant to Statement of Financial Accounting Standards No. 144 "Accounting for the Impairment or Disposal of Long-Lived Assets," the historical results of operations and loss on sale of the Bear Mountain resort are presented as discontinued operations in the Company's consolidated statements of operations.
(b) Total skier visits associated with Bear Mountain's operations have been excluded from the Company's reported total skier visits disclosed in Other Financial and Operating Data.
(c) Reflects revenue from resort operations divided by total skier visits.
(d) Cash flows from investing activities for the three months and year ended Nov. 1, 2002, reflects proceeds of $11,954,000 received from the sale of the Bear Mountain resort on October 10, 2002.
(e) Includes revolving credit facility borrowings, current portion of long-term debt and long-term debt.
Skier Visit Information:
Total skier visits generated by each of the Company's resorts for the year ended Oct. 31, 2003, and Nov. 1, 2002, were as follows:
Year Ended
-----------------
Oct. 31, Nov. 1,
2003 2002
---- ----
(In thousands)
Northstar 570 521
Sierra 353 419
Waterville Valley 223 205
Mt. Cranmore 119 96
Loon Mountain 359 301
The Summit 329 612
----- -----
1,953 2,154
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Reconciliation of Non-GAAP Financial Measures:
The financial information presented above includes information on "Total EBITDA," "Noncash Cost of Real Estate Sales," "Total EBITDA (Excluding Noncash Cost of Real Estate Sales)," "Resort Operations EBITDA," and "Real Estate and Other EBITDA (Excluding Noncash Cost of Real Estate Sales)." "Total EBITDA (Excluding Noncash Cost of Real Estate Sales)" represents net income (loss) before (i) extraordinary gains and losses, (ii) results of discontinued operations, (iii) interest expense and amortization of deferred financing costs, (iv) depreciation and depletion expense, (v) noncash cost of real estate sales, and (vi) other noncash charges and credits. "Noncash Cost of Real Estate Sales" represents the allocated portion of real estate development expenditures previously capitalized (including acquisition costs allocated to real estate development) which relate to current real estate sales. Although EBITDA is not a measure of performance under accounting principles generally accepted in the United States ("GAAP"), the information is presented because management believes it provides useful information regarding a company's ability to incur and service debt. In addition, management uses EBITDA measures to assess the Company's operating performance and to make capital investment decisions. Further, Total EBITDA (Excluding Noncash Cost of Real Estate Sales) is calculated consistent with the manner that "EBITDA" is calculated under the indenture governing the Company's Senior Notes, and therefore, management believes this measure is meaningful to holders of the Senior Notes. EBITDA should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating activities and other income or cash flow statement data prepared in accordance with GAAP, or as a measure of profitability or liquidity. In addition, the EBITDA measures as determined by the Company may not be comparable to related or similar measures as reported by other companies and do not represent funds available for discretionary use.
The following table reconciles net loss from the Company's consolidated statements of operations to the related EBITDA measures for the periods indicated:
Three Months Ended Year Ended
Oct. 31, Nov. 1, Oct. 31, Nov. 1,
2003 2002 2003 2002
---- ---- ---- ----
(In Thousands)
Net Loss $(10,921) $(17,630) $(5,361) $(1,870)
Change in Accounting Principle
for Goodwill - - - 200
Loss on Discontinued Operations - 1,446 - 2,686
Other Income (Expense) 83 51 40 105
Gain on Early Retirement of Debt - - (506) (2,761)
Amortization of Deferred Financing
Costs 301 309 1,140 1,126
Interest Expense 2,969 3,636 12,492 15,281
------ ------ ------ ------
Operating Income (Loss) (7,568) (12,188) 7,805 14,767
Depreciation and Depletion 4,289 4,588 15,766 17,094
Noncash Impairment Charge 350 - 350 -
------ ------ ------ ------
Total EBITDA (2,929) (7,600) 23,921 31,861
Noncash Cost of Real Estate Sales 4,294 (14) 4,484 2,478
------ ------ ------ ------
Total EBITDA (Excluding Noncash
Cost of Real Estate Sales) $1,365 $(7,614) $28,405 $34,339
====== ====== ====== ======
Operating Income (Loss) for
Resort Operations Segment $(11,362) $(11,589) $4,663 $7,398
Depreciation 4,169 4,477 15,639 16,892
Noncash Impairment Charge 350 - 350 -
------ ------ ------ ------
Resort Operations EBITDA $(6,843) $(7,112) $20,652 $24,290
====== ====== ====== ======
Operating Income (Loss) for Real
Estate and Other Segment $3,794 $(599) $3,142 $7,369
Depletion 120 111 127 202
Noncash Cost of Real Estate Sales 4,294 (14) 4,484 2,478
------ ------ ------ ------
Real Estate and Other EBITDA
(Excluding Noncash Cost of Real
Estate Sales) $8,208 $(502) $7,753 $10,049
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