OREANDA-NEWS. Peak Resorts, Inc. (NASDAQ:SKIS), a leading owner and operator of high-quality, individually branded ski resorts in the U.S., today reported results for its second quarter and six months ended October 31, 2016 of fiscal 2017.

Second Quarter 2017 (includes Hunter Mountain in the three and six months ended October 31, 2016):

  • Revenue was $8.5 million, compared to $6.2 million for the second quarter of fiscal 2016.
  • Resort operating expenses were up $2.2 million over the second quarter of fiscal 2016.
  • Net loss was $8.0 million, or $0.57 per share.
  • Reported EBITDA* was ($6.9) million.

* See Definitions of Non-GAAP Financial Measures

Timothy D. Boyd, president and chief executive officer, commented, “The company’s overall financial performance year to date is in line with our expectations, as the summer and fall seasons at our resorts are traditionally the time when we are gearing up for the winter ski season and only a handful of our resorts have regular off-season activities such as the zip line at Attitash or other seasonal outdoor events.

“We are very pleased with the recently announced successful completion of our $20 million cumulative convertible preferred stock private placement with CAP 1 LLC, an affiliate of Summer Road LLC, which closed subsequent to the quarter. This action significantly strengthens our balance sheet and provides funding for continued growth and general corporate purposes as we continue to anticipate the release of funds related to our United States Citizenship and Immigration Services EB-5 program at Mount Snow.”

Continued Boyd, “As we finalize preparations for the ski season we are very excited to report that, as of last weekend, four of our resorts were open including Mount Snow, Hunter Mountain, Wildcat and Big Boulder. The 2016/2017 ski season also marks the first full season with Hunter Mountain and the new multi-resort Peak Pass as parts of our portfolio. Offering our customers new resort properties, amenities and products that will enhance their skiing experience are continued areas of focus for our organization.”

(dollars in thousands except per share data)   Three months ended
October 31,		     Six months ended
October 31,
   2016   2015   2016   2015 
                     
Revenues $   8,475     $   6,155     $   15,601   $   11,587  
Loss from operations $   (10,136 )   $   (8,875 )   $   (20,253 ) $   (17,838 )
Net Loss $   (7,982 )   $   (6,888 )   $   (15,886 ) $   (13,967 )
Loss per share (basic and diluted) $   (0.57 )   $   (0.49 )   $   (1.13 ) $   (1.00 )
Weighted average shares outstanding     13,982         13,982         13,982       13,982  
Reported EBITDA $   (6,920 )   $   (6,410 )   $   (13,820 ) $   (12,925 )

* See below for Definitions of Non-GAAP Measures

Second Quarter FY2017 Resort Operating Results

Stephen J. Mueller, Peak Resorts’ chief financial officer, noted, “During the second quarter, we practiced general belt-tightening measures across our resorts to increase our overall operating efficiency, and these efforts were able to partially offset the increase in expenses primarily driven by the inclusion of Hunter Mountain in the Peak Resorts portfolio.”

(dollars in thousands)   Three months ended
October 31,		     Six months ended
October 31,
   2016   2015  2016  2015
                     
Revenues                    
 Food and beverage $ 2,728   $ 1,619   $ 5,215 $ 2,941
 Hotel/lodging $ 2,052   $ 1,314   $ 3,860 $ 2,774
 Retail $ 273   $ 297   $ 422 $ 456
 Summer activities $ 2,727   $ 2,381   $ 4,748 $ 4,304
 Other $ 695   $ 544   $ 1,356 $ 1,112
 Total $ 8,475   $ 6,155   $ 15,601 $ 11,587
(dollars in thousands)   Three months ended
October 31,		     Six months ended
October 31,
   2016   2015    2016   2015
                       
Resort operating expenses                      
 Labor and labor related expenses $ 7,810   $ 6,322   $ 15,517   $ 12,553
 Retail and food and beverage cost of sales $ 912   $ 751   $ 1,673   $ 1,267
 Power and utilities $ 843   $ 664   $ 1,431   $ 1,247
 Other $ 3,450   $ 3,046   $ 6,158   $ 5,923
 Total $ 13,015   $ 10,783   $ 24,779   $ 20,990

“Our stated goal of increasing revenue per skier is expected to be positively impacted in the 2016/2017 ski season by modest price increases, anticipated operating efficiencies and skier amenities. A great example of this is the new lodge at our Mad River property in Ohio that will provide skiers with a 46,000 square foot structure that boasts a new loft area, live music stage, slope-side deck with impressive view of the mountain, and dining capacity for more than 1,000 skiers and snowboarders,” added Mueller.

Financial Position
Mueller continued, “During the quarter, we received funding from short term borrowings including $2.75 million from our total $20 million line of credit with Royal Banks and a $5.5 million bridge loan with EPR. After the quarter ended, we completed our $20 million cumulative convertible preferred stock offering, and paid off the $5.5 million bridge loan with EPR.  We believe we now have a long-term solid financial foundation to drive organic growth across our resort portfolio and that we are also well positioned to take advantage of opportunistic and strategic acquisition opportunities.”

Boyd concluded, “We remain committed to providing value for our shareholders, and we see the 2016/2017 season as the catalyst that will drive our future performance. As we continue to reiterate, our Board anticipates revisiting the ability to issue a dividend once the EB-5 funds are released from escrow and financial covenants are met.”

Richard K. Deutsch, vice president, business and real estate development, and president of Mt. Snow, Ltd., added, “Although the United States Citizenship and Immigration Services  approved our EB-5 program earlier this year, we are still waiting for the first Petition to be approved. The program remains fully subscribed and we anticipate that the escrowed funds will be released once the first Petition is approved. We look forward to moving the Mount Snow projects forward and further investing in this keystone property in our portfolio.”