Peak Resorts reported results for Q2 and first half of its 2015 fiscal year, periods that ended October 31, 2014. On a same-resort basis, advance lift ticket and seasonal product sales for the first two months of Q3 were up more than 11 percent over the average of the past five years.
Article continues below
Skier visits for the first two months of the third quarter are running well ahead of the average of the past five years in the Northeastern region.
Stephen J. Mueller, Peak Resort's chief financial officer, says, "The primary reason for the growth in revenue for the three- and six-month periods was an increase in summer visits, particularly to our Mount Snow, Big Boulder and Attitash resorts.
"In September, we opened New England's longest zip rider of over 5,000 feet and an additional span of approximately 2,500 feet at the Attitash resort, improving its appeal as a year-round destination, although the full benefit of that initiative largely will be seen in fiscal 2016.
"Resort operating expenses rose for both the three- and six-month periods predominantly because of higher compensation costs following wage increases implemented for full-time employees in October 2013.
"General and administrative expenses rose because of legal fees related to litigation settled in the second quarter and an increase in professional fees as we prepared for the IPO. As a result, the loss from operations rose almost 5 percent in each period. However, the net loss improved in each period due to a one-time gain in the second quarter of 2015, following the settlement of a lawsuit."
"The loss on an EBITDA basis rose 3.8 percent for the quarter and 4.3 percent for the six months primarily because of an increase in loss from operations of $0.3 million for the three months ended October 31, 2014, and $0.4 million for the six months ended October 31, 2014."
"We primarily invest in our resort properties in the summer months of our first and second quarters to enhance the experiences of our winter visitors. In the first and second quarters of fiscal 2015, our capital expenditures totaled $6.3 million. Of that total, we spent $1.8 million on the zip rider at our Attitash resort.
"In addition, we invested $3 million to improve the efficiency of our snow making at Mount Snow, Wildcat and Attitash. For full-year 2015, we expect our total capital spending will be in the range of $8 million to $10 million, with our investment in growth-related projects closer to $5 million from $5.4 million in fiscal 2014.
"Going forward, we expect capital expenditures for our current resorts should be in our historic range for maintenance capital spending at 4 to 5 percent of revenue. Additional projects would largely be undertaken in conjunction with new development opportunities or future acquisitions."
"The November IPO proceeds were used, as planned, to reduce outstanding debt on a pro forma basis as of April 30, 2014, to approximately $100 million, which is 3.9 times the $25.4 million in EBITDA we reported for fiscal 2014 (12 months ended April 30, 2014). Interest expense in the first half of the current fiscal year was $8.3 million.
"Based on the timing of the debt repayment, the lower level of debt and restructured borrowing terms, we anticipate interest expense in the second half of fiscal 2015 will be in the range of $5.5 million to $6.5 million." ■