Vail Resorts reports third quarter profits
BROOMFIELD — Vail Resorts announced third quarter profits Thursday and very strong season pass sales for the spring season.
Chief executive officer Rob Katz told analysts Thursday afternoon that the company’s resort EBITDA (earnings before interest, taxes, depreciation and amortization) increased to $205.3 million, or 15.6 percent, for the quarter.
“We are very pleased with our performance in the third quarter of fiscal 2013,” Katz said on a conference call with media, investors and analysts. “We delivered record revenue and EBITDA, had a solid recovery in skier visits and achieved robust increases in spending per guest.”
Katz, while often optimistic on these earnings calls, sounded more upbeat than usual about the future. With last week’s announcement that Vail Resorts will be leasing and operating Canyons Resort in Utah, as well as two so-called “urban resort” acquisitions in Minnesota and Michigan, Katz sees dollar signs as he looks ahead.
“Going into 2014, I think we believe we can continue a lot of the momentum that we saw this year in terms of guest spend,” he told Will Marks, an analyst with JMP Securities. “If anything, the economy appears to be getting better, particularly at the higher end.”
Katz pointed toward strength in the real estate market, specifically in Colorado, as signs the economy could be heading toward further growth.
Spring season pass sales were up about 18 percent in units and 24 percent in sales dollars through May 28 compared to the same time last year. Katz said there’s no way to know how much of those sales came out of upcoming fall sales, but he thinks there’s proof the growth is significant.
“The 138,000 passes we sold this spring is more than double the number of passes we sold in the spring of 2008,” Katz said, noting that the significant growth rates aren’t expected to continue with fall pass sales.
He said growth rates from out-of-state sales matched in-state sales, and there was “huge growth” from the Detroit and Minneapolis markets, which is where the company’s new urban resorts are.
“Almost any analysis on results this spring show very strong growth,” Katz told analysts.
Skier visits were also up in the third quarter 9.1 percent over a year ago when excluding Kirkwood, Afton Alps and Mount Brighton, the company’s acquisitions since then. In Colorado, skier visits were up 11.8 percent.
The company’s net income increased to $97.6 million for the quarter, or $2.66 per share, up 22.7 percent over fiscal 2012 third quarter net income of $79.5 million, or $2.17 per share.
Despite profits, the company missed revenue expectations. The $2.66 per share was down from analyst estimates of $2.74.
The company’s stock closed at $62.16 after the announcement, down 81 cents, or 1.29 percent, from Wednesday’s close.
The company updated its fiscal 2013 earnings expectations, the guidance for resort EBITDA, to $236 million to $242 million. The company’s original fiscal 2013 guidance issued last fall was $260 million to $270 million, but in mid-January Vail Resorts announced a reduced range of $244 million to $254 million.
Net income estimates are now $31.5 million to $39 million, down from the previous estimated range of $39 million to $49 million.
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