VR scores a record quarter | SummitDaily.com

VR scores a record quarter

CLIFF THOMPSONeagle county correspondent
Summit Daily/Reid Williams From left, brothers Bart, Matthew, Brian, Chris and Kevin Carlisle, all Florida residents, were enjoying a rare spring break trip with the wives and kids Wednesday and decided to go wild, skiing in their best Elvis costumes. The Carlisles posed for numerous pictures throughout the day as other skiers noticed not one, not two, but five skiing Kings. "We've met so many great people today," Chris Carlisle said. "And we'll be going out like this tonight."

AVON – Vail Resorts, owner of Breckenridge and Keystone resorts, is reporting a record third quarter and strong rebound from last year’s $14.5 million loss, despite a dry and hot March that drove down skier numbers.Buoyed by $25 million in cost reductions last year; increases in ticket prices and other prices – and the return of free-spending destination guests – the resort company is reporting pre-tax earnings of $62.5 million for its third quarter (ended March 31) of its 2003-04 fiscal year. That’s nearly double last year’s $33.5 million and amounts to $1.77 a share.In spite of that, the company will not show a profit this year because of one-time refinancing costs and other charges.The company also owns and operates Vail, Beaver Creek and Heavenly at Lake Tahoe, as well as 10 RockResorts hotels and numerous slopeside hotels.”That’s the best quarter this company has had in 42 years,” said Adam Aron, chief executive officer and chairman. “That’s an enormous recovery and improvement.”The improvement follows recession and war that cut deeply into the travel and leisure market beginning in spring 2003. The recovery is made more impressive, Aron said, by the fact it occurred in a quarter when the month traditionally responsible for the bulk of the revenue for the month, March, actually saw skier numbers decline 2 percent at the company’s Colorado resorts.

“Nature did not do us any favors, especially in March,” he said. “It was the warmest and driest since any of us have been alive.”One thing that did favor the company is a weak dollar that makes vacationing in this country a bargain for foreign travelers. Destination guests’ on-mountain expenditures were up 12 percent, Aron said.Skier numbers at the company’s five resorts were actually down 1.6 percent for the season across the company’s five resorts, but increases in ticket prices averaging 10.2 percent and increases in spending by destination guests offset that. The ticket prices this year averaged $37.74, up from $34.24 last year. Let ’em use passes

The decrease in Colorado skiers was largely attributed to the snow-sensitive day skiers, who abandoned skiing in March when the temperatures hit the 70s. It’s a group on which the company concentrated to sell discount ski passes. Last season it sold 125,000 of the passes to Coloradans. It also sold a record number of passes at Heavenly.”It’s another affirmation to get Coloradans to purchase ski passes and take day-to-day changes in weather out of the equation,” Aron said. “With our unique array of assets, Vail Resorts is not as snowfall dependent as some observers may think.”The largest of the company’s three divisions, its mountain division, which consists of ski-related revenue, generated $234.2 million or an 11.1 percent increase over the third quarter of 2003.In the lodging division, an improving economy boosted occupancy and room rates, increasing revenue 7.5 percent to $49.5 million. A large portion of that Aron attributed to the first full season of operation of the Vail Marriott. It was back on line after a two-year remodel.The company’s real estate division, as projected, saw revenue fall $7.7 million to $4.2 million, due to the timing and mix of real estate projects. But this division actually showed a profit because of a $15.1 million advance paid by the company for bonds to build the water, sewer and roads in Bachelor Gulch that this year were paid off by the homeowners of Bachelor Gulch. Aron is predicting that the company’s real estate activities – including the $1 billion Vail redevelopment which began this spring, and a golf course community in Jackson, Wyo., will fuel a boom over the next five years.

He said the value of the real estate projects on the books has been underestimated by analysts by nearly $100 million, and said he thinks they will fuel a boom at Vail and elsewhere.”These projects could generate profitability far greater than anything we have ever experienced as a community.”Total revenue for the quarter increased $19.1 million, or 7.1 percent to $287.9 million, while expenses decreased $8.7 million or $4.7 percent to $178.8 million. As a result of the third quarter’s results, Aron said the company increased its pre-tax profit estimate by $5 million for its July 31 year end. It now is projected the company’s earnings will be $140 million, up from $104 million. Aron said since 9-11 the company has pried $45 million in “embedded operational expenses” from the company. That included paring more than 150 people from its payroll. Vail Resorts is the largest employer in Summit and Eagle counties and has nearly 14,000 employees companywide. Cliff Thompson can be reached via e-mail at: cthompson@vaildaily.com or by calling (970) 949-0555 ext. 450.

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