Where S K I Is Getting Its Lift

Skiing has been ice-cold, with operators grousing about the unimpressive turnout last year. They aren't anticipating massive crowds this season, either. But Preston Leete Smith, CEO of S-K-I Ltd., the largest publicly traded operator in the U.S., is far from worried. For one thing, S-K-I's stock is headed uphill--from 9 a share in late May to 14. And some investors believe it will hit the 20s in a year.

Part of the optimism is due to the ascent in sales and earnings. But there's more: Smith has been acquiring properties, which should push revenues to $130 million soon. S-K-I posted sales of $98.9 million for the year ended July 31, 1994.

The company, which owns and operates Vermont's Killington and Mt. Snow and California's Bear Mountain, has agreed to acquire a controlling interest in Sugarloaf Mountain, whose property in western Maine generated revenues of $17 million in 1993. S-K-I also has bought Haystack Ski Area in Vermont, which has sales of $7 million. "S-K-I has the capital, technology, and management to buy up more resorts," says Peter Schliemann of David L. Babson in Boston, which owns 7.4% of the stock.

A big rival operator is Ralcorp, which was spun off from Ralston Purina on Mar. 31. It owns the Breckenridge and Keystone resorts in Colorado. But Ralcorp's chief businesses are cereals, baby food, private-label crackers, and coupon-redemption. Some industry analysts say Ralcorp may be thinking of bowing out of skiing and might sell its resorts to S-K-I. One of Smith's objectives is to expand its operations in the West. He has had talks with Ralcorp officials but won't elaborate. "If Smith is able to buy the Ralcorp resorts, revenues of S-K-I would jump to the $200 million level in no time," says one analyst.

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