Peak Resorts Reports Results for First-Quarter FY2018

Peak Resorts Reports Results for First-Quarter FY2018

WILDWOOD, Mo., Sept. 06, 2017 (GLOBE NEWSWIRE) -- 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 the first quarter
of its 2018 fiscal year.

First-Quarter 2018 Highlights and Outlook:

  o Revenue of $7.5 million, an increase of 6% over the prior year period
  o Net loss was $8.6 million, or 64 cents per share (basic and diluted)
  o Reported EBITDA* was ($8.3) million
  o Cash and cash equivalents of $26.9 million
  o Commitment for renewed $15 million acquisition and new $10 million working
    capital lines of credit
  o West Lake Water project on track for 2017/2018 ski season opening

Timothy D. Boyd, president and chief executive officer, commented, “Fiscal
year 2018 is off to a solid start. We achieved 6% revenue growth in our
slowest season and continued to deliver on our promise to expand Mount Snow’s
skiable acres and develop other important organic growth opportunities.”

Boyd continued, “I’m pleased to report that our EB-5 funded West Lake Water
project at Mount Snow is running ahead of schedule and the new reservoir is
expected to be completely filled by early November. With adequate weather,
this project will enable us to open the resort with significantly more terrain
than in previous seasons. Our Carinthia Ski Lodge project at Mount Snow also
remains on track to be completed for the 2018/2019 ski season, and we are
awaiting permits for our two latest projects – the Hunter Mountain expansion
and the zip tour at Hidden Valley, which are expected to begin construction
this fall.”

“In conjunction with our succession planning efforts, we recently announced
the promotion of Chris Bub, chief accounting officer, to CFO, effective
October 3. Steve Mueller, our long time CFO, will remain with the company and
on the board, to assist with the transition and help with special projects and
growth initiatives,” Boyd said.

First Quarter Operating Results
Stephen J. Mueller, Peak Resorts’ chief financial officer, noted, “We achieved
organic revenue growth of 6% in the first quarter as a result of stronger food
and beverage sales at summer concerts and conferences held at our resorts.
Reported EBITDA* was down $1.4 million largely due to resort maintenance
projects returning to historical levels.  Comparability to fiscal year 2017 is
skewed by strict cost control procedures implemented in fiscal 2017 as we were
awaiting the release of our EB-5 escrow funds.”

*See page 3 for Definitions of Non-GAAP Financial Measures

                                                                              
(dollars in thousands except per share         Three months ended July 31,    
data)
                                                  2017            2016        
                                                                              
Revenues                                       $   7,520        $  7,126      
Loss from operations                           $   (11,449  )   $  (10,117 )  
Net loss                                       $   (8,595   )   $  (7,904  )  
Loss per share (basic and diluted)             $   (0.64    )   $  (0.56   )  
Weighted average shares outstanding                13,982          13,982     
Vested restricted stock units                      50              39         
Reported EBITDA*                               $   (8,304   )   $  (6,900  )  
                                                                              
(dollars in thousands)                          Three months ended July 31,   
                                                  2017            2016        
                                                                              
Revenues:                                                                     
Food and beverage                              $   2,830        $  2,487      
Hotel/lodging                                  $   1,841        $  1,808      
Retail                                         $   241          $  149        
Summer activities                              $   1,881        $  1,864      
Other                                          $   727          $  818        
Total                                          $   7,520        $  7,126      
                                                                              
(dollars in thousands)                          Three months ended July 31,   
                                                  2017            2016        
                                                                              
Resort operating expenses:                                                    
Labor and labor related expenses               $   8,611        $  7,707      
Retail and food and beverage cost of sales     $   752          $  761        
Power and utilities                            $   789          $  588        
Other                                          $   3,387        $  2,708      
Total                                          $   13,539       $  11,764     
                                                                              

Financial Position  
Mueller continued, “As recently announced, we received a commitment from Royal
Banks of Missouri, our primary banking partner, to renew our $15 million
acquisition line of credit and enter into a new $10 million working capital
line of credit that we intend to close this fall.  We intend to roll all
amounts currently outstanding under existing credit facilities with Royal
Banks into the renewed acquisition line.  These actions will bolster our
strong liquidity position going into the 2017/2018 ski season and improve
shareholder value.” 

Quarterly Investor Call and Webcast
Peak Resorts will hold its first quarter fiscal 2018 investor conference
call/webcast on Thursday, September 7, 2017 at 11 a.m. ET.

The call/webcast will be available via:

Webcast: ir.peakresorts.com on the Events page
Conference Call: 844-526-1518 (domestic) or 647-253-8644 (international)

A replay will be available on the Peak Resorts investor relations website
(ir.peakresorts.com) after the call concludes.

Definitions of Non-GAAP Financial Measures
Reported EBITDA is not a measure of financial performance under U.S. generally
accepted accounting principles (“GAAP”). The company defines Reported EBITDA
as net income before interest, income taxes, depreciation and amortization,
gain on sale/leaseback, other income or expense and other non-recurring items.
The following table includes a reconciliation of Reported EBITDA to the GAAP
related measure of net loss:

                                  Three months ended     
                                  July 31,               
                                  2017         2016      
                                                         
Net loss                        $ (8,595 )   $ (7,904 )  
Income tax benefit                (5,727 )     (5,176 )  
Interest expense, net             3,011        3,048     
Depreciation and amortization     3,145        3,217     
Other income                      (55    )     (2     )  
Gain on sale/leaseback            (83    )     (83    )  
                                $ (8,304 )   $ (6,900 )  
                                                         

We have specifically chosen to include Reported EBITDA (which we define as net
income before interest, income taxes, depreciation, amortization, gain on
sale/leaseback, other income and expense and other non-recurring items) as a
measurement of our results of operations because we consider this measurement
to be a significant indication of our financial performance and available
capital resources. Because of large depreciation and other charges relating to
our ski resorts operations, it is difficult for management to fully and
accurately evaluate our financial performance and available capital resources
using net income alone. In addition, the use of this non-U.S. GAAP measure
provides an indication of our ability to service debt, and we consider it an
appropriate measure to use because of our highly leveraged position. 
Management believes that by providing investors with Reported EBITDA, they
will have a clearer understanding of our financial performance and cash flows
because Reported EBITDA: (i) is widely used in the ski industry to measure a
company’s operating performance without regard to items excluded from the
calculation of such measure; (ii) helps investors to more meaningfully
evaluate and compare the results of our operations from period to period by
removing the effect of our capital structure and asset base from our operating
results; and (iii) is used by our board of directors, management and our
lenders for various purposes, including as a measure of our operating
performance and as a basis for planning.

Reported EBITDA is not a measure of performance defined by GAAP. The items we
exclude from net income to arrive at Reported EBITDA are significant
components for understanding and assessing our financial performance and
liquidity. Reported EBITDA should not be considered in isolation or as
alternative to, or substitute for, net income, net change in cash and cash
equivalents or other financial statement data presented in the company’s
condensed consolidated financial statements as indicators of financial
performance or liquidity. Because Reported EBITDA is not a measurement
determined in accordance with U.S. GAAP and is susceptible to varying
calculations, Reported EBITDA as presented may not be comparable to other
similarly titled measures of other companies, limiting its usefulness as a
comparative measure.

About Peak Resorts
Headquartered in Missouri, Peak Resorts, Inc. is a leading owner and operator
of high-quality, individually branded ski resorts in the U.S. The company
operates 14 ski resorts primarily located in the Northeast and Midwest, 13 of
which are company owned.

The majority of the resorts are located within 100 miles of major metropolitan
markets, including New York, Boston, Philadelphia, Cleveland and St. Louis,
enabling day and overnight drive accessibility. The resorts under the
company’s umbrella offer a breadth of activities, services and amenities,
including skiing, snowboarding, terrain parks, tubing, dining, lodging,
equipment rentals and sales, ski and snowboard instruction and mountain biking
and other summer activities. To learn more, visit the company’s website at
ir.PeakResorts.com, or follow Peak Resorts on Facebook
(https://www.facebook.com/skipeakresorts) for resort updates.

Forward Looking Statements
This news release contains forward-looking statements including statements
regarding the future outlook and performance of Peak Resorts, Inc., and other
statements based on current management expectations, estimates and
projections. These statements are subject to a variety of risks and
uncertainties, are not guarantees and are inherently subject to various risks
and uncertainties that could cause actual results to differ materially from
the forward-looking statements. These risks and uncertainties include, without
limitation, those discussed under the caption “Risk Factors” in the company’s
Annual Report on Form 10-K for the year ended April 30, 2017, filed with the
Securities and Exchange Commission, and as updated from time to time in the
company’s filings with the SEC.  The forward-looking statements included in
this news release are only made as of the date of this release, and Peak
Resorts disclaims any obligation to publicly update any forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.

 
Consolidated Statements of Operations 
(in thousands, except share and per share amounts)
(Unaudited)
 
                                                       Three months ended
                                                       July 31,
                                                       2017          2016     
                                                                      
                                                                      
Net revenue                                          $ 7,520       $ 7,126    
                                                                      
Operating expenses:                                                   
Resort operating costs                                 13,539        11,764   
Depreciation and amortization                          3,145         3,217    
General and administrative                             1,248         1,372    
Real estate and other non-income taxes                 684           563      
Land and building rent                                 353           327      
Loss from Operations                                   (11,449 )     (10,117 )
                                                                      
Other (expense) income:                                               
Interest, net of amounts capitalized of $431 and                      
$384 in 2017
and 2016, respectively                                 (3,011  )     (3,048  )
Gain on sale/leaseback                                 83            83       
Other income                                           55            2        
                                                       (2,873  )     (2,963  )
                                                                      
Loss before income taxes                               (14,322 )     (13,080 )
Income tax benefit                                     (5,727  )     (5,176  )
Net loss                                             $ (8,595  )   $ (7,904  )
                                                                      
Less accretion of Series A preferred stock             (400    )     -        
dividends
Net loss attributable to common shareholders         $ (8,995  )   $ (7,904  )
                                                                      
                                                                      
Basic and diluted loss per common share              $ (0.64   )   $ (0.56   )
                                                                      
Cash dividends declared per common share             $ 0.07        $ -        
                                                                              

Consolidated Balance Sheets                                                   
(dollars in thousands, except share and per share amounts)                    
                                                                              
                                                 July 31,        April 30,    
                                                 2017            2017         
Assets                                           (Unaudited)                  
                                                                              
Current assets:                                                               
Cash and cash equivalents                      $ 26,869        $ 33,665       
Restricted cash balances                         7,079           11,113       
Income tax receivable                            5,727           -            
Accounts receivable                              1,625           5,083        
Inventory                                        2,395           2,215        
Deferred income taxes                            591             591          
Prepaid expenses and deposits                    2,541           2,183        
Total current assets                             46,827          54,850       
                                                                              
Property and equipment, net                      193,644         188,143      
Land held for development                        37,592          37,583       
Restricted cash, construction                    26,156          33,700       
Goodwill                                         4,825           4,825        
Intangible assets, net                           774             788          
Other assets                                     661             648          
Total assets                                   $ 310,479       $ 320,537      
                                                                              
Liabilities and Stockholders' Equity                                          
                                                                              
Current liabilities:                                                          
Acquisition line of credit                     $ 2,750         $ 4,500        
Accounts payable and accrued expenses            13,842          12,371       
Accrued salaries, wages and related taxes        1,092           1,035        
and benefits
Unearned revenue                                 14,762          14,092       
EB-5 investor funds in escrow                    -               500          
Current portion of deferred gain on              333             333          
sale/leaseback
Current portion of long-term debt and            3,622           3,592        
capitalized lease obligation
Total current liabilities                        36,401          36,423       
                                                                              
Long-term debt                                   174,716         174,785      
Capitalized lease obligations                    2,343           2,708        
Deferred gain on sale/leaseback                  2,762           2,845        
Deferred income taxes                            12,474          12,474       
Other liabilities                                531             540          
Total liabilities                                229,227         229,775      
                                                                              
Series A preferred stock, $.01 par value per                                  
share, $1,000 liquidation
preference per share, 40,000 shares                                           
authorized, 20,000 shares
issued and outstanding                           17,401          17,001       
                                                                              
Commitments and contingencies                                                 
                                                                              
Stockholders' equity:                                                         
Common stock, $.01 par value per share,                                       
20,000,000 shares
authorized, 13,982,400 shares issued and         140             140          
outstanding
Additional paid-in capital                       86,435          86,372       
Accumulated deficit                              (22,724   )     (12,751   )  
Total stockholders' equity                       63,851          73,761       
Total liabilities and stockholders' equity     $ 310,479       $ 320,537      
                                                                              

 

For Further Information:
Jennifer Childe, 312-690-6003
InvestorRelations@PeakResorts.com

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