EX-99 2 form8k3703exh99-1.txt PRESS RELEASE American Skiing Company Announces Fiscal 2003 First Quarter and 2002 Year End Results PARK CITY, UTAH - March 7, 2003 -- American Skiing Company (OTC: AESKE) today announced that the previously announced re-audit of the Company's fiscal 2001 and 2000 financial statements has been completed and that its Annual Report on Form 10-K for the fiscal year ended July 28, 2002 and its Quarterly Report on Form 10-Q for the quarter ended October 27, 2002, have been filed with the Securities and Exchange Commission. This press release provides summary financial information. For more detailed information, please refer to the Company's Annual Report on Form 10-K and its Quarterly Report on Form 10-Q. "As we entered the 2002/2003 ski season, our resort operations were in a stronger position than at any other time in recent history," said CEO B.J. Fair. "During the last year, we improved our cost structure and significantly reduced resort debt through the sales of Heavenly and Sugarbush resorts. In addition, the recent refinancing of our resort credit facility provides even greater operating flexibility as we move through the current ski season and beyond." Early Season Results "Favorable weather conditions in the east and significant snowfall in Colorado set the stage for a much better start to the ski season," said Fair. "Almost all of our resorts generated increases in early season visitation over last year when we were hampered by poor weather in the east, the impact of the Olympics on the Utah market and reduced destination travel resulting from the 9/11 event. Through the end of our second fiscal quarter, our eastern resorts generated a 14% increase in year-to-date skier visits with The Canyons showing growth of more than 20% and Steamboat posting a modest 4% increase." Thanksgiving Thanksgiving results at eastern resorts improved sharply as a result of favorable weather conditions which allowed the Company's snowmaking operations to open substantially more terrain than in the prior year. All of the Company's eastern resorts were open by November 29th with much better skiing and riding conditions than in the 2001/2002 ski season. Killington resort set an all time record for skier visits during Thanksgiving weekend and other eastern resorts recorded sharply higher visitation compared to the prior year. In the west, The Canyons has capitalized on the worldwide attention generated by the 2002 Winter Olympic Games and NBC's Today Show, which made its home at the resort during the games. As a result, The Canyons reported a significant increase in visitation and, despite less than favorable snow conditions, performed close to plan. Holiday Season Early season momentum continued through the two week Christmas and New Year's Holiday period with the Company posting an 8% increase in skier visits. In the east, skier visits for the two week holiday period were 8% higher than last year with Killington and Mount Snow reporting a 6% and a 39% increase, respectively. In the west, The Canyons enjoyed a 39% increase in visits during the holiday period, despite less than optimal snow conditions. Skier visits at Steamboat increased moderately over the same period in the 2001/2002 ski season. By the close of the holiday period, year-to-date skier visits for the Company were more than 22% higher than at the same time last season with eastern resorts showing a 29% improvement. Total skier visits for The Canyons and Steamboat were up 18% and 7% year-over-year, respectively. Season Pass Sales and Reservation Activity(1) As of January 26, 2003, the Company reported that as a result of more effective planning and marketing, season pass sales increased approximately 7% year-over-year with The Canyons posting a 58% increase. The Company's online multi-day ticket product, mEticket, continues to grow in popularity among the Company's loyal customer base of skiers and riders with sales more than 14% higher year-over-year. Resort Operations Recent Trends Although the Company's operating results from July 29, 2002 through January 26, 2003 were stronger than the comparable period of the prior year, the Company has experienced significant softening in skier visits, call volume and reservation activity in subsequent weeks which may be attributable to extreme cold temperatures in the east, the soft economy, as well as concerns about the potential for war in the Middle East and terrorist activity in the United States. This recent trend has partially offset early season improvements in operating results. Furthermore, consumers continue to book their reservations closer to the actual date of travel making it increasingly difficult for the Company to forecast future performance. (1) Season pass revenues are recognized ratably over the 2nd and 3rd quarters. Real Estate Update The Company reported that it is continuing negotiations with the lenders under its senior secured credit facility for its primary real estate development subsidiary, American Skiing Company Resort Properties ("ASCRP"), as part of the Company's ongoing effort to restructure ASCRP's real estate debt. As previously reported, ASCRP has been in payment default under its senior secured credit facility since May 2002. Management believes that it is close to finalizing an agreement with the lenders that entails the formation of a new company to hold ASCRP's real estate development assets. The equity in the new company is expected to be held by lenders under the senior secured credit facility, and ASCRP. The ASCRP senior secured credit facility, as previously reported, remains in default pending completion of these negotiations. There can be no assurance that negotiations will be successfully completed, or that the payment defaults pending under the facility can be satisfactorily resolved, if at all. For more detail, please refer to the Company's Form 10-K and Form 10-Q, each filed with the Securities and Exchange Commission on March 7, 2003. Real Estate Operations Recent Trends Over the past several months, the Company has seen a reduction in sales volume and sales leads at its Grand Summit properties at Steamboat and The Canyons. These reduced sales volumes are below the Company's anticipated levels for this period. The Company believes that this is primarily the result of continuing disruptions related to its real estate restructuring efforts, which have impacted real estate sales interest at both resorts, as well as weakening economic conditions and difficulty of some potential buyers in obtaining end loan financing for fractional real estate purchases. Management is monitoring developing economic conditions and implementing new and re-energized sales and marketing programs to take advantage of visitation during the remaining ski season. Non-GAAP Financial Measurements Resort and Real Estate earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") are not measurements calculated in accordance with Generally Accepted Accounting Principles ("GAAP") and should not be considered as alternatives to operating or net income as an indicator of operating performance, cash flows as a measure of liquidity or any other GAAP determined measurement. Management believes certain items excluded from Resort and/or Real Estate EBITDA, such as the write-off of deferred financing costs, non-cash charges for stock compensation awards, and merger, restructuring and asset impairment charges are significant components in understanding and assessing the Company's financial performance. In addition, the Company has excluded other items from EBITDA in order to facilitate comparisons with previously announced operating results. These items include hotel pre-opening costs associated with the Steamboat Grand Hotel, EBITDA losses and earnings from Sugarbush Resort, the loss on the sale of development rights for the Heavenly Grand Summit quartershare hotel and the loss on the settlement of a contract dispute with the general contractor at The Canyons. Other companies may define EBITDA differently, and as a result, such measures may not be comparable to the Company's reported EBITDA. Management has included information concerning Resort and Real Estate EBITDA because it believes that EBITDA is an indicative measure of the Company's operating performance and is generally used by other leisure and hospitality operators and investors to evaluate companies in the resort industry. About American Skiing Company Headquartered in Park City, Utah, American Skiing Company is one of the largest operators of alpine ski, snowboard and golf resorts in the United States. Its resorts include Killington and Mount Snow in Vermont; Sunday River and Sugarloaf/USA in Maine; Attitash Bear Peak in New Hampshire; Steamboat in Colorado; and The Canyons in Utah. More information is available on the Company's Web site, www.peaks.com. This press release contains both historical and forward-looking statements. All statements other than statements of historical facts are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements are not based on historical facts, but rather reflect American Skiing Company's current expectations concerning future results and events. Similarly, statements that describe the Company's objectives, plans or goals are or may be forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties. American Skiing Company has tried wherever possible to identify such statements by using words such as "anticipate," "assume," "believe," "expect," "intend," "plan," and words and terms similar in substance in connection with any discussion of operating or financial performance. In addition to factors discussed above, other factors that could cause actual results, performances or achievements to differ materially from those projected include, but are not limited to, the following: the Company's substantial leverage; restrictions on the Company's ability to access sources of capital; changes in regional and national business and economic conditions affecting both American Skiing Company's resort operating and real estate segments; competition and pricing pressures; negative impact on the demand for the Company's products resulting from terrorism and the availability of air travel (including the effects of airline bankruptcies); the Company's inability to complete its restructuring plan; the payment default under the Company's real estate credit facilities and its effect on the results and operations of the Company's real estate segment; the Company's failure to improve its operations to meet financial covenants; the loss of the Company's executive officers or key operating personnel; the possibility of war and its effect on the ski, resort, leisure and travel industries; adverse weather conditions regionally and nationally; seasonal business activity; changes to federal, state and local regulations affecting both the Company's resort operating and real estate segments; failure to renew land leases and forest service permits; disruptions in water supply that would impact snowmaking operations; and other risk factors listed from time-to-time in American Skiing Company's documents filed with the Securities and Exchange Commission. This list is not exhaustive. The Company operates in a changing business environment and new risks arise from time to time. The forward looking statements included in this press release are made only as of the date of this press release and under section 27A of the Securities Act and section 21E of the Exchange Act, American Skiing Company does not have or undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or circumstances. American Skiing Company and Subsidiaries Consolidated Unaudited Financial Statements (in thousands of dollars except per share amounts)
Three Months Ended (1) Net revenues: October 27, 2002 October 28, 2001 ---------------- ---------------- Resort $ 16,911 $ 17,322 Real estate 3,714 2,791 ------------------------------------- Total net revenues 20,625 20,113 ------------------------------------- Operating expenses: Resort 22,500 23,411 Real estate 3,576 4,109 Marketing, general and administrative 10,033 9,805 Restructuring charges (2) - 1,626 Depreciation and amortization 3,571 3,929 ------------------------------------- Total operating expenses 39,680 42,880 ------------------------------------- Loss from operations (19,055) (22,767) Interest expense, net 11,119 13,711 ------------------------------------- Loss from continuing operations (30,174) (36,478) Discontinued operations (3) Loss from operations of Heavenly resort - (2,727) ------------------------------------- Loss before accounting changes (30,174) (39,205) Cumulative effect of change in accounting principle - 18,658 ------------------------------------- Net loss before preferred stock dividends (30,174) (57,863) Accretion of discount and dividends accrued on mandatorily redeemable preferred stock 8,931 7,686 ------------------------------------- Net loss available to common shareholders $ (39,105) $ (65,549) ===================================== Basic and diluted loss per common share: Loss from continuing operations $ (1.23) $ (1.40) Loss from discontinued operations - (0.09) Cumulative effect of change in accounting principle - (0.60) -------------------------------------- Net loss available to common shareholders $ (1.23) $ (2.09) ====================================== Weighted average common shares outstanding 31,724 31,344 ====================================== (1) The sale of Sugarbush was completed on September 28, 2001, results of operations are included through that date. (2) For a more detailed discussion of restructuring charges and the events that gave rise to them, please refer to the Company's Form 10-K and Form 10-Q, each dated March 7, 2003, on file with the Securities and Exchange Commission. (3) Heavenly resort was sold on May 9, 2002.
American Skiing Company and Subsidiaries Consolidated Unaudited Financial Statements (in thousands of dollars except per share amounts)
Three Months Ended (1)(2) October 27, 2002 October 28, 2001 Reconciliation to Consolidated EBITDA -------------------------------------- Loss from continuing operations $ (30,174) $ (36,478) Interest Expense, net 11,119 13,711 Depreciation and amortization 3,571 3,929 Restructuring charges - 1,626 -------------------------------------- Consolidated EBITDA (15,484) (17,212) -------------------------------------- Sugarbush EBITDA Loss - 902 -------------------------------------- Total EBITDA excluding other items $ (15,484) $ (16,310) ====================================== Reconciliation to Resort EBITDA Loss from continuing resort operations $ (24,858) $ (30,059) Interest expense, net 6,264 9,272 Depreciation and amortization 2,972 3,267 Restructuring charges - 1,626 -------------------------------------- Resort EBITDA (15,622) (15,894) -------------------------------------- Sugarbush EBITDA Loss - 902 -------------------------------------- Resort EBITDA excluding other items $ (15,622) $ (14,992) ====================================== Reconciliation to Real Estate EBITDA Loss from continuing resort operations (5,316) (6,419) Interest expense, net 4,855 4,439 Depreciation and amortization 599 662 -------------------------------------- Real Estate EBITDA $ 138 $ (1,318) ====================================== (1) The sale of Sugarbush was completed on September 28, 2001, results of operations are included through that date. (2) Excludes operating results from Heavenly which was sold on May 9, 2002.
American Skiing Company and Subsidiaries Unaudited Balance Sheet Data - October 27, 2002 (in thousands of dollars) Real estate developed for sale $ 48,603 Total assets 523,634 Total resort debt 226,503 Total real estate debt 103,237 ---------------------- Total debt 329,740 Less: cash and cash equivalents 7,371 ---------------------- Net debt 322,369 American Skiing Company and Subsidiaries Unaudited Supplemental Data (in thousands of dollars) Thirteen Weeks Ended ------------------------------------------- October 27, 2002 October 28, 2001 % Change Resort revenues (1)(2) Lift Tickets $ 120 $ 38 216% Food and beverage 3,696 3,610 2% Retail sales 886 1,027 -14% Skier Development 82 93 -12% Golf, summer activities 3,613 3,777 -4% Lodging and Property 5,907 5,666 4% Miscellaneous Revenue 2,607 3,111 -16% ----------------------------------------------------- Total resort revenues $ 16,911 $ 17,322 -2% ===================================================== American Skiing Company and Subsidiaries Unaudited Supplemental Data (excluding Sugarbush) (in thousands of dollars) Thirteen Weeks Ended ------------------------------------------- October 27, 2002 October 28, 2001 % Change Resort revenues (1)(2) Lift Tickets $ 120 $ 38 216% Food and beverage 3,696 3,502 6% Retail sales 886 1,025 -14% Skier Development 82 93 -12% Golf, summer activities 3,613 3,482 4% Lodging and Property 5,907 5,387 10% Miscellaneous Revenue 2,607 3,098 -16% ------------------------------------------------------ Total resort revenues $ 16,911 $ 16,625 2% ====================================================== (1) The sale of Sugarbush was completed on September 28, 2001, results of operations are are included through that date. (2) Excludes operating results from Heavenly which was sold on May 9, 2002.
American Skiing Company and Subsidiaries Consolidated Financial Statements (in thousands of dollars except per share amounts)
Unaudited Unaudited Three Months Ended (1) Twelve Months Ended (1) July 28, 2002 July 29, 2001 July 28, 2002 July 29, 2001 Net revenues: ------------- ------------- ------------- ------------- Resort $ 14,485 $ 15,525 $ 243,842 $ 275,686 Real estate 5,811 23,519 28,274 96,864 ---------------------------------------------------------- Total net revenues 20,296 39,044 272,116 372,550 ---------------------------------------------------------- Operating expenses: Resort 20,228 18,349 166,968 187,715 Real estate 5,689 27,111 30,091 93,422 Marketing, general and administrative 8,220 11,604 46,699 49,011 Merger, restructuring and asset impairment charges (2) 83,729 70,290 111,608 76,015 Depreciation and amortization 4,642 4,116 30,846 38,041 Write-off of deferred financing costs (3) 3,338 3,338 ---------------------------------------------------------- Total operating expenses 125,846 131,470 389,550 444,204 ---------------------------------------------------------- Loss from operations (105,550) (92,426) (117,434) (71,654) Interest expense, net 12,226 12,992 50,144 53,372 ---------------------------------------------------------- Loss from continuing operations (117,776) (105,418) (167,578) (125,026) Discontinued operations (4) Income (Loss) from operations of Heavenly resort 2,668 (2,732) 12,317 4,302 ---------------------------------------------------------- Loss before cumulative effects of changes in (115,108) (108,150) (155,261) (120,724) accounting principles Cumulative effects of changes in accounting principles, net of taxes of $0 and $(1,538), respectively - - (18,658) 2,509 ---------------------------------------------------------- Loss before preferred stock dividends (115,108) (108,150) (173,919) (118,215) Accretion of discount and dividends accrued on mandatorily redeemable preferred stock 8,534 6,077 32,791 23,357 ---------------------------------------------------------- Net loss available to common shareholders $ (123,642) $ (114,227) $ ( 206,710) $ (141,572) ========================================================== Basic and diluted loss per common share: Loss from continuing operations before cumulative effects of changes in accounting principles $ (3.98) $ (3.64) $ (6.34) $ (4.86) Income (loss) from discontinued operations 0.08 (0.09) 0.39 0.14 Cumulative effects of changes in accounting principles, net of taxes - - (0.59) 0.08 ---------------------------------------------------------- Net loss available to common shareholders $ (3.90) $ (3.73) $ (6.54) $ (4.64) ========================================================== Weighted average shares outstanding 31,719 30,653 31,628 30,525 ========================================================== (1) The sale of Sugarbush was completed on September 28, 2001, results of operations are included through that date. (2) For a more information, including a detailed discussion of significant write-offs and charges, please refer to the Company's Form 10-K and Form 10-Q, each dated March 7, 2003, on file with the Securities and Exchange Commission. (3) Write-off of deferred financing costs associated with the sale of Heavenly. (4) Heavenly resort was sold on May 9, 2002.
American Skiing Company and Subsidiaries Unaudited Consolidated Financial Statements (in thousands of dollars) Three Months Ended (1)(2) Twelve Months Ended (1)(2) Reconciliation to Consolidated EBITDA July 28, 2002 July 29, 2001 July 28, 2002 July 29, 2001 ------------- ------------- ------------- ------------- Loss from continuing operations $ (117,776) $ (105,418) $ (167,578) $ (125,026) Interest expense, net 12,226 12,992 50,144 53,372 Depreciation and amortization 4,642 4,116 30,846 38,041 Write-off of deferred financing costs (3) 3,338 - 3,338 - Merger, restructuring and asset impairment charges (4) 83,729 70,290 111,608 76,015 ----------------------------------------------------------------------- Consolidated EBITDA (13,841) (18,020) 28,358 42,402 ----------------------------------------------------------------------- Steamboat hotel pre-opening costs (5) - - - 800 Sugarbush Resort EBITDA Loss (Earnings) 13 1,092 935 (1,635) Loss on development rights for Heavenly Grand Summit (6) - 234 - 1,034 Settlement of contract dispute at The Canyons (7) - 1,300 - 1,300 ----------------------------------------------------------------------- Consolidated EBITDA excluding other items $ (13,828) $ (15,394) $ 29,293 $ 43,901 ======================================================================= Reconciliation to Resort EBITDA Loss from continuing resort operations $ (48,844) $ (89,824) $ (82,494) $ (93,925) Interest expense, net 6,680 6,384 32,479 26,363 Depreciation and amortization 4,590 3,422 28,940 35,205 Write-off of deferred financing costs (3) 3,338 - 3,338 - Merger, restructuring and asset impairment charges (4) 20,273 65,591 47,912 71,316 ------------------------------------------------------------------------ Resort EBITDA (13,963) (14,427) 30,175 38,959 ------------------------------------------------------------------------ Steamboat hotel pre-opening costs (5) - - - 800 Sugarbush Resort EBITDA Loss (Earnings) 13 1,092 935 (1,635) ------------------------------------------------------------------------ Resort EBITDA excluding other items $ (13,950) $ (13,335) $ 31,110 $ 38,124 ======================================================================== Reconciliation to Real Estate EBITDA Loss from continuing real estate operations $ (68,932) $ (15,594) $ (85,084) $ (31,101) Interest expense, net 5,546 6,608 17,665 27,009 Depreciation and amortization 52 694 1,906 2,836 Merger, restructuring and asset impairment charges (4) 63,456 4,699 63,696 4,699 ------------------------------------------------------------------------- Real Estate EBITDA 122 (3,593) (1,817) 3,443 ------------------------------------------------------------------------- Loss on development rights for Heavenly Grand Summit (6) - 234 - 1,034 Settlement of contract dispute at The Canyons (7) - 1,300 - 1,300 ------------------------------------------------------------------------- Real Estate EBITDA excluding other items $ 122 $ (2,059) $ (1,817) $ 5,777 ========================================================================= (1) The sale of Sugarbush was completed on September 28, 2001, results of operations are included through that date. (2) Excludes operating results from Heavenly which was sold on May 9, 2002. (3) Write-off of deferred financing costs associated with the sale of Heavenly. (4) For a more information, including a detailed discussion of significant write-offs and charges, please refer to the Company's Form 10-K and Form 10-Q, each dated March 7, 2003, on file with the Securities and Exchange Commission. (5) Steamboat Grand pre-opening expenses are included in resort operating expenses. (6) The loss on the sale of development rights for the Heavenly Grand Summit quartershare hotel is included in real estate operating expenses (7) The loss on the settlement of a contract dispute with the general contractor at The Canyons is included in real estate operating expenses.
American Skiing Company and Subsidiaries Unaudited Balance Sheet Data - July 28, 2002 (in thousands of dollars) Real estate developed for sale $ 50,878 Total assets 521,993 Total resort debt 218,700 Total real estate debt 102,341 --------------------- Total debt 321,041 Less: cash and cash equivalents 6,924 --------------------- Net debt 314,117 American Skiing Company and Subsidiaries Unaudited Supplemental Revenue Data (in thousands of dollars) Fiscal Year Ended ---------------------------------------------- July 28, 2002 July 29, 2001 % Change Resort revenues (1)(2) Lift Tickets $ 104,430 $ 119,278 -12% Food and beverage 35,579 39,643 -10% Retail sales 25,087 29,801 -16% Skier Development 20,075 22,384 -10% Golf, summer activities 6,990 7,223 -3% Lodging and Property 37,556 40,843 -8% Miscellaneous Revenue 14,125 16,514 -14% ------------------------------------------------ Total resort revenues $ 243,843 $ 275,686 -12% ================================================ American Skiing Company and Subsidiaries Unaudited Supplemental Revenue Data (excluding Sugarbush) (in thousands of dollars) Fiscal Year Ended -------------------------------------------- July 28, 2002 July 29, 2001 % Change Resort revenues (2) Lift Tickets $ 104,430 $ 110,854 -6% Food and beverage 35,471 37,491 -5% Retail sales 25,085 27,986 -10% Skier Development 20,075 21,189 -5% Golf, summer activities 6,696 6,617 1% Lodging and Property 37,262 38,305 -3% Miscellaneous Revenue 14,110 16,153 -13% --------------------------------------------- Total resort revenues $ 243,129 $ 258,595 -6% ============================================= Fiscal Year Ended ------------------------------------------ Unaudited Skier Visits (2) July 28, 2002 July 29, 2001 ------------------------------------------ Attitash 190,123 220,203 The Canyons 287,843 303,315 Killington 952,997 1,084,718 Mount Snow 471,628 558,194 Sugarbush - 358,728 Sugarloaf 331,279 355,154 Sunday River 521,080 546,885 Steamboat 1,001,003 1,003,317 ------------------------------------------ Total Skier Visits 3,755,953 4,430,514 ------------------------------------------ Total excluding Sugarbush 3,755,953 4,071,786 ========================================== (1) The sale of Sugarbush was completed on September 28, 2001, results of operations are included through that date. (2) Excludes operating results from Heavenly which was sold on May 9, 2002.