American Skiing Co. Reports Greater Income, Smaller Loss in 2006
SAM Magazine-Park City, Utah, Oct. 30, 2006-American Skiing Company cited strong season pass sales, continued growth at The Canyons resort, and excellent performance at Steamboat resort as factors behind a record-setting revenue year. Significantly, ASC also made payment in full of the principal balances of all real estate-related debt as a result of the sale of remaining fractional share inventory at the Steamboat Grand Hotel and Condominiums.
Skier visits grew 17 percent at The Canyons and nearly 8 percent at Steamboat, putting the latter resort over one million skier visits. Other revenue centers remained strong in the face of weather-related difficulties in the East; lift tickets, food and beverage and lodging posted modest revenue increases. Skier development posted an increase in revenues of 8 percent.
"Consistent with our strategy, principal balances of our real estate debt have been paid off," said CEO B.J. Fair. "We are now squarely focused on new development opportunities and reinvestment into our resorts." The company reported capital improvements of more than $26 million in progress or scheduled at its resorts for the upcoming winter season.
On a GAAP basis, net loss for fiscal 2006 was $65.7 million, or compared with a net loss of $73.3 million for fiscal 2005. The 2006 loss includes $60 million of non-cash interest expense associated with the company's outstanding preferred stock and subordinated notes and $31.1 million of non-cash depreciation and amortization expense in fiscal 2006. Net cash provided by operating activities increased by $13.6 million, or 39 percent, to $48.2 million from $34.6 million.
Total consolidated revenue was $307.8 million for 2006, compared with $276.5 million for 2005. Revenue from resort operations was $274.4 million in 2006 versus $267.3 million in 2005. The increase in resort revenues reflects higher business volumes at the company's western resorts as well as an increase in season pass sales at the company's eastern resorts. Revenue from real estate operations was $33.4 million for 2006, up from $9.2million for fiscal 2005, thanks to the auction of fractional share inventory at the Steamboat Grand in March 2006.
Over the entire ASC resort network, total skier visits were down 7 percent compared to the 2004-05 ski season, from 3,987,000 to 3,714,000. Skier visits at the company's western resorts increased 10 percent during the 2005-06 ski season, from 1,375,000 to 1,518,000, due to better-than-normal snow conditions experienced at Steamboat for much of the season and continued growth at The Canyons.
During the 2005-06 ski season, skier visits at the company's eastern resorts decreased 16 percent from 2,612,000 to 2,196,000. Some of the drop reflects a change in the methodology of counting visits. Last season, ASC adopted electronic scanning to estimate skier visits at its eastern resorts. (The company has used electronic scanning at its western resorts since 1998.) Using the older method, the decline in total skier visits in the east would have been measured at 5 percent.
Across all ASC resorts, if fiscal 2006 skier visits were measured under the methodology employed in prior years, total reported skier visits would have been flat.