Intrawest Releases Third Quarter Figures

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SAM Magazine--May 10, 2006, Vancouver, Canada--Thanks to the sale of real estate holdings at Mammoth Mountain, Intrawest saw its total company EBITDA for the third quarter jump to $136.5 million, up from $109.5 million for the same period last year. (EBITDA stands for earnings before interest, income taxes, non-controlling interest, depreciation and amortization and any non-recurring items.) The first phase of Intrawest's sale of real estate at Mammoth to Starwood Capital Group generated $43.2 million pre-tax profit--the second phase closed at the end of April.

Resort and travel operations revenue increased from $356.6 million in 2005 to $386.2 million in the third quarter in 2006. Broken out, revenue from Intrawest's mountain segment increased from $275.7 million last year to $289.9 million this year. But, in order to make money, you have to spend money. Resort and travel expenses increased from $273 million in 2005 to $302.9 million for this 2006 quarter. Expenses in the mountain segment increased by $16.4 million to $209.5 million. The resultant EBITDA numbers are as follows: resort and travel EBITDA increased slightly from $83 million in 2005 to $83.3 million in 2006. EBITDA in the mountain segment saw a 0.3 million increase to $82.9 million.

Overall skier visits went from 4,400,000 in the 2005 quarter to 4,572,000 in 2006. The company claims that because of spill-over effects from the terrible season last year in the Northwest and poor conditions in the East, skier visits for the third quarter are not where they should be. For example, Whistler Blackcomb saw a 15 percent increase in skier visits over last year, which was arguably one of the worst snow years on record, but the 2006 numbers are 3 percent lower than the 2004 visits, which represent a better comparison. Copper and Winter Park saw a combined nine percent increase over last year and Tremblant saw an eight percent drop thanks to a Christmas-time strike and bad weather. Stratton's numbers were down 11 percent for the quarter and Snowshoe's were down five percent. Impervious to the bad weather, Mountain Creek saw a five percent increase in visits and Blue Mountain saw a two percent jump.



I think I mis-read the PR, misperceiving that mountain R&T revenue was exceeded by expenses. Regardless, I reiterate that this company is lost right now, and could do a much better job of achieving REAL operating profits for investors (and themselves) with better management.

To be successful ski resorts, regardless of whether they are part of a large roll-up company or independent, must be run with a clear vision for the local/regional market they serve. I don't think IDR has executed this properly at most, if not all, of their US resorts.

With all the government "love" they get in Canada, it's kind of tough to screw those situations up!!


So it looks like IDR actually LOST money in the resort and travel segment of its business? that's pretty disquieting.

I think IDR needs to re-tool its management team. Way too much reactionary management style, not enough focus on managing expenses WISELY, and losing sight of the synergies that should exist from owning and operating mountain resorts (and others) in diverse geographic areas.