ASC Announces Improved Results Amid Questions About Viabilit
SAM Magazine--Park City, Ut., Nov. 1, 2004--American Skiing Company improved its financial results for the 2004 fiscal year and fourth quarter ended July 25, 2004, compared to year-earlier periods. But the company also acknowledged that its independent accounting firm, KPMG, had not been able to determine "whether substantial doubt exists about the CompanyÃs ability to continue as a going concern."
ASC reported that the sale of remaining unit inventory at The Canyons Grand Summit Hotel, gains on extinguishment of debt, and gains on transfer of assets associated with extinguishment of debt, led to a net loss of $28.5 million in fiscal 2004, compared to a net loss of $82.0 million is fiscal 2003.
The company's consolidated net loss for fiscal 2004 was $28.5 million versus $44.4 million for fiscal 2003. Excluding accretion of discount and dividends on preferred stock, gain on extinguishment of debt, and gain on transfer of assets associated with extinguishment of debt, the consolidated net loss was $34.0 million for fiscal 2004 versus $44.4 million for fiscal 2003.
The loss from resort operations was $66.6 million for fiscal 2004 compared to a loss of $23.3 million for fiscal 2003. Excluding accretion of discount and dividends on preferred stock, the loss from resort operations was $23.5 million for fiscal 2004 versus $23.3 million for fiscal 2003.
Total consolidated revenue grew seven percent to $284.1 million in fiscal 2004, from $264.5 million in fiscal 2003, due to increase real estate sales. Real estate revenue was $33.4 million in fiscal 2004 versus $12.9 million in fiscal 2003. Resort revenue was $250.7 million in fiscal 2004, compared with $251.6 million in fiscal 2003.
KPMG said it is continuing to assess the facts and circumstances surrounding ASC's 10.5% Repriced Convertible Exchangeable Preferred Stock. ASC was required to redeem this stock on Nov. 12, 2002, but lacked the funds to do so. Since the holder of the Preferred Stock has made a demand for redemption and has not agreed to extend the redemption date, KPMG has said it needs additional time and information to complete its assessment. This extension presumably gives ASC time to line up new funding for the redemption; the company is in the process of refinancing its existing senior secured credit facility and its senior subordinated notes. This extension also delayed the filing of ASC's Form 10-K with the SEC, which should take place withing the next two to three weeks. \