Press Release: Booth Creek Ski Holdings, Inc.
September 16, 2002
VAIL, CO -- Booth Creek Ski Holdings, Inc. ("Booth Creek" or the "Company") announced Friday
results for the third fiscal quarter ended Aug. 2, 2002.
Third Quarter Ended Aug. 2, 2002
Continuing Operations
Booth Creek's fiscal third quarter is an off-peak period during which the Company begins its summer maintenance
and capital programs. Booth Creek also offers summer activities at some of its resorts, including golf, mountain
biking, lodging, conference facilities, food and beverage operations and certain other recreational amenities.
Resort operations revenues for the quarter ended Aug. 2, 2002, were $3,482,000, compared with $3,248,000 in the
2001 period, reflecting increased golf rounds at Northstar and improved summer operations at Loon Mountain.
Cost of sales and selling, general and administrative expense applicable to the resort segment totaled $10,213,000
for the quarter ended Aug. 2, 2002, an increase of $435,000, or 4 percent, from the 2001 period. The increase was
principally due to normal inflationary factors.
Resort operations incurred an EBITDA loss (as defined below) from continuing operations of $6,731,000 for the quarter
ended Aug. 2, 2002, as compared to an EBITDA loss of $6,530,000 for the 2001 period. Operating loss for the resort
segment for the 2002 period was $10,579,000 compared to an operating loss of $11,704,000 for the 2001 period. The
improvement in operating loss was primarily due to reduced depreciation and amortization expense in 2002.
Real estate revenues for the quarter ended Aug. 2, 2002, were $2,400,000, due to the close of escrow on five lots
within the Unit 7 development at Northstar-at-Tahoe. One lot remains available for sale. There were no sales of
real estate during the 2001 period. Timber operations contributed revenues of $160,000 and $190,000 for the 2002
and 2001 periods, respectively.
Cost of sales and selling, general and administrative expense for the real estate and other segment totaled $748,000
(including noncash cost of real estate sales of $363,000) for the quarter ended Aug. 2, 2002, as compared to $409,000
for the 2001 period.
Real estate and other operations generated EBITDA (excluding the noncash cost of real estate sales) of $2,175,000
for the quarter ended Aug. 2, 2002, as compared to an EBITDA loss of $219,000 during the 2001 period. Operating
income for the real estate and other segment was $1,721,000 for the 2002 period, as compared to an operating loss
of $303,000 in the 2001 period.
Interest expense and other, net, was $3,960,000 for the quarter ended Aug. 2, 2002, as compared to $4,142,000 for
the 2001 period. The decline in the 2002 period was primarily due to reduced borrowings and lower average interest
rates.
Total EBITDA loss from continuing operations (excluding the noncash cost of real estate sales) was $4,556,000 for
the quarter ended Aug. 2, 2002, as compared to an EBITDA loss of $6,749,000 for the 2001 period.
The Company's loss from continuing operations for the quarter ended Aug. 2, 2002, was $12,818,000, an improvement
of $3,331,000 from the loss from continuing operations of $16,149,000 generated for the 2001 period, as a result
of the factors discussed above.
Discontinued Operations
On July 22, 2002, the Company entered into definitive agreements for the sale of all of the capital stock of Bear
Mountain, Inc. ("Bear Mountain") to Snow Summit Ski Corp. for a purchase price of $12,000,000 in cash,
subject to certain adjustments for working capital, assumed debt and allocations of off-season operating losses
and capital expenditures. As a result of the intended disposition, the Company has reflected the operating results
of Bear Mountain as discontinued operations in its consolidated statement of operations for all periods presented.
The closing of the proposed transaction is conditioned upon the receipt of certain third-party consents and governmental
approvals, including approvals of the United States Forest Service, and other customary closing conditions. The
Company is currently seeking an amendment to its Amended and Restated Credit Agreement dated March 15, 2002, which
would permit the sale transaction. The closing of the sale is expected to occur in the fourth quarter of fiscal
2002. However, no assurances can be given that the transaction will be consummated on the terms contemplated or
at all. Based on the terms of the pending transaction and the anticipated closing date, the Company recorded an
estimated impairment loss of $3,200,000 relating to the long-lived assets of Bear Mountain.
The Company's loss from discontinued operations for the quarter ended Aug. 2, 2002, was $1,290,000, excluding the
estimated impairment loss of $3,200,000, compared with a loss of $1,477,000 for the 2001 period. The improvement
was primarily due to lower depreciation expense in the 2002 period.
Combined Operations
Total EBITDA (excluding the noncash cost of real estate sales) was a loss of $5,356,000 for the quarter ended Aug.
2, 2002, compared with an EBITDA loss of $7,477,000 for the 2001 period, an improvement of $2,121,000 or 28 percent.
Net loss for the quarter ended Aug. 2, 2002, was $17,308,000, compared with a net loss of $17,626,000 for the corresponding
period of fiscal 2001.
Nine Months Ended Aug. 2, 2002
Continuing Operations
Resort operations revenue was $104,742,000 for the nine months ended Aug. 2, 2002, versus $101,819,000 (including
$1,754,000 of revenues earned under paid skier visit insurance arrangements) in the 2001 period. Total skier visits
were 2,154,000 for the 2002 period, a decline of 13,000 visits or slightly less than one percent from the 2001
period.
Cost of sales and selling, general and administrative expense for the resort operations segment was $73,340,000
for the nine months ended Aug. 2, 2002, an increase of $2,419,000, or 3 percent, from the 2001 period.
Resort operations generated EBITDA of $31,402,000 for the nine months ended Aug. 2, 2002, as compared to EBITDA
of $30,898,000 for the 2001 period. Operating income for the resort segment for the 2002 period was $18,987,000
compared to $15,161,000 for the 2001 period. The improvement in operating income was primarily due to reduced depreciation
and amortization expense in the 2002 period.
Revenues from real estate operations were $11,300,000 for the nine months ended Aug. 2, 2002, which were due to
the sale of 25 single family lots within the Unit 7 subdivision at Northstar-at-Tahoe. There were no real estate
sales in the 2001 period. Timber operations contributed revenues of $175,000 and $190,000 in the 2002 and 2001
periods, respectively.
Cost of sales and selling, general and administrative expense for the real estate and other segment totaled $3,416,000
(including noncash cost of real estate sales of $2,492,000) for the nine months ended Aug. 2, 2002, as compared
to $807,000 for the 2001 period.
Real estate and other operations generated EBITDA (excluding the noncash cost of real estate sales) of $10,551,000
for the 2002 period compared to an EBITDA loss of $617,000 for the 2001 period. Operating income for the real estate
and other segment was $7,968,000 for the 2002 period, as compared to an operating loss of $701,000 in the 2001
period.
Interest expense and other, net, was $12,516,000 for the nine months ended Aug. 2, 2002, compared to $12,984,000
for the 2001 period. The decline was primarily due to reduced borrowings and lower average interest rates in the
2002 period.
Total EBITDA from continuing operations (excluding the noncash cost of real estate sales) was $41,953,000 for the
nine months ended Aug. 2, 2002, as compared to EBITDA of $30,281,000 for the 2001 period.
The Company's income from continuing operations for the nine months ended Aug. 2, 2002, was $14,439,000, an increase
of $12,963,000 from the income from continuing operations of $1,476,000 for the 2001 period, as a result of the
factors discussed above.
Discontinued Operations
The Company recognized income from the discontinued operations of Bear Mountain, excluding the impairment loss
of $3,200,000 recorded on the anticipated disposal of $1,960,000 for the nine months ended Aug. 2, 2002, an increase
of $309,000 from the income from discontinued operations of $1,651,000 generated for the 2001 period, due primarily
to lower depreciation expense in 2002.
Combined Operations
Total EBITDA (excluding the noncash cost of real estate sales) was $45,306,000 for the nine months ended Aug. 2,
2002, compared with EBITDA of $34,198,000 for the 2001 period, an improvement of 32 percent.
Net income for the nine months ended Aug. 2, 2002, was $15,760,000, compared with net income of $4,850,000 for
the corresponding period of fiscal 2001. Net income for the 2002 and 2001 periods reflect extraordinary gains of
$2,761,000 and $1,723,000, respectively, from the early retirement of debt. Net income for the 2002 period also
reflects a charge for the change in accounting principle for goodwill of $200,000.
Booth Creek currently consists of seven resorts across North America, including Northstar-at-Tahoe, Sierra-at-Tahoe
and Big Bear Mountain in California; Waterville Valley, Mt. Cranmore Mountain Resort and Loon Mountain in New Hampshire;
and The Summit at Snoqualmie near Seattle, Washington. Booth Creek is the fourth-largest ski resort operator in
the country (www.boothcreek.com).
Except for historical matters, the matters discussed in this press release are forward-looking statements that
involve risks and uncertainties. The forward-looking statements are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's current
views and assumptions and involve risks and uncertainties that could significantly affect expected results. The
Company wishes to caution the reader that certain factors could significantly and materially affect the Company's
actual results, causing results to differ materially from those in any forward-looking statement. Please refer
to the "Forward-Looking Statements" included in the Company's Form 10-K for the year ended November 2,
2001, and the Form 10-Q for the three months ended August 2, 2002, on file with the Securities and Exchange Commission.
Booth Creek Ski Holdings, Inc.
Consolidated Financial Statements
(Dollars in thousands, except revenue per skier visit)
(Unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
Aug. 2, July 27, Aug. 2, July 27,
2002 2001 2002 2001
---- ---- ---- ----
Statement of Operations Data:
Revenue:
Resort Operations $ 3,482 $ 3,248 $104,742 $101,819
Real Estate and Other 2,560 190 11,475 190
------- ------- ------- -------
6,042 3,438 116,217 102,009
Operating Expenses:
Cost of Sales -- Resort
Operations 6,248 5,910 56,268 54,707
Cost of Sales -- Real
Estate and Other 564 167 2,737 167
Depreciation and Depletion 3,939 4,663 12,506 14,036
Amortization of Goodwill and
Other Intangible Assets - 595 - 1,785
Selling, General and
Administrative Expense 4,149 4,110 17,751 16,854
------- ------- ------- -------
Operating Income (Loss) (8,858) (12,007) 26,955 14,460
Interest Expense and Other,
Net (3,960) (4,142) (12,516) (12,984)
------- ------- ------- -------
Income (Loss) from
Continuing Operations
before Extraordinary Item
and Change in Accounting
Principle (12,818) (16,149) 14,439 1,476
Discontinued Operations:
Income (Loss) from
Discontinued Operations of
Bear Mountain Resort (1,290) (1,477) 1,960 1,651
Impairment Loss from
Anticipated Disposal of
Bear Mountain Resort (3,200) - (3,200) -
------- ------- ------- -------
Income (Loss) on
Discontinued Operations (4,490) (1,477) (1,240) 1,651
------- ------- ------- -------
Income (Loss) before
Extraordinary Item and
Change in Accounting
Principle (17,308) (17,626) 13,199 3,127
Extraordinary Gain on
Early Retirement of Debt - - 2,761 1,723
Change in Accounting
Principle - - (200) -
------- ------- ------- -------
Net Income (Loss) $(17,308) $(17,626) $ 15,760 $ 4,850
======= ======= ======= =======
Other Financial and
Operating Data:
Total Skier Visits - - 2,154,000 2,167,000
Paid Skier Visit
Insurance Revenues $ - $ - $ - $ 1,754
Resort Operations Revenue
per Skier Visit
(Excluding Paid Skier
Visit Insurance Revenues) NM NM $ 48.63 $ 46.18
Capital Expenditures
Excluding Real Estate and
Other $ 2,335 $ 2,144 $ 6,637 $ 8,029
Net Cash Provided By
(Used In):
Operating Activities $ (6,105) $ (7,027) $ 28,848 $ 21,388
Investing Activities $ (2,785) $ (2,704) $ (7,318) $ (9,100)
Financing Activities $ 2,376 $ 2,457 $(21,275) $(12,139)
Total EBITDA from
Continuing Operations $ (4,919) $ (6,749) $ 39,461 $ 30,281
Noncash Cost of Real
Estate Sales $ 363 $ - $ 2,492 $ -
Total EBITDA from
Continuing Operations
(Excluding Noncash Cost
of Real Estate Sales) $ (4,556) $ (6,749) $ 41,953 $ 30,281
Resort Operations EBITDA
from Continuing
Operations $ (6,731) $ (6,530) $ 31,402 $ 30,898
Real Estate and Other
EBITDA from Continuing
Operations (Excluding
Noncash Cost of Real
Estate Sales) $ 2,175 $ (219) $ 10,551 $ (617)
Total EBITDA (Excluding
Noncash Cost of Real
Estate Sales) $ (5,356) $ (7,477) $ 45,306 $ 34,198
As of
---------------------------------------------
Balance Sheet Data: Aug. 2, 2002 Nov. 2, 2001 July 27, 2001
------------ ------------ -------------
Total Assets $ 176,754 $ 189,218 $ 188,848
Total Debt $ 127,379 $ 148,040 $ 134,143
Preferred Stock of
Subsidiary $ - $ 1,136 $ 1,262
Common Shareholder's
Equity $ 20,193 $ 4,433 $ 23,077
NM - Not Meaningful
The financial information presented above includes information on "Total EBITDA from Continuing Operations,"
"Noncash Cost of Real Estate Sales," "Total EBITDA from Continuing Operations (Excluding Noncash
Cost of Real Estate Sales)," "Resort Operations EBITDA from Continuing Operations," "Real Estate
and Other EBITDA (Excluding Noncash Cost of Real Estate Sale)" and "Total EBITDA (Excluding Noncash Cost
of Real Estate Sales)." "Total EBITDA from Continuing Operations" represents operating income (loss)
before depreciation, depletion and amortization expense. "Noncash Cost of Real Estate Sales" represents
the allocated portion of real estate development expenditures previously capitalized (including acquisition costs
allocated to real estate development) which relate to current real estate sales. "Total EBITDA (Excluding
Noncash Cost of Real Estate Sales)" includes Total EBITDA from Continuing Operations and EBITDA associated
with the discontinued operations of Bear Mountain. Although EBITDA is not a measure of performance under accounting
principles generally accepted in the United States ("GAAP"), the information is presented because management
believes it provides useful information regarding a company's ability to incur and service debt. Further, Total
EBITDA (Excluding Noncash Cost of Real Estate Sales) is calculated essentially in the manner that "EBITDA"
is calculated under the indenture governing the Company's 12.5% senior notes due 2007 (the "Senior Notes"),
and therefore, management believes this measure is meaningful to holders of the Senior Notes. EBITDA should not
be considered in isolation or as a substitute for net income, cash flows from operating activities and other income
or cash flow statement data prepared in accordance with GAAP, or as a measure of profitability or liquidity. In
addition, the EBITDA measures as determined by the Company may not be comparable to related or similar measures
as reported by other companies and do not represent funds available for discretionary use.
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Contact:
For Booth Creek Ski Holdings, Inc.
Peeples Ink PR Ltd.
Pat Peeples, 970/845-8525
Source: Booth Creek Ski Holdings, Inc.