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Press Release: Intrawest Corporation
September 15, 2004
VANCOUVER, BC -- Intrawest Corporation, the world's leading operator and developer of village-centered resorts,
announced yesterday its results for the fiscal year ended June 30, 2004. Income from continuing operations for
the year was $59.9 million compared with $34.8 million in 2003. Income per share from continuing operations for
the year, on a fully diluted basis, was $1.25 ($1.48 before the call premium and other costs on the redemption
of bonds) compared with $0.73 ($0.96 before a write-down of technology assets) in 2003.
Cash flow from continuing operating activities for the year was $422.9 million, compared with negative cash flow
of $21.0 million last year. This $443.9-million improvement was due mainly to significantly increased cash flow
from real estate development and management services and the impact of selling projects to the Leisura partnerships.
Intrawest generated free cash flow (i.e., cash flow from continuing operating activities less cash flow for investments)
of $292.9 million for the year, which was used to reduce debt. As a result, net debt was $849.0 million at June
30, 2004, down from $1.13 billion at June 30, 2003.
"With our $285-million reduction in net debt, we have achieved a strengthened balance sheet showing healthy
liquidity and dramatically improved leverage ratios," said John Currie, chief financial officer.
Total revenue for the year increased to $1.54 billion from $1.10 billion. Total Company EBITDA (earnings before
interest, income taxes, non-controlling interest, depreciation and amortization) increased 28 per cent to $268.3
million from $209.2 million in 2003.
"2004 was a most satisfying year indeed. We more than met our objectives on income, EBITDA and free cash flow,"
said Joe Houssian, chairman, president and chief executive officer. "We are now reaping the rewards of our
business strategy and the groundwork of the past three years. Looking ahead, the recent creation of our Leisure
and Travel Group, including the alignment of all our non-real estate businesses, will further strengthen our resort
operations activities and drive growth."
For the year ended June 30, 2004, resort operations revenue was $541.3 million compared with $499.9 million in
2003. Resort operations EBITDA for the year was $105.1 million compared with $112.4 million in 2003 due to reduced
skier visits resulting from a late season start and very cold weather in January in the East, and exceptionally
warm weather in Colorado in March.
Management services revenue for the year was $124.4 million compared with $88.2 million in 2003 due to increased
lodging-management fees, fees charged to Leisura, and higher sales fees from third-party developers to Playground,
Intrawest's real estate sales and marketing division. This higher revenue increased the management services profit
contribution for the year to $27.5 million from $11.0 million in 2003.
Real estate revenue increased from $512.7 million in 2003 to $878.2 million, including $171.5 million of revenue
on the sale of 14 projects to Leisura. In accordance with generally accepted accounting principles (GAAP) in Canada,
the profit on the sales to Leisura is initially deferred. Real estate profit was $91.4 million compared with $68.3
million in 2003. This increase in profit included $9.2 million of combined land profit and equity income from Leisura.
Other contributing factors were the higher number of units closed, above average margins on certain high-end projects
and improved profits from the resort club. Intrawest delivered 1,334 real estate units in the year compared with
1,239 in 2003.
Income from continuing operations for the fourth quarter ended June 30, 2004 was $2.6 million compared with a loss
of $14.5 million (after taking a write-down of $12.3 million against technology assets) in the same period last
year. Income per share from continuing operations, on a fully diluted basis, was $0.05 compared with a loss per
share of $0.30 (a loss of $0.08 before the write-down of technology assets) in the fourth quarter of 2003.
Revenue for the quarter increased to $485.1 million from $371.4 million last year. Total Company EBITDA increased
54 per cent to $62.8 million from $40.8 million in the same quarter of 2003 as increased EBITDA from real estate
development and management services was partially offset by reduced EBITDA from resort operations.
The terms EBITDA and free cash flow do not have standardized meanings prescribed by GAAP and may not be comparable
to similarly titled measures presented by other publicly traded companies. Reconciliations between net earnings
and cash flow as determined in accordance with Canadian GAAP and EBITDA are presented in the Statistical Supplement
included below.
A conference call is scheduled for Tuesday, September 14, 2004 at 11:00 am ET (10:00 am CT, 8:00 am PT) to review
Intrawest's fiscal 2004 fourth quarter and year-end results. The call will be webcast live on Intrawest's Web site
at www.intrawest.com.
Access to the call may be obtained by calling the numbers below before the scheduled start time:
1-888-458-1598 (analysts and institutional investors only) access code
88228
1-866-332-8741 (media and retail investors) access code 88228
A playback version of the conference call will be available through September 21, 2004 at 1-877-653-0545. The password
to access the playback version is 246601.
INTRAWEST CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(in thousands of United States dollars, except per share amounts)
THREE MONTHS ENDED YEAR ENDED JUNE 30
JUNE 30 (audited)
2004 2003 2004 2003
-------------------------------------------------------------------------
RESORT OPERATIONS:
Revenue $ 76,224 $ 68,886 $ 541,315 $ 499,885
Expenses 96,906 84,948 436,184 387,450
-------------------------------------------------------------------------
Resort operations
contribution (20,682) (16,062) 105,131 112,435
-------------------------------------------------------------------------
MANAGEMENT SERVICES:
Revenue 29,200 23,357 124,394 88,202
Expenses 23,539 23,065 96,909 77,223
-------------------------------------------------------------------------
Management services
contribution 5,661 292 27,485 10,979
-------------------------------------------------------------------------
REAL ESTATE DEVELOPMENT:
Revenue 379,707 279,174 878,195 512,695
Expenses 331,581 237,187 788,504 444,438
-------------------------------------------------------------------------
48,126 41,987 89,691 68,257
Income from equity
accounted investments 837 - 1,683 -
-------------------------------------------------------------------------
Real estate development
contribution 48,963 41,987 91,374 68,257
-------------------------------------------------------------------------
Income before undernoted items 33,942 26,217 223,990 191,671
Interest and other income
(expense) 1,285 (133) 6,117 2,417
Interest expense (11,054) (13,908) (45,766) (47,142)
Corporate general and
administrative expenses (6,713) (3,835) (20,369) (14,889)
Depreciation and amortization (13,908) (15,056) (68,626) (67,516)
Write-down of technology assets - (12,270) - (12,270)
Call premium and unamortized
costs of senior notes redeemed - - (12,074) -
-------------------------------------------------------------------------
Income before income taxes
and non-controlling interest 3,552 (18,985) 83,272 52,271
Provision for income taxes 1,063 4,182 (10,434) (6,243)
Non-controlling interest (2,009) 344 (12,889) (11,274)
-------------------------------------------------------------------------
Income from continuing
operations 2,606 (14,459) 59,949 34,754
Results of discontinued
operations - - - (578)
-------------------------------------------------------------------------
Income for the period 2,606 (14,459) 59,949 34,176
Retained earnings, beginning
of period 319,147 281,720 264,640 235,515
Dividends (2,870) (2,621) (5,706) (5,051)
-------------------------------------------------------------------------
Retained earnings, end
of period $ 318,883 $ 264,640 $ 318,883 $ 264,640
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Income per common share
Basic $ 0.05 $ (0.30) $ 1.26 $ 0.73
Diluted $ 0.05 $ (0.30) $ 1.25 $ 0.73
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Weighted average number of
common shares outstanding
(in thousands)
Basic 47,591 47,559 47,588 47,364
Diluted 47,783 47,726 47,798 47,590
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INTRAWEST CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands of United States dollars)
(audited)
JUNE 30, 2004 JUNE 30, 2003
-------------------------------------------------------------------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 109,816 $ 126,832
Amounts receivable 142,427 126,725
Other assets 94,105 123,610
Resort properties 412,343 662,197
Future income taxes 18,638 10,619
-------------------------------------------------------------------------
777,329 1,049,983
Resort operations 940,949 918,727
Resort properties 368,309 405,100
Amounts receivable 52,958 76,842
Investment in and advances to Leisura 50,899 -
Other assets 65,306 65,070
-------------------------------------------------------------------------
$ 2,255,750 $ 2,515,722
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Amounts payable $ 209,037 $ 223,832
Deferred revenue 87,649 134,878
Bank and other indebtedness 109,685 287,176
-------------------------------------------------------------------------
406,371 645,886
Bank and other indebtedness 849,132 973,743
Deferred revenue 82,211 43,609
Future income taxes 87,461 94,986
Non-controlling interest in subsidiaries 43,266 46,359
-------------------------------------------------------------------------
1,468,441 1,804,584
SHAREHOLDERS' EQUITY:
Capital stock 463,485 460,742
Retained earnings 318,883 264,640
Foreign currency translation adjustment 4,941 (14,243)
-------------------------------------------------------------------------
787,309 711,139
-------------------------------------------------------------------------
$ 2,255,750 $ 2,515,722
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INTRAWEST CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of United States dollars)
THREE MONTHS ENDED YEAR ENDED JUNE 30
JUNE 30 (audited)
2004 2003 2004 2003
-------------------------------------------------------------------------
CASH PROVIDED BY (USED IN):
OPERATIONS:
Income (loss) from
continuing operations $ 2,605 $ (14,459) $ 59,949 $ 34,754
Items not affecting cash:
Depreciation and
amortization 13,908 15,056 68,626 67,516
Future income taxes (1,240) (3,914) (1,240) (3,914)
Income from equity
accounted investments (837) - (1,683) -
Amortization of financing
costs 1,566 116 6,441 3,479
Writedown of technology
assets - 12,270 - 12,270
Loss on asset disposals 717 93 1,388 858
Stock-based compensation 290 - 290 -
Amortization of benefit
plan 493 1,375 1,992 2,097
Non-controlling interest 2,009 (344) 12,889 11,274
-------------------------------------------------------------------------
Funds from continuing
operations 19,511 10,193 148,652 128,334
Recovery of costs through
real estate sales 297,966 229,474 743,405 433,011
Acquisition and development
of properties held for sale (113,916) (175,108) (487,659) (601,524)
Changes in long-term
amounts receivable, net 44,289 (1,657) 42,396 (10,109)
Changes in non-cash
operating working capital (7,982) (19,372) (23,929) 29,269
-------------------------------------------------------------------------
Cash provided by (used in)
continuing operating
activities 239,868 43,530 422,865 (21,019)
Cash provided by
discontinued operations - - - 140
-------------------------------------------------------------------------
239,868 43,530 422,865 (20,879)
-------------------------------------------------------------------------
FINANCING:
Bank and other borrowings,
net (180,039) 19,885 (304,046) 129,878
Issue of common shares
for cash 52 729 461 2,684
Redemption and repurchase
of non-resort preferred
shares - - - (6,697)
Dividends paid (2,870) (2,621) (5,706) (5,051)
Distributions to
non-controlling interests (5,357) (1,718) (16,543) (6,923)
-------------------------------------------------------------------------
(188,214) 16,275 (325,834) 113,891
-------------------------------------------------------------------------
INVESTMENTS:
Expenditures on:
Resort operations assets (18,672) (19,865) (69,342) (64,546)
Investment in Leisura (20,188) - (37,260) -
Other assets (2,081) (3,225) (23,321) (15,257)
Business acquisitions,
net of cash acquired - - - (2,849)
Proceeds from asset disposals 1,441 4,895 15,876 39,783
-------------------------------------------------------------------------
(39,500) (18,195) (114,047) (42,869)
-------------------------------------------------------------------------
Increase (decrease) in cash
and cash equivalents 12,154 41,610 (17,016) 50,143
Cash and cash equivalents,
beginning of period 97,662 85,222 126,832 76,689
-------------------------------------------------------------------------
Cash and cash equivalents,
end of period $ 109,816 $ 126,832 $ 109,816 $ 126,832
-------------------------------------------------------------------------
-------------------------------------------------------------------------
INTRAWEST CORPORATION
FOURTH QUARTER STATISTICAL SUPPLEMENT
Three months ended June 30 12 months ended June 30
2004 2003 Change 2004 2003 Change
$000's $000's $000's $000's
GENERAL
Calculation of
Total Company
EBITDA
Cash flow from
continuing
operations 239,868 43,530 422,865 (21,019)
Add (deduct):
Changes in
non-cash
operating
assets and
liabilities (220,357) (33,337) (274,213) 149,353
Current income
tax expense 177 (268) 11,674 10,157
Interest
expense 11,054 13,908 45,766 47,142
Interest in
real estate
costs 35,532 18,382 64,696 32,453
Call premium
and debt
redemption
costs - - 12,074 -
Write-down of
technology
assets - 12,270 - 12,270
------------------- --------------------
66,274 54,485 282,862 230,356
Interest and
other income,
net of non-cash
items (3,514) (13,721) (14,545) (21,121)
------------------------- --------------------------
Total Company
EBITDA 62,760 40,764 54% 268,317 209,235 28%
------------------------- --------------------------
------------------------- --------------------------
Calculation of
Free Cash Flow
Cash flow from
continuing
operating
activities 239,868 43,530 422,865 (21,019)
Add (deduct):
Expenditures
on resort
operations
assets (18,672) (19,865) (69,342) (64,546)
Expenditures
on other
assets (2,081) (3,225) (23,321) (15,257)
Investment
in Leisura (20,188) - (37,260) -
------------------- --------------------
Free cash flow 198,927 20,440 292,942 (100,822)
------------------- --------------------
------------------- --------------------
RESORT OPERATIONS
Skier visits 818,000 809,000 1% 7,150,000 7,302,000 -2%
------------------------- --------------------------
------------------------- --------------------------
Revenue from
mountain resorts 56,565 52,462 8% 488,207 450,981 8%
Revenue from
warm-weather
resorts 19,659 16,424 20% 53,108 48,904 9%
------------------------- --------------------------
Total resort
operations revenue 76,224 68,886 11% 541,315 499,885 8%
------------------------- --------------------------
------------------------- --------------------------
Breakdown of resort
operations revenue
Mountain
operations 27,215 25,650 6% 250,856 228,641 10%
Retail and rental 12,265 12,717 -4% 101,280 95,862 6%
Ski school 4,813 4,561 6% 41,653 37,070 12%
Food and beverage 14,068 13,749 2% 81,854 74,921 9%
Golf 8,252 8,100 2% 27,300 27,977 -2%
Other 9,611 4,109 134% 38,372 35,414 8%
------------------------- --------------------------
76,224 68,886 11% 541,315 499,885 8%
------------------------- --------------------------
------------------------- --------------------------
MANAGEMENT SERVICES
Breakdown of
management
services revenue
Lodging and
property
management 16,177 15,093 7% 71,192 60,810 17%
Other management
services 13,023 8,264 58% 53,202 27,392 94%
------------------------- --------------------------
29,200 23,357 25% 124,394 88,202 41%
------------------------- --------------------------
------------------------- --------------------------
REAL ESTATE DEVELOPMENT
Breakdown of real
estate development
revenue
Resort
development
group 307,843 271,491 13% 662,176 472,784 40%
Land sales to
Leisura 62,695 - n/a 171,500 - n/a
Resort Club
group 9,169 7,683 19% 44,519 39,911 12%
------------------------- --------------------------
Total real estate
development
revenue 379,707 279,174 36% 878,195 512,695 71%
------------------------- --------------------------
------------------------- --------------------------
Units closed 540 667 -19% 1,334 1,239 8%
------------------------- --------------------------
Intrawest Corporation (IDR:NYSE; ITW:TSX) is the world's leading developer and operator of village-centered resorts.
Intrawest owns or controls 10 mountain resorts in North America's most popular mountain destinations, including
Whistler Blackcomb, a host venue for the 2010 Winter Olympic Games. The company also owns Sandestin Golf and Beach
Resort in Florida and has a premier vacation ownership business, Club Intrawest. Intrawest is developing an additional
five resort villages at locations in North America and Europe. The company has a 45 per cent interest in Alpine
Helicopters Ltd., owner of Canadian Mountain Holidays, the largest heli-skiing operation in the world. Intrawest
is headquartered in Vancouver, British Columbia. For more information visit www.intrawest.com.
Statements contained in this release that are not historical facts are forward-looking statements that involve
risks and uncertainties. Intrawest's actual results could differ materially from those expressed or implied by
such forward-looking statements. Factors that could cause or contribute to such differences include, but are not
limited to, Intrawest's ability to implement its business strategies, seasonality, weather conditions, competition,
general economic conditions, currency fluctuations and other risks detailed in the company's filings with the Canadian
securities regulatory authorities and the U.S. Securities and Exchange Commission.
For additional information please contact John Currie, chief financial officer, at (604) 623-6640 or at jcurrie@intrawest.com
If you would like to receive future news releases by email, please contact investor_relations@intrawest.com
Source: Intrawest Corporation