Whistler Blackcomb Holdings Inc. Reports Strong Fiscal 2014 Third Quarter Results
WHISTLER, BC, Aug. 15, 2014 /CNW/ - Whistler Blackcomb Holdings Inc. (TSX: WB) (the "Company") today reported financial results for the three and nine months ended June 30, 2014. The Company holds a 75% interest in and manages the entities that operate Whistler Blackcomb, the largest four-season mountain resort in North America.
Highlights for the Nine Months Ended June 30, 2014
- Adjusted EBITDA (as defined below) of $90.5 million for the nine months ended June 30, 2014 increased 5% over the same period in the prior year as a result of strong revenue per visit and effective ticket price growth.
- The Company's spring sales campaign for its 2014-15 season pass and frequency cards generated $14.6 million in sales, which represents a 21% increase over the spring campaign for the 2013-14 season.
- Non-ski visits for the nine months ended June 30, 2014 were 185,000, an increase of 16% over the same period in the prior year, reflecting continued growth in the Company's non-ski business.
Dave Brownlie, the Company's President and Chief Executive Officer commented: "We are pleased with our performance for the 2013-14 ski season, which was a real testament to the resiliency of our business model. We generated a 5% increase in Adjusted EBITDA despite lower visits in response to challenging early season conditions." Mr. Brownlie continued: "It is encouraging to see 21% growth in our 2014-15 season pass and frequency card sales to $14.6 million. We are also pleased to report that our Whistler Village Gondola, gated access and enterprise resource planning capital projects are progressing on schedule and on budget."
Revenue, Visits and Pricing
- Total revenue for the three and nine months ended June 30, 2014 was $34.5 million and $223.2 million, respectively, representing increases of $4.8 million or 16% and $11.0 million or 5%, respectively, over the same periods in the prior year. The increases in total revenue were driven by higher revenue per visit, attributable to improved effective ticket price, pricing and guest spending patterns in the Company's ancillary businesses. Higher visits for the third quarter also contributed to revenue growth while higher revenue per visit for the year to date period was partially offset by lower skier visits as a result of challenging early season snow conditions.
- Total visits for the quarter and nine months ended June 30, 2014 were 393,000 and 2,130,000 respectively, an increase of 44,000 visits or 13% and a decrease of 69,000 visits or 3%, respectively, compared to the same periods in the prior year. The increase in visits for the three months ended June 30, 2014 was primarily attributable to the timing of the Easter holiday, which was in the third quarter in fiscal 2014 and the second quarter in fiscal 2013. Destination visits comprised approximately 41% of skier visits for the 2013-14 ski season compared to 38% during the prior year.
- Revenue per visit for the three and nine months ended June 30, 2014 was $87.81 and $104.77, respectively, an increase of $2.60 or 3.1% and $8.26 or 8.6%, respectively, over the same periods in the prior year. The increase in revenue per visit reflects improved pricing and guest spending in the Company's retail, rental and snow school businesses, as well as the impact of the Affinity Sports acquisition in 2013. Guest spending improved in part because of the higher proportion of destination skier visits in 2014 compared to 2013.
- Effective ticket price ("ETP", as defined below) was $47.58 and $55.77 for the three and nine months ended June 30, 2014, respectively, an increase of $0.77 or 1.6% and $4.09 or 7.9%, respectively, over the same periods in the prior year. ETP is total ski-related lift revenue divided by skier visits (see below). The growth for both the three and nine month periods ended June 30, 2014 primarily reflected increases in lift ticket prices. Lower pass and card utilization also contributed to the increased ETP for the nine months ended June 30, 2014, while higher pass and card utilization in the third quarter partially offset the ETP increase attributable to lift ticket price increases for the period.
Adjusted EBITDA, Loss per Share and Earnings per Share
- Adjusted EBITDA was $2.4 million and $90.5 million for the three and nine months ended June 30, 2014, respectively, an increase of $0.5 million or 23% and $4.6 million or 5%, respectively, compared to the same periods in the prior year. The increase in Adjusted EBITDA was driven primarily by higher revenue compared to the prior periods, as described above, offset in part by higher operating costs.
- Diluted loss per common share was $0.15 for the three months ended June 30, 2014 compared to a loss of $0.19 per share for the same period in the prior year. The loss per share was reduced primarily by increased EBITDA and lower interest expense on long term debt, which decreased by $2.1 million or 51% as a result of the Company's refinancing in November 2013.
- Diluted earnings per common share were $0.63 for the nine months ended June 30, 2014 compared to $0.61 per share for the same period in the prior year. During the nine months ended June 30, 2014, net earnings per share improved principally because of higher EBITDA and a $4.4 million reduction to interest expense on long term debt offset in part by the one-time $5.5 million prepayment penalty and one-time $2.8 million write-off of unamortized debt issuance costs in connection with the refinancing of the Company's long-term debt during the first quarter of fiscal 2014.
Financial Position
- As at June 30, 2014, the Company had long-term debt outstanding of $225.0 million, a decrease of $36.0 million, or 14%, compared to $261.0 million at September 30, 2013. The Company's cash balance at June 30, 2014 was $11.8 million compared to $41.4 million at September 30, 2013. The decrease in cash was mainly attributable to $36.0 million in net debt repayments since September 30, 2013, offset in part by increased operating cash flow during the nine months ended June 30, 2014.
Outlook
- As at August 11, 2014, other visits were 0.4 million for the year to date, an increase of 7% compared to the same period in the prior year.
Dividend
The Company's Board of Directors declared a dividend of $0.24375 per common share for the third quarter, to be paid on August 29, 2014 to shareholders of record on August 26, 2014. This dividend will be an eligible dividend for Canadian income tax purposes.
Non-GAAP Measures
This press release makes reference to Adjusted EBITDA and ETP, which are measures not prescribed by Canadian generally accepted accounting principles, or GAAP. These non-GAAP measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other companies.
Adjusted EBITDA is defined as net earnings before interest, taxes, depreciation and amortization, as well as items that management does not consider part of the Company's normal operations, examples of which include significant non-cash gains or losses on disposal of property, buildings and equipment, acquisition or disposal expenses and gains or losses or restructuring expenses relating to acquisitions or disposals of businesses, impairment or restructuring charges and reversals and other significant event-driven amounts as applicable. Adjusted EBITDA is provided as additional information to complement GAAP measures and to further understand the Company's results of operations from management's perspective. It is also a supplemental measure of performance that highlights trends in the Company's business that may not otherwise be apparent when relying solely on GAAP financial measures. The closest GAAP measure is net earnings and a reconciliation is provided below.
ETP is defined as the Company's ski ticket yield-per-skier visit calculated as total ski-related lift revenue divided by total skier visits. Ski-related lift revenue and skier visits exclude revenue and visits from summer glacier skiing and other revenue amounts. The Company believes ETP is an important measure of operating performance because it allows management, investors and others to evaluate and compare the yield generated by ski lift tickets from period to period, and ski tickets are the Company's largest source of revenue and the core of its operations. The closest GAAP measure is revenue and a reconciliation is provided below.
Non-GAAP measures should not be considered in isolation or as a substitute for analysis of financial information reported in accordance with GAAP. Readers should refer to the Company's annual information form dated December 20, 2013 and its most recent Management's Discussion & Analysis, which are available on the Company's website and under the Company's SEDAR profile at www.sedar.com, for additional details regarding non-GAAP measures.
Reconciliation of Net Earnings (Loss) to Adjusted EBITDA
The following table reconciles Adjusted EBITDA to the Company's most directly comparable GAAP measure, net earnings (loss):
| (In thousands) |
Nine months ended June 30, 2014 |
Nine months ended June 30, 2013 |
Three months ended June 30, 2014 |
Three months ended June 30, 2013 |
|
| (Recast)1 |
(Recast)1 |
||||
| Net earnings (loss) |
$ 29,473 |
$ 28,181 |
($ 10,251) |
($ 12,274) |
|
| Depreciation and amortization |
31,162 |
30,805 |
10,526 |
10,016 |
|
| Finance expense, long term debt |
16,390 |
12,494 |
2,052 |
4,164 |
|
| Finance expense, Limited Partner's |
6,025 |
5,700 |
2,175 |
1,900 |
|
| interest |
|||||
| Income tax expense (benefit) |
8,890 |
7,973 |
(2,134) |
(2,629) |
|
| EBITDA |
91,940 |
85,153 |
2,368 |
1,177 |
|
| Other income2 |
(2,958) |
- |
- |
- |
|
| Other expenses3 |
1,501 |
749 |
7 |
749 |
|
| Adjusted EBITDA |
$ 90,483 |
$ 85,902 |
$ 2,375 |
$ 1,926 |
|
| 1 |
Refer to the Company's MD&A for the three and nine months ended June 30, 2014 for a description of the recast. |
|
| 2 |
Other income is principally comprised of net insurance recoveries related to the fire that destroyed certain maintenance and administrative buildings in September 2013. |
|
| 3 |
Other expenses are principally comprised of expenditures incurred to replace items lost in the fire in September 2013 and to establish temporary work facilities for the staff displaced as a result of the fire. |
The following table reconciles ETP to our most directly comparable GAAP measure, revenue:
| (In thousands) |
Nine months ended June 30, 2014 |
Nine months ended June 30, 2013 |
Three months ended June 30, 2014 |
Three months ended June 30, 2013 |
| Revenue |
$ 223,159 |
$ 212,219 |
$ 34,510 |
$ 29,740 |
| Less: Non-ski lift revenue |
(114,689) |
(106,792) |
(21,520) |
(18,084) |
| Total ski lift revenue |
108,470 |
105,427 |
12,990 |
11,656 |
| Divided by: Total skier visits |
1,945 |
2,040 |
273 |
249 |
| Effective Ticket Price |
$ 55.77 |
$ 51.68 |
$ 47.58 |
$ 46.81 |
Conference Call Information
Management will conduct a conference call on August 15, 2014 at 7:30 a.m. Pacific Time / 10:30 a.m. Eastern Time to review the Company's fiscal 2014 third quarter results. The call can be accessed by dialing 1.800.319.4610 (Canada and US) or 1.604.638.5340 (International) prior to the start of the call. A live webcast and 30 day replay of the conference call will be available in the Presentation & Webcasts section of the Company's website.
ABOUT WHISTLER BLACKCOMB HOLDINGS INC.
The Company holds a 75% interest in each of Whistler Mountain Resort Limited Partnership and Blackcomb Skiing Enterprises Limited Partnership (the "Partnerships"), which, together, carry on the four season mountain resort business located in the Resort Municipality of Whistler, British Columbia (the "Resort Business"). The Company is the operating general partner of the Partnerships and as such manages the Resort Business. Whistler Blackcomb, the official alpine skiing venue for the 2010 Olympic Winter Games, is situated in the Coast Mountains of British Columbia, 125 kilometres (78 miles) north of Vancouver, British Columbia. North America's largest four-season mountain resort, Whistler Mountain and Blackcomb Mountain are two side-by-side mountains, connected by the world record-breaking PEAK 2 PEAK Gondola, which combined offer over 200 marked runs, over 8,000 acres of terrain, 14 alpine bowls, three glaciers, receive on average over 1,165 centimetres (459 inches) of snow annually, and offer one of the longest ski seasons in North America. In the summer, Whistler Blackcomb offers a variety of activities, including hiking and biking trails, the Whistler Mountain Bike Park, and sightseeing on the PEAK 2 PEAK Gondola. Whistler Blackcomb Holdings Inc. is listed on the Toronto Stock Exchange under the symbol "WB". Additional information is available on the Company's website at www.whistlerblackcomb.com/holdings or under the Company's SEDAR profile at www.sedar.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release and the associated conference call and webcast, which include a business update, third quarter results and question and answer session, may contain certain forward-looking statements or information, within the meaning of applicable Canadian securities laws, which reflect the current view of the Company with respect to future events and financial performance. Forward-looking statements can often be identified by the use of forward-looking terminology such as "may", "will", "would", "could", "should", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "believe" or "continue" or the negatives of such terms or variations of them or similar terminology. All forward-looking statements made by the Company are based on the opinions and estimates of management as of the date such statements are made and represent management's best judgment based on facts and assumptions that management considers reasonable. The forward-looking statements and information contained in this press release and the associated conference call and webcast include comments about the Company's 2014-15 season pass and frequency card sales and the ERP, RFID and Whistler Village Gondola capital projects, among others, and are based on certain factors and assumptions made by management of the Company including, but not limited to: business conditions, guest visitation, weather, macroeconomic and currency influences, and interest rates, among others. These forward-looking statements and information contained are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated including, but not limited to, risks relating to unfavourable weather conditions, competition from other ski and four season resorts, changes in laws, regulations and policies and failure to comply with any legal requirements, the Company's reliance on its agreements with the Province of British Columbia to operate Whistler Blackcomb, the impact of any occurring natural disasters, insufficient insurance against material claims or losses and negative economic, business and market conditions. A more detailed description of these risks is available in the Company's most recently filed annual information form and management's discussion and analysis, which is available on the Company's website and at www.sedar.com under the Company's SEDAR profile.
Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements or information prove incorrect, actual results may vary materially from those described herein. Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, undue reliance should not be placed on forward-looking statements or information because the Company can give no assurance that such expectations will prove to be correct.
These forward-looking statements and information are made as of the date of this press release, and the Company has no intention and assumes no obligation to update or revise any forward-looking statements or information to reflect new events or circumstances, except as required by applicable Canadian securities laws.
Whistler Blackcomb Holdings Inc.
Condensed Interim Consolidated Statements of Comprehensive Income
(Unaudited, in thousands, except per share amounts)
| Nine months |
Nine months |
Three months |
Three months |
|||||||
| (recast) |
(recast) |
|||||||||
| Resort revenue |
$ |
223,159 |
$ |
212,219 |
$ |
34,510 |
$ |
29,740 |
||
| Operating expenses |
111,008 |
105,008 |
25,796 |
22,024 |
||||||
| Depreciation and amortization |
31,162 |
30,805 |
10,526 |
10,016 |
||||||
| Selling, general and administrative |
21,668 |
21,309 |
6,339 |
5,790 |
||||||
| 163,838 |
157,122 |
42,661 |
37,830 |
|||||||
| Earnings from operations |
59,321 |
55,097 |
(8,151) |
(8,090) |
||||||
| Other income |
2,958 |
- |
- |
- |
||||||
| Other expense |
(1,501) |
(749) |
(7) |
(749) |
||||||
| Finance expense, long term debt |
(16,390) |
(12,494) |
(2,052) |
(4,164) |
||||||
| Finance expense, Limited Partner's |
(6,025) |
(5,700) |
(2,175) |
(1,900) |
||||||
| Net earnings (loss) before income tax |
38,363 |
36,154 |
(12,385) |
(14,903) |
||||||
| Income tax (expense) benefit |
(8,890) |
(7,973) |
2,134 |
2,629 |
||||||
| Net earnings and comprehensive |
$ |
29,473 |
$ |
28,181 |
$ |
(10,251) |
$ |
(12,274) |
||
| Net earnings (loss) and comprehensive |
||||||||||
| Attributable to Whistler Blackcomb |
$ |
23,891 |
$ |
23,234 |
$ |
(5,633) |
$ |
(7,272) |
||
| Attributable to Limited Partner's non- |
5,582 |
4,947 |
(4,618) |
(5,002) |
||||||
| $ |
29,473 |
$ |
28,181 |
$ |
(10,251) |
$ |
(12,274) |
|||
| Earnings (loss) per share |
||||||||||
| Basic |
$ |
0.63 |
$ |
0.61 |
$ |
(0.15) |
$ |
(0.19) |
||
| Diluted |
$ |
0.63 |
$ |
0.61 |
$ |
(0.15) |
$ |
(0.19) |
||
| Weighted average number of common |
||||||||||
| Basic |
38,002 |
37,940 |
38,026 |
37,958 |
||||||
| Diluted |
38,202 |
37,992 |
38,378 |
37,998 |
||||||
Whistler Blackcomb Holdings Inc.
Consolidated Statements of Financial Position
(Unaudited, in thousands)
| June 30, |
September 30, |
||||||||||
| Assets |
|||||||||||
| Current assets: |
|||||||||||
| Cash and cash equivalents |
$ |
11,807 |
$ |
41,353 |
|||||||
| Accounts receivable |
4,672 |
3,323 |
|||||||||
| Inventory |
11,773 |
15,856 |
|||||||||
| Prepaid expenses |
3,496 |
2,727 |
|||||||||
| Notes receivable |
320 |
311 |
|||||||||
| 32,068 |
63,570 |
||||||||||
| Notes receivable |
2,448 |
2,636 |
|||||||||
| Property, buildings and equipment |
319,766 |
322,316 |
|||||||||
| Property held for development |
9,244 |
9,244 |
|||||||||
| Intangible assets |
303,182 |
311,428 |
|||||||||
| Goodwill |
137,354 |
137,259 |
|||||||||
| $ |
804,062 |
$ |
846,453 |
||||||||
| Liabilities and Shareholders' Equity |
|||||||||||
| Current liabilities: |
|||||||||||
| Accounts payable and accrued liabilities |
$ |
20,331 |
$ |
24,927 |
|||||||
| Income taxes payable |
4,777 |
1,645 |
|||||||||
| Provisions |
2,175 |
2,858 |
|||||||||
| Deferred revenue |
15,349 |
22,347 |
|||||||||
| 42,632 |
51,777 |
||||||||||
| Long-term debt |
222,717 |
258,042 |
|||||||||
| Deferred income tax liability |
23,284 |
20,690 |
|||||||||
| Limited Partner's interest |
72,796 |
72,796 |
|||||||||
| Total liabilities |
361,429 |
403,305 |
|||||||||
| Equity |
|||||||||||
| Whistler Blackcomb Holdings Inc. shareholders' equity |
|||||||||||
| Common shares; no par value; unlimited number authorized; |
442,879 |
442,080 |
|||||||||
| Additional paid-in capital |
711 |
913 |
|||||||||
| Deficit |
(58,681) |
(54,781) |
|||||||||
| Total Whistler Blackcomb Holdings Inc. shareholders' equity |
384,909 |
388,212 |
|||||||||
| Limited Partner's non-controlling interest |
57,724 |
54,936 |
|||||||||
| 442,633 |
443,148 |
||||||||||
| $ |
804,062 |
$ |
846,453 |
||||||||
Whistler Blackcomb Holdings Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited, in thousands)
| Nine months |
Nine months |
|||||
| (recast) |
||||||
| Cash provided by (used in) |
||||||
| Operations |
||||||
| Net earnings and comprehensive income |
$ |
29,473 |
$ |
28,181 |
||
| Adjustments for: |
||||||
| Income tax expense |
8,890 |
7,973 |
||||
| Interest expense on long-term debt |
16,390 |
12,494 |
||||
| Finance expense on Limited Partner's interest |
6,025 |
5,700 |
||||
| Depreciation and amortization |
31,162 |
30,805 |
||||
| Disposal losses |
(21) |
749 |
||||
| Share-based compensation |
597 |
578 |
||||
| 92,516 |
86,480 |
|||||
| Interest paid on long-term debt |
(7,768) |
(11,538) |
||||
| Prepayment penalty paid on second lien facility repayment |
(5,500) |
- |
||||
| Finance expense paid on Limited Partner's interest |
(3,850) |
(5,700) |
||||
| Income taxes paid |
(3,166) |
(410) |
||||
| Changes in non-cash operating working capital |
(12,305) |
(9,556) |
||||
| $ |
59,927 |
$ |
59,276 |
|||
| Financing |
||||||
| Dividends paid on common shares |
$ |
(27,791) |
$ |
(27,744) |
||
| Distributions to Limited Partner's non-controlling interest |
(2,794) |
(4,248) |
||||
| Repayment of long-term debt |
(310,000) |
- |
||||
| Draws on revolving credit facility |
274,000 |
- |
||||
| Debt issuance costs |
(2,627) |
- |
||||
| $ |
(69,212) |
$ |
(31,992) |
|||
| Investing |
||||||
| Expenditures on property, buildings, equipment and intangibles |
$ |
(20,647) |
$ |
(12,373) |
||
| Proceeds from sale of property and equipment |
207 |
158 |
||||
| Repayment of notes receivable |
179 |
142 |
||||
| $ |
(20,261) |
$ |
(12,073) |
|||
| Cash and cash equivalents, end of period |
||||||
| (Decrease) Increase in cash and cash equivalents |
$ |
(29,546) |
$ |
15,211 |
||
| Cash and cash equivalents, beginning of period |
41,353 |
43,634 |
||||
| $ |
11,807 |
$ |
58,845 |
|||
SOURCE: Whistler Blackcomb
David Wilcox, Manager, Finance & Investor Relations, Whistler Blackcomb Holdings Inc., [email protected], ph: 604.938.7376
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