Vail Resorts Posts 50% Drop In Net Income For 2012

Vail Resorts Posts 50% Drop In Net Income For 2012

2012 was a difficult year for the ski industry. A lack of snowfall across much of the US led to a reduced number of skier visits. Everyone from local ski shops to the big dogs like Vail Resorts Inc. took a hit.  Net income attributable to Vail Resorts, Inc. was down from $34.5 million in fiscal 2011 to just $16.5 million in fiscal 2012.

Vail Resorts CEO Rob Katz sited the challenging winter of 2011-12 for the sharp decline and had this to say about it. 

“For the full fiscal year, I am very proud of our results given that the 2011-2012 ski season was the most challenging winter in the history of the United States ski industry and our performance demonstrated the resiliency of our business model. In particular, the strength of our growing season pass business and the comprehensive and differentiated experience we provide at our resorts stabilized our revenues, in the face of very challenging weather.”

Katz when on to say “In the Mountain Segment, net revenues actually increased 1.9 percent for fiscal 2012 despite total skier visits declining 12.1 percent compared to fiscal 2011,” Katz continued. “Several key factors contributed to our Mountain Segment results: the strength of season pass sales, which were up $15.8 million or 13.2% in revenue over a year ago; an increase in our effective ticket price, excluding season passes, of 9.3 percent; enhanced consumer spending resulting in double-digit growth in yield-per-skier visit in our ski school and dining operations and increased international visitation of approximately two. Each of these factors is a positive indicator as we look towards the upcoming season.”

Despite the earning report the company’s stock posted a new 52-week high of $59.46 during Tuesday trading.

“Our balance sheet remains in a very strong position,” Katz concluded. “In fiscal 2012, we generated $185.4 million of operating cash flow and ended the fiscal year with $46.1 million of cash on hand. In the fourth quarter of fiscal 2012, in addition to paying out our quarterly dividend, we repurchased $22.5 million of stock at an average price of $46.78. As of July 31, 2012, Net Debt was 2.3 times trailing twelve months Total Reported EBITDA, and we had no borrowings under the revolver component of our senior credit facility. Additionally, we have virtually no principal payments due on debt until 2019.”

Vail Resorts operates seven ski resorts within the United States, including Vail Mountain, Beaver Creek, Breckenridge and Keystone in Colorado, as well as Northstar, Heavenly and Kirkwood in California.