WHISTLER BLACKCOMB HOLDINGS INC WHISTLER, BC, Aug. 10, 2016 /PRNewswire/ - Whistler Blackcomb Holdings Inc. (TSX: WB) (the "Company") today reported financial results for the three and nine months ended June 30, 2016. 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
-- Revenue of $278.7 million for the first nine months of 2016 was 22.9%
higher than revenue for the equivalent period last year. During the
third quarter this year revenue grew 4.7% to $36.9 million primarily due
to a 7.6% increase in revenue per visit during the quarter.
-- Adjusted EBITDA of $116.8 million for the first nine months of 2016 was
30.2% higher than Adjusted EBITDA for the equivalent period last year
primarily associated with growth in visitation and higher guest
spending. Third quarter Adjusted EBITDA declined to $0.6 million as a
result of lower skier visits and increased operating and selling general
and administrative ("SG&A") expenses, as described below.
-- As of August 7, 2016 the Company generated a 32% increase in 2016-17
season pass and frequency card sales to $19.6 million, reflecting strong
guest loyalty in our regional market and positive returns on an increase
in marketing spending during the quarter.
Regarding the Company's year to date results, Dave Brownlie, the Company's President and Chief Executive Officer commented: "All of our ancillary businesses have delivered solid performances for the year to date and our results this year demonstrate the strength of our operations during a more normal ski season for Whistler Blackcomb." Mr. Brownlie continued: "Our non-ski visitation momentum has continued this year with recent guest experience enhancements in our sightseeing, hiking, bike park, and summer activity businesses and we are optimistic for the remainder of the 2016 summer. Looking ahead to next ski season, I am very pleased with the significant growth in our pre-committed 2016-17 season pass and frequency card sales to date. Growing our pre-committed revenue continues to be an important long-term objective for Whistler Blackcomb as it contributes to the stability of our business."
Financial & Operating Results Overview
(In thousands, except per visit amounts and Effective Ticket Price ("ETP" as defined below))
Nine Months Nine Months Three months Three months
ended June 30, ended June 30, ended June 30, ended June 30,
2016 2015 2016 2015
---- ---- ---- ----
Visit Metrics, Non-
GAAP Measures &
Financial Data
--------------
Skier visits 2,159 1,770 240 253
------------ ----- ----- --- ---
Other visits 236 219 151 149
------------ --- --- --- ---
Total visits 2,395 1,989 391 402
------------ ----- ----- --- ---
ETP $59.70 $59.88 $54.18 $44.98
--- ------ ------ ------ ------
Revenue per total
visit $116.35 $113.96 $94.32 $87.63
----------------- ------- ------- ------ ------
Adjusted EBITDA $116,795 $89,710 $647 $3,315
--------------- -------- ------- ---- ------
Financial Data
--------------
Total revenue $278,669 $226,673 $36,880 $35,229
------------- -------- -------- ------- -------
Operating expenses,
excluding
depreciation (133,706) (114,687) (28,969) (26,743)
and amortization
----------------
Selling, general
and administrative (28,598) (22,276) (7,694) (5,171)
------------------- ------- ------- ------ ------
Depreciation and
amortization (32,181) (31,445) (10,989) (10,498)
---------------- ------- ------- ------- -------
Earnings (loss)
from operations $84,184 $58,265 $(10,772) $(7,183)
---------------- ------- ------- -------- -------
Visit, Pricing and Financial Results Summary
-- The decrease in skier visits for the three months ended June 30, 2016
was attributable to the timing of the Easter holiday period, which was
in the second quarter this year and the third quarter last year, and
fewer winter operating days during the third quarter this year as the
2015-16 ski season ended on May 30, 2016 compared to June 7, 2015 for
the 2014-15 ski season. The increase in skier visits for the nine months
ended June 30, 2016 was attributable to strong growth in both regional
and destination visitation due to a number of factors, including
increased sales and marketing initiatives in certain key markets over
the past two years, the Company's $54 million in growth investments
since the beginning of fiscal 2013, a return to more normalized snowfall
during the 2015-16 ski season, favourable foreign exchange rates and
Whistler Blackcomb's leading resort rankings. Other visits increased by
1.3% for the quarter ended June 30, 2016 compared to the third quarter
last year in spite of a later bike park opening due to the larger
snowpack this year.
-- For the 2015-16 ski season destination skier visits are estimated to
have comprised approximately 46% of skier visits compared to
approximately 49% for the 2014-15 ski season. Other visits increased for
both the three and nine month periods ended June 30, 2016 reflecting
continued growth of the Company's non-ski operations.
-- The increase in revenue per total visit for the three and nine months
ended June 30, 2016 reflects the strong mix of destination visits,
higher pricing and increased guest spending. ETP for the quarter ended
June 30, 2016 increased compared to the same period in the prior year as
a result of lower utilization of season passes and frequency cards this
year, in part due to fewer winter operating days during the quarter, as
described above. The decrease in ETP for the nine months ended June 30,
2016 was attributable to higher utilization of season pass and frequency
card products compared to last year, resulting in a lower yield on those
visits, offset in part by increased lift ticket prices in 2016.
-- The decrease in Adjusted EBITDA for the three months ended June 30, 2016
was driven by lower skier visits and higher operating and SG&A expenses
compared to the third quarter last year, offset in part by the increased
revenue per visit, as described above. The higher operating costs during
the quarter were primarily attributable to increased volumes in the
Company's ancillary businesses, normal wage inflation and the timing of
certain operating costs not incurred in the third quarter last year.
SG&A costs also increased during the quarter due to higher employee
incentive accruals as a result of the Company's strong financial
performance during the year, which are being recorded evenly throughout
the fiscal year, and the timing of marketing spending. The timing of
certain operating and SG&A expenses and the increased incentive accrual
resulted in a $2.1 million decrease in Adjusted EBITDA during the
quarter ended June 30, 2016 compared to the same period in the prior
year.
-- The increase in Adjusted EBITDA for the nine months ended June 30, 2016
was driven by significant growth in visitation, as described above,
combined with margin increases primarily as a result of the operating
leverage inherent in the Company's business, partly offset by lower
Adjusted EBITDA during the third quarter, as described above.
Treasury Summary
-- As at June 30, 2016, the Company had long-term debt outstanding of
$188.0 million, a decrease of $46.5 million, or 19.8%, compared to
$234.5 million at September 30, 2015. The Company's cash and cash
equivalents balance at June 30, 2016 was $8.5 million compared to $5.7
million at September 30, 2015.
-- Cash interest paid during the three and nine months ended June 30, 2016
decreased by 23% and 12% to $1.6 million and $5.8 million, respectively,
compared to the equivalent periods in the prior year due to a lower
interest rate on the Company's credit facility and a lower average debt
balance.
Indicators
-- As of August 7, 2016 other visits were 454,000 for the year to date, an
increase of 8% compared to the same period in the prior year.
-- As of August 7, 2016, the Company generated $19.6 million in 2016-17
season pass and frequency card sales, which represented a 32% increase
over sales for the 2015-16 season and a 34% increase over sales for the
2014-15 season at the same time in the prior years.
Proposed Strategic Business Combination with Vail Resorts, Inc.
On August 5, 2016, the Company entered into a strategic business combination with Vail Resorts, Inc. ("Vail") pursuant to which Vail agreed to acquire 100 percent of the Company's common shares (the "Arrangement"). The Company's common shareholders will receive $17.50 per share in cash, plus 0.0998 shares of Vail common stock. The share exchange ratio is subject to a currency exchange rate adjustment six days before closing of the Arrangement. Based upon closing stock prices and currency exchange rates as of August 5, 2016, the Company's common shareholders would receive total consideration of $36.00 per share, comprised of $17.50 in cash and 0.0975 shares of Vail common stock. The Arrangement is currently expected to close in the fall of 2016 and is subject to a number of customary closing conditions, including, among others, approval by the Company's common shareholders and approval under the Investment Canada Act and the Competition Act of Canada. Refer to the Company's press release dated August 8, 2016 for further details.
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, 2016 to shareholders of record on August 22, 2016. 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 consolidated net earnings (including net earnings attributable to the 25% non-controlling interest) 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, restructuring or refinancing 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. Seventy five percent of Adjusted EBITDA is attributable to Whistler Blackcomb Holdings Inc. shareholders, based on the Company's equity interest in the Partnerships. 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 11, 2015 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 Nine Months Three months Three months
ended June ended June ended June ended June
30, 2016 30, 2015 30, 2016 30, 2015
--- -------- -------- -------- --------
Consolidated net
earnings (loss) $52,723 $32,226 $(14,128) $(9,858)
---------------- ------- ------- -------- -------
Depreciation and
amortization 32,181 31,445 10,989 10,498
---------------- ------ ------ ------ ------
Finance expense,
long term debt 6,486 9,237 1,734 1,992
---------------- ----- ----- ----- -----
Finance expense,
Limited
Partner's 7,693 6,338 2,612 2,035
interest
--------
Income tax
expense
(benefit) 15,400 10,047 (2,706) (2,008)
---------- ------ ------ ------ ------
EBITDA $114,483 $89,293 $(1,499) $2,659
------ -------- ------- ------- ------
Other income - (133) - -
------------ --- ---- --- ---
Other expense 1,882 550 1,716 656
------------- ----- --- ----- ---
Transaction costs 430 - 430 -
----------------- --- --- --- ---
Adjusted EBITDA $116,795 $89,710 $647 $3,315
--------------- -------- ------- ---- ------
The following table reconciles ETP to our most directly comparable GAAP measure, revenue:
(In
thousands,
except
ETP) Nine Months Nine Months Three months Three months
ended June ended June ended June ended June
30, 2016 30, 2015 30, 2016 30, 2015
--- -------- -------- -------- --------
Revenue $278,669 $226,673 $36,880 $35,229
------- -------- -------- ------- -------
Less:
Non-
ski
lift
revenue (149,782) (120,694) (23,887) (23,848)
------- -------- -------- ------- -------
Total
ski
lift
revenue $128,887 $105,979 $13,003 $11,381
------- -------- -------- ------- -------
Divided
by:
Total
skier
visits 2,159 1,770 240 253
------- ----- ----- --- ---
Effective
Ticket
Price $59.70 $59.88 $54.18 $44.98
--------- ------ ------ ------ ------
Conference Call Information
Management will conduct a conference call on August 10, 2016 at 7:30 a.m. Pacific Time / 10:30 a.m. Eastern Time to review the Company's fiscal 2016 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 1,170 centimetres (461 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 a 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 are based on certain factors and assumptions made by management of the Company including, but not limited to: failure to, in a timely manner, or at all, obtain the Regulatory Approvals and court approvals for the Arrangement, failure of the parties to otherwise satisfy the conditions to complete the Arrangement, the possibility that our Board of Directors could receive an Acquisition Proposal and approve a Superior Proposal (each, as defined in the Arrangement Agreement), the effect of the announcement of the Arrangement on our strategic relationships, operating results and business of Whistler Blackcomb generally, significant transaction costs or unknown liabilities, the risk of adverse actions that would prevent or hinder the completion of the Arrangement, failure to realize the expected benefits of the Arrangement, compliance with all applicable laws and other customary risks associated with transactions of a similar nature to the Arrangement, whether expressed or implied, risks relating to unfavourable weather conditions, the seasonality of our operations, availability of capital, competition from other ski and four season resorts, changes in laws, regulations and policies and failure to comply with any legal requirements, our reliance on our agreements with the Province of British Columbia to operate Whistler Blackcomb, the impact of any occurring natural disasters, risks related to growth projects and acquisitions, insufficient insurance against material claims or losses, risks relating to Whistler Blackcomb's access to and use of debt financing (including the potential lack of availability of financing for Renaissance on satisfactory terms), negative economic, business and market conditions, satisfaction of conditions precedent to the commencement and completion of Renaissance (not all of which are in our control), decreases in leisure and business travel, capital expenditures, currency fluctuations, dependence on key employees and seasonal workforce, workforce risks (including labour for the construction of Renaissance), litigation or governmental investigations, safety and accident risks, environmental laws and regulations, risks related to privacy laws and information technology, and risks relating to third party interests and general economic conditions. In addition, if the Arrangement is not completed, and we continue as an independent entity, there are risks that the announcement of the Arrangement and the dedication of our resources to the completion of the Arrangement could have an adverse impact on our relationships with our stakeholders and could have a material adverse effect on the current and future operations, financial condition and prospects of the Company. 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 are 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
ended June ended June ended June ended June
30, 30, 30, 30,
2016 2015 2016 2015
---- ---- ---- ----
Resort Revenue $278,669 $226,673 $36,880 $35,229
------------------------------------ -------- -------- ------- -------
Operating expenses 133,706 114,687 28,969 26,743
Depreciation and
amortization 32,181 31,445 10,989 10,498
Selling, general and
administrative 28,598 22,276 7,694 5,171
-------------------- ------ ------ ----- -----
194,485 168,408 47,652 42,412
------- ------- ------ ------
Earnings (loss) from
operations 84,184 58,265 (10,772) (7,183)
Other income - 133 - -
Other expense (1,882) (550) (1,716) (656)
Finance expense, long
term debt (6,486) (9,237) (1,734) (1,992)
Finance expense, Limited
Partner's interest (7,693) (6,338) (2,612) (2,035)
Net earnings (loss)
before income tax 68,123 42,273 (16,834) (11,866)
------------------- ------ ------ ------- -------
Income tax (expense)
benefit (15,400) (10,047) 2,706 2,008
Net earnings (loss) and
comprehensive $52,723 $32,226 $(14,128) $(9,858)
income (loss)
------------
Net earnings (loss) and
comprehensive
income (loss):
Attributable to Whistler
Blackcomb $41,452 $26,504 $(8,114) $(5,500)
Holdings Inc. shareholders
Attributable to Limited
Partner's non- 11,271 5,722 (6,014) (4,358)
controlling interest
--------------------
$52,723 $32,226 $(14,128) $(9,858)
------- ------- -------- -------
Earnings (loss) per
share
Basic $1.09 $0.70 $(0.21) $(0.14)
Diluted $1.08 $0.70 $(0.21) $(0.14)
Weighted average number
of common shares
outstanding
Basic 38,130 38,039 38,152 38,050
Diluted 38,266 38,097 38,328 38,103
------- ------ ------ ------ ------
Whistler Blackcomb Holdings Inc.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited, in thousands)
June 30, September 30,
2016 2015
==== ====
Assets
Current assets
Cash and cash equivalents $8,457 $5,682
Accounts receivable 4,037 3,783
Income taxes receivable - 210
Inventory 15,572 22,590
Prepaid expenses 3,262 4,215
Notes receivable 161 153
---
31,489 36,633
Notes receivable 462 624
Property, buildings and
equipment 306,107 315,312
Property held for
development 9,244 9,244
Intangible assets 281,020 290,009
Goodwill 142,343 142,343
-------- ------- -------
$770,665 $794,165
-------- --------
Liabilities and
Shareholders' Equity
Current liabilities
Accounts payable and accrued
liabilities $23,712 $28,793
Income taxes payable 10,771 -
Provisions 1,969 1,701
Deferred revenue 20,035 27,974
------
56,487 58,468
Other liabilities 3,610 3,691
Long-term debt 185,840 232,436
Deferred income tax
liability 27,587 26,089
Limited Partner's liability 72,796 72,796
------ ------
Total liabilities 346,320 393,480
Share capital 444,714 443,290
Contributed surplus 1,938 1,485
Deficit (77,113) (90,666)
------- -------
Total Whistler Blackcomb
Holdings Inc. shareholders'
equity 369,539 354,109
Non-controlling interest 54,806 46,576
------ ------
424,345 400,685
------- -------
$770,665 $794,165
======== ========
Whistler Blackcomb Holdings Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Unaudited, in thousands)
Nine months Nine months
ended June ended June
30, 30,
2016 2015
==== ====
Cash provided by (used in)
Operations
Net earnings and
comprehensive income $52,723 $32,226
Adjustments for:
Income tax expense 15,400 10,047
Finance expense on long-term debt 6,486 9,237
Finance expense on Limited
Partner's interest 7,693 6,338
Depreciation and amortization 32,181 31,445
Disposal losses 1,882 550
Share-based compensation 912 698
===
117,277 90,541
Interest and swap
installments paid on
long-term debt (5,783) (6,571)
Finance expense paid on
Limited Partner's
interest (7,324) (6,618)
Income taxes paid (2,922) (5,601)
Changes in non-cash
operating working capital (5,401) (14,225)
$95,847 $57,526
======= =======
Financing
Dividends paid on common
shares (27,899) (27,817)
Distributions to Limited
Partner's non-
controlling interest (3,041) (4,254)
Repayment of long-term
debt (82,312) (24,000)
Draws on revolving credit
facility 35,812 15,610
Proceeds from issuances of
common stock 965 44
Debt issuance costs (380) (382)
=================== ==== ====
$(76,855) $(40,799)
======== ========
Investing
Expenditures on property,
buildings, equipment and
intangibles (16,499) (23,463)
Proceeds from sale of
property and equipment 128 192
Repayment of notes
receivable 154 145
================== === ===
$(16,217) $(23,126)
======== ========
Cash and cash equivalents,
end of period
Increase/(decrease) in
cash and cash equivalents 2,775 (6,399)
Cash and cash equivalents,
beginning of period 5,682 8,410
========================== ===== =====
$8,457 $2,011
====== ======
SOURCE Whistler Blackcomb
