Vail Resorts expects unprofitable first quarter
AVON – When Vail Resorts announces its first-quarter financial results Friday, you can expect to see the normal early-ski season operating loss.While revenues don’t match expenses because the ski slopes aren’t open during the quarter that runs from Aug. 1 to Oct. 31, expect to see far lower expenses.The resort company will be reaping the full benefits of a $25 million cost-cutting program implemented 18 months ago, and it will also see the benefits of lower interest rates from refinancing $490 million in long-term debt that’s expected to save up to $5 million annually.
Expenses were pared from budgets across its four Colorado ski resorts and one Lake Tahoe-area resort as well as at its 10 RockResorts and other hotel and leisure properties. Along with Vail Mountain and Beaver Creek, Vail Resorts owns Breckenridge and Keystone in Summit County and Heavenly in California. The company’s stock last month bumped up to better than $22 a share – its initial public offering price – on speculation that the company may sell some of its hotel properties. That possibility was even broached by Vail Resort’s Chief Executive Adam Aron during a conference call on the first quarter earnings. Hotels, like the company’s luxury RockResorts ,are selling for a premium as the travel and leisure industry returns to profitability after three tough years.Speculators may also be eyeing the upside from the company’s more than $500 million in slopeside redevelopment over the next five years in Vail and Lionshead. The renovation is eventually expected to boost profits.
Last year Vail Resorts lost $6 million on record revenues of $721.9 million, largely because of $37 million in one-time refinancing charges and $5 million spent cleaning mold from an employee housing facility the company owns in Breckenridge.Without those additional expenses the company would have posted a $20 million profit, a $28.9 million improvement from the previous year’s $8.5 million loss.The company is projecting it will earn $152 to $160 million this year in pre-tax profit.
Staff Writer Cliff Thompson can be reached at 949-0555, ext. 450, or firstname.lastname@example.org.Vail, Colorado