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Peak Resorts: The New ASC?

ss20

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A minute from the Alta exit off the I-15!
Well, this doesn't sound good. Can't say this is a surprise.

http://www.newenglandskiindustry.com/viewstory.php?storyid=174

Peak Resorts to Attempt IPO Again
Wednesday, October 22, 2014, NewEnglandSkiIndustry.com

The pending event likely prompting the latest IPO attempt is a 10% interest only loan related to Mount Snow. $42.9 million is due on April 1, 2016.

According to the SEC Form S-1, Peak Resorts has $204 million in assets, $175 million in long term debt (most of it at 10% interest), and $3.5 million in stockholders' equity. The company reported 1.57 million skier visits and 182 thousand tubing visits in fiscal year 2014.

I'm no banker, but 175 million $ in the hole probably isn't a good thing I suppose.
 

skiNEwhere

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Yes companies don't want to have a lot of debt but that doesn't mean they can't be successful. The construction equipment company caterpillar is a great example of this.

As a shareholder, what I'd be more concerned about are their plans for growth. The ski industry is volatile due to the weather, I don't see much growth from operations alone, it would have to come from real estate.
 

Domeskier

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L
Yes companies don't want to have a lot of debt but that doesn't mean they can't be successful. The construction equipment company caterpillar is a great example of this.

As a shareholder, what I'd be more concerned about are their plans for growth. The ski industry is volatile due to the weather, I don't see much growth from operations alone, it would have to come from real estate.

Agreed. That S-1 better disclose their position on domes.
 

skiNEwhere

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5 bucks says they build a dome before they ever upgrade the summit triple at attitash
 

Quietman

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The SEC Form is a very interesting read and provides a lot of insight into the economics of ski area operations.
 

BenedictGomez

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The SEC Form is a very interesting read and provides a lot of insight into the economics of ski area operations.

You're right, here are my top-10 takeaways for those who are either too lazy, or not boring enough to enjoy reading SEC filings:

1) It's pretty telling who isnt book running.
2) They're losing money & don't have a lot of cash.
3) They have a ton of debt.
4) With a few notable exceptions, they own mostly crummy little ski areas.
5) Why they plan on offering a quarterly dividend is completely beyond me.
6) They plan on raising lift ticket & season pass prices and call that a big component of their success.
7) They claim they intend to continue to acquire ski areas when it's a strategic fit (interesting given their current debt/equity).
8: For the 13/14 season, they got 33.1% of revenue on weekends & 24.4% of revenue during the 3 major holiday periods.
9) Lots of info here on what segments comprise what % of revenue and what items are what % of expenses (interesting stuff).
10) They're highly leveraged to Mount Snow from a top-line perspective (40%). As Mount Snow goes, so too goes this company.
 

bigbob

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Some of those dinky areas have more revenue than Wildcat, which is 3rd from the bottom!
 

Savemeasammy

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I'm not sure if running ski areas with Wall St's best interests in mind, rather than skier/riders best interests, is a great idea...


Sent from my iPhone using Tapatalk
 

Tin

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After reading through it I'm more convinced the snow making system was put in at Wildcat to make it easier to sell.
 

yeggous

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After reading through it I'm more convinced the snow making system was put in at Wildcat to make it easier to sell.

This is an interesting suggestion that I had not thought of, but it makes sense. You can't sell the train wreck that you had last year, so patch it up and offload it. The question becomes do you sell off Attitash too? They might be worth more as a package.
 

deadheadskier

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Cranmore seems to be on solid financial footing. Maybe they'll step in, buy both areas and create a near monopoly on the MWV ski product.

I'd be psyched if Bretton Woods bought Wildcat as well. Biggest complaint people have with BW is lack of challenging terrain. Having Wildcat to offer would make sense for them.

I don't care who buys Attitash. Just replace the damn triple chair.
 

Tin

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This is an interesting suggestion that I had not thought of, but it makes sense. You can't sell the train wreck that you had last year, so patch it up and offload it. The question becomes do you sell off Attitash too? They might be worth more as a package.

Before they even turn a light switch on they have $27k+ a month in debt payments. And only 64k visits? Is that number tickets sold or just people who show daily including pass holders?

Attitash makes them too much money, doesnt have a ton of debt.
 

MadMadWorld

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The line between running a successful ski area and closing/being sold seems to get smaller and smaller these days. It really wouldn't shock me to see any ownership go belly up. Smaller mountains only seem to last a few years these days and medium sized ski areas are running into more and more trouble.
 

VTKilarney

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The issue I see with Bretton Woods purchasing the property is that Bretton Woods is a resort that has a ski area. I'm not sure if they want skiing to be their primary focus.
 

EPB

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You're right, here are my top-10 takeaways for those who are either too lazy, or not boring enough to enjoy reading SEC filings:

1) It's pretty telling who isnt book running.
2) They're losing money & don't have a lot of cash.
3) They have a ton of debt.
4) With a few notable exceptions, they own mostly crummy little ski areas.
5) Why they plan on offering a quarterly dividend is completely beyond me.
6) They plan on raising lift ticket & season pass prices and call that a big component of their success.
7) They claim they intend to continue to acquire ski areas when it's a strategic fit (interesting given their current debt/equity).
8: For the 13/14 season, they got 33.1% of revenue on weekends & 24.4% of revenue during the 3 major holiday periods.
9) Lots of info here on what segments comprise what % of revenue and what items are what % of expenses (interesting stuff).
10) They're highly leveraged to Mount Snow from a top-line perspective (40%). As Mount Snow goes, so too goes this company.

Agreed. This was a great read. I'd love to see a map of the land they own at Attitash that they earmark for potential real estate development too.
 

Tin

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A lot of negatives but what they did with Crotched is impressive. Almost 100k visits last year and catching on. It could survive independently. If they went under someone would buy Crotched in a second.
 
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