Peak Resorts to go Public

[thetrailboss]

According to SAM, Peak will make a public offering.

http://www.saminfo.com/

Thoughts?

 

[john1200c]

According to SAM, Peak will make a public offering.

http://www.saminfo.com/

Thoughts?

Infusion of cash, perhaps some upgrades on the way???

 

[deadheadskier]

When has this ever been a good thing?

certainly didn't help ASC and Intrawest

 

[roark]

Infusion of cash, perhaps some upgrades on the way???

Or a continued greater expansion of holdings.

When has this ever been a good thing?

certainly didn't help ASC and Intrawest

That was my first thought as well. Is there another publically traded ski operation besides Vail? (yes, MTN does a lot more than just run Vail the ski area...)

 

[thetrailboss]

One big downside, and Les Otten said this with the case of ASC, is that Peaks will lose control over major decisions to an elected board and stockholders who are interested in making the most return on their investment.

 

[skime]

According to SAM, Peak will make a public offering.

http://www.saminfo.com/

Thoughts?

it's a good sign for financial markets....im surprised anyone would invest in an industry that relies on discretionary income:argue:

 

[threecy]

Some Peak Resorts history: http://www.newenglandskihistory.com/skiareamanagement/peakresorts.php

They have a lot of debt, a significant amount of which has double digit interest rates.

 

[wa-loaf]

One big downside, and Les Otten said this with the case of ASC, is that Peaks will lose control over major decisions to an elected board and stockholders who are interested in making the most return on their investment.

Yup, Killington will now only be open during vacation weeks ...:razz:

 

[Black Phantom]

Yup, Killington will now only be open during vacation weeks ...:razz:

What does this have to do with Killington?:dunce:

 

[wa-loaf]

What does this have to do with Killington?:dunce:

Oh right. that's Powdr? But doesn't everything have to do with Killington anyway?

 

[Black Phantom]

Oh right. that's Powdr? But doesn't everything have to do with Killington anyway?

Not if you do not ski there.

 

[WWF-VT]

SEC filing

http://www.sec.gov/Archives/edgar/data/1517401/000095012311036367/c63465sv1.htm

 

[bobbutts]

The Peak Resorts

Attitash, Barlett, NH
Skiing, Snowboarding, Spa, Alpine Slide, Waterslides, Horseback Riding, Mountain Biking
3 Quad Chair, 3 Triple Chairs, 3 Double Chairs, 3 Carpet Lift, 70 Trails, 2 Terrain Parks, Onsite Ski and Snowboard Rentals, 97% Snowmaking
Boston Mills, Peninsula, OH
Skiing, Snowboarding
4 Triple Chairs, 2 Double Chairs, 1 Surface Lifts, 10 Trails, Onsite Ski and Snowboard Rentals, 100% Snowmaking, Night Skiing
Brandywine, Sagamore Hills, OH
Skiing, Snowboarding, Snow Tubing
4 Quad Chairlifts, 1 Triple Chairs, 4 Surface Lifts, 10 Trails, Onsite Ski and Snowboard Rentals, 100% Snowmaking, Night Skiing
Crotched Mountain, Bennington, NH
Skiing, Snowboarding
2 Quad Chairlifts, 1 Triple Chairs, 1 Double Chair, 2 Surface Lifts, 1 Wonder Carpet, 17 Trails, Onsite Ski and Snowboard Rentals, 100% Snowmaking, Night Skiing
Hidden Valley, Wildwood, MO
Skiing, Snowboarding and Private Golf Club
1 Quad Chairlift, 2 Triple Chairs, 3 Surface Lifts, 13 Trails, Onsite Ski and Snowboard Rentals, 100% Snowmaking, Night Skiing
Big Boulder, Lake Harmony, PA
Skiing, Snowboarding, Snow Tubing
2 Triple Chairs, 5 Double Chairs, 1 Carpet Lift, 16 Trails, 3 Terrain Parks, Onsite Ski and Snowboard Rentals, 100% Snowmaking, Night Skiing
Jack Frost, Blakeslee, PA
Skiing, Snowboarding, Snow Tubing
1 Quad Chair, 2 Triple Chairs, 6 Double Chairs, 1 Carpet Lift, 24 Trails, 2 Terrain Parks, Onsite Ski and Snowboard Rentals, 100% Snowmaking
Mad River Mountain, Bellefontaine, OH
Skiing, Snowboarding, Snow Tubing
1 Quad Chairlift, 1 Triple Chair, 3 Double Chairs, 4 Surface Lifts, 20 Trails, Onsite Ski and Snowboard Rentals, 100% Snowmaking, Night Skiing
Mount Snow, West Dover, VT
Skiing, Snowboarding, Golf, Mountain Biking, Hiking, Spa, On-Mountain Dining
4 Quad Chair, 3 Triple Chairs, 4 Double Chairs, 3 Surface Lift, 1 Tow Rope, 106 Trails, 4 Terrain Parks, Onsite Ski and Snowboard Rentals, 80% Snowmaking
Paoli Peaks, Paoli, IN
Skiing, Snowboarding, Snow Tubing
5 Chairlifts, 2 Surface Lifts, 1 Wonder Carpet, 17 Trails, Onsite Ski and Snowboard Rentals, 100% Snowmaking, Night Skiing
Snow Creek, Weston, MO
Skiing, Snowboarding, Snow Tubing
2 Triple Chairlifts, 1 Double Chairlift, 3 Surface Lifts, 17 Trails, Onsite Ski and Snowboard Rentals, 100% Snowmaking, Night Skiing
Wildcat, Pinkham Notch, NH
Skiing, Snowboarding, Zip-line, Scenic Gondola rides, Hiking, Fishing
1 Quad Chairlift, 3 Triple Chairlifts, 50 Trails on 225 acres, Onsite Ski and Snowboard Rentals, 90% Snowmaking

 

[EPB]

This all seems pretty strange. Peak Resorts focuses on ski area operations more than the typical resorting company, but given the current state of the economy, it would be surprising to see that investors would have any sort of confidence in a ski area operators' abilities to distribute wealth to shareholders. They don't operate like a normal resorting company, and real estate has been a big source of profits for many resorting companies with Peak Reorts' size.

Their risk is significantly correlated to the weather, which makes cash flows even more unpredictable than normal. I know that threecy said that their interest rates have climbed past 10% in some cases. but there's really no reason for an investor to buy their equity at more than pennies on the dollar. This mixture between unpredictability, and leverage is grounds for disaster.

This is a very questionable move. Peak would probably be better off selling a few of their properties than trying to issue equity, but that's just my take on the matter.... We'll see.

 

[ta&idaho]

So is Mount Snow's new six-pack a speculative bubble?

 

[thetrailboss]

This sounds eerily similar to ASC....but then again maybe they learned from ASC.

We are a leader and innovator in the ski industry with 12 ski areas through the Midwest, Northeast and Southeast United States. Our ski areas offer guests high-quality skiable terrain as well as terrain parks for snowboarding and other snow sports. We employ modern snowmaking technology on a majority of our terrain that gives our guests an opportunity to participate in snow sports even in less-than-favorable weather.​

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Combined, our ski areas had approximately 1.7 million skier visits in the 2009/2010 ski season, which we believe put us among the top U.S. companies in terms of number of skier visits. We now operate more ski areas than any other company in the United States. Through development and acquisitions, our revenues have grown 180% from fiscal 2006 to 2010.​

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Our largest source of revenue is the sale of ski lift tickets, followed by food and beverage sales, equipment rentals, ski instruction services, hotel/lodging and merchandise sales. We generated approximately $90 million in revenue during fiscal 2010.​

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[thetrailboss]

Some more interesting excerpts:

Our Strengths ​

• Our ski areas are located in geographically diverse areas. Adverse weather patterns are challenges that all ski area operators face. In order to mitigate the negative effects that adverse weather may have on our overall financial results, we have strategically acquired or developed our ski areas in geographically diverse regions of the United States in order to compensate for any adverse weather that one region may experience over another during a particular ski season.

• We own or lease and operate all of our ski areas. We are unique in the ski industry in that we not only own or lease our ski areas, but we operate all 12 of our ski areas, giving us and our employees the specialized skills and experience necessary to maintain our past success. With this knowledge, we believe that we are in a better position to maximize our operational efficiencies and integrate the businesses of any future ski areas that we may acquire or develop.

• Our acquisition strategy has proven successful. Our commitment to efficient snowmaking and our desire to diversify our ski area locations have been a key component of our past acquisition strategy. Our management team has been successful in implementing this strategy in the past, and as a result, we have enhanced our presence in certain regions and built a new presence in others, while complementing our existing ski area portfolio. The business and acquisition experience of our management team has allowed us to integrate these new businesses smoothly and profitably.

• We utilize modern snowmaking technology. We are committed to providing our guests quality ski experiences, but at the same time, are focused on reducing our costs and energy uses. We have invested in snowmaking technology on a majority of our terrain that allows us to make a significant amount of snow while reducing our energy costs.

Our Strategy ​

• We invest in and improve our existing ski areas. Our financial success depends, in large part, on maintaining and increasing our skier visits. We have invested substantial amounts of money to adopt what we believe to be the most efficient snowmaking system available as standard equipment at all of our resorts. We believe that our snowmaking system provides us with a competitive advantage over other ski area operators. We also continually improve the existing facilities and equipment at our ski areas and are currently seeking permits for the redevelopment of our largest ski area, Mount Snow.

• We monitor potential acquisition targets to build geographical diversity and increase market share. We believe that, given our profitable results at our current resorts and our proven acquisition history, we are positioned for further growth within the day ski area and overnight drive ski area markets. Our past acquisitions have been driven by our goals to diversify our locations and increase skier visits, which will continue to be the driving factors of any future acquisitions that we may complete.

Peak Resorts, Inc. was incorporated in Missouri on September 24, 1997 as a holding company to own or lease and operate day ski areas and overnight drive destination ski areas through its wholly-owned subsidiaries. Since Peak was formed, the Company has acquired or developed a total number of 12 ski areas.​

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[ta&idaho]

Mad River Mountain, Bellefontaine, OH
Skiing, Snowboarding, Snow Tubing
1 Quad Chairlift, 1 Triple Chair, 3 Double Chairs, 4 Surface Lifts, 20 Trails, Onsite Ski and Snowboard Rentals, 100% Snowmaking, Night Skiing

Mad River Mountain. Snow tube it if you can.

 

[thetrailboss]

More:

Our business is highly seasonal and the occurrence of certain events during our peak times could have a negative effect on our revenues.​

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Our resort operations are highly seasonal. Although the air temperatures and timing and amount of snowfall can influence the number and type of skier visits, the majority of the skier visits are from mid-December to the end of March. Accordingly, during the past three fiscal years, we generated approximately 90% of our revenues during the third and fourth fiscal quarters. In addition, throughout our peak quarters, we generate the highest revenues on weekends and during three major holiday periods: Christmas, Dr. Martin Luther King, Jr. Day and Presidents Day. During the 2009/2010 ski season, we generated 33% of our revenues on weekends and 29% of our revenues during these three major holiday periods. Our resorts typically experience operating losses and negative cash flows during the first and second quarters of each fiscal year, as a result of the seasonality of our business. Operating results for any three-month period are not necessarily indicative of the results that may be achieved for any subsequent quarter or for a full fiscal year.​

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The leases for the land underlying Jack Frost and Big Boulder may be terminated by the landlord and if terminated, would eliminate revenues from these resorts.​

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We do not own the land underlying the Jack Frost and Big Boulder resorts. We have entered into a lease with Big Boulder Corporation and a lease with Blue Ridge Real Estate Company, both of which terminate on December 1, 2033. The terms of the leases provide that the landlord has a right to terminate the leases at any time, upon the payment of approximately $500,000 plus the net book value of the assets relating to the property. If these leases are terminated, we would not be able to operate Jack Frost and Big Boulder, and therefore, the revenues generated by these resorts would be eliminated. Jack Frost and Big Boulder generated 7% and 6% of our consolidated revenues for the fiscal year ended April 30, 2010, respectively.​

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The loss of our key executive officers would harm our business.​

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Our success depends to a significant extent upon the performance and continued service of our key management team which includes Timothy Boyd, our president and principal executive officer, Stephen Mueller, our vice president and principal financial and accounting officer, and Richard Deutsch, our vice president in charge of business and real estate development. The loss of the services of this management team could have a material adverse effect on our business and operations because of Messers. Boyd’s, Mueller’s and Deutsch’s specific and unique knowledge of operating multiple ski resorts, including day ski areas and overnight drive ski areas.​

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The high fixed cost structure of ski resort operations can result in significantly lower margins if revenues decline.​

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The cost structure of ski resort operations has a significant fixed component with variable expenses including, but not limited to, resort related fees, credit card fees, retail/rental cost of sales and labor, ski school labor and dining operations. Any material declines in the economy, elevated geopolitical uncertainties and/or significant changes in historical snowfall patterns, as well as other risk factors discussed herein, could adversely affect revenue. As such, our margins, profits and cash flows may be materially reduced due to declines in revenue given our relatively high fixed cost structure. In addition, increases in wages and other labor costs, energy, healthcare, insurance, transportation, fuel, and other expenses included in our fixed cost structure may also reduce our margin, profits and cash flows.​

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We may be unable to further develop our Mount Snow property if we are unable to obtain approval under Vermont’s Act 250.​

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We have plans to further develop our resort at Mount Snow. Such plans are subject to approval by the Vermont District Environmental Commission under Vermont’s Act 250, the Land Use and Development Act. Our master plan is currently in the approval process, but we will also need to submit applications for the construction phases after the master plan has been approved. Our master plan contemplates the redevelopment of skier service buildings, parking lots and ski-in/ski-out real estate. Failure to obtain approval at any stage of the process could cause a delay of such plans or prevent us from executing such redevelopment plans that we expect will enhance a skier’s experience at Mount Snow.​

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A significant portion of our ski resorts are operated under leases or Forest Service permits.​

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We lease a significant portion of the land underlying certain of our ski resorts or use them pursuant to renewable permits or licenses. If any of these arrangements were terminated or not renewed on expiration, or renewed on terms materially less favorable to us, our ability to possess and use the land would be impaired.​

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A substantial portion of the skiable terrain at our Attitash, Mount Snow and Wildcat Mountain resorts is federal land that is used under the terms of permits with the United States Forest Service. The permits give the United States Forest Service the right to review and comment on the location, design, and construction of improvements in the permit area and on certain other operational matters. The permits can also be terminated or modified by the United States Forest Service for specific compelling reasons or in the event we fail to perform any of our obligations under the permits. Otherwise, the permits may be renewed. A termination or modification of any of our permits could have a material adverse affect on our results of operations. Currently, our permits expire as follows:​

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Ski Area Special Use Permit Expiration Date Attitash April 4, 2047 Mount Snow April 4, 2047 Wildcat Mountain November 18, 2050

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Additionally, we lease some or all of our property at Paoli Peaks, Crotched Mountain, Mad River, Jack Frost and Big Boulder from third parties. Our lease at Paoli Peaks terminates in 2078, our lease at Crotched Mountain terminates in 2053 (though we have 10 options to extend the lease for additional periods of 15 years each), and our lease at Mad River terminates in 2026. Currently, the leases for our Jack Frost and Big Boulder resorts provide that the lessor has a right to terminate the leases at any time, upon the payment of certain fees. A termination of any of these leases could negatively impact our results of operations.​

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[thetrailboss]

And more about how things have been going:

Despite the recent economic recession, we experienced improved operating results as a result of price increases and increased skier visits, generally. Though we experienced fewer skier visits in fiscal 2009, results improved primarily because of expense reductions. However, uncertainties still exist surrounding the strength and duration of the general economic climate, and as such, we cannot predict whether our favorable trends will continue and what impact the economy will have on our future operations.​

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The timing and duration of favorable weather can have an impact on our revenues in regards to the timing and number of skier visits. Though the amount of snowfall early in the ski season does encourage skier visits, all of our ski areas have snowmaking capabilities in the event that the natural snowfall is insufficient. Cold weather, however, is essential to a successful ski season. The weather was favorable during the 2009/2010 ski season, but there is no way to predict favorable weather conditions in the future. We sell season passes prior to the start of the ski season to help mitigate any negative effects that unfavorable weather may have on our revenues. During the last two ski seasons, we have had an increase in the preseason sales of season passes. There can be no assurance that future preseason pass sales will be similar to historical trends.​

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We have increased the prices of most of our lift tickets, passes and certain other products and services in each of the last two seasons. There can be no assurance that we will be able to increase prices in the future or the impact that pricing increases may have on visitation or revenue.​

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Effective October 20, 2010, we acquired Wildcat Mountain Ski Area through the purchase of the assets of Wildcat Mountain Ski Area, Inc., Meadow Green-Wildcat Skilift Corp. and Meadow Green-Wildcat Corp. for a total of approximately $5 million. Wildcat Mountain is located in northern New Hampshire and serves the New Hampshire, Boston, Massachusetts and Rhode Island markets. Wildcat Mountain is located in close proximity to the Attitash ski area and gives our skiers the opportunity to use the same lift tickets and season passes for both Wildcat Mountain and Attitash, thus providing our visitors with more ski choices and opportunities. The results of operations of Wildcat Mountain are included in our consolidated results of operations from the effective date of the acquisition, October 20, 2010, forward. Our acquisition of Wildcat Mountain has not had a significant impact on our overall results of operations. ​

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In March 2011, we entered into an agreement to replace Mount Snow’s Summit Local triple chair lift with a new Leitner Poma high-speed detachable six-passenger bubble chair lift. We expect that the new lift will reduce the ride time of the current lift by nearly half. In addition, the new lift’s bubble chairs provide shelter from inclement weather and the convenience of ski-on ski-off loading and unloading.​

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