American Skiing Company - "Northeast Skier Visits"

[WWF-VT]

No surprise based on the lousy weather this season...

American Skiing Company information - Unaudited Skier Visits

• 
  2006 2005 Change
• Attitash 186,693 211,301 -11.60%
• Killington 795,400 985,962 -19.30%
• Mount Snow 429,822 523,698 -17.90%
• Sugarloaf/USA 310,583 366,382 -15.20%
• Sunday River 473,159 524,861 -9.90%
  

 

[Greg]

More info here too:

http://news.alpinezone.com/8913/

 

[Geoff]

No surprise based on the lousy weather this season...

American Skiing Company information - Unaudited Skier Visits

• 
  2006 2005 Change
• Attitash 186,693 211,301 -11.60%
• Killington 795,400 985,962 -19.30%
• Mount Snow 429,822 523,698 -17.90%
• Sugarloaf/USA 310,583 366,382 -15.20%
• Sunday River 473,159 524,861 -9.90%
  

That 19.3% drop at Killington sounds about right. Late opening, early closing, a big thaw in early December, 3 disaster weekends in January. It seems like it rained every Thurdsay all winter.

Their financials make you wonder when they'll finally go bankrupt. $600+ million in debt. Book value of the resorts is closer to $450 million. They can't generate enough operating profit to pay off even a fraction of their interest payments on those loans.

 

[skibum1321]

Their financials make you wonder when they'll finally go bankrupt. $600+ million in debt.

Not soon enough. Nothing would make me happier than ASC finally folding.

 

[ski_resort_observer]

That 19.3% drop at Killington sounds about right. Late opening, early closing, a big thaw in early December, 3 disaster weekends in January. It seems like it rained every Thurdsay all winter.

Their financials make you wonder when they'll finally go bankrupt. $600+ million in debt. Book value of the resorts is closer to $450 million. They can't generate enough operating profit to pay off even a fraction of their interest payments on those loans.

ASC will not go bankrupt for the simple reason that the entity that really owns it, Oak Hill Capital, cannot recoup any investment value if it does.

As always it really comes down to the snow or lack thereof. If you believe in that silver lining saying, not saying that I do here, there is much that can be looked at in that way via both the 2nd and 3rd quarter reports. Some say that if New England had a good snow year ASC might have actually almost maybe broke even.

ASC will go out of business only if and when Oak Hill decides to throw in the towel and take whatever they can get out of the company.

 

[tree_skier]

Don't forget the canyons and steamboat had monster years. After skiing MS virtually every weekend day this past year don't ask me where they would put another 15%. the place was packed.

 

[Tin Woodsman]

Don't forget the canyons and steamboat had monster years. After skiing MS virtually every weekend day this past year don't ask me where they would put another 15%. the place was packed.

The Western resorts may have had monster years, but I doubt they were able to make up for the collective loss of 400,000+ skiers days from the Eastern resorts.

Killington below 800K? Pres Smith can't be impressed. And if he's dead (don't know) he'd be rolling in his grave.

 

[ski_resort_observer]

The Western resorts may have had monster years, but I doubt they were able to make up for the collective loss of 400,000+ skiers days from the Eastern resorts.

Killington below 800K? Pres Smith can't be impressed. And if he's dead (don't know) he'd be rolling in his grave.

The 2 western resorts and the 5 new england resorts are about the same in total skier visits, about 2m. The western resorts did make up for about 60% of those 400,000 lost in the east. Not selling Steamboat was a good thing businesswise desptie all the legal pressure from the buyers.

I know very few agree but I feel the AllforOne pass is starting to bite them in the butt. The balance of short term income and a positive skier experience is starting to change, especially at Kmart.

 

[thetrailboss]

Yes, I've heard lots of :argue: about the impacts of the pass program...more skiers and riders on the weekends. The thing that has changed is that everyone has that pass and hasn't noticed how much day rates have gone up for the few who buy day tix....K-mart was over $70 IIRC.

 

[thetrailboss]

Don't forget the canyons and steamboat had monster years. After skiing MS virtually every weekend day this past year don't ask me where they would put another 15%. the place was packed.

Am looking forward to skiing Snow this season...hopefully we will meet you there, tree_skier!

 

[frozencorn]

I'd like to think that since I blew out my knee in Feb, I account for at least 1% of each of the above.....

 

[Angus]

Does anyone know who owns the debt - in any sort of bankruptcy, the debt holders call the shots. purchasing debt in distressed companies is a speciality with opportunities with huge upside.

 

[Tin Woodsman]

Does anyone know who owns the debt - in any sort of bankruptcy, the debt holders call the shots. purchasing debt in distressed companies is a speciality with opportunities with huge upside.

I think much of it is owed to Fleet/Back of America. They were ASC's primary pushers, I mean bankers.

 

[ski_resort_observer]

As you might expect ASC owes alot to many diferent and diverse companies. Their debt has been restructured many times. From the 2nd Q(2004) report these 3 are owed the most.

On May 14, 2004, American Skiing Company Resort Properties, Inc. ("Resort Properties"), the principal real estate development subsidiary of American Skiing Company (ASC), completed the restructuring of the real estate term facility (the "Term Loan") from Fleet National Bank, Ski Partners, LLC and Oak Hill Capital Partners.

Oak Hill also owns a majority of ASC's stock.

 

[Geoff]

As you might expect ASC owes alot to many diferent and diverse companies. Their debt has been restructured many times. From the 2nd Q(2004) report these 3 are owed the most.

On May 14, 2004, American Skiing Company Resort Properties, Inc. ("Resort Properties"), the principal real estate development subsidiary of American Skiing Company (ASC), completed the restructuring of the real estate term facility (the "Term Loan") from Fleet National Bank, Ski Partners, LLC and Oak Hill Capital Partners.

Oak Hill also owns a majority of ASC's stock.

That May 14, 2004 thing was the default on the Fleet debt that turned the land where the Killington Village is supposed to go over to SP Land. The guy who is listed as the Ski Partners LLC principal works for Fleet so they're really just a Fleet shell company. Killington Ltd holds 25% interest in the corporation that now owns the land. It's 200+ acres at K base and another 200+ over at Bear Mountain. Centex is developing the property though they haven't submitted a plan to the town yet. SP Land is out of Texas as is Oak Hill. I've never seen it stated publicly but I think SP Land is wholly owned by Oak Hill. They must have thrown a bunch of cash at Ski Partners to grab the land.

Oak Hill holds the senior debt at ASC and at least one seat on the board of directors. As far as I know, they don't own any stock in the place. Their debt can be converted into stock but Oak Hill would be idiots to do that. Who'd want to own stock in ASC?

In their last 10-Q, ASC owed north of $600 million. They're never going to be able to pay the interest on all that debt.

 

[riverc0il]

seems like ASC has been treading water financially for some time. i have no finance or banking experience, but i would suspect they wouldn't have to worry about the debt unless they couldn't keep making payments, that is when the creditors get angry. if they can keep making payment but only enough to result in perma debt since the interest keeps growing, i would suspect the banks would be more than happy to let ASC keep hanging themselves. perma debt seems better for the banks than an under valued sale. these mountains and properties have gotten so huge no one would ever pay what they are actually worth if a sale was made. blows my mind how are banking/finance system works with these big corporations. if this was joe blow trying to just make ends meet and pay for the morgage, it would be eviction time by now!

definitely no surprise that skiers visits were down because of the weather. also as previously mentioned, a later opening and earlier closing contributed. i think what IS surprising is how much visits were down, especially how hard ASC worked the all for one pass. skier visits really don't count as much for an area that makes that much money up front before the season begins compared to areas that rely more on day trippers.

 

[Geoff]

definitely no surprise that skiers visits were down because of the weather. also as previously mentioned, a later opening and earlier closing contributed. i think what IS surprising is how much visits were down, especially how hard ASC worked the all for one pass. skier visits really don't count as much for an area that makes that much money up front before the season begins compared to areas that rely more on day trippers.

In the good ol' days, Killington would have actually been up in a year like last one. Their reputation was first to open, last to close, and blow snow until the snowmaking ponds are sucked dry. Obviously, the corporate bean counters in Utah now control decisions at Killington. October and May aren't profitable so Killington now schedules their opening to be the weekend before Turkey Day, just like everybody else. They close in early May and don't pile on the snow so it's extremely thin by mid-April. 40 years of building the brand down the tubes. When the skiing sucked, people went to resorts with better snowmaking reputations. Killington has historically had the largest season pass base in North America. You'd buy a pass there knowing you'd be making at least a few turns in October and you'd be skiing until June 1. ASC decided to drop pass prices and lower the quality of the product. It obviously backfired since their day ticket results have been terrible. Would you rather sell pant loads of $70+ walk-up day tickets or dump cheap season passes on the market in the early summer and have a big slice of people not renew because they're disgusted with the product quality? Killington had no problem getting a million skier visits when they had the snowmaking reputation, the highest day ticket price in the East, and a pass price set to break even with 22 ski days.

One of my best friends was complaining about Killington race coaches to me the other day. Most of the good ones have quit. In the old days, being a coach got you a free pass plus free passes for your family. This could easily be worth $5K or more. They were also on Killington payroll and received a minimum wage kicker and employee food discounts. When a pass is discounted to sub-$400, there is absolutely no incentive to put in all the hard hours. I'm sure the same is true for all the other volunteer positions and part-time positions. Ski patrol is topped up on weekends with volunteers. The full-timers were treated so shabbily by Killington that they're now union. The part time ski instructors have had big turnover. Ditto other part-time weekend jobs at the ticket window, in the cafeteria, parking cars.... The replacements aren't the same quality level. If you have a pulse, you're hired.

 

[SkiDog]

In the good ol' days, Killington would have actually been up in a year like last one. Their reputation was first to open, last to close, and blow snow until the snowmaking ponds are sucked dry. Obviously, the corporate bean counters in Utah now control decisions at Killington. October and May aren't profitable so Killington now schedules their opening to be the weekend before Turkey Day, just like everybody else. They close in early May and don't pile on the snow so it's extremely thin by mid-April. 40 years of building the brand down the tubes. When the skiing sucked, people went to resorts with better snowmaking reputations. Killington has historically had the largest season pass base in North America. You'd buy a pass there knowing you'd be making at least a few turns in October and you'd be skiing until June 1. ASC decided to drop pass prices and lower the quality of the product. It obviously backfired since their day ticket results have been terrible. Would you rather sell pant loads of $70+ walk-up day tickets or dump cheap season passes on the market in the early summer and have a big slice of people not renew because they're disgusted with the product quality? Killington had no problem getting a million skier visits when they had the snowmaking reputation, the highest day ticket price in the East, and a pass price set to break even with 22 ski days.

One of my best friends was complaining about Killington race coaches to me the other day. Most of the good ones have quit. In the old days, being a coach got you a free pass plus free passes for your family. This could easily be worth $5K or more. They were also on Killington payroll and received a minimum wage kicker and employee food discounts. When a pass is discounted to sub-$400, there is absolutely no incentive to put in all the hard hours. I'm sure the same is true for all the other volunteer positions and part-time positions. Ski patrol is topped up on weekends with volunteers. The full-timers were treated so shabbily by Killington that they're now union. The part time ski instructors have had big turnover. Ditto other part-time weekend jobs at the ticket window, in the cafeteria, parking cars.... The replacements aren't the same quality level. If you have a pulse, you're hired.

Very well put and extermely well thought out. I think EVERYTHING you said above is true..Killington built a reputation that Big Corporation just doesn't see. To them its all about bottom line. I can't say that I don't love the price of the all for one passes, but would much rather go back to day tickets or higher priced season passes if it went back to the "old killington"....I can remember days of old skiing kmart 2nd week of october not anymore..and thats sad..

M

 

[ski_resort_observer]

That May 14, 2004 thing was the default on the Fleet debt that turned the land where the Killington Village is supposed to go over to SP Land. The guy who is listed as the Ski Partners LLC principal works for Fleet so they're really just a Fleet shell company. Killington Ltd holds 25% interest in the corporation that now owns the land. It's 200+ acres at K base and another 200+ over at Bear Mountain. Centex is developing the property though they haven't submitted a plan to the town yet. SP Land is out of Texas as is Oak Hill. I've never seen it stated publicly but I think SP Land is wholly owned by Oak Hill. They must have thrown a bunch of cash at Ski Partners to grab the land.

Oak Hill holds the senior debt at ASC and at least one seat on the board of directors. As far as I know, they don't own any stock in the place. Their debt can be converted into stock but Oak Hill would be idiots to do that. Who'd want to own stock in ASC?

In their last 10-Q, ASC owed north of $600 million. They're never going to be able to pay the interest on all that debt.

I was in a hurry and just wanted to document Tin's correct statement that Fleet/Bank of America was one of the major debt holders. Thought I was the only one who thought the cheap passes would hurt Kmart not help it.

Can't question the intelligence of Oak Hill in owning ASC stock but I took it directly from the same report. Last time I checked Oak Hill had 3 members of the BOD. In a very quick peruse of the 2005 report on 8/9/99 Oak Hill purchased 150 million worth of ASC's stock. I remember others as well. When I get some time I will do a closer look.

On all this, only time will yield the final results. It's a long shot at best but if this winter if both coasts get good snow and the stock market goes on a bull run, ya never know. I have always rooted for the underdog.

 

[Tin Woodsman]

definitely no surprise that skiers visits were down because of the weather. also as previously mentioned, a later opening and earlier closing contributed. i think what IS surprising is how much visits were down, especially how hard ASC worked the all for one pass. skier visits really don't count as much for an area that makes that much money up front before the season begins compared to areas that rely more on day trippers.

Yes, it IS surprising how much visits were down at K-Mart and Mt. Sneaux. But you don't even know the half of it. Sure the weather was bad, but they were down nearly 20% while the entire state of VT was down only 6%.

When you run the numbers, this result is absolutely staggering. K-Mart and Mt. Sneaux collectively lost 284,438 skier days last season vs. the prior year. The entire state of VT lost 264,732. This means that outside of ASC's two areas, the other ski resorts in the state actually added 19,706 skier days even despite the lousy weather! ASC accounted for 107% of VT's lost skier days!!

If that isn't an indictment of how poorly those two areas are run, I don't know what is.