ASC woes continue

[ski_resort_observer]

Small article in the Portland paper saying that a local auction company will be auctioning off 200 fractional units owned by ASC at Steamboat as ASC could not sell them at market value. And so it continues.

 

[Greg]

http://news.coskiing.com/425/

 

[rjc1976]

That stinks for the people who paid full price. At the same time though, it looks like some people will be getting some nice bargains.

 

[ski_resort_observer]

Was wondering if Keenan had any link to ASC. On US 1 in Freeport, ASC had some sort of office/store setup. Even tho I passed it everday on my way to work at LL Bean, I never stopped to check it out. About 2 years ago Keenan took it over, renovated and made it their office.

 

[Skifastsailfast]

Was wondering if Keenan had any link to ASC. On US 1 in Freeport, ASC had some sort of office/store setup. Even tho I passed it everday on my way to work at LL Bean, I never stopped to check it out. About 2 years ago Keenan took it over, renovated and made it their office.

I'm pretty sure the Keenans are from Kingfield, about half an hour from Sugarloaf, but whether there's any official connection to ASC, I wouldn't know. It's a pretty big name in these parts of auctions, foreclosure and otherwise.

 

[skibum]

I lived in Steamboat for eight years. The horror stories about the shoddy construction of the "Grand Slum-it" were common knowledge around town. Not that many ski town condos are well built, but...
They did make national news when they opened and they realized that a full size SUV with a ski rack (2/3 of the Denver market) could not fit into the parking garage. Also the retail along the street has sat empty for years because of massive snow and ice slides off of the roof.

 

[ski_resort_observer]

Was wondering if Keenan had any link to ASC. On US 1 in Freeport, ASC had some sort of office/store setup. Even tho I passed it everday on my way to work at LL Bean, I never stopped to check it out. About 2 years ago Keenan took it over, renovated and made it their office.

I'm pretty sure the Keenans are from Kingfield, about half an hour from Sugarloaf, but whether there's any official connection to ASC, I wouldn't know. It's a pretty big name in these parts of auctions, foreclosure and otherwise.

The Keenan Auction Comapany is located now in South Portland. They moved from the Freeport location about a year ago. My wife and I have a food business so I go once in awhile to their restaurant equipment auctions. Usually when a restaurant goes out of business. You would be amazed at what you can get at an auction.

I don't think there is any official connection just thought it was ironic that they are handling ASC real estate liquidation sales and 3/4 years ago they replaced ASC as tenents of this building in Freeport.

 

[ski_resort_observer]

1st quarter results, 2006

ASC just made public their 1st quarter(fiscal 2006) earnings report.
Not good news.

Fiscal 2006 First Quarter Results

On a GAAP basis, net loss attributable to common shareholders for the first quarter of fiscal 2006 was $42.2 million, or $1.33 per basic and diluted common share, compared with a net loss attributable to common shareholders of $37.7 million, or $1.19 per basic and diluted common share for the first quarter of fiscal 2005. Total consolidated revenue was $20.1 million for the first quarter of fiscal 2006, compared with $19.5 million for the first quarter of fiscal 2005. Revenue from resort operations was $17.1 million for the first quarter of fiscal 2006 compared with $17.8 million for the first quarter of fiscal 2005. The decrease in resort revenues reflects the lower levels of summer business at the Company's eastern resorts due to rainy weather, and lower levels of group and conference business at Steamboat and The Canyons in the first quarter of fiscal 2006. Revenue from real estate operations was $3.0 million for the quarter versus $1.7 million for the comparable period in fiscal 2005. The increase in real estate revenue was primarily a result of increased sales of fractional unit inventory at Steamboat versus the comparable period in fiscal 2005.

And so it goes.....

 

[dmc]

On the bright side... Hunter Mountain has sold all it's shared for the Katskill Mountain Club and burned the mortage last week...

On to the next step... So glad the mountain was never sold and remains a family business..

 

[JimG.]

On the bright side... Hunter Mountain has sold all it's shared for the Katskill Mountain Club and burned the mortage last week...

On to the next step... So glad the mountain was never sold and remains a family business..

No wonder Russ was smiling so much when I spoke to him yesterday.

 

[ChileMass]

Re: 1st quarter results, 2006

On a GAAP basis, net loss attributable to common shareholders for the first quarter of fiscal 2006 was $42.2 million, or $1.33 per basic and diluted common share.......Total consolidated revenue was $20.1 million for the first quarter of fiscal 2006.....

I'm no accountant, but it doesn't take a genius to see that a single-quarter loss of $42 million on revenue on only $20 million just isn't good business. Whew!!

The problem is that there are a lot of us out here that like all the cushy accommodations that you only really get at big-mountain resorts like the ASC properties. With all due rspect to my hardcore AZ bretheren and sisteren, I am not going to spend a week's vacation and the dough required to go to a spartan ski hill like Cannon or MRG or Saddleback. If I'm gonna plunk down the big dough to take the family off on a "special" ski vacation, I'm going to Breck or Steamboat or Park City or Lake Placid or Stowe or Sunday River to get the nice hotels, the nice restaurants, the cute village, the clubs, etc etc. And ASC tries to provide this. The question is - why can't they make a profit at it? Especially at the prices they charge for tickets, condos, meals and everything else??!!?? I'm also not a ski industry insider, so perhaps someone has some insight on why smaller ski resorts can seemingly be profitable, but the ASC properties keep turning over their management and ownership?

 

[Tin Woodsman]

Re: 1st quarter results, 2006

I'm no accountant, but it doesn't take a genius to see that a single-quarter loss of $42 million on revenue on only $20 million just isn't good business. Whew!!

It's important to point out that ASC's fiscal 1st quarter seems to cover the late summer/fall period when revenues are at their lowest. Those figures aren't reflective of the baseline level of profitability (or lack thereof) ASC has. It does point out that ASC has done a lousy job building their 4 season business.

The problem is that there are a lot of us out here that like all the cushy accommodations that you only really get at big-mountain resorts like the ASC properties. With all due rspect to my hardcore AZ bretheren and sisteren, I am not going to spend a week's vacation and the dough required to go to a spartan ski hill like Cannon or MRG or Saddleback. If I'm gonna plunk down the big dough to take the family off on a "special" ski vacation, I'm going to Breck or Steamboat or Park City or Lake Placid or Stowe or Sunday River to get the nice hotels, the nice restaurants, the cute village, the clubs, etc etc.

I disagree that you can't get this elsewhere. If I want to go super high class at MRG, I could stay at the Pitcher Inn in Warren and be treated like a king. And the Sunday River/Bethel area isn't exactly a hotspot of nightlife. People want things to be as easy as possible when booking vacations to ski country. The problem is, everyone else thinks the same way, so you end up at overcrowded destinations like Breck, PC, or K-Mart. If you take a second to peel the onion back a layer or two, you can find whatever you want at 75% of the resorts out there, and will likely come away with a far better skiing experience for your trouble.

And ASC tries to provide this. The question is - why can't they make a profit at it? Especially at the prices they charge for tickets, condos, meals and everything else??!!?? I'm also not a ski industry insider, so perhaps someone has some insight on why smaller ski resorts can seemingly be profitable, but the ASC properties keep turning over their management and ownership?

Three things - ASC is poorly run in general, doesn't know how to do real-estate, and is underneath a massive pile of debt. Of the roughly $60MM in expenses this quarter, $20MM was debt expense. That's right, their debt expense was equal to their revenues. That's not a formula for success, no matter what industry you're in or time of year it is. That debt is killing them b/c it means they have nothing to invest to expand or spruce of their resorts. There's a reason why the infrastructure at K-Mart, Pico, and Mt. Sneaux looks tired. There's a reason why the Grand Slum-its are notorious for their lousy quality and thin walls. Even with enormous amounts of time and energy spent restructuring their debt, they still have almost $700MM outstanding, over 50% more than their total assets. I guess they have negative shareholders equity. These guys will be in Ch. 11 before long, it's only a matter of time.

 

[ski_resort_observer]

Re: 1st quarter results, 2006

It's important to point out that ASC's fiscal 1st quarter seems to cover the late summer/fall period when revenues are at their lowest. Those figures aren't reflective of the baseline level of profitability (or lack thereof) ASC has. It does point out that ASC has done a lousy job building their 4 season business.

The problem is that there are a lot of us out here that like all the cushy accommodations that you only really get at big-mountain resorts like the ASC properties. With all due rspect to my hardcore AZ bretheren and sisteren, I am not going to spend a week's vacation and the dough required to go to a spartan ski hill like Cannon or MRG or Saddleback. If I'm gonna plunk down the big dough to take the family off on a "special" ski vacation, I'm going to Breck or Steamboat or Park City or Lake Placid or Stowe or Sunday River to get the nice hotels, the nice restaurants, the cute village, the clubs, etc etc.

I disagree that you can't get this elsewhere. If I want to go super high class at MRG, I could stay at the Pitcher Inn in Warren and be treated like a king. And the Sunday River/Bethel area isn't exactly a hotspot of nightlife. People want things to be as easy as possible when booking vacations to ski country. The problem is, everyone else thinks the same way, so you end up at overcrowded destinations like Breck, PC, or K-Mart. If you take a second to peel the onion back a layer or two, you can find whatever you want at 75% of the resorts out there, and will likely come away with a far better skiing experience for your trouble.

And ASC tries to provide this. The question is - why can't they make a profit at it? Especially at the prices they charge for tickets, condos, meals and everything else??!!?? I'm also not a ski industry insider, so perhaps someone has some insight on why smaller ski resorts can seemingly be profitable, but the ASC properties keep turning over their management and ownership?

Three things - ASC is poorly run in general, doesn't know how to do real-estate, and is underneath a massive pile of debt. Of the roughly $60MM in expenses this quarter, $20MM was debt expense. That's right, their debt expense was equal to their revenues. That's not a formula for success, no matter what industry you're in or time of year it is. That debt is killing them b/c it means they have nothing to invest to expand or spruce of their resorts. There's a reason why the infrastructure at K-Mart, Pico, and Mt. Sneaux looks tired. There's a reason why the Grand Slum-its are notorious for their lousy quality and thin walls. Even with enormous amounts of time and energy spent restructuring their debt, they still have almost $700MM outstanding, over 50% more than their total assets. I guess they have negative shareholders equity. These guys will be in Ch. 11 before long, it's only a matter of time.

Your analysis of their financial problems are right on. I have heard alot of talk that if ASC does not have a good ski season then this perhaps will be the final nail hammered into their coffin.

I think regarding the customer and the product your both right. The customer you describe is just what the big resorts are looking for but with alittle effort you can find most of those things at the other resorts.

 

[kingslug]

On the bright side... Hunter Mountain has sold all it's shared for the Katskill Mountain Club and burned the mortage last week...

On to the next step... So glad the mountain was never sold and remains a family business..

Amazing. Didn't think they would sell all of them so fast.

 

[Dr Skimeister]

For years, I've heard that ASC's attempt to build a Grand Summit Hotel at each of the properties that they own/owned was too highly mortgaged and hence have been saddled with paying pretty much only the interest on these notes. This is reflected in the stock price of 26 cents a share, down from a high of around $2.50 a share back in '01. Compare this to stock of Intrawest Corp. (Stratton, Tremblant, Mountain Creek, Copper, etc.) that is at it's all time high of around $28 a share. Looks like it comes down to poor management and poor financial decision making.

 

[rjc1976]

On the bright side... Hunter Mountain has sold all it's shared for the Katskill Mountain Club and burned the mortage last week...

On to the next step... So glad the mountain was never sold and remains a family business..

Amazing. Didn't think they would sell all of them so fast.

It's funny...I thought it took them a long time to finally sell out, at least when you compare it to sales at the Jackson Gore Inn at Okemo. Either way, it's good news for Hunter, and the higher level of construction certainly helped. I've stayed at the Grand Summit at Mount Snow before, and I can definitely say that the Kaatskill Mountain Club is constructed better. It's the little things like concrete between the floors that make a big difference in the end. Hopefully the west side expansion is still on schedule now that the condos are out of the way.

 

[Newpylong]

There's a reason why the Grand Slum-its are notorious for their lousy quality and thin walls

Funny I'm on vacation right now at Killington typing this from my room at the Grand. Its college week and the place is a big party. I didn't hear a peep trying to nodd off last night, so, the walls are NOT thin. Secondly, I find the quality of the place (room, staff, food, value) to be very good. I got my boots on in my room, walked out the bottom floor, and across a 200 foot bridge and I was on the Snowshed lift. It is an incredably nice play to stay. Sooooo it aint all that bad as you say :lol: :lol:

 

[ctenidae]

I think ASC's problems arose when tey decided to be in teh hotel business rather than the ski business. The Summit Lodges were heavily debt financed, which was a gamble that didn't pay off. If they'd been able to sell all the units like they'd planned, they'd be fine, but they haven't. Not even close, which means that rather than being able to pay off the notes with cash, they're stuck making interest payments, and those only barely.

They really need to find a smart partner who knows how to restructure debt, and find a way to unload some of the property. Honestly, if they could sell off a mountain, they'd be able to pay down the debt and make a go of it. As I recall, overall the ski operations are profitable, but it's all sucked up by the massive hole that is their construction debt.