Killington: Centex bailed out

[SkiDog]

Man...that is so yesterday's news. Your using FY 2005...FY 2007 is only a couple of weeks away for ASC...

yeah and that would mean they would soon (not until this fiscal year is closed) be posting the 05/06 reports...that will show EXACTLY what the skier visits BY RESORT are...until then we can only guess and use the "unaudited" numbers from you link you posted...but again..I failed to see the western resorts skier visits listed there.......so its not really "yesterday's news" now is it???

M

 

[SkiDog]

This link may be a little better....but still says. Mt Snow and Sugarloaf posted "excellent growth in visits"...so..we'll have to wait for 05/06 annual report to know for sure who tops skier visits for ASC...no matter the percentage loss of the east coast resorts this past season....just because the east lost percentage doesnt necessarily translate into the west increasing percentage...

http://forums.alpinezone.com/4100-a...-conditions-drive-increases-asc-revenues.html

M

 

[ctenidae]

None of the areas are exactly what I'd call "cash cows" from skier visits. The price of your lift ticket barely puts the beggining of a dent in the daily operating costs. They make most of their money from the food and lodging. To get an accurate picture, you'll need to look at skier/day/dollars or something. Of course, it will take the 10-K to have reliable info, and that won't be out until October at the earliest (2005 was submitted 10/31, 2004 on 11/9). until then, it's pissing in the wind.

I did look over their most recent quarterly report, adn while they've managed some fairly nifty restructuring of their debt, what they've essentially done is push it further down the balance sheet and further out to the future. The good news is that they've worked out from under some of the construction loans that could have been called in and kileld them. THey did this by auctioning off all teh available units at Steamboat. Really, it makes sense for them to sell that mountain now, since there's no more development they can do, and they've sold off all the real estate they can.

 

[Bubbartzky]

Regarding skier visits, ASC before the season announced that they were changing the method by which they count skier visits at their Eastern resorts. Instead of prorating season tickets into skier days they now count scanned tickets each day and, if the scanning of my season pass is any indication, they missed a whole lot of skier days as a result.

 

[Tin Woodsman]

OK well as soon as ASC posts those reports ill be sure to check them out...but until then its the only thing I can base it on....

Also the link you provide is UNAUDITED SKIER VISITS..that means those numbers will likely change, and still Killington is the tops in the EAST...my post was basically to refute the MT SNOW claim of "cash cow" for ASC..Killington is still by far the biggest cash cow for ASC no matter what the last 2 measly seasons say...I also didnt see anywhere in that link provided, which still isnt hard #'s, that says what the west coast resorts did skier visit wise...can you provide that link???

I still think the east coast, vt in particular, resorts carry ASC and they pump all those profits into the western resorts...

M

From your comments, I'm not sure you understand the concept of a cash cow. A cash cow is an operating unit that spits out free cash flow to its parent or shareholders. Just b/c K-Mart has the most skier visits in the ASC family, that doesn't make it a cash cow at all. While skier visits can help to drive revenues, the other side of the coin are the expenses you incur to service those skiers, and the cpaital you're investing to improve/maintain your facility. K-Mart has about 80% more skier visits than Mt. Snow, but it also has 5 separate base lodges/areas (Skyeship, Bear, Snowshed, K-1, Rams Head). Mt. Snow has 2. That's a lot of extra fixed expense. K-Mart is also FAR larger than Mt snow, leading to higher snowmaking, grooming, patrolling and other trail maintenance costs. Also, something that impacts both of those resorts is the lower revnue per visitor that they are experiencing as a result of ASC's idiotic pass pricing policy. Think about this - they dramaticaly lowered their prices last year, yet their 20% drop in skier days account for over 100% of alll losses in skier visits for the entire state of VT.

Whatever the case, while K-Mart probably does hold the skier visits crown at ASC and might be somewhat profitable, that's a far cry from being a cash cow. And the numbers are trending downwards.

 

[shwilly]

if the scanning of my season pass is any indication, they missed a whole lot of skier days as a result.

Really? There were entire days when your pass wasn't scanned?

There were plenty of runs when my pass wasn't scanned, or they'd try to scan, it wouldn't work, and the lifty would just say "beeep" and let me go, but I don't think there were any days when I didn't get scanned once in 10+ runs.

I don't think it matters whether a season pass gets scanned once or 30 times in a day -- they know that Bob Smith, owner of season pass #1234, was there that day, and count it as one skier day.

 

[Tin Woodsman]

Regarding skier visits, ASC before the season announced that they were changing the method by which they count skier visits at their Eastern resorts. Instead of prorating season tickets into skier days they now count scanned tickets each day and, if the scanning of my season pass is any indication, they missed a whole lot of skier days as a result.

ASC themselves have also stated that they don't believe this change will generate a material difference in their reported skier days. Either way, they've always been clueless with the multi-day passes, going back to the Magnificent 7 fiascos. Mine became a Magnificent 15.

 

[ski_resort_observer]

As Tin pointed out, having the most skier visits does not always translate to the most profits. Kmart skiers are mostly season pass holders, severly underpriced season passes, who spend very little at the mountain when compared to the destination skiers who go to Steamboat and spend thousands each trip.

Like you said, the facts will come out in a couple of months after ASC's FY is over, July 31st.

 

[SkiDork]

From your comments, I'm not sure you understand the concept of a cash cow. A cash cow is an operating unit that spits out free cash flow to its parent or shareholders. Just b/c K-Mart has the most skier visits in the ASC family, that doesn't make it a cash cow at all. While skier visits can help to drive revenues, the other side of the coin are the expenses you incur to service those skiers, and the cpaital you're investing to improve/maintain your facility. K-Mart has about 80% more skier visits than Mt. Snow, but it also has 5 separate base lodges/areas (Skyeship, Bear, Snowshed, K-1, Rams Head). Mt. Snow has 2. That's a lot of extra fixed expense. K-Mart is also FAR larger than Mt snow, leading to higher snowmaking, grooming, patrolling and other trail maintenance costs. Also, something that impacts both of those resorts is the lower revnue per visitor that they are experiencing as a result of ASC's idiotic pass pricing policy. Think about this - they dramaticaly lowered their prices last year, yet their 20% drop in skier days account for over 100% of alll losses in skier visits for the entire state of VT.

Whatever the case, while K-Mart probably does hold the skier visits crown at ASC and might be somewhat profitable, that's a far cry from being a cash cow. And the numbers are trending downwards.

Actually 6 (or maybe even 7). You forgot the peak restaurant, and I believe they count Pico in the skier visits (I might be wrong on that) in which case you have the Pico base lodge.

 

[ctenidae]

What was the point of this discussion again?

 

[Bubbartzky]

Really? There were entire days when your pass wasn't scanned?

There were plenty of runs when my pass wasn't scanned, or they'd try to scan, it wouldn't work, and the lifty would just say "beeep" and let me go, but I don't think there were any days when I didn't get scanned once in 10+ runs.

I don't think it matters whether a season pass gets scanned once or 30 times in a day -- they know that Bob Smith, owner of season pass #1234, was there that day, and count it as one skier day.

Yep, I've had days where the pass wasn't scanned at all. I live in Killington so I do a lot of midweek skiing and as the season wears on and lifties begin to recognize some of the regulars at particular chairs, or on chairs where they're short staffed to begin with, they don't even check as long as they see the pass dangling from the jacket. I would often ski a couple of hours in the middle of a day and never get scanned once.

 

[Bubbartzky]

ASC themselves have also stated that they don't believe this change will generate a material difference in their reported skier days. Either way, they've always been clueless with the multi-day passes, going back to the Magnificent 7 fiascos. Mine became a Magnificent 15.

ASC can state whatever it wants...it sure doesn't make it true. Read their 10-K or anyone else's for that matter when it comes to litigation for example. Companies almost always say that they believe pending major suits against them have little or no merit, thereby avoiding the need to include the dollars at risk in some kind of reserve that would hit the balance sheet.

Anyway, back to Centex pulling out, this is more than a bump in the road, in all probability. They now have to find a new developer with new financing, one that's interested in a project this size with the short and long term risks involved in vacation real estate development, all sited a resort that is extremely limited on capital to improve the basic attraction. A project that's already a year behind its estimated schedule will probably now fall further behind. While I'm sure they'll get through it, this just seems to be more of a hill than a bump.

 

[tree_skier]

I think tree_skier has info on this, but not sure if he will share it.

I won't go into specific numbers but EBITDA at Mount Snow hasn't been below 8 figures in over 10 years. They are second only to K-mart in that figure in asc east. For you non accounting people EBITDA is Earnings Before Interest, Taxes, Depriciation and Amoritization. A more accurate indication of worth of a company.

 

[Vortex]

I kind of agree with Bubba here. Any slow down is a negitive. A company that is fighting finacial concerns loses a partnership with a organization that can help it draws further questions.. When Loon got some help on the devlopement side many of us felt relief. Expansion may actually take place that have been on the board since the 80's anyway.

 

[Vortex]

I won't go into specific numbers but EBITDA at Mount Snow hasn't been below 8 figures in over 10 years. They are second only to K-mart in that figure in asc east. For you non accounting people EBITDA is Earnings Before Interest, Taxes, Depriciation and Amoritization. A more accurate indication of worth of a company.

Thankx I did not want to put words in your mouth nor did I know what level of comfort you had in sharing info.:idea:

 

[SkiDog]

I won't go into specific numbers but EBITDA at Mount Snow hasn't been below 8 figures in over 10 years. They are second only to K-mart in that figure in asc east. For you non accounting people EBITDA is Earnings Before Interest, Taxes, Depriciation and Amoritization. A more accurate indication of worth of a company.

So this means killington is ASC's "cash cow" right? Then Mt Snow? then...???

Thanks

M

 

[Vortex]

I believe Sr in next. I thought Sr came in ahead of Mount snow, but I see I'm wrong.

 

[ctenidae]

I won't go into specific numbers but EBITDA at Mount Snow hasn't been below 8 figures in over 10 years. They are second only to K-mart in that figure in asc east. For you non accounting people EBITDA is Earnings Before Interest, Taxes, Depriciation and Amoritization. A more accurate indication of worth of a company.

It's the "I" in that term that's painful for ASC.

Centex wasn't bringing money to the table for this deal- they're getting paid to do the design, and probably run the construction. This isn't a financial bump, but a timing one. ASC is now going with the firm that was originally supposed to get the deal, anyway.

 

[SkiDork]

ASC can state whatever it wants...it sure doesn't make it true. Read their 10-K or anyone else's for that matter when it comes to litigation for example. Companies almost always say that they believe pending major suits against them have little or no merit, thereby avoiding the need to include the dollars at risk in some kind of reserve that would hit the balance sheet.

Anyway, back to Centex pulling out, this is more than a bump in the road, in all probability. They now have to find a new developer with new financing, one that's interested in a project this size with the short and long term risks involved in vacation real estate development, all sited a resort that is extremely limited on capital to improve the basic attraction. A project that's already a year behind its estimated schedule will probably now fall further behind. While I'm sure they'll get through it, this just seems to be more of a hill than a bump.

What about Hart Howerton? Are they an equivelant replacement of Centex? Does SP step up and fill the void somehow? Or will they try to enlist the aid of a 3rd as yet unknown partner?

 

[ctenidae]

Hart Howerton is an equivalent to Centex. There for the same thing.

SP Land is a partnership consisting of ASC, Oak Hill and Ski Partners. It really exists as a way to move some of the debt around, and changing it from debt to equity. Ski Partners could be, I suppose, considered a "as yet unknown" third partner, but they've been involved for quite a while.

This is them:

http://www.e2mpartners.com/properties/skipartners.html

Essentially, when ESC defaulted on their loan from CSFB, SP Land was formed by E2M to buy the loan. In exchange, they get majority ownership in the land.