Peak Resorts: The New ASC?

[yeggous]

I'd call BS on that. You still need people to answer the phones, keep communications/utilities running. May is the main mountain bike trail maintenance month so there's no way they won't be at the mountain.

I too question the definition of "all" employees but the general decision is clear.


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[cdskier]

I too question the definition of "all" employees but the general decision is clear.

Probably more like "all non-essential" employees that aren't needed to keep the lights on every day...

 

[deadheadskier]

I'd call BS on that. You still need people to answer the phones, keep communications/utilities running. May is the main mountain bike trail maintenance month so there's no way they won't be at the mountain.

Let me tell you a little story about Snowshoe Mountain Resort. I was group manger of F&B there in 2002-2003. Intrawest owned it then. They were by far the largest and most successful ski resort operator in the country at that time. ASC was failing; Vail was growing, but no where near what they are today; Powdr, Boyne and Peaks barely existed.

At Snowshoe, I oversaw $2.5M worth of business, 6 supervisors at 3 F&B outlets and roughly 80 staff members during peak season. There were two other Group Managers overseeing similar operations. We reported to the Director of F&B. Also three back of the house kitchen mangers

Come April 15th, every single line level associate at the resort was laid off. This following a 400K plus skier visit season. All the management worked 70+ house week during the off season to compensate. To your point of answering phones, only salaried management was kept on and they took over coverage, often having to switch to third shift. Snowshoe was the biggest MTB destination in the East back then; all maintenance projects were basically postponed until June.

We in F&B worked 6+ days a week during off season. We ran banquets during the day and the one restaurant open at night we would rotate between serving, dishwashing and bartending each night. Servers that were paid $2.13/hr at the time were deemed too expensive at a resort that brought in $35+M for the year. Intrawest as a whole was a Billion dollar company then and the directive came from the top to lay off $2.13/hr employees and have salaried management do the job.

So having experienced that at Intrawest, I have no doubt something similar could happen at Peaks given the winter we just had.

 

[catskillman]

There were layoff's at Hunter yesterday. And the ski shop is going to be closed until May. Interesting, as it becomes an Orvis fly fishing shop in the summer and trout season starts sometime in April............

 

[Funky_Catskills]

There were layoff's at Hunter yesterday. And the ski shop is going to be closed until May. Interesting, as it becomes an Orvis fly fishing shop in the summer and trout season starts sometime in April............

Who got laid off? Other than the normal end of season lay offs..

 

[180]

http://www.insidermonkey.com/blog/p...nagement-sells-out-of-cratering-stock-437436/

 

[steamboat1]

http://www.insidermonkey.com/blog/p...nagement-sells-out-of-cratering-stock-437436/

Go on take the money & run....who, who, who.

 

[Funky_Catskills]

There were layoff's at Hunter yesterday. And the ski shop is going to be closed until May. Interesting, as it becomes an Orvis fly fishing shop in the summer and trout season starts sometime in April............

So yes... Hunter did let people go for the month.. But they will come back in May unless they were seasonal.
Just a cost saver as after a bad winter. I heard they got a little extra $ to help and they can get unemployment..

Hotel is staying open..

All is well...

 

[yeggous]

All is well...

That's a funny interpretation of well. I'd feel differently if I just lost half my income for the month.

 

[Funky_Catskills]

That's a funny interpretation of well. I'd feel differently if I just lost half my income for the month.

Nobody is fired or laid of permanently...
In the ski world thats pretty fukcing awesome..

And it's also first hand from friends who are ok with it...
Unemployment and the extra cash.. All good... Doesn't cost much to live here..

 

[doublediamond]

That's pretty stupid. It's not going to go any lower - it can only go up. And they've promised dividends will still be awarded this quarter. I'm actually surprised their Q3 earnings were only off by 35%. Next year is supposed to be a La Nina year and analysts are forecasting a rebound to $6.50 a share by this time next year.

... oh and SKIS was up 10% yesterday ...

 

[180]

Here is the letter sent to all home owners at the hotel.
Hello Owners,

Hunter Mountain is officially closed for the 2015-16 season. We do hope you were able to enjoy the Mountain this winter.

With the closing, Van Winkle’s Restaurant will be also be closing from now until Tuesday, May 10[SUP]th[/SUP]. They will have limited hours for April 15[SUP]th[/SUP] – April 17[SUP]th[/SUP] and April 22[SUP]nd[/SUP] – April 25[SUP]th[/SUP]. Starting May 11[SUP]th[/SUP] through July 3[SUP]rd[/SUP] they will resume being open Wednesday through Sunday, closed Monday and Tuesday.
[FONT=&quot] [/FONT]

 

[BenedictGomez]

That's pretty stupid. It's not going to go any lower - it can only go up. And they've promised dividends will still be awarded this quarter. I'm actually surprised their Q3 earnings were only off by 35%. Next year is supposed to be a La Nina year and analysts are forecasting a rebound to $6.50 a share by this time next year.

... oh and SKIS was up 10% yesterday ...

That is not true of any stock.

SKIS is not a stock you put your kids college money in, it's very speculative, and if they have to cut the dividend, the stock will get cut in half (probably worse actually).

 

[catskillman]

Here is the letter sent to all home owners at the hotel.
Hello Owners,

Hunter Mountain is officially closed for the 2015-16 season. We do hope you were able to enjoy the Mountain this winter.

With the closing, Van Winkle’s Restaurant will be also be closing from now until Tuesday, May 10[SUP]th[/SUP]. They will have limited hours for April 15[SUP]th[/SUP] – April 17[SUP]th[/SUP] and April 22[SUP]nd[/SUP] – April 25[SUP]th[/SUP]. Starting May 11[SUP]th[/SUP] through July 3[SUP]rd[/SUP] they will resume being open Wednesday through Sunday, closed Monday and Tuesday.

Does this also include the bar???

It is great that they can collect umemployment, however, in NY the max is $425 which is very low. NJ is $625!!\\

 

[chuckstah]

That is not true of any stock.

SKIS is not a stock you put your kids college money in, it's very speculative, and if they have to cut the dividend, the stock will get cut in half (probably worse actually).

+1. Any stock can fluctuate in value greatly. All stocks are very fluid in price, especially ones based on revenue partially controlled by things beyond the owner's control, such as weather. There is no guarantee that next season won't be worse than this one and no guarantee that the stock won't go to zero. That being said, I really hope next season is much better than this one, which COULD help raise SKIS value. But no sure thing.

 

[machski]

Anyone else starting to get concerned here?

From newenglandskihistory:
REPORT: Peak Resorts Financial Concerns Prompting Layoffs, Construction DelaysMount Snow West Lake project may not be completed in 2016.Sunday, April 10, 2016, NewEnglandSkiIndustry.comFeeling the pressure of a devastating winter and high debt load, Peak Resorts is in the midst of making major cuts at some of its northeastern properties.

Wildcat Cuts
According to an industry source, multiple full time, year round Wildcat employees in operations and marketing have been let go. In addition, the Attitash and Wildcat Director of Marketing’s thirteen year tenure at the ski areas recently came to an end.

Wildcat has subsequently suspended Monday-Friday operations, a half of a month earlier than in 2015. If Wildcat reopens on April 16, it will be the last open New Hampshire ski area, as well as the only Peak Resorts area operating.

Mount Snow West Lake Reservoir
Meanwhile, at Peak Resorts flagship Mount Snow, the previously announced West Lake snowmaking project is in jeopardy. According to a source at the ski area, the project has a “50/50” chance of being ready for the 2016-17 season.

The formal groundbreaking for the 120 million gallon snowmaking reservoir was held in May of 2015. When Peak Resorts announced the $66 million West Lake and Carinthia projects were fully funded in August of 2015, the company expecting U.S. Citizenship and Immigration Services I-526 Petition approval by the end of 2015. The company was planning to complete the project with $30 million in EB-5 money, however those phase one funds are still awaiting I-526 approval. According to its most recent SEC 10-Q filing, $52 million in EB-5 funding is being held in escrow.


Peak Resorts Financials
With the large sum frozen in escrow, the recent $36.8 million Hunter Mountain acquisition, and the devastating Northeast winter, Peak Resorts saw its free cash balance drop to $11.4 million in January, down 45% from the previous winter. Long term debt has increased by 20% to $118 million, the vast majority of which has an annual interest rate of over 10%. Peak Resorts’ stock closed at $3.24 on Friday, down 64% since its initial public offering 17 months ago.

 

[yeggous]

I can confirm that the layoffs. There is a very negative vibe among the remaining employees.


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[Jully]

Anyone else starting to get concerned here?

From newenglandskihistory:
REPORT: Peak Resorts Financial Concerns Prompting Layoffs, Construction DelaysMount Snow West Lake project may not be completed in 2016.Sunday, April 10, 2016, NewEnglandSkiIndustry.comFeeling the pressure of a devastating winter and high debt load, Peak Resorts is in the midst of making major cuts at some of its northeastern properties.

Wildcat Cuts
According to an industry source, multiple full time, year round Wildcat employees in operations and marketing have been let go. In addition, the Attitash and Wildcat Director of Marketing’s thirteen year tenure at the ski areas recently came to an end.

Wildcat has subsequently suspended Monday-Friday operations, a half of a month earlier than in 2015. If Wildcat reopens on April 16, it will be the last open New Hampshire ski area, as well as the only Peak Resorts area operating.

Mount Snow West Lake Reservoir
Meanwhile, at Peak Resorts flagship Mount Snow, the previously announced West Lake snowmaking project is in jeopardy. According to a source at the ski area, the project has a “50/50” chance of being ready for the 2016-17 season.

The formal groundbreaking for the 120 million gallon snowmaking reservoir was held in May of 2015. When Peak Resorts announced the $66 million West Lake and Carinthia projects were fully funded in August of 2015, the company expecting U.S. Citizenship and Immigration Services I-526 Petition approval by the end of 2015. The company was planning to complete the project with $30 million in EB-5 money, however those phase one funds are still awaiting I-526 approval. According to its most recent SEC 10-Q filing, $52 million in EB-5 funding is being held in escrow.


Peak Resorts Financials
With the large sum frozen in escrow, the recent $36.8 million Hunter Mountain acquisition, and the devastating Northeast winter, Peak Resorts saw its free cash balance drop to $11.4 million in January, down 45% from the previous winter. Long term debt has increased by 20% to $118 million, the vast majority of which has an annual interest rate of over 10%. Peak Resorts’ stock closed at $3.24 on Friday, down 64% since its initial public offering 17 months ago.

I wonder whether the 11.4 million in operating capital/free cash is pre or post season pass sales to this point.

I can confirm that the layoffs. There is a very negative vibe among the remaining employees.


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While it absolutely is terrible for anyone who was laid off, I'm not horribly worried yet. This should hopefully be a solid summer in terms of season pass sales generating revenue and I'm assuming that Peaks does not lose any money from their summer operations.

As long as they have enough free cash to go into next season and make snow and get every resort up and running, then we shouldn't have any issue. The issue will come if next season is as abysmal as this season. Though if next year is a banner year or even a slightly above average year for snowfall, Peaks is looking to be in great shape.

Right now it appears to be just a mix of the Hunter acquisition adding debt during what turned out be an absolutely devastating financial winter season. The EB-5 funds being frozen isn't connected to the current Peaks financial woes as far as I know.

 

[steamboat1]

How does a new 120m gallon reservoir for snowmaking funded with $30m EB-5 money create 60 new full time permanent jobs?

 

[Jully]

How does a new 120m gallon reservoir for snowmaking funded with $30m EB-5 money create 60 new full time permanent jobs?

Year round SCUBA diving tours of the lake?