Yes, with a crazy high interest rate too. That's how they finance almost all of their acquisitions. The exception is Wildcat which was seller financed at a reasonable interest rate.
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Peak Resorts: The New ASC?
- Thread starter ss20
- Start date
Yes, with a crazy high interest rate too. That's how they finance almost all of their acquisitions. The exception is Wildcat which was seller financed at a reasonable interest rate.
sull1102
Member
Interesting note, last I drove by Carinthia and they have started clearing trees between the base lodge, parking lot, and Glen Run Condos. This area is for one of the new hotel buildings, not the base lodge. I was really surprised to see any work going on at all over there.
drjeff
Well-known member
Those 2 clearings are for the base lodge redevelopment (the one below the lodge and the existing condo's) and the new pumphouse for the West Lake snowmaking project (at the top of the ski baba lift behind the bottom terminal of Heavy Metal)
Peak is ready to go if/when the EB-5 money is released. Not to mention they've also been welding segments of snowmaking pipe to be replaced this summer as well
Sometimes the gloom and doom that people that just read press releases project isn't quite the same thing that is actually happening when you see things in person....
sull1102
Member
Yeah it was great to see pipe being assembled over on launch pad, trees being cleared out, just progress being made.
Sure, but that much debt and at such high interest rates doesn't concern you as a Peaks pass holder? It certainly concerns me.
Not only am I concerned about their ability to maintain ownership, but also funding upkeep and improvements. While the snowmaking improvements at Wildcat have been awesome, there's still a lot of pipe on the hill that needs to be replaced to function properly if at all.
Not only am I concerned about their ability to maintain ownership, but also funding upkeep and improvements. While the snowmaking improvements at Wildcat have been awesome, there's still a lot of pipe on the hill that needs to be replaced to function properly if at all.
sull1102
Member
I can't speak to the 'Cat, but over here I can say as a Peak Pass holder I'm confident in their ownership of MS and seeing action on multiple projects just yesterday was a big help. Of course I agree, having that debt hanging there could be a problem down the road, but I doubt they would buy Hunter in December and five months later have no plan on place.
machski
Well-known member
True, but nor could they foresee how bad this season would turn out after that purchase. Their plans they had are likely being re-evaluated and adjusted right now as I doubt they are where they hoped to be today. If the EB-5 $$ is delayed (say 12 months at the earliest from now which I have to think is not unrealistic), where will their plans be?? Let's just hope next year is an October to April blockbuster of a season.
SIKSKIER
New member
Looks like you had reason to be concerned.http://www.newenglandskiindustry.com/viewstory.php?storyid=433
Jully
Active member
At the same time though, it says their off season activities are fully funded. So there's that at least! Still concerned though.
Pm me please, I was on the fence and then went away for weekend and totally forgot !!!!!
Sent.
steamboat1
New member
My guess is they took the loan.
Peak Resorts:
Peak Resorts announced what was already known by many—a hiatus in its dividend, tied to a cash crunch resulting from a triple whammy of a terrible ski season, $12 million of pre-funding of an E-B project, and an unexpected delay in the government approval to release funds raised to finance the EB-5 project. At the same time, however, the company surprised by saying its new multi-mountain Peak Pass—which is enabled by the late season acquisition of Hunter Mountain—is driving a 40% spike in season pass unit sales and a 29% rise in season pass dollar volumes. This bodes well... particularly if next season we get better ski weather.
The company has said that the dividend is dependent on approval from the government to release $52 million of funds raised via EB-5 and currently held in escrow for a Mount Snow development project. So this argues that if the approval comes through, the dividend could come back. Peak pre-spent $12 million for this development effort, in anticipation of getting the funds released by now. The release is only waiting on approval of the first of 104 investor petitions in the financing group. Peak says it is not aware of any problem with the application, and that it is just suffering from an approval delay that is similar to what other EB-5 programs are going through, because of a rise in EB-5 application volumes. Peak's pre-spending, combined with a terrible ski season, and the hiatus in EB-5 fund release, pushed Peak's cash balance to $11.5 million at the end of January, from $20.9 million in the year-ago period. The dividend payout was about $1.9 million per quarter. EB-5 work will likely remain suspended until the application is approved. As time goes on, this creates risk that we miss the summer/fall window to move work on this project ahead.
On a more positive note, its Peak pass product is proving very popular. This multi-resort ski pass is essentially a Northeast corollary to Vail's popular Epic pass, as it allows skiers to visit either Hunter or Mount Snow. Also included are Attitash, Wildcat and Crotched Mountains in New Hampshire, and Jack Frost and Big Boulder in Pennsylvania. Peak said that because of this new product, pre-season sales of season passes are up 40% in units and 29% in revenues. This looks encouraging for next season, particularly if weather is typical, rather than unusually warm like last winter in the Northeast
Peak Resorts:
Peak Resorts announced what was already known by many—a hiatus in its dividend, tied to a cash crunch resulting from a triple whammy of a terrible ski season, $12 million of pre-funding of an E-B project, and an unexpected delay in the government approval to release funds raised to finance the EB-5 project. At the same time, however, the company surprised by saying its new multi-mountain Peak Pass—which is enabled by the late season acquisition of Hunter Mountain—is driving a 40% spike in season pass unit sales and a 29% rise in season pass dollar volumes. This bodes well... particularly if next season we get better ski weather.
The company has said that the dividend is dependent on approval from the government to release $52 million of funds raised via EB-5 and currently held in escrow for a Mount Snow development project. So this argues that if the approval comes through, the dividend could come back. Peak pre-spent $12 million for this development effort, in anticipation of getting the funds released by now. The release is only waiting on approval of the first of 104 investor petitions in the financing group. Peak says it is not aware of any problem with the application, and that it is just suffering from an approval delay that is similar to what other EB-5 programs are going through, because of a rise in EB-5 application volumes. Peak's pre-spending, combined with a terrible ski season, and the hiatus in EB-5 fund release, pushed Peak's cash balance to $11.5 million at the end of January, from $20.9 million in the year-ago period. The dividend payout was about $1.9 million per quarter. EB-5 work will likely remain suspended until the application is approved. As time goes on, this creates risk that we miss the summer/fall window to move work on this project ahead.
On a more positive note, its Peak pass product is proving very popular. This multi-resort ski pass is essentially a Northeast corollary to Vail's popular Epic pass, as it allows skiers to visit either Hunter or Mount Snow. Also included are Attitash, Wildcat and Crotched Mountains in New Hampshire, and Jack Frost and Big Boulder in Pennsylvania. Peak said that because of this new product, pre-season sales of season passes are up 40% in units and 29% in revenues. This looks encouraging for next season, particularly if weather is typical, rather than unusually warm like last winter in the Northeast
It's never a good sign when you're paying dividends when you're saddle but debt with 10+% interest.
I'm increasingly convinced that the dividend is to prop up the stock price. And the stock is to give an exit strategy to the private ownership.
machski
Well-known member
If they took an additional Loan from EPR, the dividends are shut down until repayment of said loan is complete. So, if the dividend was holding up the stock price, then the stock price is likely to dive even lower if this has in fact happened.
BenedictGomez
Well-known member
It was odd wording in that press release.
They should have noted that if EB-5 isn't released perhaps they'll need those dividend funds for future payments on the work, which surely must be what they meant, but they didn't say that, so it just sounded weird.
Jully
Active member
I took it as they are trying to use some other funds to push forward the EB-5 project in the meantime. Not sure if they can do that though.
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