Peak Resorts: The New ASC?

[steamboat1]

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.

I think they already laid out $12m of their own money for the West Lake project which they hope will be repaid when EB-5 funds held in escrow are released. Sounds like construction on the project is halted until then with only some ground clearing & pipe welding happening. Part of the reason they're cash strapped I guess.

 

[Newpylong]

West Lake itself was pretty much completed on their own dime last year. Now waiting for the EB-5 funds to construct the dams, pump houses, pipes between these, and connecting all of this to the main that goes up to the base of the mountain.

I imagine that will be very difficult without the EB-5 capital before the start of the upcoming season.

 

[yeggous]

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

I think these pass sale numbers are a bit skewed. Keep in mind that early season prices ended a month later last year. Some portion of this increase is likely to be due to front loading of sales.

 

[joshua segal]

I think these pass sale numbers are a bit skewed. Keep in mind that early season prices ended a month later last year. Some portion of this increase is likely to be due to front loading of sales.

Maybe, but in the case of Crotched, there is usually a lot of marketing of the next season's pass during March when there are lots of skiers on the hill. Mountain ops did an amazing job staying open as late as they did, but there were no crowds to whom to market the passes. Based on that, I can't interpret the strong early sales as anything but good!

BTW, stock brokers always say, "past results are no guarantee of future performance" and the same is true of ski seasons. Never-the-less, history shows that in a typical good year season pass sales rise for the next season and in a bad year, season pass sales go down for the following season.

 

[yeggous]

Maybe, but in the case of Crotched, there is usually a lot of marketing of the next season's pass during March when there are lots of skiers on the hill. Mountain ops did an amazing job staying open as late as they did, but there were no crowds to whom to market the passes. Based on that, I can't interpret the strong early sales as anything but good!

BTW, stock brokers always say, "past results are no guarantee of future performance" and the same is true of ski seasons. Never-the-less, history shows that in a typical good year season pass sales rise for the next season and in a bad year, season pass sales go down for the following season.

They also failed to mention what percentage of the pass sales increase could be due to the inclusion of Hunter. This is not a fair comparison.

 

[drjeff]

And yet Peak announced today that they're moving forward with the haul rope replacement on the Flying Yankee at Attitash - yup, things certainly could be better financially now for Peak, however they're not exactly in a Magic like situation as some are trying to insinuate....

 

[steamboat1]

And yet Peak announced today that they're moving forward with the haul rope replacement on the Flying Yankee at Attitash - yup, things certainly could be better financially now for Peak, however they're not exactly in a Magic like situation as some are trying to insinuate....

Yep Magic is not $118m, possibly $128m, in debt carrying 10%+ interest rates.

 

[joshua segal]

Yep Magic is not $118m, possibly $128m, in debt carrying 10%+ interest rates.

And Magic is barely open. I'll take Peak's problems over Magic's any day!

 

[drjeff]

http://finance.yahoo.com/news/peak-resorts-announces-mount-snow-201500115.html

Boom! Bring it on!

 

[thetrailboss]

http://finance.yahoo.com/news/peak-resorts-announces-mount-snow-201500115.html

Boom! Bring it on!

Good news


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[jaytrem]

MS has also been replacing the snowmaking pipe on Roller Coaster....

 

[Newpylong]

Looks like 8" water and 4" air coming out, interesting combo for that run. I can see why they want to replace it besides age.

 

[WoodCore]

Mount Snow's EB-5 money has been approved. http://digital.vpr.net/post/eb-5-money-mount-snow-project-released

 

[drjeff]

Looks like 8" water and 4" air coming out, interesting combo for that run. I can see why they want to replace it besides age.

Since rollercoaster is now a mix of mainly portable fanguns on roughly the upper 1/2 and Snowlogic DV4's on the lower 1/2 (at least last season as the year before they had the lower 1/2 lined almost exclusively with HKD Impulses, so who knows if they'll tweak once again their low e air/water selection on Rollercoaster this summer) that 8"/4" mix should have plenty of capacity for when they light it up

 

[ss20]

Sweet. Now can they catch up and finish within the next 6 months...

 

[Newpylong]

Since rollercoaster is now a mix of mainly portable fanguns on roughly the upper 1/2 and Snowlogic DV4's on the lower 1/2 (at least last season as the year before they had the lower 1/2 lined almost exclusively with HKD Impulses, so who knows if they'll tweak once again their low e air/water selection on Rollercoaster this summer) that 8"/4" mix should have plenty of capacity for when they light it up

8/4" coming out not in. That's new 6" epoxy coated on the right it looks like. The other is probably also going to be 6". Much more common than 8/4.

 

[steamboat1]

My only beef is I can't see new snowmaking infrastructure, a new base lodge & some condo's creating over 1,000 new jobs which is the requirement for the EB-5 money being used. It's said EB-5 can't be used for new lifts because a new lift doesn't create enough jobs. How many "new" jobs does a new snowmaking system create especially since there was already snow making jobs with their existing system. Same applies to an old base lodge versus a new base lodge, jobs already existed. Yes the condos will create new jobs but not anywhere 1,000. Yes I've heard the story about new jobs being created in the area & not just at the mountain because of increased visitation but wouldn't a new lift increase visits too? Yet EB-5 money can't be used for a new lift. I just can't see how the proposed projects meet the requirements of job creation.

 

[deadheadskier]

It definitely won't meet the requirement. Even if you factor in the added job at the pillow factory somewhere (likely overseas anyhow)

 

[Edd]

I wonder if there's any wiggle room in the definition of "permanent" job that the applicants count on.

 

[Smellytele]

I thought they were using the "save jobs" clause. ???