Peak Resorts: The New ASC?

[BenedictGomez]

Wonder if they really need the money for capital projects, or if they're going to pull the trigger on a small resort (or both).

 

[Jully]

Wonder if they really need the money for capital projects, or if they're going to pull the trigger on a small resort (or both).

Hopefully it is that and not just money for operating and start up costs for the upcoming season!

 

[SIKSKIER]

http://www.newenglandskiindustry.com/viewstory.php?storyid=471

 

[SIKSKIER]

http://www.newenglandskiindustry.com/viewstory.php?storyid=471
The comman stockholders get screwded in this deal.

 

[steamboat1]

Hopefully it is that and not just money for operating and start up costs for the upcoming season!

I'd go with operating & start up costs seeing they had so little free cash available at the end of their fiscal year in April. Didn't Goldberg say Jay needs $7-$8 to carry them over the summer? That's one resort, Peak has many more.

"Peak Resorts exited the 2016 fiscal year on April 30 with only $5.396 million in free cash."

 

[steamboat1]

http://www.newenglandskiindustry.com/viewstory.php?storyid=471
The comman stockholders get screwded in this deal.

Not if they vote it down.

 

[Jully]

More screwed than if the company goes under though? I get the feeling this is going to sail through the stockholders given the current situation.

 

[mbedle]

I'd go with operating & start up costs seeing they had so little free cash available at the end of their fiscal year in April. Didn't Goldberg say Jay needs $7-$8 to carry them over the summer? That's one resort, Peak has many more.

"Peak Resorts exited the 2016 fiscal year on April 30 with only $5.396 million in free cash."

I think I read they needed 12 million to get through the offseason and startup.

 

[Jully]

I think I read they needed 12 million to get through the offseason and startup.

I wonder what the remaining $8 million is for then (or if they even have a specific use for it in mind). Upon buying Hunter last year, they had spoken about trying to acquire another resort. I'd be surprised if they went that route given everything that's happened, but it's not out of the realm of comprehension.

 

[BenedictGomez]

Not if they vote it down.

Which as you know, is not going to happen.

 

[steamboat1]

Not if they vote it down.

Which as you know, is not going to happen.

...

 

[yeggous]

Do they think they will have buyers? None of their recent financials would inspire me to invest. I suppose there will be some folks hoping they're buying low

The press release says they already have a buyer lined up. It is preferred stock. Somebody bought a seat on the Board.

 

[180]

[FONT=&quot]http://www.newenglandskiindustry.com/viewstory.php?storyid=471

[/FONT]

 

[sull1102]

Is there ANY chance at all this works out? Barring a record breaking season, which is what we all want, how does Peak pay out $1.6-mil per year(is this ongoing or just 5 years), restart dividends at some point, build out Mount Snow, AND continue their desired expansions/acquisitions. This seems like a horrible deal, not quite a killer, but there's literally no room for error it looks like. Also, how long does that $20-mil really last before they need another infusion?

 

[Jully]

Is there ANY chance at all this works out? Barring a record breaking season, which is what we all want, how does Peak pay out $1.6-mil per year(is this ongoing or just 5 years), restart dividends at some point, build out Mount Snow, AND continue their desired expansions/acquisitions. This seems like a horrible deal, not quite a killer, but there's literally no room for error it looks like. Also, how long does that $20-mil really last before they need another infusion?

Well in previous years Peaks did have a decent amount of free cash at the end of the seasons and Hunter should provide a substantial increase in revenue. I do believe they are profitable and even a return to normal should allow this strategy to work.

Definitely no room for error though. Even a below average season might be the end / require some sell offs or other substantial actions to get them through the off season.

 

[FBGM]

Next ASC right here. Spending the money's that are not there. EB5 funny moneys and now wall street help me money. If anyone wants to buy some crappy cheap ski areas you're time will come. Give them another year or two.

 

[ss20]

Some serious red flags in the company's financials. I don't know how some people are still denying that. My guess is this is stay-afloat money and pray the next few years are good enough to where they can build up real estate at Mount Snow and get back on track financially.

I highly doubt this is for an acquisition. That would be financial suicide...if buying Hunter coupled with this terrible season wasn't already.

 

[doublediamond]

The Peaks financials are a million times better than ASC's.

From my quick glance, this is an issuance of preferred stock which will be converted to common stock if the price goes up or if transferred or automatically after 12 years. ASC's preferred stock deal was a reorganization of debt. ASC's was a death pill trying to hold them over. This isn't.

ASC's debt was from taking on other areas' debt and expansion/real estate debt. Peak's debt is entirely from purchase of ski areas. Only $2M of the $73.5M Attitash/Mt Snow deal was assumption of ASC debt. ASC on the other hand assumed $58.5M of debt with its $104.6M merger with SKI Ltd.

These aren't even apples and oranges. These are apples and koalas.

Peak's has no significant financial needs on the horizon.

* Wildcat has a brand new snowmaking system and no pressing lift needs.
* Attitash is fine at least for now.
* Crotched is chugging along with its HSQ and the most powerful snowmaking system per acre in New England.
* Hunter is an inevitable goldmine: great lifts, great powerful snowmaking, and market base already there.
* Their midwest operations are profitable.

The only thing is ... Mt Snow water. The Sun Brook snowmaking *can* wait. But Peaks had to start construction on their West Lake project because they will soon run out of Haystack water. It just sucks that they haven't gotten their EB-5 funds released and had the worst winter ***EVER*** so their cash reserves got a little low. Next winter is forecasted to be average for both temp and precip. They'll be fine. $1.6M of annual dividends is less than what Peaks had been issuing before this disastrous winter.

 

[doublediamond]

The press release says they already have a buyer lined up. It is preferred stock. Somebody bought a seat on the Board.

No. They have a right to *nominate* someone to the board subject to shareholder approval. They will hold a 30% stake but barely any more voting power than their current 8.7% as the preferred stock and common stock vote on a 1:1 by share basis, not by share value (these preferred shares are 20k shares at $1000).

 

[catskillman]

Well they saved money by not putting up a tent for the Celtic and German festivals - let everyone stand out in the blazing sun. There were 2 small tents, that fit maybe 70 folks on rows of uncomfortable chairs, with a dusty dirt path between them and the band. Unbelievable.And then the wondered why noone paid the $15 to go the following week. Word is it is just their way of discontinuing these festivals....Anyone else notice the moat that was consturcted under the 6 pack? That was a major job........