Whistler Blackcomb Holdings Inc. Reports Record Fiscal 2014 Second Quarter Results

WHISTLER, BC, May 14, 2014 /CNW/ - Whistler Blackcomb Holdings Inc. (TSX: WB) (the "Company") today reported financial results for the three and six months ended March 31, 2014. The Company holds a 75% interest in and manages the entities that operate Whistler Blackcomb, the largest four-season mountain resort in North America.

Highlights for the Six Months Ended March 31, 2014

  • Revenue of $188.6 million was a first half record for the Company and increased 3% over the first half of the prior year. The growth in revenue was achieved through a 10% increase in revenue per total visit compared to the same period in 2013, demonstrating the Company's strong pricing power and favourable guest spending in the Company's ancillary businesses.

  • Adjusted EBITDA (as defined below) of $88.1 million was a first half record and increased 5% over the same period in the prior year as a result of healthy revenue growth and disciplined cost management.

  • Skier visits for the 2013-2014 ski season to March 31, 2014 of 1.67 million compared to 1.79 million in the prior season, reflecting weaker visitation during the first quarter of this season and the timing of the Easter holiday period.  Skier visit momentum was maintained subsequent to March 31, 2014 resulting in skier visits of 1.93 million for the season to May 12, 2014 compared to 2.02 million in the prior year.

Dave Brownlie, the Company's President and Chief Executive Officer commented: "We were very pleased with our performance for the first half of 2014.  Challenging early season conditions contributed to lower skier visits yet we still achieved strong EBITDA growth for the quarter and year to date.  The success of our pre-commitment sales strategy and our ability to drive increased revenue per visit, due in large part to a higher proportion of destination visits and strong guest spending in our ancillary businesses, contributed to this exceptional performance. It is encouraging to deliver 5% Adjusted EBITDA growth for the first half of the year in spite of lower skier visits. Looking ahead to the spring and summer seasons, we have a busy event schedule in front of us and are focused on the opening of the Whistler Mountain Bike Park on May 16, 2014."

Revenue, Visits and Pricing

  • Total revenue was $138.8 million and $188.6 million for the three and six months ended March 31, 2014, respectively, increases of $6.6 million or 5% and $6.2 million or 3%, respectively, over the same periods in the prior year. The increase in total revenue was primarily a result of higher revenue per visit, driven by improved effective ticket price ("ETP", as defined below) combined with price increases and higher guest spending in the Company's ancillary businesses, offset partially by lower skier visits.

  • Season pass and frequency card sales for the 2013-14 season totalled $44.2 million for the first half of 2014, a 1% increase compared to the prior year.

  • Total visits for the quarter and six months ended March 31, 2014, were 1,311,000 and 1,737,000, respectively, a decrease of 50,000 visits or 4% and 113,000 visits or 6%, respectively, compared to the same periods in the prior year.  The decrease in visits for the three months ended March 31, 2014 was primarily attributable to the timing of the Easter holiday period, which was in the third quarter in fiscal 2014 and the second quarter in fiscal 2013. Destination visits comprised approximately 41% of skier visits for the first half of 2014 compared to 37% during the first half last year.

  • Revenue per visit for the three and six months ended March 31, 2014 was $105.88 and $108.61, respectively, an increase of $8.75 or 9.0% and $9.97 or 10.1%, respectively, over the same periods in the prior year.  The increase in revenue per visit reflects price increases and improved guest spending in the Company's retail, rental and ski school businesses, as well as the impact of the Affinity Sports acquisition in 2013.  Guest spending improved in part because of the higher proportion of destination skier visits experienced in 2014 compared to 2013.

  • ETP was $58.20 and $57.11 for the three and six months ended March 31, 2014, respectively, an increase of $4.76 or 8.9% and $4.75 or 9.1%, respectively, over the same periods in the prior year. ETP is total ski-related lift revenue divided by skier visits. This growth reflected increases in lift ticket prices and an increased weighting of higher yielding lift products sold.

Adjusted EBITDA and Earnings per Share

  • Adjusted EBITDA was $78.6 million and $88.1 million for the three and six months ended March 31, 2014, respectively, an increase of $4.9 million or 7% and $4.1 million or 5%, respectively, compared to the same periods in the prior year.  The increase in Adjusted EBITDA was driven primarily by higher revenue compared to the prior periods, as described above.

  • Diluted earnings per common share were $0.96 for the quarter ended March 31, 2014 compared to $0.87 per share for the quarter ended March 31, 2013.  The increase in earnings per share for the second quarter was partially attributable to a one-time net recovery of $1.5 million from fire insurance recorded during the quarter, as well as a $1.6 million reduction in interest expense on long term debt during the quarter ended March 31, 2014 as a result of the Company's refinancing in November 2013.

  • Diluted earnings per common share were $0.77 for the six months ended March 31, 2014 compared to $0.80 per share for the six months ended March 31, 2013.  During the six months ended March 31, 2014 net earnings per share were reduced by the one-time $5.5 million prepayment penalty and one-time $2.8 million write-off of unamortized debt issuance costs in connection with the refinancing of the Company's long-term debt during the first quarter.

Financial Position

  • As at March 31, 2014, the Company had long-term debt outstanding of $217.0 million, a decrease of $44.0 million, or 17%, compared to $261.0 million at December 31, 2013. The Company's cash balance at March 31, 2014 was $18.0 million compared to $43.3 million at December 31, 2013.  The decrease in cash was mainly attributable to $44.0 million in revolving debt repayments during the period, offset in part by strong operating cash flow during the second quarter. Cash interest expense for first half of 2014 declined by 26% compared to the prior year, reflecting the lower interest rate on the Company's new credit facility.

  • Subsequent to March 31, 2014, the Company applied an additional $5.0 million of its cash balance against its revolving credit facility and reduced the principal amount of debt outstanding to $212.0 million.

Outlook

  • As at May 12, 2014, season to date skier visits were 1.93 million, a decrease of 4% compared to the same period in the prior year.

  • Management estimates that total skier visits for the 2013 -2014 ski season to date were comprised of 59% regional guests and 41% destination guests, compared to 62% and 38%, respectively, for the prior year's ski season.

Dividend

The Company's Board of Directors declared a dividend of $0.24375 per common share for the second quarter, to be paid on May 30, 2014 to shareholders of record on May 27, 2014. This dividend will be an eligible dividend for Canadian income tax purposes.

Non-GAAP Measures

This press release makes reference to Adjusted EBITDA and ETP, which are measures not prescribed by Canadian generally accepted accounting principles, or GAAP. These non-GAAP measures do not have standardized meanings and are therefore unlikely to be comparable to similar measures presented by other companies. Adjusted EBITDA is defined as consolidated earnings from operations before depreciation and amortization, as well as items that management does not consider part of the Company's normal operations, examples of which include significant non-cash gains or losses on disposal of property, buildings and equipment, acquisition or disposal expenses and gains or losses or restructuring expenses relating to acquisitions or disposals of businesses, impairment or restructuring charges and reversals and other significant event-driven amounts as applicable. Adjusted EBITDA is provided as additional information to complement GAAP measures and to further understand the Company's results of operations from management's perspective. It is also a supplemental measure of performance that highlights trends in the Company's business that may not otherwise be apparent when relying solely on GAAP financial measures. The closest GAAP measure is net earnings and a reconciliation is provided below. ETP is defined as the yield-per-skier visit calculated as total ski-related lift revenue divided by total skier visits. Ski-related lift revenue and skier visits exclude revenue and visits from summer glacier skiing and other revenue amounts. The Company believes ETP is an important measure of operating performance because it allows management, investors and others to evaluate and compare the yield generated by ski lift tickets from period to period, and ski tickets are the Company's largest source of revenue and the core of its operations. Non-GAAP measures should not be considered in isolation or as a substitute for analysis of financial information reported in accordance with GAAP. Readers should refer to the Company's annual information form dated December 20, 2013 and its most recent management's discussion and analysis ("MD&A"), which are available on the Company's website and under the Company's SEDAR profile at www.sedar.com, for additional details regarding non-GAAP measures.

Reconciliation of Net Earnings to Adjusted EBITDA

The following table reconciles Adjusted EBITDA to the Company's most directly comparable GAAP measure, net earnings:

(In thousands)  Six months
ended
March 31,
2014
      Six months
ended
March 31,
2013
      Three months
ended
March 31,
2014
      Three months
ended
March 31,
2013
          (Recast)1               (Recast)1
Net earnings $ 39,724       $ 40,455       $ 52,020       $ 46,068
Depreciation and amortization 20,636       20,789       10,112       10,143
Finance expense, long term debt 14,338       8,330       2,371       4,079
Finance expense, Limited Partner's interest 3,850       3,800       1,925       1,900
Income tax expense 11,024       10,602       13,625       11,544
Other income2 (2,958)       -       (2,958)       (11)
Other expenses3 1,494       -       1,493       -
Adjusted EBITDA $ 88,108       $ 83,976       $ 78,588       $ 73,723
1Refer to the Company's MD&A for the three and six months ended March 31, 2014 for a description of the recast.
2Other income is principally comprised of net insurance recoveries related to the fire that destroyed certain maintenance and administrative buildings in September 2013.
3Other expenses are principally comprised of expenditures incurred to replace items lost in the fire in September 2013 and to establish temporary work facilities for the staff displaced as a result of the fire.
 
 

Conference Call Information

Management will conduct a conference call on May 14, 2014 at 7:30 a.m. Pacific Time / 10:30 a.m. Eastern Time to review the Company's fiscal 2014 second quarter results. The call can be accessed by dialing 1.800.319.4610 (Canada and US) or 1.604.638.5340 (International) prior to the start of the call. A replay of the call will be archived for 30 days on the Presentations & Webcasts section of the Company's website.

ABOUT WHISTLER BLACKCOMB HOLDINGS INC.

The Company holds a 75% interest in each of Whistler Mountain Resort Limited Partnership and Blackcomb Skiing Enterprises Limited Partnership (the "Partnerships"), which, together, carry on the four season mountain resort business located in the Resort Municipality of Whistler, British Columbia (the "Resort Business"). The Company is the operating general partner of the Partnerships and as such manages the Resort Business. Whistler Blackcomb, the official alpine skiing venue for the 2010 Olympic Winter Games, is situated in the Coast Mountains of British Columbia, 125 kilometres (78 miles) north of Vancouver, British Columbia. North America's largest four-season mountain resort, Whistler Mountain and Blackcomb Mountain are two side-by-side mountains, connected by the world record-breaking PEAK 2 PEAK Gondola, which combined offer over 200 marked runs, over 8,000 acres of terrain, 14 alpine bowls, three glaciers, receive on average over 1,180 centimetres (465 inches) of snow annually, and offer one of the longest ski seasons in North America. In the summer, Whistler Blackcomb offers a variety of activities, including hiking and biking trails, the Whistler Mountain Bike Park, and sightseeing on the PEAK 2 PEAK Gondola. Whistler Blackcomb Holdings Inc. is listed on the Toronto Stock Exchange under the symbol "WB".  Additional information is available on the Company's website at www.whistlerblackcomb.com/holdings or under the Company's SEDAR profile at www.sedar.com.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release and the associated conference call and webcast, which include a business update, second quarter results and question and answer session, may contain certain forward-looking statements or information, within the meaning of applicable Canadian securities laws, which reflect the current view of the Company with respect to future events and financial performance. Forward-looking statements can often be identified by the use of forward-looking terminology such as "may", "will", "would", "could", "should", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "believe" or "continue" or the negatives of such terms or variations of them or similar terminology. All forward-looking statements made by the Company are based on the opinions and estimates of management as of the date such statements are made and represent management's best judgment based on facts and assumptions that management considers reasonable. The forward-looking statements and information contained in this press release and the associated conference call and webcast include comments about the Company's 2014 summer season, among others, and are based on certain factors and assumptions made by management of the Company including, but not limited to: business conditions, guest visitation, weather, macroeconomic and currency influences, and interest rates, among others. These forward-looking statements and information contained are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated including, but not limited to, risks relating to unfavourable weather conditions, competition from other ski and four season resorts, changes in laws, regulations and policies and failure to comply with any legal requirements, the Company's reliance on its agreements with the Province of British Columbia to operate Whistler Blackcomb, the impact of any occurring natural disasters, insufficient insurance against material claims or losses and negative economic, business and market conditions. A more detailed description of these risks is available in the Company's most recently filed annual information form and management's discussion and analysis, which is available on the Company's website and at www.sedar.com under the Company's SEDAR profile.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements or information prove incorrect, actual results may vary materially from those described herein. Although the Company believes that the expectations reflected in such forward-looking statements and information are reasonable, undue reliance should not be placed on forward-looking statements or information because the Company can give no assurance that such expectations will prove to be correct.

These forward-looking statements and information are made as of the date of this press release, and the Company has no intention and assumes no obligation to update or revise any forward-looking statements or information to reflect new events or circumstances, except as required by applicable Canadian securities laws.


Condensed Interim Consolidated Statements of Comprehensive Income
(unaudited, in thousands, except per share amounts)

                                       
      Six months
ended
March 31, 2014
        Six months
ended
March 31, 2013
        Three months
ended
March 31, 2014
        Three months
ended
March 31, 2013
                (recast)                   (recast)
                                     
Resort revenue    $ 188,649       $ 182,479        $ 138,812       $ 132,198
                                     
Operating expenses     85,212         82,984         52,342         50,314
Depreciation and amortization     20,636         20,789         10,112         10,143
Selling, general and administrative     15,329         15,519         7,882         8,161
      121,177         119,292         70,336         68,618
                                     
Earnings from operations     67,472         63,187         68,476         63,580
                                     
Other income     2,958         -         2,958         11
Other expense     (1,494)         -         (1,493)         -
Finance expense, long term debt     (14,338)         (8,330)         (2,371)         (4,079)
Finance expense, Limited Partner's interest     (3,850)         (3,800)         (1,925)         (1,900)
                                     
Net earnings before income tax     50,748         51,057         65,645         57,612
                                     
Income tax expense     (11,024)         (10,602)         (13,625)         (11,544)
                                     
Net earnings and comprehensive income   $ 39,724       $ 40,455       $ 52,020       $ 46,068
                                     
Net earnings and comprehensive income:                                    
  Attributable to Whistler Blackcomb Holdings Inc. shareholders   $ 29,524       $ 30,506       $ 36,826       $ 33,091
  Attributable to Limited Partner's non-controlling interest     10,200         9,949         15,194         12,977
    $ 39,724       $ 40,455       $ 52,020       $ 46,068
                                     
Earnings per share                                    
  Basic   $ 0.78       $ 0.80       $ 0.97       $ 0.87
  Diluted   $ 0.77       $ 0.80       $ 0.96       $ 0.87
                                     
Weighted average number of common shares outstanding                                    
  Basic     37,990         37,931         38,020         37,951
  Diluted     38,114         37,984         38,237         37,990



Consolidated Statements of Financial Position
(unaudited, in thousands)

               
      March 31,
2014
      September 30,
2013
               
Assets              
               
Current assets:              
  Cash and cash equivalents    $ 17,995     $ 41,353
  Accounts receivable     11,870       3,323
  Inventory     12,706       15,856
  Prepaid expenses     3,166       2,727
  Notes receivable     320       311
      46,057       63,570
Notes receivable     2,452       2,636
Property, buildings and equipment     323,603       322,316
Property held for development     9,244       9,244
Intangible assets     305,108       311,428
Goodwill     137,273       137,259
    $ 823,737     $ 846,453
               
Liabilities and Shareholders' Equity              
               
Current liabilities:              
  Accounts payable and accrued liabilities   $ 25,852     $ 24,927
  Income taxes payable     6,205       1,645
  Provisions     2,591       2,858
  Deferred revenue     13,844       22,347
      48,492       51,777
Long-term debt     214,585       258,042
Deferred income tax liability     24,519       20,690
Limited Partner's interest     72,796       72,796
Total liabilities     360,392       403,305
               
Equity              
  Whistler Blackcomb Holdings Inc. shareholders' equity
             
    Common shares; no par value; unlimited number   authorized;
  38,026 outstanding  (Sept 30, 2013 - 37,958)
    442,879       442,080
    Additional paid-in capital     504       913
    Deficit     (43,779)       (54,781)
Total Whistler Blackcomb Holdings Inc. shareholders' equity     399,604       388,212
  Limited Partner's non-controlling interest     63,741       54,936
      463,345       443,148
    $ 823,737     $ 846,453



Condensed Interim Consolidated Statements of Cash Flows
(unaudited, in thousands)

                   
      Six months
ended
March 31, 2014
          Six months
ended
March 31, 2013
                  (recast)
Cash provided by (used in)                  
                   
Operations                  
                   
Net earnings and comprehensive income   $ 39,724         $ 40,455
                   
Adjustments for:                  
  Income tax expense     11,024           10,602
  Interest expense on long-term debt     14,338           8,330
  Finance expense on Limited Partner's interest     3,850           3,800
  Depreciation and amortization     20,636           20,789
  Disposal losses     14           -
  Share-based compensation     390           431
      89,976           84,407
                   
Interest paid on long-term debt     (5,668)           (7,664)
Prepayment penalty paid on second lien facility repayment     (5,500)           -
Finance expense paid on Limited Partner's interest     (1,925)           (3,800)
Income taxes paid     (2,635)           (88)
Changes in non-cash operating working capital     (15,606)           (9,657)
                   
    $ 58,642         $ 63,198
                   
Financing                  
Dividends paid on common shares   $ (18,522)         $ (18,492)
Distributions to Limited Partner's non-controlling interest     (1,395)           (2,831)
Repayment of long-term debt     (305,000)           -
Draws on revolving credit facility     261,000           -
Debt issuance costs     (2,627)           -
    $ (66,544)         $ (21,323)
                   
Investing                  
Expenditures on property, buildings, equipment and intangibles   $ (15,827)         $ (8,677)
Proceeds from sale of property and equipment     196           142
Repayment of notes receivable     175           138
    $ (15,456)         $ (8,397)
                   
Cash and cash equivalents, end of period                  
(Decrease) Increase in cash and cash equivalents   $ (23,358)         $ 33,478
Cash and cash equivalents, beginning of period     41,353           43,634
    $ 17,995         $ 77,112

 

 

 

SOURCE Whistler Blackcomb Holdings Inc.

For further information:

David Wilcox 
Manager, Finance & Investor Relations 
Whistler Blackcomb Holdings Inc. 
dwilcox@whistlerblackcomb.com
ph: 604.938.7376