ORDA seems to be still making snow?

I've been saving money with the hopes that the stock market crashes soon, and then I'll buy like crazy. Thanks for the advice, I won't invest in skiing.

Ethan Snow wrote

I've been saving money with the hopes that the stock market crashes soon, and then I'll buy like crazy. Thanks for the advice, I won't invest in skiing.

Dollar cost averaging though... think long haul.

Just call me Mr. Boring.

snoloco wrote

Then I'm completely dumbfounded as to why any ski areas even exist if all they ever do is lose money.

Are you really trying to be a Troll? No one said they all loose money.

PeeTex wrote

snoloco wrote

Then I'm completely dumbfounded as to why any ski areas even exist if all they ever do is lose money.

Are you really trying to be a Troll? No one said they all loose money.

No, and Z was saying non stop that ski areas lose money and aren't profitable except in a good year.

snoloco wrote

PeeTex wrote

snoloco wrote

Then I'm completely dumbfounded as to why any ski areas even exist if all they ever do is lose money.

Are you really trying to be a Troll? No one said they all loose money.

No, and Z was saying non stop that ski areas lose money and aren't profitable except in a goof year.

We all know Z doesn't do his homework and relies on Fox News for his "facts" so go pull some annual reports, quote them and rub his nose in it. Don't spout back some inflammatory crap - do your homework.

snoloco wrote

PeeTex wrote

snoloco wrote

Then I'm completely dumbfounded as to why any ski areas even exist if all they ever do is lose money.

Are you really trying to be a Troll? No one said they all loose money.

No, and Z was saying non stop that ski areas lose money and aren't profitable except in a good year.

There's a huge dichotomy between smaller independent ski areas ("local" hills) and the large, corporate-owned destination resorts.  I think it's a real struggle for the smaller hills to compete, to make money and even to survive.  Just look at all the troubled ski areas here in NY (West, Willard, Greek among others have all been through ups and downs).  Of course we don't have insight into their financial statements like we do with Vail, Intrawest and Peak, but all indications are that it's a tough business.  I wouldn't want to be the owner of a small hill.  Coach is right on that count.

But large corporations with diversified properties, sophisticated marketing, market share, lawyers and accountants can do well.  Vail is proof of that, though there are still plenty of risks with weather, the economy, etc. etc.  Peak Resorts, though, I'm not so sure about.  Too leveraged, too geographically concentrated, lower tier resorts.  Hunter could be very good for them revenue-wise, but the debt load on the purchase may kill it.  We'll see.

snoloco wrote

Peak Resorts owns mostly day ski areas, not destination resorts.  These tend not to have slopeside lodging which means less revenue.  

Revenue is important, but profit - what's left after you pay the bills - is what really matters.

snoloco wrote

It'll be interesting to see what happens with Hunter on their annual report.  I'm guessing Hunter is one of the few ski areas to turn a profit, or at least take less of a loss.

You're not going to see results for individual ski areas in Peak's (or Vail's or Intrawest's) annual reports, so you're not going to be able to determine if Hunter "turns a profit."  There will be some hill-specific numbers like skier days and operating days, but not a P&L.  What you will be able to see, with some digging, is how Hunter impacts Peak's overall performance.  There will be pluses and minuses.

Just a quick comparison of revenue for the 3 publicly traded ski companies.  Contrary to popular opinion, the vast majority of revenue is from on-mountain sources (lift tix, equip rentals, lessons, food & bev, etc).  Revenue from real estate development is surprisingly small.  Numbers are in thousands and are from the most recent fiscal year.

Revenue:          Vail                 Intrawest               Peak Resorts
Mountain     $1,104,029 79%      $470,501 80%     $97,235 93%
Lodging           254,553 18%     $57,814 10%         $7,623 7%
Real estate          41,342 3%     $59,274 10%
                                                               
Total revenue  $1,399,924         $587,589           $104,858

The advantage of Peak's lower tier resorts is they have little competition.  They pretty much have a monopoly in Missouri and Ohio.  They also have a huge presence in NH.  When you look at their annual reports they have been taking a loss lately, but they have also been investing heavily.  Over the past 10 years, they added 5 ski areas to their profile, 4 of which were bigger than anything they had previously.  Obviously that costs a lot and will result in a loss initially.  Their biggest disadvantage of owning lower tier resorts is that they lose out on the real estate market.  However, their report says that they make up for this with increased revenue from equipment rentals.

This is good info. Any business needs to watch the money. Cash flow + margin = bottom line. Whatever the business model (feeder hill, medium, big, destination), they need to have something left at the end in order to keep going. In a bad year, they either need the rainy day fund or good credit or else the bills don't get paid

snoloco wrote

When you look at their annual reports they have been taking a loss lately

The cumulative net loss for the 5 years reported in their 10K is around $2.5 million pre-tax.  That's not good.

Last year, gross revenue was $105 million.  EBITDA (earnings before interest, taxes, depreciation and amortization) was $25.4 million.  That's not bad.  But the interest expense on their debt ($15.5 million) and depreciation ($9.5 million) is killing their earnings (a $2.6 million loss pre-tax last year).

Now, here's the thing.  The IPO in Nov 2014 was used to pay off their debt.  That's good.  Their interest expense for the current fiscal year should be much, much less.  The Hunter acquisition in Nov 2015 is expected to bring in $27 million in annual revenue and generate $6 million in EBITDA.  But since the acquisition was 100% debt financed ($20 million mtg @ 8%, $15 million line of credit @ 4.5% plus 1% annual commitment fee, $1.8 million lease assumption), the $6 million will be reduced by $2.5 to $3 million in interest expense.  Then there'll be another $2 million (wild-ass guess) additional depreciation expense from Hunter.  Hunter should still generate positive bottom line earnings, but not nearly as much as it could be if the borrowing could have been avoided.

Between the IPO's elimination of debt in Nov 2014 and the acquisition of Hunter in Nov 2015 (even with the additional debt it brought), Peak could see a major turn-around in its bottom line for the current fiscal year ending 4/30/2016.  I think you could expect a $12-ish million pre-tax profit, assuming a "normal" winter.  But this isn't a normal winter.  Last time we had a shit winter, 2011-12, Peak's revenues declined by 15% but operating expenses only went down 5%.  Expectations are more like a 20+ % decline in revenue for this year.  That's probably going to wipe out this year's profit.

Peak's stock is currently trading below $4.  If they return to profitability in that $12 million pre-tax range I mentioned, you could see the share price climb back towards IPO levels ($9).  If they don't (and it doesn't seem likely for at least another year), you'll see the share price continue to stagnate.  It could be a good long-term (1-year plus) play, essentially you are gambling on next winter's weather.  Wanna gamble your college savings?

Ethan Snow wrote

Sno, I dig your enthusiasm.
One day you and I are going to have to team up, and run the best ski center in the East with high speed bubbles in one area, Fixed quads in another area, and SnowLogic Dual Vector guns on every trail. We will also diversify our business and make money on more than just snow. Like beer. BTW, no one has mentioned Beer? I heard that ski areas are selling quite a bit more beer this season because people are spending more time in the bar, and less time on the sub-par slopes. I'm going to be the first ski area that is also a hops plantation. Just look at Omegang Brewery in Cooperstown. A stupid little brewery that is now a enormously wealthy but privately owned Brewery al because of baseball. The same can be done with skiing if it's done right.

ski areas make a lot of money selling beer, so do sports stadiums. I believe it was during the American ski company day's but am not a 100% sure. Some bean counter figured out that if we served beer in a 15 oz pint glass we would make X amount more money. so it was worth it for them to replace all the existing, perfectly fine pint glasses, with 15 oz ones. sources at mnt snow is where this info came from

I'm betting the farm on Peak! Strike price or bust!

And have you been to a Vail resort? fucking waiters in bowties serve your $50 lunch and $12 drinks. They have add ons for days, if you are a baller: Platinum passes to skip the lift line, valet parking, etc etc.... No wonder they make money!

Vail doesn't operate ski resorts.  More like amusement parks.  Have no plans to ski at any of their mountains.

Peak Resorts is in a huge spending spree right now.  I think their loss will be eliminated once they get out of this period.  Luckily, Hunter doesn't need many capital improvements, so they're just going to pocket the profits from it.  It might be a good time to buy their stock since it's so low now.  Maybe it'll go back up once they're out of spending spree mode.  

Jeff thanks for the in depth statement analysis..

history has proven that when these companies get greedy  and take on huge amounts of debt, the house of cards comes crashing down.. If we have 2 bad winters in a row..It's game over..
I wouldn't want to be the proud owner of Peak Resorts stock..

Jason took the words right out of my mouth. I'm not a financial advisor but I would think there are other undervalued stocks out there that are a lot less risky then any ski resort company. In my 20s I worked for mountains owned by two of these mega corporations and now there both out of business

goremountain wrote

...snowmakers have guns blasting on Twister, Headwaters, Sunway...

they must be making snow on Twister to keep enuf base for USSA Finals, which is in 10 days, when it's suppose to be quite warm.

its probably a stock that might make a good candidate to short - not that I have ever done that - something about it just seems dirty to me.  I would not buy that stock under any circumstance at this point.  I cant recall a good return on any stock I've ever purchased that is under $10 and under $5 has always been a disaster for me.  Sno - go buy 100 shares at $4 with your own money and see how you then feel about blowing snow that is going to melt.

The chart is showing 10% swings on a daily basis which is common in such a low price stock with not a low of volume.  Super easy to be burned by that.  What scares me about the earnings estimates is that they are predicting a 0.87 eps for this quarter that ends in April ups from 0.70 last year and given this weather and they had a negative earnings surprise in the Jan quarter of -18% this has disaster written all over it.  There you go Ptex I did my homework just for you this time.


I heard WF is going to blow some this week.

when I was at Gore two weekends ago there was some huge mounds on Twister they built up to push around in case of rain before the races to come.

According to the website.....WF will be firing up the snow guns tomorrow!

Coach Z wrote

Sno - go buy 100 shares at $4 with your own money and see how you then feel about blowing snow that is going to melt.

All snow that is blown anywhere is going to melt at some point.  I want to ski, so I want there to be snow.  I'd feel better about them making snow than letting the mountain close the first weekend in March.  

Not sure if Hunter is going to make anymore.  Windham is currently lit up.