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Section 1: 8-K (8-K)

20151215 8K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): December 15, 2015

PEAK RESORTS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

Missouri

 

001-35363

 

43-1793922

(State or other jurisdiction of

 

(Commission

 

(I.R.S. Employer

incorporation)

 

File Number)

 

Identification No.)

 

 

 

 

 

 

17409 Hidden Valley Drive

 

 

Wildwood, Missouri

 

63025

(Address of principal executive offices)

 

(Zip Code)

 

(636) 938-7474

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act.

Soliciting material pursuant to Rule 14a-12 under the Exchange Act.

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.



 

Item 2.02. Results of Operations and Financial Condition.

On December 15, 2015, Peak Resorts, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended October 31, 2015. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated into this Item 2.02 by reference. The information contained in the website is not a part of this Current Report on Form 8-K.

The information under this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 8.01.Other Events.

As previously disclosed, the Company’s fourth-quarter 2015 interest expense on its post-restructuring debt level was approximately $2.6 million. Management indicated that the run rate for quarterly interest expense was expected to remain near that level going forward. 

The pending acquisition of Hunter Mountain is expected to increase the Company’s outstanding debt by approximately $35 million to $138 million. Assuming a hypothetical blended rate of 6.5 percent to 7.0 percent for the new debt, the run rate for quarterly interest expense would rise to approximately $3.3 million to $3.4 million after the transaction closes. 

Based on the hypothetical blended rate for the new debt, after the transaction closes, the Company’s overall blended interest rate is expected to decline to approximately 9.6 percent to 9.7 percent from the present 10.6 percent level.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

 

 

Exhibit No.

 

Description of Exhibit

99.1

 

Press Release of Peak Resorts, Inc. dated December 15, 2015.

 

 

 

 

 

2



 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

Dated: December 15, 2015

 

 

 

 

PEAK RESORTS, INC.
(Registrant)

 

 

 

 

 

By:

/s/ Stephen J. Mueller

 

Name:

Stephen J. Mueller

 

Title:

Chief Financial Officer

 

 

3


 


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Section 2: EX-99.1 (EX-99.1)

20151215 8K Exhibit

C:\Users\rburton\Desktop\untitled.pngExhibit 99.1

 

 

 

 

 

 

 

 

 

For Further Information: 

Heather Wietzel, 616-233-0500

investorrelations@peakresorts.com

For Immediate Release

 

Peak Resorts Reports Results for Second-Quarter and Six-Months FY2016

Interim Results on Track and Early Sales of Season Passes are Positive

 

Wildwood, Missouri, December 15, 2015 – Peak Resorts, Inc. (NASDAQ:SKIS), a leading owner and operator of high-quality, individually branded ski resorts in the U.S., today reported results for its fiscal 2016 second quarter and six months, periods in which the company anticipates losses due to the seasonality of the ski industry.

 

·

Revenue, net loss and the Reported EBITDA* loss for the fiscal 2016 second quarter and six months were essentially unchanged from the same periods of fiscal 2015, and in line with management’s expectations.

·

Net loss per share for the second-quarter and six months was 49 cents and $1.00, respectively, substantially below the prior periods due to the higher number of shares outstanding.

·

Sales of season passes through October 31 for the 2015-2016 ski season were up approximately 4.0 percent in sales dollars versus the comparable period in the prior year.

·

Acquisition of Hunter Mountain remains on track to close before calendar year end.

 

Timothy D. Boyd, president and chief executive officer, commented, “Although our second quarter ends before the start of ski season, in more recent weeks, our Big Boulder, Mount Snow and Wildcat resorts opened for the 2015-2016 season.  In addition, we announced our first acquisition as a public company on November 30. Our roadmap for growth calls for a mix of organic growth, resort development and acquisitions. This transaction hopefully represents the first in a series of value-add transactions over the coming years.

 

“Over the past few weeks, we have been moving forward with the final steps required to complete the purchase of Hunter Mountain for cash consideration of $35 million plus the assumption of two capital leases estimated at approximately $1.8 million. The Catskills' premier winter resort destination, Hunter Mountain generates approximately $27 million (unaudited) in annual revenue. The purchase price will be slightly more than six times Hunter Mountain’s adjusted EBITDA, which is estimated at approximately $6 million (unaudited) for its fiscal year ended April 30, 2015.”

 

* See below for Definitions of Non-GAAP Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands except per share data)

 

Three months ended
October 31,

 

 

Six months ended
October 31,

 

 

2015

 

 

2014

 

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

6,155 

 

$

6,230 

 

$

11,587 

$

11,826 

Loss from operations

$

(8,875)

 

$

(6,887)

 

$

(17,838)

$

(15,963)

Net Loss

$

(6,888)

 

$

(6,743)

 

$

(13,967)

$

(14,903)

Loss per share (basic and diluted)

$

(0.49)

 

$

(1.69)

 

$

(1.00)

$

(3.74)

Weighted average shares outstanding

 

13,982 

 

 

3,982 

 

 

13,982 

 

3,982 

Reported EBITDA

$

(6,410)

 

$

(6,480)

 

$

(12,925)

$

(13,038)

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Peak Resorts, Inc.Page 2 of 2

 

Three- and Six-Month Resort Operating Results

Stephen J. Mueller, Peak Resorts’ chief financial officer, noted, “Total revenue and resort operating expenses were in line with last year for both the three- and six-month periods. Higher revenue from the new zipline rider attraction at the Attitash resort largely offset lower food and beverage revenue related to the March 2015 termination of a restaurant lease at our Big Boulder resort.

 

“The zipline at Attitash proved to be a popular attraction in its first full year of operation. It continued to attract visitors through the fall, as it gave riders a great view of the Mount Washington Valley from high above the tree canopy. We expect it to grow in popularity in future years.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

Three months ended
October 31,

 

 

Six months ended
October 31,

 

 

2015

 

 

2014

 

 

2015

 

2014

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

Food and beverage

$

1,619 

 

$

2,018 

 

$

2,941 

$

3,730 

Hotel/lodging

$

1,314 

 

$

1,357 

 

$

2,774 

$

2,680 

Retail

$

297 

 

$

308 

 

$

456 

$

468 

Other

$

2,925 

 

$

2,547 

 

$

5,416 

$

4,948 

Total

$

6,155 

 

$

6,230 

 

$

11,587 

$

11,826 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

Three months ended
October 31,

 

 

Six months ended
October 31,

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

Resort operating expenses

 

 

 

 

 

 

 

 

 

 

 

Labor and labor related expenses

$

6,322 

 

$

6,329 

 

$

12,553 

 

$

12,588 

Retail and food and beverage cost of sales

$

751 

 

$

896 

 

$

1,267 

 

$

1,530 

Power and utilities

$

664 

 

$

789 

 

$

1,247 

 

$

1,480 

Other

$

3,046 

 

$

3,137 

 

$

5,923 

 

$

5,999 

Total

$

10,783 

 

$

11,151 

 

$

20,990 

 

$

21,597 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Position Supports Strategy

Mueller noted, “The strength of our balance sheet has allowed us to continue to implement our strategic plan during the summer months when our cash receipts are typically lower. At October 31, 2015, we had $4.6 million of cash and cash equivalents, compared to $16.8 million at April 30, 2015, and $6.1 million at October 31, 2014.  The change in cash and cash equivalents since year-end reflected normal operating cash flow. Cash balances begin to benefit during the second quarter from early season pass sales.  In addition, we invested about $7.8 million in Mount Snow’s West Lake project during the first half of this fiscal year as we await the release of the EB-5 funds held in escrow. For the first half of fiscal 2016, dividend and interest payments totaled $9.4 million. Fiscal 2016 capital expenditures for routine maintenance remain below our targeted 4.0 to 5.0 percent of estimated full-year revenue.”

 

Richard K. Deutsch, vice president, business and real estate development, added, “As previously announced, we moved ahead with the development plan at our Mount Snow ski resort, breaking ground in May 2015 for Phase 1 – the West Lake project. That project continued in full swing into early fall and now is about 50 percent complete.  During construction season, over 12 miles of pipe were installed. Mount Snow is seeing some benefit from that pipe this ski season, as it has a wider diameter than the old pipe, and we are making snow more quickly with the greater volume of water.  We will resume full-scale work in late spring and fully expect this project will completed prior to the 2016-2017 ski season.


 

 

Peak Resorts, Inc.Page 3 of 3

 

“As we have reported, we are very pleased with the interest in and success of our EB-5 program, which will finance this work. When we closed the program in August, we had investor commitments to provide all of the funding and we now have in escrow all of the $52 million raised. Upon approval of the first investor’s I-526 Petition, which we now expect to occur in the first quarter of calendar 2016, all of the committed funds will be released from escrow. We recently responded to a routine information request related to the offering from the United States Citizenship and Immigration Services.”

 

Quarterly Investor Call and Webcast

Peak Resorts will hold its second-quarter investor conference call/webcast on Tuesday, December 15, at 9 a.m. ET.

 

The call/webcast will be available via:

 

Webcast:ir.peakresorts.com on the Events page

Conference Call:877-292-0959 (domestic) or 412-542-4158 (international)

 

A replay will be available on the Peak Resorts investor relations website (ir.peakresorts.com) after the call concludes.

 

Definitions of Non-GAAP Measures

Reported EBITDA is not a measure of financial performance under U.S. generally accepted accounting principles (“GAAP”). The company defines Reported EBITDA as net income before interest, income taxes, depreciation and amortization, gain on sale/leaseback, investment income, other income or expense and other non-recurring items. The following table includes a reconciliation of Reported EBITDA to net loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

Three months ended
October 31,

 

 

Six months ended
October 31,

 

2015

2014

 

2015

2014

Net loss

$

(6,888)

$

(6,743)

 

$

(13,967)

$

(14,903)

Income tax benefit

$

(4,459)

$

(4,356)

 

$

(8,979)

$

(9,528)

Interest expense, net

$

2,557 

$

4,298 

 

$

5,278 

$

8,640 

Depreciation and amortization

$

2,465 

$

2,308 

 

$

4,913 

$

4,614 

Investment income

$

(2)

$

(3)

 

$

(4)

$

(6)

Gain on sale/leaseback

$

(83)

$

(83)

 

$

(166)

$

(166)

Non-routine legal and settlement of lawsuit

$

 -

$

(1,901)

 

$

 

$

(1,689)

Reported EBITDA

$

(6,410)

$

(6,480)

 

$

(12,925)

$

(13,038)

 


 

 

Peak Resorts, Inc.Page 4 of 4

 

We have chosen to specifically include Reported EBITDA as a measurement of our results of operations because we consider this measurement to be a significant indication of our financial performance and available capital resources. Because of large depreciation and other charges relating to our ski resorts, it is difficult for management to fully and accurately evaluate our financial results and available capital resources using net income. Management believes that by providing investors with Reported EBITDA, investors will have a clearer understanding of our financial performance and cash flow because Reported EBITDA: (i) is widely used in the ski industry to measure a company’s operating performance without regard to items excluded from the calculation of such measure, which can vary by company primarily based upon the structure or existence of their financing; (ii) helps investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the effect of our capital structure and asset base from our operating structure; and (iii) is used by our management for various purposes, including as a measure of performance of our operating entities and as a basis for planning.

 

 

Items excluded from Reported EBITDA are significant components in understanding and assessing financial performance or liquidity. Reported EBITDA should not be considered in isolation or as alternative to, or substitute for, net income, net change in cash and cash equivalents or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Reported EBITDA is not a measurement determined in accordance with GAAP and is susceptible to varying calculations, Reported EBITDA as presented may not be comparable to other similarly titled measures of other companies.

 

 

About Peak Resorts

Headquartered in Missouri, Peak Resorts is a leading owner and operator of high-quality, individually branded ski resorts in the U.S. The company currently operates 13 ski resorts primarily located in the Northeast and Midwest, 12 of which are company owned.

 

The majority of the resorts are located within 100 miles of major metropolitan markets, including New York City, Boston, Philadelphia, Cleveland and St. Louis, enabling day and overnight drive accessibility. The resorts under the company's umbrella offer a breadth of activities, services and amenities, including skiing, snowboarding, terrain parks, tubing, dining, lodging, equipment rentals and sales, ski and snowboard instruction and mountain biking and other summer activities. To learn more, visit the company's website at PeakResorts.com, or follow Peak Resorts on Facebook (https://www.facebook.com/skipeakresorts) for resort updates.

 

Forward Looking Statements

This news release contains forward-looking statements regarding the future outlook and performance of Peak Resorts, Inc., within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations. These risks and uncertainties are discussed under the caption “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended April 30, 2015, filed with the Securities and Exchange Commission (the “SEC”), and as updated from time to time in the company’s filings with the SEC.  Peak Resorts undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.


 

 

Peak Resorts, Inc.Page 5 of 5

 

Consolidated Income Statements

(in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

(Unaudited)

 

 

 

Three months ended
October 31,

 

 

Six months ended
October 31,

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

6,155 

 

$

6,230 

 

$

11,587 

 

$

11,826 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

Resort operating expenses

 

 

10,783 

 

 

11,151 

 

 

20,990 

 

 

21,597 

Depreciation and amortization

 

 

2,465 

 

 

2,308 

 

 

4,913 

 

 

4,614 

General and administrative expenses

 

 

1,029 

 

 

947 

 

 

1,965 

 

 

2,033 

Land and building rent

 

 

338 

 

 

357 

 

 

676 

 

 

714 

Real estate and other taxes

 

 

415 

 

 

454 

 

 

881 

 

 

931 

 

 

 

15,030 

 

 

15,217 

 

 

29,425 

 

 

29,889 

Other Operating Income-gain on settlement of lawsuit

 

 

 -

 

 

2,100 

 

 

 -

 

 

2,100 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from Operations

 

 

(8,875)

 

 

(6,887)

 

 

(17,838)

 

 

(15,963)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

Interest, net of interest capitalized of $91 and $196  in 2015 and $157 and $286 in 2014

 

 

(2,557)

 

 

(4,298)

 

 

(5,278)

 

 

(8,640)

Gain on sale/leaseback

 

 

83 

 

 

83 

 

 

166 

 

 

166 

Investment income

 

 

 

 

 

 

 

 

 

 

 

(2,472)

 

 

(4,212)

 

 

(5,108)

 

 

(8,468)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before income tax benefit

 

 

(11,347)

 

 

(11,099)

 

 

(22,946)

 

 

(24,431)

Income tax benefit

 

 

(4,459)

 

 

(4,356)

 

 

(8,979)

 

 

(9,528)

Net Loss

 

$

(6,888)

 

$

(6,743)

 

$

(13,967)

 

$

(14,903)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share

 

$

(0.49)

 

$

(1.69)

 

$

(1.00)

 

$

(3.74)

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.1375 

 

$

 -

 

$

0.2750 

 

$

 -


 

 

Peak Resorts, Inc.Page 6 of 6

 

 

Consolidated Balance Sheets

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

October 31,

 

 

April 30,

 

 

 

 

2015

 

 

2015

 

Assets

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4,582 

 

$

16,849 

 

Restricted cash balances

 

 

53,499 

 

 

37,519 

 

Income tax receivable

 

 

8,979 

 

 

 -

 

Accounts receivable

 

 

529 

 

 

1,639 

 

Inventory

 

 

2,739 

 

 

1,583 

 

Deferred income taxes

 

 

970 

 

 

970 

 

Prepaid expenses and deposits

 

 

2,197 

 

 

1,930 

 

 

 

 

73,495 

 

 

60,490 

 

Property and equipment-net

 

 

150,035 

 

 

143,944 

 

Land held for development

 

 

35,780 

 

 

35,780 

 

Other assets

 

 

1,342 

 

 

1,326 

 

 

 

$

260,652 

 

$

241,540 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

14,059 

 

$

8,218 

 

Accrued salaries, wages and related taxes and benefits

 

 

1,071 

 

 

927 

 

Unearned revenue

 

 

15,136 

 

 

8,606 

 

EB-5 investor funds in escrow

 

 

51,504 

 

 

30,002 

 

Current portion of deferred gain on sale/leaseback

 

 

333 

 

 

333 

 

Current portion of long-term debt and capitalized lease obligation

 

 

1,829 

 

 

999 

 

 

 

 

83,932 

 

 

49,085 

 

Long-term debt

 

 

97,232 

 

 

97,569 

 

Capitalized lease obligation

 

 

4,092 

 

 

1,494 

 

Deferred gain on sale/leaseback

 

 

3,345 

 

 

3,511 

 

Deferred income taxes

 

 

8,831 

 

 

8,831 

 

Other liabilities

 

 

594 

 

 

612 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

Common stock, $.01 par value, 20,000,000 shares authorized, 13,982,400 shares issued

 

 

140 

 

 

140 

 

Additional paid-in capital

 

 

82,538 

 

 

82,538 

 

Accumulated Deficit

 

 

(20,052)

 

 

(2,240)

 

 

 

 

62,626 

 

 

80,438 

 

 

 

$

260,652 

 

$

241,540 

 

 

 

 

 


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