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Section 1: 8-K (8-K)

20180712 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): July 12, 2018 

 

PEAK RESORTS, INC. 

 

(Exact name of registrant as specified in its charter)

 

 

(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.

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).     Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     




 

Item 2.02. Results of Operations and Financial Condition.   

On July 12, 2018, Peak Resorts, Inc. (the "Company") issued a press release announcing its financial results for the fourth fiscal quarter and year ended April 30, 2018. 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 9.01. Financial Statements and Exhibits.   

(d) Exhibits.  



 

 



 

 



 

 

Exhibit No.

 

Description of Exhibit

99.1

 

Press Release of Peak Resorts, Inc. dated July 12, 2018.




 



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: July 12, 2018

PEAK RESORTS, INC.

(Registrant)

By:/s/ Christopher J. Bub

Name:Christopher J. Bub

Title:Chief Financial Officer












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Section 2: EX-99.1 (EX-99.1)

20180712 Ex99.1

Picture 2                                                                             Exhibit 99.1



News Announcement               For Immediate Release 

PEAK RESORTS REPORTS RECORD FISCAL 2018
FOURTH QUARTER REVENUE



Fourth Quarter Reported EBITDA Rises 4% Year over Year



Wildwood, MissouriJuly 12, 2018 – Peak Resorts, Inc. (NASDAQ:SKIS) (“Peak” or the “Company”), a leading owner and operator of high-quality, individually branded U.S. ski resorts, today reported financial results for its fiscal 2018 fourth quarter and year as summarized below:









 

 

 

 

 

 

 

 

 

 

(in thousands, except per share data)

 

Three months ended

April 30,

 

 

Twelve months ended

April 30,



 

2018

 

 

2017

 

 

2018

 

2017



 

 

 

 

 

 

 

 

 

 

Revenues

$

56,032 

 

$

51,263 

 

$

131,662 

$

123,249 

Resort operating costs

$

31,951 

 

$

28,871 

 

$

96,593 

$

87,319 

Income from operations

$

17,413 

 

$

17,607 

 

$

10,219 

$

14,069 

Net income

$

9,680 

 

$

8,962 

 

$

1,352 

$

1,241 

Net income (loss) available to common shareholders for basic EPS

$

9,280 

 

$

8,162 

 

$

(248)

$

441 

Net income (loss) available to common shareholders for diluted EPS

$

9,680 

 

$

8,962 

 

$

(248)

$

441 

Income (loss) per share (basic)

$

0.66 

 

$

0.58 

 

$

(0.02)

$

0.03 

Income (loss) per share (diluted)

$

0.56 

 

$

0.52 

 

$

(0.02)

$

0.03 

Weighted average common shares (basic)

 

13,982 

 

 

13,982 

 

 

13,982 

 

13,982 

Vested restricted stock units (“RSUs”)

 

102 

 

 

49 

 

 

78 

 

35 

Dilutive effect of conversion of preferred stock

 

3,180 

 

 

3,145 

 

 

-

 

-

Dilutive effect of unvested RSUs

 

44 

 

 

47 

 

 

-

 

24 

Reported EBITDA*

$

21,515 

 

$

20,678 

 

$

25,585 

$

26,782 



*See pages 3-4 for Definitions of Non-GAAP Financial Measures



Timothy D. Boyd, President and Chief Executive Officer, commented, “Our strong fiscal fourth quarter results complete what was a record year for Peak Resorts, as we generated revenue growth of 9% and a 4% increase in Reported EBITDA in the fiscal 2018 fourth quarter. Although the winter brought significant weather-related challenges, our results from the 2017/2018 ski season, which spanned 145 operating days from its beginning in November to its end in April, demonstrate the value of our Peak Pass in adding stability to our financial performance. Our results also highlight the attractive returns we are achieving on our ongoing investments in mountain infrastructure which enable us to mitigate the impacts of adverse weather while providing guests with terrific on-mountain experiences.



“For example, Mount Snow had an exceptional year with record skier visits and increased revenue, as our expanded and improved snowmaking capabilities resonated with guests. Skier visits for the 2017/2018 ski season were up 14% year-over-year at Mount Snow which compares favorably to the roughly 1.2% increase seen across the state of Vermont according to the Vermont Ski Areas Association. As a result, we believe our operating and financial performance at Mount Snow outperformed the industry in both Vermont and across the entire Northeast, demonstrating that our ongoing efforts at Mount Snow are paying off. We


 

 

believe the opening of the new lodge at Carinthia this fall will drive further increases in visitation and allow us to generate continued strong performance at our flagship resort.



“Across the balance of the Northeast, the strong appeal of our regional Peak Pass, our world-class guest experiences and our sought after snow and riding terrain, allowed us to outperform the broader industry despite extremely unpredictable and variable weather. Industry-wide, season passes have become an important part of the guest offering. We believe our Peak Pass stands alone in that it is offered at a compelling price point for skiers and riders of all ages, features uncomplicated and unlimited access, and serves as the preferred way for Northeast skiers and riders to drive to and explore our diverse mountains and resorts in Vermont, New York, New Hampshire and Pennsylvania.



“Hunter Mountain capped off a very good season in early April and is now a hive of activity as crews work to implement the Hunter North expansion that will result in a 25% increase in skiable terrain and add automated snowmaking and a second six passenger high-speed detachable lift. Visitors to the Hunter Mountain website and our social media followers are getting a glimpse of the exciting progress at the resort, and we believe this project will be well received as the 2018/2019 season gets underway later this year.



“We also generated very strong fiscal fourth quarter and full year results across our Midwest mountains as these locations benefited from favorable winter weather after several less than stellar winters and a 19% rise in visitation over the prior year. Skiing, riding and tubing remain popular winter pursuits in the Midwest and our guests in Ohio, Missouri and Indiana value the offerings and continued enhancements at our mountains.



“Finally, on the expense side, rising labor costs are a reality in our business and for the leisure and hospitality industry as a whole, and we are working diligently to efficiently staff our properties and manage expenses. Our fourth fiscal quarter was also impacted by a weather-driven shift in walk-up demand from February to March, which resulted in some increased investments to get guests to return to our mountains and increased power and utility costs as we made additional snow at the end of the season to drive more skiing availability in March.”



Fiscal Fourth Quarter Results Review

Fiscal 2018 fourth quarter revenue increased 9.3% year over year to $56.0 million as the Company benefited from an 11.4% rise in food and beverage revenue, a 9.9% increase in ski instruction revenue and 9.6% growth in lift ticket and tubing revenues, as well as 22.4% growth in other revenue.



Resort operating expenses in the fiscal 2018 fourth quarter rose 10.7% year over year to $32.0 million, with a 14.5% increase in labor expenses driven primarily by increases in the minimum wage and labor shortages in the Northeast resulting in increased overtime expense. Other operating expense growth in the quarter included a 10.4% increase in retail and food and beverage cost of sales, which rose in-line with increased revenue from these sources, as well as a 9.6% increase in power and utility expense driven primarily by late season snowmaking in the Northeast and some rate increases. General and administrative expenses of $1.7 million increased by roughly $0.9 million and included the payment of employee incentive bonuses in the fiscal 2018 fourth quarter compared to a reversal of incentives in the prior year when internal targets were not met.



Reported EBITDA for the fourth fiscal quarter of 2018 was $21.5 million, compared to $20.7 million in the year-ago quarter.



Balance Sheet Update


 

 

As of April 30, 2018, the Company had cash and cash equivalents of $23.1 million and total outstanding debt of $180.9 million, including $12.4 million drawn against its revolving line of credit and long-term debt of $165.8 million, net of debt issuance costs and current portion.



Christopher J. Bub, Chief Financial Officer, added, “Peak Resorts’ fiscal fourth quarter, which helped drive strong full year financial results, has positioned the Company favorably with a stable balance sheet and healthy cash balance as we work throughout the summer to prepare for the upcoming 2018/2019 ski season.



“We invested $4.3 million in capital improvements in the fiscal 2018 fourth quarter and a total of $31.0 million for the full year, including nearly $22.0 million on our West Lake and Carinthia expansions at Mount Snow. Notably, with this spending, the majority of our deferred maintenance projects from fiscal 2017 are now complete. As we look to fiscal 2019, we expect to finish work on the new Carinthia Ski Lodge at Mount Snow and the Hunter North terrain expansion projects in time for the upcoming ski season, which we believe will drive additional growth at both mountains. We also plan to continue to invest in and enhance the guest experience at our resorts to help further improve our financial results and increase shareholder value. Overall, the team at Peak Resorts made great progress throughout fiscal 2018 and we look forward to building on our momentum in fiscal 2019 and beyond.”



Investor Conference Call and Webcast

The Company will host an investor conference call and webcast to discuss its fiscal 2018 fourth quarter results today at 9:00 a.m. ET. Interested parties can access the conference call by dialing (844) 526-1518 or, for international callers, by dialing (647) 253-8644; the conference ID number is 7091919. A webcast of the conference call can also be accessed live at ir.peakresorts.com (select “Event Calendar”). Following the completion of the call, an archived webcast will be available for replay at the same location.



Definitions and Reconciliations of Non-GAAP Financial 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, other income or expense and other non-recurring items. The following table includes a reconciliation of Reported EBITDA to the GAAP related measure of Net income (loss):







 

 

 

 

 

 

 

 

 

(dollars in thousands)

Three months ended
April 30,

 

Twelve months ended
April 30,



2018

2017

 

2018

2017

Net income

$

9,680 

$

8,962 

 

$

1,352 

$

1,241 

Income tax (benefit) expense

 

4,273 

 

5,805 

 

 

(3,962)

 

749 

Interest expense, net

 

3,586 

 

2,980 

 

 

13,322 

 

12,473 

Depreciation and amortization

 

3,553 

 

3,071 

 

 

13,231 

 

12,713 

Restructuring and impairment charges

 

549 

 

 -

 

 

2,135 

 

 -

Other income

 

(43)

 

(57)

 

 

(160)

 

(61)

Gain on sale/leaseback

 

(83)

 

(83)

 

 

(333)

 

(333)

Reported EBITDA*

$

21,515 

$

20,678 

 

$

25,585 

$

26,782 







The Company has specifically chosen to include Reported EBITDA as a measurement of its results of operations because it considers this measurement to be a significant indication of its financial performance and available capital resources. Because of large depreciation and other charges relating to the Company’s ski resort operations, it is difficult for management to fully and accurately evaluate financial performance and available capital resources using net income alone. In addition, the use of this non-U.S. GAAP measure provides an indication of the Company’s ability to service debt, and management considers it an appropriate


 

 

measure to use because of the Company’s highly leveraged position. Management believes that by providing investors with Reported EBITDA, they will have a clearer understanding of the Company’s financial performance and cash flows 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; (ii) helps investors to more meaningfully evaluate and compare the results of the Company’s operations from period to period by removing the effect of its capital structure and asset base from operating results; and (iii) is used by the Board of Directors, management and lenders for various purposes, including as a measure of the Company’s operating performance and as a basis for planning.



The items excluded from net income to arrive at Reported EBITDA are significant components for understanding and assessing the Company’s financial performance and liquidity. Reported EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, net change in cash and cash equivalents or other financial statement data presented in the Company’s condensed consolidated financial statements as indicators of financial performance or liquidity. Because Reported EBITDA is not a measurement determined in accordance with U.S. GAAP and is susceptible to varying calculations, Reported EBITDA as presented may not be comparable to other similarly titled measures of other companies, limiting its usefulness as a comparative measure.



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 operates 14 ski resorts primarily located in the Northeast and Midwest, 13 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 ir.peakresorts.com or follow Peak Resorts on Facebook for resort updates.



For further information, or to receive future Peak Resorts news announcements via e-mail, please contact JCIR, at 212-835-8500 or skis@jcir.com.



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, 2017, 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.



Investor Contact:

Norberto Aja, Jim Leahy, Joseph Jaffoni

JCIR

212-835-8500 or skis@jcir.com


 

 

Condensed Consolidated Statements of Operations

(dollars in thousands, except per share amounts)

(Unaudited)





 

 

 

 

 

 

 

 

 

 

 

 



 

 

Three months ended
April 30,

 

 

Twelve months ended
April 30,



 

 

2018

 

 

2017

 

 

2018

 

 

2017



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

56,032 

 

$

51,263 

 

$

131,662 

 

$

123,249 



 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Resort operating costs

 

 

31,951 

 

 

28,871 

 

 

96,593 

 

 

87,319 

Depreciation and amortization

 

 

3,553 

 

 

3,071 

 

 

13,231 

 

 

12,713 

General and administrative

 

 

1,667 

 

 

749 

 

 

5,797 

 

 

5,431 

Land and building rent

 

 

347 

 

 

397 

 

 

1,401 

 

 

1,395 

Real estate and other non-income taxes

 

 

552 

 

 

568 

 

 

2,286 

 

 

2,322 

Impairment loss

 

 

549 

 

 

-

 

 

2,135 

 

 

-



 

 

38,619 

 

 

33,656 

 

 

121,443 

 

 

109,180 

Income from operations

 

 

17,413 

 

 

17,607 

 

 

10,219 

 

 

14,069 



 

 

 

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest, net of amounts capitalized of

 

 

 

 

 

 

 

 

 

 

 

 

$166 and $1,256 in 2018 and $351 and

 

 

 

 

 

 

 

 

 

 

 

 

$1,545 in 2017, respectively

 

 

(3,586)

 

 

(2,980)

 

 

(13,322)

 

 

(12,473)

Gain on sale/leaseback

 

 

83 

 

 

83 

 

 

333 

 

 

333 

Other income

 

 

43 

 

 

57 

 

 

160 

 

 

61 



 

 

(3,460)

 

 

(2,840)

 

 

(12,829)

 

 

(12,079)



 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

13,953 

 

 

14,767 

 

 

(2,610)

 

 

1,990 

Income tax expense (benefit)

 

 

4,273 

 

 

5,805 

 

 

(3,962)

 

 

749 

Net income

 

$

9,680 

 

$

8,962 

 

$

1,352 

 

$

1,241 



 

 

 

 

 

 

 

 

 

 

 

 

Less declaration and accretion of Series A preferred

 

 

 

 

 

 

 

 

 

 

 

 

stock dividends

 

 

(400)

 

 

(800)

 

 

(1,600)

 

 

(800)

Net income (loss) attributable to common shareholders

 

$

9,280 

 

$

8,162 

 

$

(248)

 

$

441 



 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per common share

 

$

0.66 

 

$

0.58 

 

$

(0.02)

 

$

0.03 



 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per common share

 

$

0.56 

 

$

0.52 

 

$

(0.02)

 

$

0.03 



 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.07 

 

$

0.14 

 

$

0.28 

 

$

0.14 



 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per preferred share

 

$

20.00 

 

$

 -

 

$

60.00 

 

$

 -


 

 

Condensed Consolidated Balance Sheets

(dollars in thousands, except per share amounts)





 

 

 

 

 

 

 



 

 

April 30,

 

 

April 30,

 



 

 

2018

 

 

2017

 

Assets

 

 

 

 

 

 

 



 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

23,091 

 

$

33,665 

 

Restricted cash

 

 

1,163 

 

 

11,113 

 

Accounts receivable

 

 

8,560 

 

 

5,083 

 

Inventory

 

 

1,971 

 

 

2,215 

 

Prepaid expenses and deposits

 

 

12,731 

 

 

2,183 

 

Total current assets

 

 

47,516 

 

 

54,259 

 



 

 

 

 

 

 

 

Property and equipment, net

 

 

204,095 

 

 

188,143 

 

Land held for development

 

 

37,634 

 

 

37,583 

 

Restricted cash, construction

 

 

12,175 

 

 

33,700 

 

Goodwill

 

 

4,382 

 

 

4,825 

 

Intangible assets, net

 

 

731 

 

 

788 

 

Other assets

 

 

1,797 

 

 

648 

 

Total assets

 

$

308,330 

 

$

319,946 

 



 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 



 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Revolving lines of credit

 

$

12,415 

 

$

4,500 

 

Current maturities of long-term debt

 

 

2,614 

 

 

3,592 

 

Accounts payable and accrued expenses

 

 

12,079 

 

 

12,371 

 

Accrued salaries, wages and related taxes and benefits

 

 

922 

 

 

1,035 

 

Unearned revenue

 

 

16,084 

 

 

14,092 

 

Current portion of deferred gain on sale/leaseback

 

 

333 

 

 

333 

 

EB-5 investor funds in escrow

 

 

 -

 

 

500 

 

Total current liabilities

 

 

44,447 

 

 

36,423 

 



 

 

 

 

 

 

 

Long-term debt

 

 

165,837 

 

 

177,493 

 

Deferred gain on sale/leaseback

 

 

2,512 

 

 

2,845 

 

Deferred income taxes

 

 

7,809 

 

 

11,883 

 

Other liabilities

 

 

504 

 

 

540 

 

Total liabilities

 

 

221,109 

 

 

229,184 

 



 

 

 

 

 

 

 

Series A preferred stock, $0.01 par value per share, $1,000

 

 

 

 

 

 

 

Liquidation preference per share, 40,000 shares authorized,

 

 

 

 

 

 

 

20,000 shares issued and outstanding

 

 

17,401 

 

 

17,001 

 



 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 



 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Common stock, $0.01 par value per share, 40,000,000 shares

 

 

 

 

 

 

 

authorized, 13,982,400 shares issued and outstanding

 

 

140 

 

 

140 

 

Additional paid-in capital

 

 

86,631 

 

 

86,372 

 

Accumulated deficit

 

 

(16,951)

 

 

(12,751)

 

Total stockholders' equity

 

 

69,20 

 

 

73,761 

 

Total liabilities and stockholders' equity

 

$

308,330 

 

$

319,946 

 




 

 

Supplemental Operating Data

(dollars in thousands)

(Unaudited)





Three months ended
April 30,

 

Twelve months ended
April 30,



 

2018

 

 

2017

 

 

2018

 

2017

Revenues:

 

 

 

 

 

 

 

 

 

 

 Lift and tubing tickets

$

30,285 

 

$

27,630 

 

$

61,683 

$

58,100 

 Food and beverage

 

9,936 

 

 

8,917 

 

 

24,749 

 

23,078 

 Equipment rental

 

3,727 

 

 

3,696 

 

 

9,991 

 

8,582 

 Ski instruction

 

4,262 

 

 

3,879 

 

 

9,128 

 

8,562 

 Hotel/lodging

 

3,237 

 

 

2,988 

 

 

9,874 

 

9,731 

 Retail

 

2,512 

 

 

2,460 

 

 

6,748 

 

6,395 

 Summer activities

 

 -

 

 

-

 

 

4,459 

 

4,549 

 Other

 

2,073 

 

 

1,693 

 

 

5,030 

 

4,252 

    Total

$

56,032 

 

$

51,263 

 

$

131,662 

$

123,249 



 

 

 

 

 

 

 

 

 

 

Resort operating expenses:

 

 

 

 

 

 

 

 

 

 

 Labor and labor related expenses

$

16,637 

 

$

14,534 

 

$

53,026 

$

48,253 

 Retail and food and beverage cost of sales

 

4,714 

 

 

4,271 

 

 

11,855 

 

10,820 

 Power and utilities

 

2,933 

 

 

2,676 

 

 

8,331 

 

7,843 

 Other

 

7,667 

 

 

7,390 

 

 

23,381 

 

20,403 

    Total

$

31,951 

 

$

28,871 

 

$

96,593 

$

87,319 






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