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Vail Resorts Inc. Reports Operating Results (10-Q)

December 04, 2012 | About:
10qk

10qk

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Vail Resorts Inc. (MTN) filed Quarterly Report for the period ended 2012-10-31.

Vail Resorts, Inc. has a market cap of $2.01 billion; its shares were traded at around $55.84 . Vail Resorts, Inc. had an annual average earning growth of 4.6% over the past 10 years.

Highlight of Business Operations:

Revenue from owned hotel rooms increased $1.7 million, or 13.8%, for the three months ended October 31, 2012 compared to the three months ended October 31, 2011, primarily driven by $1.0 million of incremental room revenue from Flagg Ranch partially offset by a decrease in transient revenue of $0.3 million from GTLC due to the adverse conditions caused by wild fires. Owned room revenue was also positively impacted by our Colorado lodging properties, which revenue increased $1.0 million, resulting from improved summer visitation to our Colorado mountain resorts and an increase in group business primarily at our Keystone resort. Revenue from managed condominium rooms increased $0.3 million, or 4.8%, for the three months ended October 31, 2012 compared to the three months ended October 31, 2011, primarily driven by additional managed condominium units at One Ski Hill Place in Breckenridge, The Ritz-Carlton Residences, Vail and Kirkwood.

Dining revenue for the three months ended October 31, 2012 increased $1.1 million, or 11.0%, as compared to the three months ended October 31, 2011, primarily due to an increase in group business at our Keystone resort resulting in a $0.6 million increase in revenue and incremental dining revenue from Flagg Ranch. Golf revenue increased $0.1 million, or 1.2%, for the three months ended October 31, 2012 compared to the three months ended October 31, 2012, primarily due to an increase in the number of paid golf rounds played at our Red Sky Ranch courses. Other revenue increased $0.4 million, or 4.2%, in the three months ended October 31, 2012 compared to the three months ended October 31, 2011, primarily due to an increase in conference services provided to our group business at our Keystone resort and an increase in retail and ancillary revenue resulting from the addition of Flagg Ranch.

Real Estate segment net revenue for the three months ended October 31, 2011 was driven by the closing of four condominium units at The Ritz-Carlton Residences, Vail ($9.2 million of revenue with an average selling price per unit of $2.3 million and an average price per square foot of $1,118) and two condominium units at One Ski Hill Place ($3.3 million of revenue with an average selling price per unit of $1.6 million and an average price per square foot of $1,046). The average price per square foot of both these projects is driven by their premier locations and the comprehensive and exclusive amenities related to these projects.

Operating expense for the three months ended October 31, 2011 included cost of sales of $10.9 million resulting from the closing of four condominium units at The Ritz-Carlton Residences, Vail (average cost per square foot of $988) and from the closing of two condominium units at One Ski Hill Place (average cost per square foot of $867). The cost per square foot for both these projects is reflective of the high-end features and amenities and high construction costs associated with mountain resort development. Additionally, sales commissions of approximately $0.7 million were incurred commensurate with revenue recognized. Other operating expense of $6.2 million (including $0.9 million of stock-based compensation expense) was primarily comprised of general and administrative costs which includes marketing expense for the real estate available for sale (including those units that have not yet closed), carrying costs for units available for sale and overhead costs, such as labor and labor-related benefits and allocated corporate costs.

On June 7, 2011, our Board of Directors approved the commencement of a regular quarterly cash dividend on our common stock at an annual rate of $0.60 per share, subject to quarterly declaration. On March 5, 2012 our Board of Directors approved a 25% increase to our annual cash dividend to an annual rate of $0.75 per share (or $26.9 million annually based upon shares outstanding as of October 31, 2012), subject to quarterly declaration. During the three months ended October 31, 2012, the Company paid a cash dividend of $0.1875 per share ($6.7 million in the aggregate). This dividend was funded through available cash on hand. Subject to the discretion of our Board of Directors, applicable law and contractual restrictions, we anticipate paying regular quarterly cash dividends on our common stock for the foreseeable future. The amount, if any, of the dividends to be paid in the future will depend upon our available cash on hand, anticipated cash needs, overall financial condition, restrictions contained in our Credit Agreement and the Indenture, future prospects for earnings and cash flows, as well as other factors considered relevant by our Board of Directors.

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