Vail Resorts Reports Fiscal 2021 Third Quarter Results, Early Season Pass Sales Results, and Provides Fiscal 2021 Outlook
Vail Resorts, Inc. reported results for the third quarter of fiscal 2021 ended April 30, 2021, which were negatively impacted by COVID-19 and related limitations and restrictions, reported results of early season pass sales for the 2021/2022 North American ski season, and provided its outlook for the fiscal year ending July 31, 2021.
Commenting on the Company's fiscal 2021 third quarter results, Rob Katz, Chief Executive Officer, said, "Given the continued challenging operating environment as a result of COVID-19, we are very pleased with our overall results for the quarter and for the full 2020/2021 North American ski season. Results continued to improve as the season progressed, primarily as a result of stronger destination visitation at our Colorado and Utah resorts, including improved lift ticket purchases relative to fiscal 2021 second quarter results. Excluding Peak Resorts, total visitation at our U.S. destination mountain resorts and regional ski areas for the third quarter was only down 3% compared to the third quarter of fiscal 2019. Whistler Blackcomb's performance continued to be negatively impacted due to the continued closure of the Canadian border to international guests, including guests from the U.S., and was further impacted by the resort closing earlier than expected on March 30, 2021 following a provincial health order issued by the government of British Columbia. Whistler Blackcomb's total visitation for the third quarter declined nearly 60% compared to the third quarter of fiscal 2019.
"While visitation and lift revenue trends improved throughout the quarter, our ancillary lines of business continued to be more significantly and negatively impacted by COVID-19 related capacity constraints and limitations, particularly in food and beverage and ski school. We maintained disciplined cost controls throughout the quarter and continued operating our ancillary lines of business at reduced capacity. Resort Reported EBITDA margin for the third quarter was 52.0%, exceeding both the prior year period of 43.9% and fiscal 2019 third quarter of 50.2%. These results reflect our rigorous approach to cost management, as well as a higher proportion of lift revenue relative to ancillary lines of business compared to prior periods."
A more complete discussion of our operating results can be found within the Management's Discussion and Analysis of Financial Condition and Results of Operations section of the Company's Form 10-Q for the third fiscal quarter ended April 30, 2021, which was filed today with the Securities and Exchange Commission.
The following are segment highlights:
Resort - Combination of Mountain and Lodging Segments
The Company continues to maintain significant liquidity. Our total cash and revolver availability as of April 30, 2021 was approximately $2.0 billion, with $1.3 billion of cash on hand, $419 million of U.S. revolver availability under the Vail Holdings Credit Agreement and $203 million of revolver availability under the Whistler Credit Agreement. As of April 30, 2021, our Net Debt was 2.8 times trailing twelve months Total Reported EBITDA. We remain confident in the strong cash flow generation and stability of our business model, and we will continue to be disciplined stewards of our capital with a focus on high-return capital projects, continuous investment in our people and strategic acquisition opportunities. While we are not reinstating the dividend this quarter, we remain committed to returning capital to shareholders, and our Board of Directors will continue to closely monitor the economic and public health outlook on a quarterly basis to assess the appropriate time to reinstate the dividend."
Season Pass Sales
Commenting on the Company's season pass sales for the upcoming 2021/2022 North American ski season, Katz said, "We are very pleased with the results for our season pass sales to date, with guests showing strong enthusiasm for the enhanced value proposition of our pass products, driven in part by the 20% reduction in all pass prices for the upcoming season. Pass product sales through June 1, 2021 for the upcoming 2021/2022 North American ski season increased very significantly as compared to sales through June 2, 2020 for the 2020/2021 North American ski season, due to the lack of any spring sales deadlines in 2020 as a result of COVID-19, making the year over year comparison to the spring 2020 results not relevant for performance trends. Compared to sales for the 2019/2020 North American ski season through June 4, 2019, pass product sales for the 2021/2022 season through June 1, 2021 increased approximately 50% in units and 33% in sales dollars. Pass product sales are adjusted to include Peak Resorts pass sales in both periods and eliminate the impact of foreign currency by applying an exchange rate of $0.83 between the Canadian dollar and U.S. dollar in both periods for Whistler Blackcomb. As a reminder, pass product sales for the full selling season through December 6, 2020, as compared to the full selling season through December 8, 2019, increased approximately 20% in units and approximately 19% in sales dollars."
Katz continued, "Relative to season to date pass product sales for the 2019/2020 season through June 4, 2019, we saw very strong unit growth with our renewing pass holders and even stronger unit growth in new pass holders, which include guests in our database who previously purchased lift tickets or passes but did not buy a pass in the previous season and guests who are completely new to our database. We saw our strongest unit growth in our destination markets, particularly in the Northeast, and also had very strong growth across our local markets. Compared to the period ended June 4, 2019, effective pass price decreased 10%, as compared to the 20% price decrease we implemented this year. We believe this highlights how our lower pricing has increased the propensity of pass holders to spend a portion of the new discount to purchase higher valued pass products. The pass results to date exceeded our original expectations for the impact of the 20% price reduction, however we still have the majority of our pass selling season ahead of us and it is not yet clear if these trends will continue through the fall. We will provide more information about our pass sales results, including comparisons to pass sales results for the 2020/2021 North American ski season, in our September 2021 earnings release.
Regarding Epic Australia Pass sales, Katz commented, "We are very pleased with ongoing sales of the Epic Australia Pass, which end on June 15, 2021 and are up approximately 43% in units through June 1, 2021, as compared to the comparable period through June 4, 2019, representing significant growth following the acquisition of Falls Creek and Hotham in April 2019. Given the recent COVID-19 related lockdowns in Victoria, Australia, we will be monitoring any impacts on Epic Australia pass sales."
Commenting on the outlook for fiscal 2021, Katz said, "Net income attributable to Vail Resorts, Inc. is expected to be between $93 million and $139 million for fiscal 2021. We expect that Resort Reported EBITDA for fiscal 2021 will be between $530 million and $570 million, and we expect that Resort Reported EBITDA Margin for fiscal 2021 will be approximately 28.9%, using the midpoint of the guidance range. Our guidance assumes all of our operations are open and aligned with current health and safety protocols and capacity restrictions, current demand trends continue, we experience normal weather conditions throughout the Australian ski season and North American summer season, and there is no impact from potential COVID-19-related shutdowns or lockdowns. The guidance specifically assumes no impact from potential demand or operational disruptions associated with the current lockdowns in Victoria, Australia. The outlook for fiscal year 2021 is predicated on current Canadian and Australian foreign exchange rates of $0.82 and $0.78, respectively, for each currency to the U.S. dollar for the remainder of the fiscal year."
The following table reflects the forecasted guidance range for the Company's fiscal year ending July 31, 2021, for Reported EBITDA (after stock-based compensation expense) and reconciles such Reported EBITDA guidance to net income attributable to Vail Resorts, Inc.