Analyst upgrades Vail Resorts stock

Stifel Nicolaus analyst Steven Wieczynski (Vail Daily. Thursday, May 31, 2012) expects the stock to outperform the S&P 500 by more than 10 percent over the next 12 months. "With Vail shares declining 12 percent in the last two months (compared to the S&P decline of 5 percent), we believe this has created an attractive entry point as we push toward the 2012-13 ski season", Wieczynski wrote in a note to investors. "While Vail shares have historically traded lower (7 percent average decline during summer months back to 2007) during the summer months, we believe continued encouraging demand signals toward the 2012/2013 ski season, continued strong international visitation, revised summer program offerings, and solid Free Cash Flow (FCF) support could all be catalysts for the shares".
Five reasons Stifel Nicolaus thinks Vail shares are compelling:

• Encouraging season pass sales. Stifel Nicolaus says Vail can "easily push mid-to-upper single digit price increases on their pass program over the next five years given the quality of assets and the value proposition still inherent for their customers".

• Continued strong international visitation should help drive margins. Citing "impressive" international visitation in the 2011-12 ski season, despite snowfall, the firm believes "spending on non-mountain activities will continue to improve given international guests' propensity to spend more than the typical domestic visitor".

• Revamped summer program could partially eliminate seasonality. The firm points to the recently passed legislation — the Ski Areas Recreational Opportunity Enhancement Act that allows for more on-mountain summer activities, which Congress passed last year — "could present a low risk opportunity to drive incremental EBITDA".

• Strong FCF generation should allow for acquisitions or shareholder distributions. Stifel Nicolaus cites Vail's "underleveraged and conservatively managed balance sheet" as reasons to expect management to "carefully address any attractive M&A opportunities, whether they exist in the U.S., Europe or Asia".

• Valuation compelling at current levels. Current trading prices present an opportunity "for investors to enter the shares in order to capture upside to numbers heading into the 2012-13 ski season".

Other Vail Resorts analysts have also maintained that Vail Resorts shares (MTN on the New York Stock Exchange) are attractive because of the company's "asset quality, long-term pricing power, solid balance sheet, free cash flow, and strong management team", according to the latest investor note from Credit Suisse in May. Credit Suisse analyst Joel Simkins put the stock's price target at $55 in that note, while JMP Securities analyst Will Marks put the price target at $57 in his latest note to investors earlier this month (the stock closed on May 31 at $43.47).
While Bank of America Merrill Lynch analyst Shaun Kelley maintained a neutral rating for MTN as it enters a seasonally slow period, he wrote in a May 1 note to investors that Bank of America Merrill Lynch recognizes "the growth potential of its assets in a more normalized operating environment".

Vail Resorts is the leading mountain resort operator in the United States. Vail Resorts operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado, and Heavenly, Northstar and Kirkwood in the Lake Tahoe area of California and Nevada, and the GrandTeton Lodge Company in Jackson Hole, Wyoming. The Company's subsidiary, RockResorts, a luxury resorthotel company, manages casually elegant properties. Vail Resorts Development Company is the real estateplanning, development and construction subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly heldcompany traded on the New York Stock Exchange.

Vail Resorts Reports Third Quarter Results

Vail Resorts reported results for the third quarter of fiscal 2012 ended April 30, 2012 and the results of its spring pass sales for the 2012/2013 ski season.
Vail Resorts ski areas experienced historically low snowfall (with cumulative snowfall at our six resorts (excluding Kirkwood) down more than 50% over the prior ski season) and one of the mildest winters on record, including over the key spring break and Easter periods, which adversely impacted our skier visitation which was down 9.8% (with our Colorado and Tahoe resorts down 9.0% and 12.4%, respectively) for the three months ended April 30, 2012 compared to the same period in the prior year.  Despite these unprecedented conditions, revenues were generally stabilized by increased season pass sales, higher pricing and increased average guest spend.
Lift ticket revenue increased by 0.7% over the prior year and ancillary revenue from ski school and retail/rental was up 1.1% and 1.3%, respectively, while dining revenue was down 1.1% driving an 11.6% increase in total ancillary revenue per skier visit.
Total Mountain net revenue increased by 0.9% over the prior year with a 9.8% decline in skier visits more than offset by a 12.8% increase in season pass revenue and a 9.4% increase in Effective Ticket Price (“ETP”) excluding season pass holders.
Mountain Reported EBITDA increased 0.6% and Resort Reported EBITDA (which includes the Company’s Mountain and Lodging segments) decreased by 0.5% from the prior year.
Commenting on the Company’s fiscal 2012 third quarter results, Rob Katz, Chief Executive Officer said, "We are pleased with our third quarter results as they evidenced our ability to successfully navigate the most challenging winter in the history of the United States ski industry. Cumulative snowfall levels for the 2011/2012 ski season were down more than 50% across our resorts, compared with the prior year, and snowfall at our Colorado resorts was down more than 70% in March. The lack of snow, combined with unseasonable temperatures, affected visitation levels during the key spring break and Easter vacation periods. Yet, despite these unprecedented conditions, we delivered an approximate 1% increase in Mountain Reported EBITDA in the third quarter compared with the prior year. This performance demonstrates the stability and resiliency of our business model, which benefitted from our growing season pass business, as well as the quality of our resorts and the breadth of the experience we offer, which attracted guests throughout the season".
Continuing on the third quarter performance, Katz added "There were several positive indicators in the third quarter that contributed to our performance and bode well as we look toward the 2012/2013 ski season. Our Mountain net revenue increased 0.9% to $354.6 million as higher spending per skier visit, improved lift ticket pricing and strong season pass revenue more than offset the decline in skier visits. Lift ticket revenue increased 0.7% during the quarter despite a drop of 9.8% in visitation benefitting from a 12.8% increase in season pass revenue and a 9.4% gain in ETP, excluding season pass holders. On a per visit basis, our ski school revenue per visit increased 12.1%, dining revenue per visit was higher by 9.7% and retail/rental revenue per visit was up 12.3%, reflecting the high income demographic of our resort guests enabling us to benefit from enhanced consumer spending, especially in the luxury segment, as well as from our international guests. Over the course of the 2011/2012 ski season, our international visitation increased by approximately 2%, despite a 12.1% decline in total visitation and continued challenges in the European economy, reflecting targeted marketing efforts to drive more visits from this growing international segment. For the full 2011/2012 ski season, visitation at our Tahoe resorts declined 22.4% compared to the prior year, while our Colorado resorts were down 8.9% with Beaver Creek essentially flat reflecting its higher mix of luxury and destination guests. Our season passholders, representing arguably our most weather sensitive guests, skied only approximately one day less, on average, in the current ski season compared to the prior year. Overall season pass revenue represented approximately 40% of our total lift ticket revenue for the winter season. Also during the third quarter we leveraged our strong balance sheet, acquiring a third Tahoe resort, Kirkwood, with early indications that this unique resort should prove to be highly complementary to our existing portfolio and pass programs. Finally, I could not be more pleased to report that total spring season pass sales, which include sales through Tuesday May 29, 2012 compared to sales through Tuesday May 31, 2011 and including Kirkwood pass sales in both years, were up approximately 17% in units and approximately 22% in sales dollars. These sales, which will be recorded as revenue in the second and third quarters of fiscal 2013, provide perhaps the strongest indicator we have seen for the upcoming 2012/2013 ski season".
Vail Resorts is the leading mountain resort operator in the United States. Vail Resorts operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado, and Heavenly, Northstar and Kirkwood in the Lake Tahoe area of California and Nevada, and the GrandTeton Lodge Company in Jackson Hole, Wyoming. The Company's subsidiary, RockResorts, a luxury resorthotel company, manages casually elegant properties. Vail Resorts Development Company is the real estateplanning, development and construction subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly heldcompany traded on the New York Stock Exchange.

Vail Resorts Closes Its Acquisition of Kirkwood Mountain Resort at Lake Tahoe

Vail Resorts today announced that the Company has closed on its acquisition of Kirkwood Mountain Resort at Lake Tahoe, California, recognized by skiers and snowboarders as offering some of the best high alpine advanced terrain in North America. Vail Resorts now operates three world-class mountain resorts in the Lake Tahoe region and together with Heavenly Mountain Resort and Northstar California, provides guests and pass holders unparalleled value with the very best that Lake Tahoe has to offer. The transaction, which included the ski resort and undeveloped sites at the center of the base area, closed for total consideration of approximately $18.0 million. The seller retains a participation interest in the base area parcels and continues to own the remainder of the real estate development sites.
Vail Resorts is already delivering amazing value from the acquisition to its guests. This season, Heavenly and Northstar pass holders can ski and ride at Kirkwood and Kirkwood pass holders can visit Northstar and Heavenly. The Company reported that they are already seeing thousands of reciprocal visits from pass holders at the three resorts.
With the previous announcement of the Kirkwood acquisition, Vail Resorts immediately began including Kirkwood in its industry-leading season pass offering. The Company recently announced the best value in 2012-2013 season passes, including the new Tahoe Local Pass that provides access to more than 10,000 total skiable acres between Kirkwood, Heavenly Mountain Resort and Northstar California, marking the most combined terrain in Tahoe. Priced at $419, Tahoe Local pass holders receive seven-day-per-week access to all three Tahoe resorts for $80 less than last year’s comparable Epic Local Pass. Guests of Heavenly, Northstar and Kirkwood now have a variety of season pass options to choose from depending on when and how often they want to ski and ride.
• New for 2012-2013, the Tahoe Local Pass™ offers skiing and riding seven days a week to Heavenly, Northstar, and Kirkwood resorts for $419. The Tahoe Local Pass includes access on Saturdays at all three Tahoe resorts with limited holiday restrictions and $50 pass holder tickets available for purchase during blackout dates. Priced $80 less than last year’s Epic Local Pass, the Tahoe Local Pass pays for itself in just over four days.
• The Tahoe Value Pass™, available for $379, includes skiing or riding seven days a week at Heavenly, skiing and riding at Northstar and Kirkwood on Sunday-Friday, and restricted on all Saturdays at Northstar and Kirkwood. Holiday restrictions apply, but pass holders can purchase a $50 ticket to any of the three resorts on restricted dates. In less than four days of skiing or riding, the Tahoe Value Pass pays for itself.
• The Epic Pass™, the best season pass deal in the ski industry, offers unlimited, unrestricted skiing at Vail, Beaver Creek, Breckenridge, Keystone, Heavenly, Northstar, Kirkwood and Arapahoe Basin for $659. The Epic Pass pays for itself in less than six days on the mountain.
• Epic 7-Day™ pays for itself in less than five days and is ideal for people who don’t plan to ski more than seven days. The Epic 7-Day gives skiers and snowboarders a total of seven unrestricted days of skiing at Vail, Beaver Creek, Breckenridge, Keystone, Heavenly, Northstar and Arapahoe Basin anytime during the season for $509.

Vail Resorts is the leading mountain resort operator in the United States. Vail Resorts operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado, and Heavenly, Northstar and now Kirkwood in the Lake Tahoe area of California and Nevada, and the GrandTeton Lodge Company in Jackson Hole, Wyoming. The Company's subsidiary, RockResorts, a luxury resorthotel company, manages casually elegant properties. Vail Resorts Development Company is the real estateplanning, development and construction subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly heldcompany traded on the New York Stock Exchange.

Ski Girls Rock Vail With Lindsey Vonn

Olympic gold medalist and World Cup Alpine Ski Champion, Lindsey Vonn, took some time this week to ski with a few of her biggest fans on Vail Mountain in Colorado, USA as part of the resort’s exclusive Ski Girls Rock program, introduced this season.
A few lucky girls from around the globe, including representatives from Brazil, England and Canada, in addition to a select handful of girls who participated in the Ski Girls Rock lesson program this season, were chosen to return to Vail to ski with their idol as a part of Vonn’s homecoming celebration on April 1.
The popular Ski Girls Rock program debuted during the 2011-2012 ski season, offering a new premium lesson inspired and designed by Lindsey Vonn, exclusively for girls ages 5-15. Lessons consist of no more than four students per group and are led by dedicated female instructors who not only focus on improving skiing skills but empowering girls through the sport and creating opportunities to bond, build confidence and develop teamwork and social skills.

Vail Resorts To Acquire Kirkwood Mountain Resort in Lake Tahoe

Vail Resorts today announced that it has enteredinto an agreement to acquire Kirkwood Mountain Resort at Lake Tahoe, Calif., recognized by skiers andsnowboarders as offering some of the best high alpine advanced terrain in North America. Vail Resorts ispurchasing the ski resort as well as the undeveloped sites at the center of the base area which are zonedfor residential and commercial development for a purchase price of approximately $18.0 million. The sellerwill retain a participation interest in the base area parcels and will continue to own the remainder of the realestate development sites. Following the acquisition, Vail Resorts will now operate three world-classmountain resorts in the Lake Tahoe region which between them offer the entire breadth of the skiing andriding experience, including Heavenly Mountain Resort in South Lake Tahoe, Northstar California on thenorth shore and Kirkwood Mountain Resort.Vail Resorts also announced that, effective immediately, Heavenly and Northstar pass holders will haveaccess to Kirkwood and Kirkwood pass holders will be able to ski and ride Heavenly and Northstar.
"We are thrilled to welcome Kirkwood into our family as our seventh world-class mountain resort. Kirkwoodoffers some of the most extraordinary ski terrain found anywhere in North America with high alpine trails andthe most annual average snowfall in Lake Tahoe. Kirkwood represents skiing and riding at its purest,something we intend to retain and protect long into the future", said Rob Katz, chairman and chief executiveofficer of Vail Resorts. “When combined with Heavenly and Northstar, we will be able to offer our guests andpass holders unparalleled value with the very best that Lake Tahoe has to offer. We are excited to be ableto offer Kirkwood to our pass holders right away – it’s like opening day to a whole new season”. As of today, Epic Pass and Epic Local Pass holders will have unrestricted access to ski and ride Kirkwood.Tahoe Value Pass holders can ski and ride there every day except on Saturdays. Kirkwood pass holderswith the following passes will have access to Heavenly and Northstar: Premium Pass holders and 7 WoodPass holders will have unlimited, unrestricted access to Heavenly and Northstar, while 6 Wood Pass holderswill have access to Heavenly and Northstar six days a week, Sunday-Friday, with no holiday restrictions. 5Wood Pass holders will have access to Heavenly and Northstar five days a week, Monday-Friday. TheCompany also announced that it intends to retain a Kirkwood-only season pass and Kirkwood-only daily lifttickets, priced comparably to what’s offered today.
Located about 35 miles southwest of South Lake Tahoe, Kirkwood Mountain Resort offers pure high alpineskiing and riding at its best. The ski resort’s unique location, completely surrounded by National Forest atop the Sierra Crest combined with elevations ranging 7,800 to 9,800 feet, create a geographical predispositionto receive the lightest, driest and most plentiful snow in the Tahoe region with an average of 472 inchesannually. Kirkwood offers 2,000 feet of vertical drop and more than 2,300 acres of terrain from groomedbeginner runs to hair-raising cornices, cliffs and the most high-angle grooming around. The resort offers fourterrain parks, from beginner to advanced, as well as a Boarder X course.Vail Resorts expects to close on the acquisition of Kirkwood Mountain Resort within the next month. Furtherterms of the agreement were not disclosed. Closing is subject to certain conditions, including transfer of theU.S. Forest Service Permit.
Vail Resorts is the leading mountain resort operator in the United States. Vail Resorts operate the mountain resorts of Vail, Beaver Creek, Breckenridge and Keystone in Colorado, and Heavenly, Northstar and now Kirkwood in the Lake Tahoe area of California and Nevada, and the GrandTeton Lodge Company in Jackson Hole, Wyoming. The Company's subsidiary, RockResorts, a luxury resorthotel company, manages casually elegant properties. Vail Resorts Development Company is the real estateplanning, development and construction subsidiary of Vail Resorts, Inc. Vail Resorts is a publicly heldcompany traded on the New York Stock Exchange.