Peak Resorts going public

[RootDKJ]

I'm surprised the JF/BB crew didn't pick up on this, but nonetheless here it is.

 

http://www.saminfo.c...le.php?tid=5023

 

SAM Magazine--April 18, 2011--Peak Resorts, Inc. announced that it has filed a registration statement on Form S-1 with the U.S. Securities and Exchange Commission ("SEC") relating to a proposed initial public offering of shares of its common stock. The number of shares to be offered and the price range for the offering have not yet been determined.

 

The underwriter of the proposed offering will be Rodman & Renshaw, LLC. This offering will be made only by means of a prospectus.

 

A copy of the preliminary prospectus, when available, may be obtained from the offices of Rodman & Renshaw, LLC, 1251 Avenue of the Americas, 20th Floor, New York, New York, 10020, (212) 430-1709.

 

A registration statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. The registration statement on Form S-1 may be accessed through the SEC's website at www.edgar.sec.gov

 

Here's the SEC filing: http://www.sec.gov/A...7/c63465sv1.htm

 

Some quotes

 

Our business is highly seasonal and the occurrence of certain events during our peak times could have a negative effect on our revenues.

Our resort operations are highly seasonal. Although the air temperatures and timing and amount of snowfall can influence the number and type of skier visits, the majority of the skier visits are from mid-December to the end of March. Accordingly, during the past three fiscal years, we generated approximately 90% of our revenues during the third and fourth fiscal quarters. In addition, throughout our peak quarters, we generate the highest revenues on weekends and during three major holiday periods: Christmas, Dr. Martin Luther King, Jr. Day and Presidents Day. During the 2009/2010 ski season, we generated 33% of our revenues on weekends and 29% of our revenues during these three major holiday periods. Our resorts typically experience operating losses and negative cash flows during the first and second quarters of each fiscal year, as a result of the seasonality of our business. Operating results for any three-month period are not necessarily indicative of the results that may be achieved for any subsequent quarter or for a full fiscal year.

 

Additionally, we lease some or all of our property at Paoli Peaks, Crotched Mountain, Mad River, Jack Frost and Big Boulder from third parties. Our lease at Paoli Peaks terminates in 2078, our lease at Crotched Mountain terminates in 2053 (though we have 10 options to extend the lease for additional periods of 15 years each), and our lease at Mad River terminates in 2026. Currently, the leases for our Jack Frost and Big Boulder resorts provide that the lessor has a right to terminate the leases at any time, upon the payment of certain fees. A termination of any of these leases could negatively impact our results of operations.

 

The leases for the land underlying Jack Frost and Big Boulder may be terminated by the landlord and if terminated, would eliminate revenues from these resorts.

We do not own the land underlying the Jack Frost and Big Boulder resorts. We have entered into a lease with Big Boulder Corporation and a lease with Blue Ridge Real Estate Company, both of which terminate on December 1, 2033. The terms of the leases provide that the landlord has a right to terminate the leases at any time, upon the payment of approximately $500,000 plus the net book value of the assets relating to the property. If these leases are terminated, we would not be able to operate Jack Frost and Big Boulder, and therefore, the revenues generated by these resorts would be eliminated. Jack Frost and Big Boulder generated 7% and 6% of our consolidated revenues for the fiscal year ended April 30, 2010, respectively.

 

There's some really interesting accounting data in the SEC filing, that maybe someone can better decipher, but if I'm reading the top of page 17 correctly, JF/BB have consistently done well over 11Mil in revenue for the past 3 years.

[Ride Delaware ?]

Although I haven't boarded at any Peak Resort mountains, the best we can hope for is something like what happened with ASC. A huge influx of cash meaning that we will get a bunch of awesome lift, snowmaking, and lodging upgrades before slowly being run into the ground with expensive mismatched acquisitions. Then somebody with better managing skills will pick them up several years after the company downturn, consolidate business practices, perform the necessary maintenance that has been neglected, and run it more like a business should be run. Either way, we gain. However, it would just be nicer to see them succeed from the outset.

 

On another note, if Peak can stay close to its core business and not get too big too quick (Intrawest/ASC), I think this could be an excellent decision. Lets hope it plays out well for them, and for us...

Edited April 20, 2011 by Ride Delaware ?

[Justo8484]

i'm surprised no one has mentioned this, but being that a public corporation's sole responsibility is return on investment for it's shareholders, how's that going to play out for boulder pushing the first to open/last to close argument every year? they say themselves that they're only profitable 50% of the fiscal year, and are operating at a loss for part of ski season. while i think it's awesome that they (try to) stay open into april every year, how would a shareholder, who's solely investing in the company for the payout, and not because they are a snowsports enthusiast, take them operating at a loss? is this even something that would be up for debate on a shareholder vote? i don't own any meaningful amount of stock, so i'm really not sure how these things work.

[Ride Delaware ?]

You receive a proxy vote in proportion to the amount of shares that you own in the company. Most of the time these votes have nothing to do with the way that separate business entities within the company are run ie: jf/bb. These votes usually do with larger decisions such as stock offerings or mergers and acquisitions. Even more likely, is that these proxy votes will be used to vote in members of the board who do make day to day operation decisions. Obviously this is just a short synopsis on how this works, but it is the general idea.

 

It will be interesting to see how Peak Resorts manages the resort with the public offering. The decision to stay open longer/shorter is likely more complex than we believe it is. As we all know, the decision to open early is mostly a marketing ploy for PR. The results of this ploy are likely not able to be calculated monetarily. While they are incurring a great deal of costs early on (staff, snowmaking, lifts, lodge operations, etc), they are also generating revenue. On the flip side, they stop making snow, cut back lift ops, and cut down employees at the end of the season. From what I have been told the last several weeks (even into April), generated lift lines and therefore revenue. With such decreased costs, they probably broke even, maybe a slight loss. However, it is revenue. The real question is how much peak would benefit/lose by not opening early and closing late. If they open in Mid December through late March, is that decrease in costs and loss in revenue proportionate. Are they actually losing profit depending on how they manage operating costs? Who knows. Only time will tell. The only way we could find that out would be to see their income statements for the jf/bb properties.

[RootDKJ]

Although I haven't boarded at any Peak Resort mountains, the best we can hope for is something like what happened with ASC. A huge influx of cash meaning that we will get a bunch of awesome lift, snowmaking, and lodging upgrades before slowly being run into the ground with expensive mismatched acquisitions. Then somebody with better managing skills will pick them up several years after the company downturn, consolidate business practices, perform the necessary maintenance that has been neglected, and run it more like a business should be run. Either way, we gain. However, it would just be nicer to see them succeed from the outset.

 

On another note, if Peak can stay close to its core business and not get too big too quick (Intrawest/ASC), I think this could be an excellent decision. Lets hope it plays out well for them, and for us...

Real estate was a big part of both ASC and Intrawest's demise, no?

[FK.]

Which Mad River are they talking about?

 

Congrats Peaks. Maybe with the new influx of capital they can build a high speed lift at Jack Frost on the east side.

 

I believe its the mad river in ohio, see alot of edits from there on NS and the features look very similar to those at big boulder

[JFskiDan]

Quote

 

The leases for the land underlying Jack Frost and Big Boulder may be terminated by the landlord and if terminated, would eliminate revenues from these resorts.

 

We do not own the land underlying the Jack Frost and Big Boulder resorts. We have entered into a lease with Big Boulder Corporation and a lease with Blue Ridge Real Estate Company, both of which terminate on December 1, 2033. The terms of the leases provide that the landlord has a right to terminate the leases at any time, upon the payment of approximately $500,000 plus the net book value of the assets relating to the property. If these leases are terminated, we would not be able to operate Jack Frost and Big Boulder, and therefore, the revenues generated by these resorts would be eliminated. Jack Frost and Big Boulder generated 7% and 6% of our consolidated revenues for the fiscal year ended April 30, 2010, respectively.

 

 

There's some really interesting accounting data in the SEC filing, that maybe someone can better decipher, but if I'm reading the top of page 17 correctly, JF/BB have consistently done well over 11Mil in revenue for the past 3 years.

 

JFBB generate 6% and 7% of the consolidated revenue, which is 11 mil? so peak is doing close to 100 mil? that sounds pretty decent for a seasonal business, but i guess thats depending on what thier operating costs are.

 

posted on thier facebook page - "10 shares with each season pass purchased before 4/28/2011"

[toast21602]

this could go either way....