BROOMFIELD, Colo., April 1, 2020 /PRNewswire/ -- Vail Resorts, Inc.
(NYSE: MTN) today provided an update on its response to the
evolving impact of COVID-19 on its business.
Rob Katz, Chief Executive
Officer, said, "The circumstances surrounding COVID-19 are
unprecedented and the financial impact to our Company and the
broader travel industry has been significant. Following the
difficult decision to close our North American mountain resorts,
retail stores and lodging properties for the remainder of the
2019/2020 North American ski season, we have quickly transitioned
to evaluating the longer-term impacts for our Company and our
resort operations. While we will continue to assess our ability to
reopen select resorts for late-season skiing, we are keenly aware
that the current travel restrictions may stay in place beyond that
timeframe and could ultimately impact the timing of our ability to
open our North American resorts for their summer season and our
Australian resorts for their winter season. And once we are
able to reopen, we assume weaker travel demand may continue,
impacting our fourth fiscal quarter of 2020 and our first fiscal
quarter of 2021.
"The Company went into this challenging time period with a
strong financial position and based on recent events, we are
currently incorporating more challenging scenarios into our
planning for our fourth fiscal quarter of 2020 and the first fiscal
quarter of 2021. As mentioned in our March
18, 2020 press release, we are taking additional proactive
steps to align our capital spending and return of capital approach
to ensure that we remain positioned for long-term success. We
are also taking steps to address our operating costs and the
inability of many of our employees to perform their roles in the
current environment.
"We are reducing our capital plan for calendar 2020 by
approximately $80-$85 million, with the vast majority of these
savings coming from the deferral of many of our discretionary
capital projects. We are planning to defer all new chair
lifts, terrain expansions and other mountain and base area
improvements, while continuing with the vast majority of our
maintenance capital spending.
"In this moment, we believe that maintaining liquidity is in the
best long-term interests of the Company and our shareholders, and,
as such, the Company's Board of Directors has made the decision to
suspend our quarterly cash dividend for the next two quarters,
preserving over $140 million of
liquidity for our business. We remain committed to returning excess
capital to shareholders and will re-evaluate decisions on capital
allocation in December 2020. The
Company's previously announced dividend payment occurring on
April 9, 2020, is not affected by
this suspension.
"To ensure we can navigate the financial challenges ahead and
because of the reality of their inability to work at their
locations, we have made the difficult decision to furlough the
majority of our U.S. year-round hourly employees for at least a
month, and potentially longer depending on when we are able to
reopen our operations. We will be continuing healthcare
coverage for these employees, including covering the entire cost of
their healthcare premiums and hope to bring these employees back to
work as soon as possible. Additionally, we will be
implementing a six-month salary reduction for all U.S. salaried
employees, with reductions beginning at 5% and rising to 25% for
our top executives. As CEO, I will be foregoing my full salary for
the next six months and our Board of Directors will also be
foregoing 100% of their cash compensation during this period.
We also may announce potential changes for our Canadian-based and
Australian-based employees, but our approach will be based on the
unique challenges faced by those resorts and any other local
considerations.
"We have also communicated with our season pass holders and
indicated that we have heard their frustration about the early
closure to the 2019/2020 ski season and are committed to
identifying an approach for them that acknowledges this past season
and retains their loyalty for the future. We intend to share
more details about our season pass plans with our guests by the end
of April and are deferring all auto-renew charges and all spring
deadlines for Buddy Tickets into May.
"This is one of the most challenging times many of us can
remember, and it is disappointing to announce these changes,
especially those impacting our employees. However, we also
recognize that the impacts of the current crisis have certainly hit
the travel industry and our Company quite hard. We believe
that the actions we are announcing today will allow the Company to
maintain cushion on our liquidity and financial covenants under our
credit facilities through the upcoming quarters and position the
Company for success in the future. I am evermore grateful for the
commitment and loyalty of our employees, guests and community
members during this challenging time."
About Vail Resorts, Inc. (NYSE: MTN)
Vail Resorts,
Inc., through its subsidiaries, is the leading global mountain
resort operator. Vail Resorts' subsidiaries operate 37 world-class
mountain resorts and urban ski areas, including Vail, Beaver
Creek, Breckenridge,
Keystone and Crested Butte in Colorado; Park
City in Utah; Heavenly,
Northstar and Kirkwood in the Lake
Tahoe area of California
and Nevada; Whistler Blackcomb in
British Columbia, Canada;
Perisher, Falls Creek and Hotham
in Australia; Stowe, Mount
Snow, Okemo in Vermont;
Hunter Mountain in New York; Mount
Sunapee, Attitash, Wildcat and Crotched in New Hampshire; Stevens Pass in Washington; Liberty, Roundtop, Whitetail,
Jack Frost and Big Boulder in
Pennsylvania; Alpine Valley,
Boston Mills, Brandywine and Mad
River in Ohio; Hidden Valley and Snow Creek in Missouri; Wilmot in Wisconsin; Afton Alps in Minnesota; Mt. Brighton in Michigan; and Paoli Peaks in Indiana. Vail Resorts owns and/or manages a
collection of casually elegant hotels under the RockResorts brand,
as well as the Grand Teton Lodge Company in Jackson Hole, Wyo. Vail Resorts Development
Company is the real estate planning and development subsidiary of
Vail Resorts, Inc. Vail Resorts is a publicly held company traded
on the New York Stock Exchange (NYSE: MTN). The Vail Resorts
company website is www.vailresorts.com and consumer website is
www.snow.com.
Forward-Looking Statements
Certain statements
discussed in this press release, other than statements of
historical information, are forward-looking statements within the
meaning of the federal securities laws, including the timing for
re-opening our North American resorts; the payment of dividends;
our expectations regarding the fourth quarter of fiscal 2020 and
the first quarter of fiscal 2021; the ultimate effects of COVID-19
on our business and results of operations; our planned deferred
capital expenditures for calendar year 2020; and our expectations
regarding our liquidity and financial covenants under our credit
facilities. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. All forward-looking statements are subject to certain risks
and uncertainties that could cause actual results to differ
materially from those projected. Such risks and uncertainties
include but are not limited to the ultimate duration of COVID-19
and its short-term and long-term impacts on consumer behaviors, the
economy generally and our business and results of operations;
prolonged weakness in general economic conditions, including
adverse effects on the overall travel and leisure related
industries; willingness or ability of our guests to travel due to
terrorism, the uncertainty of military conflicts or outbreaks of
contagious diseases (such as the current outbreak of COVID-19), and
the cost and availability of travel options and changing consumer
preferences; unfavorable weather conditions or the impact of
natural disasters; risks related to our reliance on information
technology, including our failure to maintain the integrity of our
customer or employee data and our ability to adapt to technological
developments or industry trends; risks related to cyber-attacks;
the seasonality of our business combined with adverse events that
occur during our peak operating periods; competition in our
mountain and lodging businesses; high fixed cost structure of our
business; our ability to fund resort capital expenditures; risks
related to a disruption in our water supply that would impact our
snowmaking capabilities and operations; our reliance on government
permits or approvals for our use of public land or to make
operational and capital improvements; risks associated with
obtaining governmental or third party approvals; risks related to
federal, state, local and foreign government laws, rules and
regulations; risks related to changes in security and privacy laws
and regulations which could increase our operating costs and
adversely affect our ability to market our products and services
effectively; risks related to our workforce, including increased
labor costs; loss of key personnel and our ability to hire and
retain a sufficient seasonal workforce; adverse consequences of
current or future legal claims; a deterioration in the quality or
reputation of our brands, including our ability to protect our
intellectual property and the risk of accidents at our mountain
resorts; our ability to successfully integrate acquired businesses,
or that acquired businesses may fail to perform in accordance with
expectations, including Falls
Creek, Hotham, Peak Resorts or future acquisitions; our
ability to satisfy the requirements of Section 404 of the
Sarbanes-Oxley Act of 2002, with respect to acquired businesses;
risks associated with international operations; fluctuations in
foreign currency exchange rates where the Company has foreign
currency exposure, primarily the Canadian and Australian dollars;
changes in accounting judgments and estimates, accounting
principles, policies or guidelines or adverse determinations by
taxing authorities as well as risks associated with uncertainty of
the impact of tax reform legislation in the United States; a materially adverse change
in our financial condition; and other risks detailed in the
Company's filings with the Securities and Exchange Commission,
including the "Risk Factors" section of the Company's Annual Report
on Form 10-K for the fiscal year ended July
31, 2019, which was filed on September 26, 2019.
All forward-looking statements attributable to us or any persons
acting on our behalf are expressly qualified in their entirety by
these cautionary statements. All guidance and forward-looking
statements in this press release are made as of the date hereof and
we do not undertake any obligation to update any forecast or
forward-looking statements whether as a result of new information,
future events or otherwise, except as may be required by law.
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SOURCE Vail Resorts, Inc.