Vail Resorts, Inc.

Good day, everyone. Good afternoon and welcome to the Vail Resorts Fiscal 2023 Third Quarter Earnings Call. Today's conference is being recorded. Currently, all callers have been placed in a listen-only mode. And following management's prepared remarks, the call will be opened up for your questions. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If you need to remove yourself from the queue, press star 2. To get to as many questions as time permits, we ask that you please limit yourself to one question and one follow-up. At any time, if you should need operator assistance, press star zero. And I'll turn the call over to Kirsten Lynch, Chief Executive Officer of Vail Resorts. You may begin.

Thank you. Good afternoon, everyone. Welcome to our fiscal 2023 third quarter earnings conference call. Joining me on the call this afternoon is Angela Korch, our Chief Financial Officer. Before we begin, let me remind you that some information provided during this call may include forward-looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties, as described in our SEC filings, and actual future results may vary materially. Forward-looking statements in our press release included this afternoon, along with our remarks on this call, are made as of today, June 8, 2023, and we undertake no duty to update them as actual events unfold. Today's remarks also include certain non-GAAP financial measures. Reconciliations of these measures are provided in the tables included with our press release, along with our quarterly report on Form 10-Q. We're filed this afternoon with the SEC and are also available on the Investor Relations section of our website at www.failresorts.com. Let's turn to our fiscal 2023 third quarter results. We are pleased with our overall results for the quarter and for the 2022-2023 North American ski season with strong growth in visitation and spending versus the prior year. After the challenges experienced in the second quarter of fiscal 2023, driven by weather disruptions in Tahoe and across our Midwest, Mid-Atlantic, and Northeast resorts, collectively referred to as our Eastern US resorts, the results in March and April improved as expected, with strong demand from local and destination guests, driving visitation and resort net revenue above prior year record levels. Favorable conditions enabled an extended season at resorts across Utah, Tahoe, and the Northeastern US, while some resorts in the Midwest and Mid-Atlantic regions closed earlier than originally intended due to the unseasonably warm weather and lack of terrain. Our results throughout the 2022-2023 North American ski season highlight both the stability that comes from the advanced commitment of our season pass products and our strong operational execution through the season. The winter season included significant weather-related challenges from the travel disruptions over the peak holiday period, abnormal weather variability across our eastern U.S. resorts, and significant storm-related disruptions at our Tahoe resorts during multiple peak periods throughout the season. Despite these weather events, the company grew visitation, resort net revenue, and resort-reported EBITDA to record levels supported by the stability created from our advanced commitment strategy and a strong finish to the season with good spring conditions at our resorts in Colorado, Utah, Tahoe, and the Northeastern US. Our ancillary businesses, including ski school, dining, and retail rental, experienced strong growth compared to the prior year period when those businesses were impacted by capacity constraints driven by staffing, and in the case of dining, by operational restrictions associated with COVID-19. Staffing levels enabled our mountain resorts to deliver a strong guest experience, resulting in a significant improvement in guest satisfaction scores, which exceeded pre-COVID-19 levels at our destination resorts. Now I would like to turn the call over to Angela to further discuss our financial results and fiscal 2023 outlook.

Thank you. As Kirsten mentioned, we are pleased with our overall results for the quarter. And as expected, we saw improved results in March and April. Net income attributable to Vail Resorts was $325 million, or $8.18 per diluted share, for the third quarter of fiscal 2023, compared to net income attributable to Vail Resorts of $372.6 million, or $9.16 per diluted share in the prior year. The decrease in net income attributable to Vail Resorts compared to the prior year is primarily due to an increase in expense associated with a change in the estimated fair value of the contingent consideration liability related to our Park City Resort lease. Resort reported EBITDA was $623.3 million in the third quarter of fiscal 2023, an increase of $12.8 million, or 2.1% compared to the same period in the prior year. Resort reported EBITDA was impacted by the timing of recognition of past product revenue as a result of delayed resort openings in the prior year and early resort openings in the current 2022-2023 North American ski season. This change in resort operating dates, opening dates resulted in a past product revenue decrease of approximately $40 million for the third quarter of fiscal 2023 compared to the third quarter of fiscal 2022 and represents a timing difference that offsets with our second quarter of fiscal 2023. Now turning to our outlook for fiscal 2023, the strong finish of the season produced resort reported EBITDA results that were in line with our expectations. And we now expect net income attributable to VAIL resorts for fiscal 2023 to be between $251 million and $283 million And Resort reported EBITDA for fiscal 2023 to be between $837 million and $853 million. Our balance sheet remains strong and the business continues to generate robust cash flow. Our total cash and revolver availability as of April 30th, 2023 was approximately $1.5 billion with $896 million of cash on hand and $628 million of combined cash. revolver availability across our credit agreements. As of April 30th, 2023, our net debt was 2.3 times trailing 12 months total reported EBITDA. The company repurchased approximately 1.8 million shares at an average price of $225.01 for a total of $400 million during the quarter, representing 4.4% of the company's outstanding stock as of the beginning of the third quarter. We have approximately 1.8 million shares remaining under our authorization for share repurchases and remain focused on returning capital to shareholders while always prioritizing the long-term value of our shares. Additionally, the company declared a quarterly cash dividend on Vail Resorts common stock of $2.06 per share. The dividend will be payable on July 12th, 2023 to shareholders of record as of June 27th, 2023 We will continue to be disciplined stewards of our capital and remain committed to prioritizing investments in our guest and employee experience, high return capacity expanding capital projects, strategic acquisition opportunities, and returning capital to our shareholders through our quarterly dividend and share repurchase program. Now I'll turn the call back over to Kirsten to discuss our spring pastels.