Intrawest Corporation had hoped to put the shaky 2004-05 ski season behind them, but a disappointing early golf season for the resort and travel operator resulted in a $21.5 million fourth quarter loss, or 45 cents per diluted share. (All sums in U.S. dollars.)
The fourth quarter wrapped up on June 30 with Intrawest pinning their losses on the sale of five underperforming golf courses.
Even so, fourth quarter notwithstanding, Intrawest is reporting record total revenue of 2005 $1.68 billion compared to $1.55 billion the previous year.
"The strong performance of Abercrombie & Kent, the newest member of Intrawests portfolio, was very gratifying and it speaks to the power of its brand," said Intrawest chairman, president and CEO Joe Houssian. "We are pleased at the acceleration and expansion of our partnering strategy in all phases of real estate development. The joint ventures that we entered into in the fourth quarter are great examples of how this strategy is paying off for our shareholders."
In other words, it pays to diversify.
Intrawest released its quarterly and year-end report on Tuesday, Sept. 13, and despite a fourth quarter loss shares were up on both the Toronto Stock Exchange and New York Stock Exchange.
Some of the Fiscal 2005 Year End Highlights include:
Record total revenue of $1.68 billion compared to $1.55 billion the previous year.
Abercrombie & Kent adventure tours and record results at non-B.C. resorts offset the impact of the worst weather in more than 40 years for resorts like Whistler-Blackcomb.
Total earnings per share were $0.68, compared to $1.25 in 2004, but net income is expected to grow after a one-time refinancing taking advantage of higher interest rates.
Real estate joint venture and sales transactions in the fourth quarter helped to contribute to a free cash flow of $62 million.
Despite a challenging year for Whistler-Blackcomb, Intrawests flagship ski resort, overall skier visits to Intrawest resorts were up to 7,227,000 (approximate) compared to 7,150,000 the previous year, a one per cent increase. At the same time, ski operations generated more revenue per skier visit. Total skier visit revenue in 2005 was $862.5 million, compared to $541.3 million in 2004, or a 59 per cent increase.
Intrawests purchase of the remaining 55 per cent of Alpine Helicopters in December of 2004 also contributed $26.6 million in revenue to the companys total mountain resort and travel operations revenue, which increased by $30.6 million in 2005.
The rise in the Canadian dollar from approximately $0.74 in 2004 to $0.80 in 2005 also had a positive impact, adding $18.8 million to mountain resort and travel operations revenue.
In regards to the fourth quarter loss, Intrawest announced plans to sell five standalone golf courses that were underperforming and to reinvest the money in more profitable areas. In preparation for the sale, the courses were appraised for value, which resulted in a write-down of $17.6 million the bulk of the fourth quarter loss.
The list includes the two Swaneset courses in B.C., Three Peaks in Colorado, South Mountain in Arizona and Big Island Country Club in Hawaii.
Real Estate development has slowed down for Intrawest, with $628.8 million in revenue in 2005, verses $879 million in revenue in 2004. Intrawests real estate division typically fluctuates from year to year and quarter to quarter, based on the number of units that could be completed and released.
While Intrawest earned more revenue in 2005, the company also spent $9 million more on capital expenditures than 2004. That included a conference centre and second golf course at Blue Mountain in Ontario, employee housing and a new lift at Mammoth Mountain in California, and a new administration building at Mont Tremblant.
The capital expenditures budget will include $33 million in 2006 for new lifts, buildings and equipment for mountain resorts, and IT infrastructure.
The complete fiscal report can be found online at www.intrawest.com.
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