Intrawest reports successful year
Intrawest, developer of Base Village and owner of Copper Mountain and Winter Park resorts, issued a glowing company report Tuesday for its fiscal year that ended in June, despite the fact both of the company’s Colorado resorts recorded decreases in skier numbers for the 2003-2004 ski season. Copper Mountain saw an 8.8 percent decline in skier days and dropped below the 1 million mark by serving 931,143 skiers, compared to 1,058,016 during the prior season. Winter Park posted more skier days than Copper with 955,615 visits, a 4 percent decline over the resort’s 2002-2003 season. At Copper, only 230 inches of snow fell last year when the resort averages 280 inches annually, said spokeswoman Jamie Wilson. Warm temperatures in March also reduced visits from Colorado Front Range skiers, she said. “Although mountain conditions were great at the end of the season, warmer temperatures in the Front Range impacted their choice to drive up to the mountains,” Wilson said.Ski areas across the state logged a 3.4 percent decline in skier visits during last season.Intrawest served 11 percent of North America’s skiing public with 7 million skier visits, compared to 7.3 million during the 2002-2003 season. Executives at Intrawest also blamed weather Tuesday for a 3 percent reduction in skier numbers at the company’s Western resorts, which include its Colorado areas, Whistler/Blackcomb in British Columbia and Mammoth, Calif. Skier visits were down 7 percent at its Eastern resorts. “From 9/11 up until now, these weren’t the easiest years for anyone in this industry,” said Joe Houssian, company chairman, president and chief executive officer. “But that is behind us and now we’ll move forward.”Intrawest pays down debtIntrawest’s revenues and net income were up over fiscal year 2003 but a substantial reduction in the company’s debt represented the brightest financial information for the year. This will allow the company to use increased cash flow to attract new customers, Houssian said. The company reported $1.5 billion in revenue compared to $1.1 billion the previous year. “We overachieved on all our internal goals and projections,” Houssian said during a conference call. Net income totaled $60 million for the fiscal year, compared to $34 million in 2003.The company turned its balance sheet around by increasing cash flow to $423 million compared to a negative cash flow of $21 million last year. The cash flow was used to reduce debt to $849 million, down nearly $300 million from last year’s $1.13 billion. This year’s creation of the company’s Leisure and Travel Group consolidated management services like marketing and reservations in what Houssian called an “intellectual tie-in” of the company’s departments, excluding real estate. The move will reduce costs and help the company present a packaged product to customers, Houssian said. Offering more than skiingAlso this year, Intrawest expanded its potential customer base by forming a partnership with the luxury leisure travel company Abercrombie & Kent. The company plans to continue to move into broader vacation destination markets.”Intrawest is now taking its expertise and applying it in new areas we hadn’t thought about five years ago,” Houssian said. “It’s not about let’s get that last condo sold so we can drive down debt. It’s about turning our attention … we’ll now see our company grow in a fashion that allows us to see a return on capital.” One tangible area of new spending arising from increased cash will be seen this fall in the East, where company executives plan a marketing campaign to attract affluent New York-area customers to its resorts, including Colorado destinations. Details were sketchy during a conference call Tuesday as executives worried about competitor Vail Resorts absorbing the information, but radio advertisements, billboard ads and direct-mail marketing tools were listed as planned means to “link offers to Western resorts to our Eastern resorts.” The campaign is “very, very new for the destination resort market,” Houssian said.Resort real estate sells at higher pricesAn earlier earnings call pegged earnings per share for the year at $1.28, but Tuesday’s report increased that amount to $1.48, partially due to increased real estate sales. Fewer units were sold in the fourth quarter compared to last year, but the average sale price was significantly higher. Average unit price was $531,000 compared to $375,000 the previous 12 months.The company launched nine projects at six different resorts since February, selling 653 units – a 95 percent sellout. “The demand for real estate is extremely strong in all of our markets,” Currie said. More than 600 units are expected to close in 2005 at an average price of $570,000-$580,000.
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