PR: Intrawest Resort Transformation Strategy Brings Results

11/18/98

Intrawest is remaking mountain resorts and in the process is shattering the conventional wisdom in the industry announced Joe Houssian, Intrawest's chairman, president and chief executive officer at the company's Annual General Meeting in Denver. The conventional wisdom is that this industry is slow growth. At Intrawest we've proven the exact opposite,'' said Houssian.

In addressing the 1998 fiscal results, Houssian said that strong same-resort growth plus acquisitions have driven Intrawest's growth in total company EBITDA at a compound average growth rate of 54% over the past five years. And income per share has been even higher at 56%. During that time the ski industry has grown visits at a rate of 1% to 2% per annum while Intrawest has grown skier visits at a rate of 9% per annum - on a same-resort basis.

The growth we've achieved is a direct result of our formula to take under-performing resorts and transform them,'' said Houssian. ``Plus we've got demographics working for us. Recreation has become an integral part of people's lives. It's no longer considered a luxury item. Baby boomers are at the stage of their lives where they've paid for their house, saved their money and are now in a position to take their vacations and buy a second home.''

Early indications are that Intrawest is headed for yet another great year. Across Intrawest's network of resorts, season pass and express card sales are up from this time last year by 34%. This reflects increases at every Intrawest resort.

Lodging bookings are also up from last year, increasing 15% year to date. Tremblant, for example, has already booked the same number of groups as they had for the whole of last season. This increase in bookings at our resorts reflects an increase in bed base capacity, added attractions and new programming.

Part of Intrawest's formula is to grow off-season revenue at its resorts. The first quarter results show this emphasis is already starting to pay off. The company today announced that total revenue for the first quarter ended September 30, 1998 increased almost three times to $126.8 million from $46.1 million. Total company EBITDA for this period was $12.2 million, almost eight times higher than the same period last year. This strong performance offset higher interest and depreciation allowing the company to reduce its traditional seasonal loss from $3.9 million ($0.11 per share) to $2.6 million ($0.07 per share).

The significant increase in revenue this quarter reflects Intrawest's growing summer business and expansion into warm-weather resorts,'' said Dan Jarvis, executive vice president and chief financial officer.

Revenue from ski and resort operations was $56.4 million in the first quarter, double last year's first quarter revenue of $27.7 million. Sandestin and Raven added $19.8 million of revenue and all mountain resorts showed increases except for Copper. Copper's summer revenue was down mainly because of a decline in special event revenues due to the active summer construction schedule. The operating loss from ski and resort operations for the first quarter was $1.7 million, the same as the prior year.

Real estate sales totalled $65.3 million for the quarter, about four times higher than last year as Intrawest increased the volume of closed sales from 48 units to 201 units. These sales generated operating profit of $11.6 million, up significantly from $3.4 million last year.

On the real estate side of the business we had the best first quarter ever,'' said Jarvis. ``This was due to a large contribution from Keystone and the addition of the Sandestin real estate.''

This kind of improvement in the summer, combined with the results we've been seeing over the past five years and the early indicators for this year, provide us with considerable optimism for the future. Our strategy to extend the active time at our resorts by adding facilities, lodging, retail and attractions is a proven winner,'' said Jarvis.

Intrawest is the leading developer and operator of mountain resorts across North America. The company owns Whistler/Blackcomb, rated North America's No.1 resort. It also owns Panorama in British Columbia, Tremblant and Mont Ste. Marie in Quebec, Copper in Colorado, Stratton in Vermont, Snowshoe in West Virginia, Mountain Creek in New Jersey and Mammoth in California. The company also has a high-end timeshare business and is creating world-class, four-season resort villages at Keystone, Colorado, Squaw Valley near Lake Tahoe, California and Solitude, Utah. Intrawest owns Sandestin Resort in Florida and 14 golf courses. Intrawest also recently completed an international alliance with Compagnie des Alpes, the largest ski company in the world in terms of skier visits.

Intrawest Corporation's shares are listed on the New York Stock Exchange (IDR) and the Toronto and Montreal exchanges (ITW). The Company is headquartered in Vancouver, British Columbia.

Back to Business Main