Vail Resorts plans to spend excess cash, continues stock buy back during strong second quarter

By Lisa Kerner

Charlotte, N.C., March 12 - Vail Resorts, Inc. said it is evaluating a combination of strategic options for use of its excess cash, including increased real estate investment and resort capital expenditures, strategic acquisitions, debt repayment and stock repurchases.

But it also noted that its credit facility and the note indenture limit its ability to make investments or distributions, including the payment of dividends, stock repurchases and the pay off of its 6¾% notes, according to a 10-Q filing with the Securities and Exchange Commission.

In announcing its second-quarter 2007 results, Vail said its total revenue increased $73.0 million, or 25.4%, to $361.0 million, from $288.0 million for the prior-year period. Net income for the quarter of $53.0 million, or $1.35 per share, was up compared to net income of $43.0 million, or $1.12 per diluted share, for the second-quarter 2006.

"Based on our current estimates, we expect full-year Resort reported EBITDA, the combination of our Mountain and Lodging segments, to range from $211 million to $219 million, and Resort reported EBITDA excluding stock-based compensation expense to range from $216 million to $224 million," Vail Resorts chief executive officer Robert Katz said in the release.

"Finally, based on our current estimates, we expect net income to range from $55 million to $63 million and net income excluding stock-based compensation expense to range from $60 million to $68 million."

Vail continued its previously announced share repurchase program in the second quarter, resulting in the repurchase of 167,700 shares at an average price of $44.76 for a total of $7.5 million.

"Since inception of this program in fiscal 2006, the company has repurchased 673,500 shares at an average price of $38.38 for a total amount of approximately $25.8 million, with 2,326,500 shares remaining available under the existing repurchase authorization," Katz added.

Vail Resorts is a mountain resort operator based in Broomfield, Colo.

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