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Intrawest files $100M IPO

post #1 of 56
Thread Starter 

"~~Exclusive: Ski resort operator Intrawest files $100M IPO'

 

Article

http://www.bizjournals.com/denver/news/2013/11/12/ski-resort-operator-intrawest-files.html?ana=twt

 

SEC Filing

http://www.sec.gov/Archives/edgar/data/1587755/000156761913000131/s000092x2_s1.htm

 

 

~~ Nov 12, 2013, 5:59am MST Updated: Nov 12, 2013, 7:56am MST Exclusive: Ski resort operator Intrawest files $100M IPO . Enlarge Ben Blankenburg | Thinkstock . L. Wayne HicksSocial Media Engagement Officer / Digital Producer- Denver Business Journal Email | LinkedIn | Google+ | Cultural Attache blog Intrawest Resorts Holdings Inc., which operates the Winter Park Resort and Steamboat Ski & Resort in Colorado, on Tuesday registered for an initial public offering to raise as much as $100 million. The Denver company has called Denver home since 2011, having relocated its headquarters from Canada. Intrawest said it intends to list its shares on the New York Stock Exchange, although it didn't disclose a proposed symbol. Intrawest said it intends to use the proceeds from the offering "for working capital and other general corporate purposes, which may include potential investments in, and acquisitions of, ski and adventure travel businesses and assets." In addition to Winter Park and Steamboat, the company operates Mount Tremblant Resort in Quebec, Stratton Mountain Resort in Vermont and Snowshoe Mountain in West Virginia. Intrawest also owns a half-interest in Blue Mountain Ski Resort in Ontario. Intrawest had 3.15 million skier visits in its 2013 fiscal year, which ended June 30; that's up from 2.76 million the year before. The company lost $19.3 million on revenue of $513.4 million in 2012, but rebounded to post a $3.4 million profit on revenue of $524.4 million a year later. Intrawest's CEO is William "Bill" Jensen, who previously was president of the Mountain Division of Broomfield-based Vail Resorts Inc. (NYSE: MTN) for two years beginning in February 2006. He joined Intrawest as its chief executive in June 2008. L. Wayne Hicks is Social Media Engagement Officer / Digital Producer of the Denver Business Journal, writes for the "Cultural Attache" blog, and compiles the daily "Morning Edition" email. Phone: 303-803-9221.

post #2 of 56

Maybe now Steamboat will consider offering lift ticket discount plans  :ROTF

post #3 of 56

Hmmmm, some new stock to consider......

post #4 of 56

ahh, come on they are putting a giant plastic coca-cola bear at the base this year for free!  Isn't that enough? 

post #5 of 56

Just what skiers want, companies pressured to grow quarterly earnings running more ski resorts.  If Interwest can successfully raise money and acquire enough resorts at some point they can push ticket prices, reduce service, etc.   They can also bring more capital to bear on development of land in and around ski areas.

post #6 of 56
Thread Starter 

To put it in perspective the last IPO around this same date was in 2010 that raised 300 Mil, here we go again..... The offering was "~~between $12.50 and $13, with an indicated yield of 7.5 percent to 7.8 percent"

post #7 of 56

My eye was drawn to the fact that they made all of 3 M in profit on 524 M of revenue!  Talk about razor thin margins..that's 1/2% of profit.  I guess I'll drop my plans to buy a ski resort anytime soon.  Agree that this will NOT lead to better service or cheaper tickets.  I've given up on those pipe dreams. 

post #8 of 56

A couple newspaper articles:

 

http://www.steamboattoday.com/news/2012/dec/04/stamboat-ski-area-parent-intrawest-selling-shares-/

http://www.denverpost.com/business/ci_24506422/denvers-intrawest-resorts-files-100-million-ipo

 

What a joke.  Intrawest was a public company until the Fortress hedge fund took it private and saddled it with debt in 2006.  

 

They say they intend to use the proceeds of the IPO  "to evaluate acquisition opportunities where the opportunity would provide a strategic fit within our existing portfolio of businesses."   

 

What a joke.  They intend to make acquisitions after they've recently sold off Whistler and Copper Mountain to cover their debt payments.  Huh?

 

Looks like Fortress is just looking to get some fools in the public markets to throw some good money after Fortress' bad money.   Fortress will get a few pennies on the dollar back and still retain control of the company.
 

Intrawest now has $2 BILLION in debt and no longer owns Whistler and Copper Mountain?!?!?!? Anybody know how much debt Intrawest had prior to being taken private by Fortress?

post #9 of 56
Quote:
Originally Posted by Lorenzzo View Post
 

Just what skiers want, companies pressured to grow quarterly earnings running more ski resorts.  If Interwest can successfully raise money and acquire enough resorts at some point they can push ticket prices, reduce service, etc.   They can also bring more capital to bear on development of land in and around ski areas.

 

you want any business to make a profit.  A business that loses money is a biz that you don't want to do biz with(tm)......

 

Profitable business's reinvest to make more money ie improved snowmaking, better lifts, expanded terrain.  Non-profitable business's will cut...

 

I don't know enough about this deal but to say  but future acquisitions may be the deal. Look at the horse-race going on at KSL, the game is clearly to acquire multiple resorts (not just for skiing) whereby you can capture customers revenue by offering them your brand at multiple locations, makes good sense. Its not much different than saying hey, if you like our brand, then anywhere you want to go I can provide you a consistent service delivery for any season. It provides buyer confidence and reduces resistance.  I am sure that the average family who goes on a golf/ski/adventure vacation goes to different resorts but would be much more likely to book with a known entity due to familiarity and cost savings.   Think Starbucks or McDonald's or to some extent, time share-like opportunities.  They already offer a bundled ticket option. I wouldn't be surprised that in the future they bundle lodging opportunities as well like a time share week that can be used within any of their properties.  Its really a smart idea. 

 

if they are going to get into the race, they better understand its not just about buying multiple properties but rather creating a brand and providing customers a selection of resorts that makes sense.   


Edited by Finndog - 11/13/13 at 7:15am
post #10 of 56

Hmmmmmm.  Interesting article from Steaboat Springs real-estate 

What does this mean for real-estate? 

 

http://www.steamboatsprings-realestate.com/blog/intrawest-ipo-steamboat-ski-areas-owner-files-for-an-ipo-what-does-it-mean-for-steamboat.html

post #11 of 56
Quote:
Originally Posted by Trekchick View Post
 

Hmmmmmm.  Interesting article from Steaboat Springs real-estate 

What does this mean for real-estate? 

 

http://www.steamboatsprings-realestate.com/blog/intrawest-ipo-steamboat-ski-areas-owner-files-for-an-ipo-what-does-it-mean-for-steamboat.html

 

I think it means John spent too much time at the local dispensary.

 

Too bad you can't short an IPO before it comes out.

post #12 of 56
Quote:
Originally Posted by Trekchick View Post
 

Hmmmmmm.  Interesting article from Steaboat Springs real-estate 

What does this mean for real-estate? 

 

http://www.steamboatsprings-realestate.com/blog/intrawest-ipo-steamboat-ski-areas-owner-files-for-an-ipo-what-does-it-mean-for-steamboat.html

 

what was the point of the article? 

 

It won't mean anything for real estate.  Steamboat is a destination resort. its not like summit county.  It doesn't matter who owns it, it matters who manages it.  Intra owns very little real estate there and very little of the base property. That was there problem when they bought it. They couldn't do much to influence the overhauling of the base "mall" and surrounding properties. 

post #13 of 56

Well: If it does to Intrawest what it did to Vail Resorts, you can expect the company to go from guest-centric to shareholder return centric, lots of firings, maintenance of low wages, putting things like safety on the back burner, and a whole lot of wonderful stuff.

post #14 of 56
Quote:
Originally Posted by sjhill9859 View Post
 

Well: If it does to Intrawest what it did to Vail Resorts, you can expect the company to go from guest-centric to shareholder return centric, lots of firings, maintenance of low wages, putting things like safety on the back burner, and a whole lot of wonderful stuff.

And yet the customers keep coming in droves........:rolleyes 

post #15 of 56
Quote:
Originally Posted by SHREDHEAD View Post

 

 

Too bad you can't short an IPO before it comes out.

 

Correct.

post #16 of 56
Quote:
Originally Posted by Finndog View Post
 

 

you want any business to make a profit.  A business that loses money is a biz that you don't want to do biz with(tm)......

 

Profitable business's reinvest to make more money ie improved snowmaking, better lifts, expanded terrain.  Non-profitable business's will cut...

 

I don't know enough about this deal but to say  but future acquisitions may be the deal. Look at the horse-race going on at KSL, the game is clearly to acquire multiple resorts (not just for skiing) whereby you can capture customers revenue by offering them your brand at multiple locations, makes good sense. Its not much different than saying hey, if you like our brand, then anywhere you want to go I can provide you a consistent service delivery for any season. It provides buyer confidence and reduces resistance.  I am sure that the average family who goes on a golf/ski/adventure vacation goes to different resorts but would be much more likely to book with a known entity due to familiarity and cost savings.   Think Starbucks or McDonald's or to some extent, time share-like opportunities.  They already offer a bundled ticket option. I wouldn't be surprised that in the future they bundle lodging opportunities as well like a time share week that can be used within any of their properties.  Its really a smart idea. 

 

if they are going to get into the race, they better understand its not just about buying multiple properties but rather creating a brand and providing customers a selection of resorts that makes sense.   

Within a laboratory in an Economics building on a college campus that may be true.  But in the real world with its inefficiencies it just doesn't work that way.  Today's Wall Street World is about quick money not reinvesting.  Short term maximum growth in earnings.  This then leaves operating assets soon exhausted but not leveraged enough to fail.  The model exemplifying this is the world of public REIT-s.  The reinvestment into new assets (subtracting condo conversion for Res. REIT-s) from profit is and has been nil, assets depreciate faster than non-publicly owned and the liquidity of those assets towards their best use is almost non-existent as REIT-s have book losses from their phantom growth in earnings that prevents selling and buying or selling and developing.

 

The surest sign there is no real viable long term upside or strategy is when you hear branding in an instance where it is of no benefit.  Interwest extracting branding value from dissimilar assets as a result of their name? Seriously?

post #17 of 56
Quote:
Originally Posted by sjhill9859 View Post
 

Well: If it does to Intrawest what it did to Vail Resorts, you can expect the company to go from guest-centric to shareholder return centric, lots of firings, maintenance of low wages, putting things like safety on the back burner, and a whole lot of wonderful stuff.

Yes, that's exactly what happens with public ownership of real estate type assets.

post #18 of 56
Quote:
Originally Posted by Lorenzzo View Post
 

Within a laboratory in an Economics building on a college campus that may be true.  But in the real world with its inefficiencies it just doesn't work that way.  Today's Wall Street World is about quick money not reinvesting.  Short term maximum growth in earnings.  This then leaves operating assets soon exhausted but not leveraged enough to fail.  The model exemplifying this is the world of public REIT-s.  The reinvestment into new assets (subtracting condo conversion for Res. REIT-s) from profit is and has been nil, assets depreciate faster than non-publicly owned and the liquidity of those assets towards their best use is almost non-existent as REIT-s have book losses from their phantom growth in earnings that prevents selling and buying or selling and developing.

 

The surest sign there is no real viable long term upside or strategy is when you hear branding in an instance where it is of no benefit.  Interwest extracting branding value from dissimilar assets as a result of their name? Seriously?

 

Again i haven't read the prospectus but I think the value of the KSL branding and building of the network has been successful and not yet realized.  Just look here to see how many people are buying the epic passes and them specifically traveling to those resorts that are covered by the pass where they spend dollars. You are now seeing other resorts following suit. If you look at this historically, IntraWest was actually one of the first to start this.  The branding is not the parent name in this case.

 

The consumer doesn't cares that KSL owns all of these resorts; they just know that Snow.com gives them access to all of these 26 resorts, products and services https://epicrace.epicpass.com/?intcmp=SP000034  There's even a contest to see who can spend money at each one :D

 

They are now buying up local resorts like in MN, here again. you own a ski pass at Brighton, well, now you get discounts at all their other resorts. Want to buy ski's or other equipment, yep, we sell that too since we own the shops on the mountains and control what brands gets sold.  

 

Regarding not reinvesting, I simply cannot agree with that. Even in my own small business, we reinvest to offer new products and services as well to replace older less efficient equipment. Looking at the steamboat, they just made significant reinvestment's into expanded snowmaking and to replace older, less efficient equipment, Copper just added a lift, several resorts opened new terrain. All of which will improve the bottom line. Any company that does not reinvest will die. Now if you are talking about an investment group engaging in raiding, that's a different story.  

post #19 of 56

does anyone know what the trading symbol will be and when will the ipo be offered. the prospectus seemed to have omitted that info.

post #20 of 56
Quote:
Originally Posted by Finndog View Post
 

 

Again i haven't read the prospectus but I think the value of the KSL branding and building of the network has been successful and not yet realized.  Just look here to see how many people are buying the epic passes and them specifically traveling to those resorts that are covered by the pass where they spend dollars. You are now seeing other resorts following suit. If you look at this historically, InterWest was actually one of the first to start this

 

Regarding not reinvesting, I simply cannot agree with that. Even in my own small business, we reinvest to offer new products and services as well to replace older less efficient equipment. Looking at the steamboat, they just made significant reinvestment's into expanded snowmaking and to replace older, less efficient equipment, Copper just added a lift, several resorts opened new terrain. All of which will improve the bottom line. Any company that does not reinvest will die. Now if you are talking about an investment group engaging in raiding, that's a different story.  

Not yet realized as in unrealized and oversold to investors.  More skier days at lower rates isn't a branding result, it's a result of scale, they're totally different concepts.  A brand asset is one capable of achieving greater revenue and bottom line with the same product because people associate greater value with the name.  In Intrawest's case if anything people pay less for their name not more.  Discounting for market share gets countered by competition and everyone gets less, which is what's happening and overall it's the result of elasticity not brand. 

 

Playing with some growth measures by unsustainable, uneconomic investment is standard procedure for companies planning an IPO.  Assets locked into public ownership simply lack the capital without a Wall Street feeding which is exactly what's going on here.  It's simple math without significant growth either potential or actual.  How has Interwest done with prior public assets?  Mammoth, Whilstler, they're all the examples needed even if you haven't had experience with public investing to have witnessed the dynamics.

 

Yes, private companies large and small do reinvest and Intrawest may be no exception until they lock assets into the public world.  That was my point. This isn't controversial or theoretical, REIT's are universal in this, as are companies with limited growth potential.   It's just the way the street works, everything flows off expectation of EPS growth.  There's no choice involved, management gets forced into bleeding assets for growth.  In the unlikely case there is growth potential, it would come from pushing rates which would go to my original point that it's bad for skiers.  Once the increases are realized, quarterly pressure for continued growth will starve the assets. 

 

Again, none of this is theoretical, it's almost universal in the real world when dealing with real estate type depreciating assets with maxed out growth in earnings.  Your approach to business is irrelevant as you aren't public, in fact it follows public vs. private dynamics as described.

post #21 of 56

So when Verizon and AT&T expands thier tower network and adds 4g or Comcast upgrades its lines for faster service what is that? When Verizon bought out Vodafone what was that? 

post #22 of 56

^^^^ Those are tech companies in an oligopoly with significant growth and market share potential in an environment with changing technology.  Real estate type companies bear almost no resemblance.  The former gets fed through earnings growth and the street's ongoing investment.  The latter doesn't.

 

Scale provides benefits to high fixed cost low marginal cost businesses.  A key contrast between operating real estate assets and tech.

post #23 of 56

So you think KSL is a real estate only company?  They are not in the entertainment/leisure business? 

 

 

significant market growth?  you need to check that.  

post #24 of 56

In a tech oligopoly where scale and technology advantage can win the game, there's always huge growth potential through investment unless and until a near monopoly is obtained.  That's exactly the type of industry where growth is real.  Look at relative stock sector performance over quarters going back a ways, it's that simple.  There's little similarity if any between the two industries.

 

Yes, ski areas are operating real estate assets similar to retail real estate.  They all oversell the entertainment component because that's where in theory branding and low cost growth come in.  But as we know chairlift improvements are hardly near free.  Find one retail, apartment or any other similar company where it's been more than a sales pitch.

 

Going back to theory, a place like Deer Valley may have brand value but like Vail it would become unquestionably lost through simple economics if they went public and tried to apply it to acquired assets.  As a passholder there it isn't the brand that does it for them it's the actual product.

post #25 of 56

^^^ that's my point, its not about one single resort, its about linking all resorts and retail into a business itself that directs customers into using any of their properties to capture those leisure dollars.  Its just building on the time share model. 

 

All business's invest in ways to be more efficient whereby lowering cost, driving market share and increasing profits. I am not sure what business you are in but I just can't agree with your premise that business' dont reinvest.  

post #26 of 56
Quote:
Originally Posted by Finndog View Post
 

 

Again i haven't read the prospectus but I think the value of the KSL branding and building of the network has been successful and not yet realized.  Just look here to see how many people are buying the epic passes and them specifically traveling to those resorts that are covered by the pass where they spend dollars. You are now seeing other resorts following suit. If you look at this historically, IntraWest was actually one of the first to start this.  The branding is not the parent name in this case.

 

The consumer doesn't cares that KSL owns all of these resorts; they just know that Snow.com gives them access to all of these 26 resorts, products and services https://epicrace.epicpass.com/?intcmp=SP000034  There's even a contest to see who can spend money at each one :D

 

They are now buying up local resorts like in MN, here again. you own a ski pass at Brighton, well, now you get discounts at all their other resorts. Want to buy ski's or other equipment, yep, we sell that too since we own the shops on the mountains and control what brands gets sold.  

 

Regarding not reinvesting, I simply cannot agree with that. Even in my own small business, we reinvest to offer new products and services as well to replace older less efficient equipment. Looking at the steamboat, they just made significant reinvestment's into expanded snowmaking and to replace older, less efficient equipment, Copper just added a lift, several resorts opened new terrain. All of which will improve the bottom line. Any company that does not reinvest will die. Now if you are talking about an investment group engaging in raiding, that's a different story.  

 

I definitely agree with you here. Intrawest use to own Mountain Creek in NJ. I would buy a season pass there, and get free days or 50% off lift tickets at Mont Tremblant, Stratton, and Steamboat. We would also get lodging deals. A few years ago Intrawest sold Mountain Creek and those deals disappeared, I haven't bought a Mountain Creek lift since that happened. i also do not go to any of thier other resorts as much as I use to either. 

post #27 of 56
Quote:
Originally Posted by Finndog View Post
 

^^^ that's my point, its not about one single resort, its about linking all resorts and retail into a business itself that directs customers into using any of their properties to capture those leisure dollars.  Its just building on the time share model. 

 

All business's invest in ways to be more efficient whereby lowering cost, driving market share and increasing profits. I am not sure what business you are in but I just can't agree with your premise that business' dont reinvest.  

Lol.  No, businesses with access to capital do.  REIT-s don't have that which is why their assets languish.  All companies with traditional limited growth assets face the same thing.  The street makes money by taking things public (or private), overselling the story to people who'll buy it because like you there generally are.  Go to a market with both public and private large assets and analyze them, the story is consistent.  

 

My business career? it's directly on point, at least it was until I semi-retired young.

post #28 of 56
Quote:
Originally Posted by Bill9994 View Post
 

 

I definitely agree with you here. Intrawest use to own Mountain Creek in NJ. I would buy a season pass there, and get free days or 50% off lift tickets at Mont Tremblant, Stratton, and Steamboat. We would also get lodging deals. A few years ago Intrawest sold Mountain Creek and those deals disappeared, I haven't bought a Mountain Creek lift since that happened. i also do not go to any of thier other resorts as much as I use to either. 

And you know that offering discounts increases revenue and bottom line?  How do you know that?  Why didn't it work for Interwest previously?  We know it didn't because they were forced to sell their major assets.  What in the heck else does one need to know?

post #29 of 56

The KSL model is clearly different from what Intra did in the past. 

 

regarding investment, I get that they use investor capital but that's not what I was discussing.  

post #30 of 56

Finn... are you talking KSL or Vail Resorts?  KSL only has 2 mountains that I'm aware of (Squaw and Alpine... and some shares in Whistler, but not majority), Having a hard time following your argument of KSL's business model since they have limited holdings in the ski industry.

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