Total revenue increased 15.1% to $56.3 million, over fourth quarter of 2008 - Same store RevPAR for Generation II resorts increased 0.4 percent and substantially outperformed hotel industry average
Great Wolf Resorts, Inc. (NASDAQ: WOLF) reported results today for the fourth quarter ended December 31, 2009.
“In 2009 Great Wolf Resorts delivered outstanding results as our peak weekend business has remained consistently strong” 2009 Fourth Quarter Highlights
* Total revenue increased 15.1% to $56.3 million, over fourth quarter of 2008.
* Same store RevPAR for Generation II resorts increased 0.4 percent and substantially outperformed hotel industry average.
* Adjusted EBITDA was $8.8 million.
For the fourth quarter ended December 31, 2009, the Company reported a net loss of $(11.7) million, or $(0.38) per share, compared to a net loss $(36.5) million, or $(1.18) per diluted share for the same period a year earlier. The 2008 results include the impact of pre-tax impairment charges of $17.4 million for goodwill and $18.8 million for the Company’s investment in one of its joint ventures, and the related effect on income taxes of the non-deductibility of a majority of the goodwill impairment charge for income tax purposes.
“In 2009 Great Wolf Resorts delivered outstanding results as our peak weekend business has remained consistently strong,” said Kim Schaefer, chief executive officer. “As a result of the strength of the Great Wolf Lodge® brand along with our value proposition of providing guests with a high-quality vacation at an affordable price, we have bettered the broader hotel industry in RevPAR performance for the past two years. We also made progress on our balance sheet during the year by extending our near-term maturities. We have limited capital needs going into 2010 and our resorts generate strong cash flows, which allow us sufficient cash to operate our business.”
Ms. Schaefer continued, “While we expect that ongoing economic uncertainty and challenges will continue, growth, both organic and external, remains an important part of Great Wolf Resorts’ strategy as we move into 2010. From a growth perspective, we remain committed to continually improving the guest experience, providing new amenities and enhancing our group business. We will also look to improve operating efficiency and stay disciplined from a capital allocation perspective by utilizing a license and management model to increase cash flow.”
Operating Results
Total revenues increased 15.1 percent to $56.3 million from $48.9 million in the fourth quarter of 2008. Adjusted EBITDA in the quarter decreased to $8.8 million from $11.1 million in the fourth quarter of 2008.
As a percentage of total revenue, adjusted EBITDA was 15.6% compared to 22.8% in the fourth quarter of 2008. The reduction in margin was driven primarily by an increase in selling, general and administrative (SG&A) costs year over year due to the ramp-up effect of the opening of the Company’s new resort in Concord, NC in 2009, along with the expansion of the Company’s Grapevine, TX resort completed in 2009.
Brand Results
Same store revenue per available room (RevPAR) in the fourth quarter of 2009 was down 0.7 percent (2.8 percent using constant dollars, which normalizes the foreign currency translation effect on operating statistics of the Company’s Canadian resort), compared to the 11.7 percent RevPAR decline for the overall U.S. hotel industry according to Smith Travel Research data. Same-store occupancy was down 70 basis points. In the fourth quarter of 2009, approximately 91 percent of the Company’s system-wide room revenue was from leisure guests. Same store average daily rate (ADR) increased 0.7 percent (1.5 percent decrease using constant dollars). Total same store revenue per occupied room (Total RevPOR), which includes revenue from rooms, food and beverage, and other amenities, increased 0.9 percent (1.2 percent decrease using constant dollars).
Same store RevPAR for Great Wolf’s Generation II resorts, which are generally larger resorts that better represent the Company's current resort development model and contribute more than 80 percent of the Company’s Adjusted EBITDA, increased 0.4 percent (2.3 percent decrease using constant dollars) versus 2008. Same store occupancy increased 10 basis points, with both group and leisure occupancy up slightly. Same store ADR increased 0.2 percent (2.5 percent decrease using constant dollars), while total RevPOR for Generation II resorts increased 0.4 percent (2.3 percent decrease using constant dollars).
The Company’s fourth quarter 2009 same store operating statistics do not reflect the results of two Generation II resorts:
* Grapevine, TX, which underwent a significant expansion completed early in first quarter 2009.
* Concord, NC, which opened at the end of first quarter 2009.
Balance Sheet and Liquidity
As of the end of the fourth quarter, the Company has no debt maturities until July 2011 and no significant long-term capital commitments for construction or development of new properties. Over the near term, the Company intends to utilize the substantial portion of its free cash flow to manage its balance sheet leverage.
