Volatile Stock to Watch: Vail Resorts, Inc. (NYSE: MTN)

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Vail Resorts, Inc. (NYSE: MTN) stock fell 1.93% on September 27th, 2020 (Source: Google finance) after the company reported a fiscal fourth-quarter loss of $153.6 million compared with $89.5 million, in the year-ago period. The company posted lower than expected results for the fourth quarter of FY 20 as it got negatively impacted by COVID-19 and the resulting closure of the North American destination mountain resorts and regional ski areas beginning on March 15, 2020. The stock recovered over 0.5% on 28th September, 2020 (as of  12:52 pm GMT-4  ; Source: Google finance)

The Resort Reported EBITDA for the year was negatively affected by the deferral of about $118 million of pass product revenue and related deferred costs to fiscal 2021 on the back of pass holder credits offered to 2019-2020 North American pass holders to encourage renewal for the 2020-2021 season. Overall, Net income attributable to Vail Resorts was $98.8 million for the fiscal year 2020, compared to net income of $301.2 million in the prior fiscal year. The company’s liquidity position remained strong with total cash and revolver availability as of August 31, 2020 of about $953 million with $360 million of cash on hand, $419 million of US revolver availability under the Vail Holdings Credit Agreement and $174 million of revolver availability under the Whistler Credit Agreement.

Moreover, the company to increase the liquidity and reduce costs, had raised $600 million through the issuance of unsecured senior notes, suspending the dividend for a cash savings of more than $70 million per quarter, reducing the capital plan for calendar year 2020 by approximately $80 million to $85 million, and executing significant reductions in the operating expenses. Resort net revenue for the fourth quarter fell $167 million compared to the prior year, while Resort Reported EBITDA fell $43 million over the same time period, due to $124 million in net cost reductions on the back of combination of reduced seasonal labor and expenses, as well as significant overhead cost-saving actions. The company continues to anticipate to have sufficient liquidity to fund operations through at least the 2021-2022 ski season, even in the event of extended resort shutdowns.

MTN in the fourth quarter of FY 20 has reported the adjusted loss per share of $3.82, missing the analysts’ estimates for the adjusted loss per share of $3.47, according to analysts surveyed by FactSet. The company had reported the adjusted revenue of $77.2 million in the fourth quarter of FY 20, missing the analysts’ estimates for revenue of $138.3 million.

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