ASC's losses exceed $200M

Ski area owners report softening in demand

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— American Skiing Co. sustained unprecedented losses of $206.7 million in fiscal year 2002, according to long-overdue earnings reports released Friday.

By comparison, the company posted losses of $141,572 in fiscal 2001. The 2002 losses amounted to $6.54 per share of commonly traded stock. ASC's shares were trading below 15 cents this month.

ASC also released its earnings report for the first quarter of fiscal 2003, reflecting a slowing in the rate at which it was losing money. The company lost $39 million in the three-months ending Oct. 27, 2002. That compares to $65.5 million for the corresponding period a year earlier.

The earnings report also included bad news about the performance of the company's real estate division.

"Over the past several months, (ASC) has seen a reduction in sales volume and sales leads at its Grand Summit properties at Steamboat and The Canyon (near Park City, Utah)," the earnings release reported. "These reduced sales volumes are below the company's anticipated levels for this period."

ASC had obtained new funds for promoting sales at the Steamboat Grand last fall after renegotiating the terms of a loan with Textron. A burst of about 15 sales of eighth-share interests in condominium units at the Steamboat Grand were closed on in late February.

ASC CEO B.J. Fair found reason for optimism in the company's ability to retire a portion of its debt and restructuring of its major resort loan last year.

"We improved our cost structure and significantly reduced resort debt through the sales of Heavenly and Sugarbush resorts," Fair said. "In addition, the recent financing of our resort credit facility provides even greater operating flexibility as we move through the current ski season and beyond."

The first-quarter financials aren't particularly revealing about the company's immediate future because revenue stream at most ASC resorts is minimal in late summer and early fall. Results from the second and third quarters will shed more light on whether the company can meet its payment schedule under the terms of it restructured debt.

To that end, ASC reported skier traffic at its eight ski areas was up more than 22 percent through the holidays, but demand has begun to wane since the first of the year.

"Although the company's operating results through Jan. 26 were stronger than last year, (ASC) has experienced significant softening in skier visits, call volume and reservation activity in subsequent weeks," an ASC spokesman reported.

"Almost all of our resorts generated increases in early season visitation over last year," Fair said. He reported that eastern resorts like Killington, Vt., were up by as much as 29 percent through the holiday and Steamboat was up 7 percent year over last year.

He attributed the recent softening of the market to extreme cold temperatures in the East, a soft economy and concerns about impending war.

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