Great Wolf Resorts Announces Updated Earnings Guidance for Second Quarter and Full Year 2005
Great Wolf Resorts, Inc. (NASDAQ:WOLF), the nation's largest owner, operator and developer of drive-to family resorts featuring indoor waterparks and other family-oriented entertainment activities, today announced that the company is revising its earnings guidance for the second quarter and the full year 2005.
The company's revised earnings guidance for the second, third and fourth quarters and for the full year 2005 is as follows (amounts in thousands, except per share data):
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Third Quarter
--------------------------------------Second Quarter------------------
Low High
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Net income (loss) $ (1,000) $ 9,000 $10,200
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Net income (loss) per diluted share $ (0.03) $ 0.30 $ 0.34
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Adjusted EBITDA (a) $ 7,000 $24,400 $26,400
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Adjusted net income (loss) (a) $ (700) $ 9,600 $10,800
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Adjusted net income (loss) per
diluted share $ (0.02) $ 0.32 $ 0.36
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Fourth Quarter Full Year 2005
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Low High Low High
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Net income (loss) $(2,000) $(1,400) $ 3,700 $ 5,500
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Net income (loss) per diluted
share $ (0.07) $ (0.05) $ 0.12 $ 0.18
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Adjusted EBITDA (a) $ 8,500 $ 9,500 $47,000 $50,000
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Adjusted net income (loss) (a) $(1,160) $ (560) $ 8,500 $10,300
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Adjusted net income (loss) per
diluted share $ (0.04) $ (0.02) $ 0.28 $ 0.34
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"With the upcoming expiration on June 18 of the lock-up period from our IPO, we felt it appropriate to update our second quarter and full year earnings guidance with our most recent view of operating results," said John Emery, chief executive officer. "Our goal is to provide an updated picture of our current expectations for the second quarter and the remainder of the year."
"Although our first quarter results were ahead of our original projections as a result of the Easter holiday and related school spring breaks falling in the first quarter this year, our budgeting expectations for 2005 underestimated the total impact of this shift on our second quarter results," Emery said. "Additionally, in the Sandusky market our Great Wolf Lodge resort has been impacted by a significant increase in the number of competitive rooms of indoor waterpark resorts. During the second quarter of 2004, our 271-room resort was the only indoor waterpark resort in that market, while today indoor waterpark resorts have more than 800 rooms in this market. As a result of the increase in competitive pressure in this market, our Sandusky resort's results in the second quarter were negatively impacted, and we expect that situation to continue to affect the resort's operating results through the remainder of 2005. Our long-term view on the Sandusky market is positive based on our experience with competition in the Wisconsin Dells market. We expect the new supply in the Sandusky market will be absorbed by a gradual increase in overall demand over time."
As a result of all of these factors, the company has decreased its second quarter Adjusted EBITDA projection from a range mid-point of $8.5 million to $7.0 million, and reduced its full year Adjusted EBITDA guidance from a range mid-point of $52.0 million to a range mid-point of $48.5 million.
"Our Williamsburg resort, while still in its first few months of operation, has been extremely well received by vacationers," Emery noted. "Our summer bookings for Williamsburg are very strong and are showing a significant rate premium in comparison to our existing resorts, which evidences the strength of our brand in that market. We also have announced a 100-room expansion to the Williamsburg resort, which we expect to complete by late 2006. We believe the market will easily support a larger resort and our expansion will allow us to continue to capitalize on the substantial opportunities available in our first East Coast location.
"On the development front, construction of our Great Wolf Lodge in the Pocono Mountains in Pennsylvania is proceeding smoothly, and the resort is on target to open in Fall 2005. We also expect to break ground soon on construction of our Great Wolf Lodge to be built at Paramount's Kings Island in Mason, Ohio. That resort will be owned by a joint venture we formed with Paramount Parks, a unit of Viacom Inc. That joint venture is a good example of the synergies and relationships we are looking to build to help to establish a sustainable competitive advantage within new marketplaces. Our business plan calls for the development of two owned resorts a year and we expect to announce our next new development project soon."
Great Wolf Resorts is the leader in indoor waterpark destination resorts and owns and operates its family resorts under the Great Wolf Lodge and Blue Harbor Resort brands. Great Wolf Resorts is a fully integrated resort company and owns and/or manages Great Wolf Lodge locations in: Wisconsin Dells, Wisconsin; Sandusky, Ohio; Traverse City, Michigan; Kansas City, Kansas; Williamsburg, Virginia; the Pocono Mountains, Pennsylvania (scheduled to open in Fall 2005); Niagara Falls, Ontario (scheduled to open in 2006); and Mason, Ohio (scheduled to open in late 2006);and Blue Harbor Resort & Conference Center in Sheboygan, Wisconsin.
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