Great Wolf Resorts Reports 2009 Third Quarter Results
	Same store RevPAR for Generation II resorts declined 4.0 percent on a constant dollar basis as compared to the third quarter of 2008, substantially better than industry average decline of 16.9 percent.
Great Wolf Resorts, Inc. (NASDAQ: WOLF), North America's leading family of indoor waterpark resorts, reported results today for the third quarter ended September 30, 2009. Third Quarter 2009 Highlights Adjusted EBITDA increases 7.7% to $24.8 million, over the third quarter of 2008. Same store RevPAR for Generation II resorts declined 4.0 percent on a constant dollar basis as compared to the third quarter of 2008, substantially better than industry average decline of 16.9 percent. For the third quarter ended September 30, 2009, the Company reported net loss of $(42.1) million, or $(1.35) per diluted share, compared to net income of $2.2 million, or $0.07 per diluted share for the same period a year earlier. The 2009 results include (1) a non-cash charge of $28.5 million to establish a valuation allowance against its deferred tax assets, and (2) a non-cash impairment charge of $24.0 million related to the Company's Blue Harbor Resort & Conference Center in Sheboygan, Wisconsin. 'Adjusted EBITDA in the third quarter of 2009 was the highest in the Company's history, driven by our industry-leading RevPAR performance combined with our resort-level cost controls,' said Kim Schaefer, chief executive officer. 'Our third quarter, which includes the summer vacation months, is dominated by leisure travelers, who have continued to seek out the high value family vacation that Great Wolf's resorts offer. From an operating perspective, our third quarter results were encouraging and underscore the relative strength of our brand.' Ms. Schaefer concluded, 'We believe we have growth opportunities ahead as we employ a disciplined capital allocation strategy, focusing on licensing arrangements and joint ventures in order to expand the geographic reach of our brand. With meaningful improvements to our operations and our balance sheet the last 18 months, we are now positioned for the near and long-term with a lower cost structure, improved liquidity position, and a capable management team.' Story continues below ↓ Advertisement Operating Results In the third quarter of 2009, adjusted EBITDA increased 7.7 percent to $24.8 million from $23.0 million in the third quarter of 2008. Total revenues increased 10.7 percent to $76.8 million from $69.4 million in the third quarter of 2008. In light of the challenging economic environment, the Company remained focused on minimizing controllable costs. The three categories that make up the majority of controllable costs are resort departmental expenses, selling, general and administrative (SG&A) costs and property operating costs. As a percentage of revenues, these costs were 61.9 percent compared to 59.1 percent in the 2008 third quarter. The slight year over year increase in costs was primarily due to less capitalized labor and overhead costs for construction projects in 2009 as compared to 2008, and the effect of the ramping up of operations at the Company's Concord, North Carolina resort that opened in March 2009. Brand Results Same store revenue per available room (RevPAR) in the third quarter of 2009 was down 5.5 percent (4.7 percent using constant dollars, which normalizes the foreign currency translation effect on operating statistics of the Company's Canadian resort), compared to the 16.9 percent RevPAR decline for the overall U.S. hotel industry according to Smith Travel Research data. Same-store occupancy was down 190 basis points. In the third quarter of 2009, approximately 93 percent of the Company's system-wide room revenue was from leisure guests. Same store average daily rate (ADR) declined 2.9 percent (2.2 percent using constant dollars). Total same store revenue per occupied room (Total RevPOR), which includes revenue from rooms, food and beverage, and other amenities, decreased 2.3 percent (1.6 percent 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, was down 5.0 percent (4.0 percent using constant dollars) versus 2008. Same store occupancy was down 160 basis points, with group occupancy up slightly, offset by a larger decline in leisure occupancy. Same store ADR declined 2.9 percent (1.9 percent using constant dollars), while total RevPOR for Generation II resorts decreased 2.4 percent (1.4 percent using constant dollars). The Company's third quarter 2009 same store operating statistics do not reflect the results of two Generation II resorts: Grapevine, Texas, which underwent a significant expansion completed early in first quarter 2009. Concord, North Carolina, which opened at the end of first quarter 2009. Balance Sheet and Liquidity As of the end of the third 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. As of September 30, 2009, the Company had: Unrestricted cash and cash equivalents: $28.0 million Total secured debt: $472.5 million Total unsecured debt: $80.5 million Weighted average cost of total debt: 6.7% Weighted average debt maturity: 5.8 years