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Condor Capital Management’s 2013/14 Ski Season Wrap-up

Condor Capital Management’s 2013/14 Ski Season Wrap-up: Ample Snow for Most, But Drought in California Hinders Overall Visits

MARTINSVILLE, N.J., June 9, 2014 (GLOBE NEWSWIRE) — After a solid season in the prior year, many ski enthusiasts entered this year with high hopes for another good year. For much of the country, this came true thanks to cold temperatures, due to the now-infamous “polar vortex”, and strong snowfall totals across much of the country. According to Ken Schapiro of Condor Capital Management, while these conditions proved costly for the national economy — gross domestic product (GDP) contracted in the first quarter of 2014 — they greatly benefited ski resorts throughout the U.S. Despite ample snowfall across most parts of the country, a historic dearth of precipitation in California and the broader Pacific region hindered overall skier visits. With that being said, according to data released by the National Ski Areas Association (NSAA), skier days fell 1.3% year-over-year to 56.2 million during the 2013/14 season. This figure missed our expectations as conditions in the Pacific region continued to deteriorate into seasons’ end.

Similar to previous years, resort visitation was somewhat weak early in the season, only to improve in the latter part when snowfall and mountain conditions improved. However, results were highly divergent between regions. While resorts in Colorado and Utah had a good season as large snow packs lured skiers in the second half, those in California struggled mightily. During the all-important Christmas holiday, California resorts reported that snowfall was just 11% of their long-run average. Vail Resorts, owner of several ski areas across the western-U.S., noted that its Lake Tahoe properties received 73% less snow than normal through January. NSAA figures showed that visits in the Pacific region, which includes California and Washington, plunged nearly 28% from last year to the second-lowest level in 36 years. Stripping this region out of the national data, the remainder of the country collectively enjoyed a 5.3% rise in visits, the best season in 36 years. Illustrating the benefit of having a diversified base of resorts, Vail reported that its skier visits gained 2.3% year-over-year, through April 20th, despite a sharp decline at its resorts in the Lake Tahoe area. In British Columbia, Canada, Whistler Blackcomb saw visits decline 4% over last year to 1.93 million, though it managed to generate record revenue thanks to higher average ticket prices and better ancillary spending.

The cold weather and healthy snowfall also benefited the ski-related lodging and retail industries during the 2013/14 season. According to statistics from DestiMetrics, a Denver-based analytics firm, lodging at winter resorts in the U.S. saw a 4.6% increase in occupancy and a 10.4% increase in revenue during the November through April period. In addition to lodging, the retail industry experienced one of the best years on record. Data from SnowSports Industries America (SIA) show that sales at snow sports retailers between August and March hit an all-time high of $3.6 billion, which was up 4% in units sold and 7% in dollar terms. Online sales saw gains as well, also notching an all-time high — $867.4 million. These results are in stark contrast to the broader retail environment, which struggled during the holiday season and first quarter due to the harsh winter. The fact that sales dollars rose more than units sold indicates that retailers had pricing power and maintained lean inventories, which decreases the need to discount products towards the end of the season. The accessories category showed the best gains, with sales jumping 7% in units and dollars sold rising a robust 14%. This category tends to benefit the most from strong snowfall, as enthusiasts look to upgrade their goggles, gloves, etc. Looking towards next year, retailers could see a bump in equipment sales, as skiers look to upgrade their skis, boots, etc. after making good use of them this season.

Going into next year, enthusiasts hope that Mother Nature will grace them with more fresh powder and cold temperatures. Considering the extremely poor conditions in the Pacific region, a bounce back there and even an average weather season elsewhere should allow skier days to best this year’s total nationally.

Condor Capital Management

Founded in 1988, Condor Capital Management is an employee-owned, SEC-registered investment advisor based in Martinsville, N.J. employing 15 professional and support staff. Since Condor is a fee-only investment management firm, its fees are based on portfolio size, not sales commissions or number of trades. For more information on Condor Capital Management, please visit www.condorcapital.com or call 732-356-7323.

Contact: Ken Schapiro, info@condorcapital.com

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