Great Wolf posts 4th quarter loss

Posted | Contributed by Jeff

Great Wolf Lodge posted a net loss of $38 million for its fourth quarter, but adjusted net income only shows an estimated $2 million loss, according to the company's treasurer. The adjusted numbers are the result of a $43 million write-off of goodwill in connection with the sale of 70 percent interests of the company's Wisconsin Dells and Sandusky Great Wolf Lodge resorts to the CNL Income properties joint venture. The company says the Ohio and Michigan properties are performing below historic levels.

Read more from The Sandusky Register via PointBuzz.

"The operators definitely have different methods in markets where we don't have competition versus where we do have competition," he said. "There's different marketing strategies and different operating strategies."

Uh...maybe we have to keep our prices a little lower...? :-)

Could someone with a business background explain the difference between net loss and adjusted loss?

Basically, there were changes to their balance sheet that was caused from the sale of 70% of their ownership of the Dells and Sandusky properties. Most simply put, "goodwill" is when you're buying something and you pay more than its worth, or you're selling something and take less than it's worth. Because it's a reduction in the balance sheet, GAAP says it has to be recorded as a loss. It's considered a "non-cash" loss.

That's different from cash losses from operations, where it cost you more to run the business than you actually made from it. Although, this release also shows a weakening in their operational performance. (That 50% occupancy rate must scare the heck out them...)

EDIT: Actually, it's even worse than that...I just took a better look at their release. Their comp numbers are at 47.3%!

*** This post was edited by JZarley 2/24/2006 4:41:57 PM ****** This post was edited by JZarley 2/24/2006 4:49:19 PM ***

I suppose they can't really blame the weather, either.
"Umm, this really mild winter, has umm... made previously seasonal waterparks in the Northern U.S. now operate year round, thus increasing, ummm...competition."

I bet PKI is banking on future trouble for Great Wolf.

Heres the deal, Great Wolf Leases the land for say 30 years, Builds a resort and if they don't stay in buisness for the whole time. The land owner gets gets full posession of resort.

A buddy of mine inherited his fathers Auto Garage. Pep Boys offered him a killer deal to lease the land, Tear down the 40 year old garage and build a new one with a store included.

Pep Boys went out three years into the thirty year clause. He's got a new garage out of it and is now leasing the garage to a Car X and the store is leased to a seven eleven type outfit.

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