Great Wolf Resorts Q1 2009 Earnings Call Transcript

May. 5.09 | About: Great Wolf (WOLF)

Great Wolf Resorts Inc. (NASDAQ:WOLF)

Q1 2009 Earnings Call

May 05, 2009 09.00 AM ET

Executives

Jerry Daly - Daly Gray Communications

Kimberley K. Schaefer - Chief Executive Officer

James A. Calder - Chief Financial Officer

Analysts

Steven Wieczynski - Stifel Nicolaus & Company, Inc

William Crow - Raymond James

Susan Gutierrez - JMP Securities

Jeffrey Thomison - Hilliard Lyons

Hayley Wolff - Rochdale Securities

Operator

Welcome to the Great Wolf Resorts' First Quarter 2009 Earnings Conference Call on the 5th of May, 2009. Throughout today's recorded presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. (Operator Instructions).

I'll now hand the conference over to Mr. Jerry Daly. Please go ahead, sir.

Jerry Daly

Thank you, Kate. Good morning everyone and welcome to Great Wolf Resorts first quarter 2009 earnings conference call. This morning Great Wolf released their first quarter 2009 results and I hope you've had a chance to review the press release. If you did not receive a copy of the release, please call our office at 703-435-6293 and we'll be happy to either fax or e-mail you a copy.

You also may view a copy of the release at the company's website www. greatwolf.com by clicking on corporate site at the bottom left of the page and then clicking on the news releases button. A replay of this conference call will be available later today at www.streetevents.com for 30 days. A replay of the call also will be posted on the company's website through June 5, 2009. The replay will be available by telephone until midnight on Tuesday, May, the 12th, 2009 by dialing 800-406-7325 with a reference number of 4063446.

The conference call is the property of Great Wolf Resorts and any redistribution; retransmission or rebroadcast of this call in any form without the express written consent of Great Wolf is prohibited.

Management has asked me to inform you that in compliance with the SEC's Safe Harbor guidelines, certain statements that might be made during today's conference call could be considered forward-looking and subject to certain risks that could cause results to differ materially from those projected.

Those statements may include, but are not limited to, estimates of the company's future revenues, earnings and development activities. I refer you to the company's SEC filings for further information on the factors that could cause actual results to differ from any estimates.

Now, I'd like to introduce Kim Schaefer, Chief Executive Officer and Jim Calder, Chief Financial Officer who will provide you with some insights into the company's first quarter 2009 financial and operating results.

Let me turn the session over to you, Kim.

Kimberley K. Schaefer

Thanks Jerry. Good morning everyone. Since our call in February the highlights from Wolf are that our first quarter results of operations exceeded our guidance. Our RevPAR results continued to exceed the lodging industry averages and we opened our twelfth resort in Concord, North Carolina.

We have made a slight change for our remarks and that we're going to focus on our Gen II Resorts and total same-store for the future. More than 80% of our EBITDA comes from our Gen II Resorts, so we believe that this change will ensure that you get the most helpful information on how to think about our company. However, Gen I is still reported in our operating statistics in our supporting tables.

Our overall same-store first quarter RevPAR decline of 10.2% in constant dollars outperformed hotel industry RevPAR decline of 17.7%. January and February performed well, as we've mentioned on our fourth quarter earnings call and March was softer with the shift of Spring break primarily into April. Occupancy was down 370 basis points and ADR fell 5% in constant dollars, which was mainly attributed to a decrease in a number of peak days and a slower booking pace which is we've really seen for the last six months.

Our guest loyalty continues to grow with a 32% repeat visitor for Q1 and 64% on repeat and referral. We did see a decrease in ancillary spend of about 3%. We believe that the combination of group room increase in discretionary spend of our guest being challenged as well as a slight uptick in the length of stay.

Our Gen II first quarter RevPAR decline of 8.2% in constant dollars was a combination of a 170 basis points decline in occupancy and a decrease in rate of 6%.

Group rooms accounted for 11% of the occupancy in the first quarter, compared to 8% in 2008. We did see a decrease in corporate groups which drove down our Tuesday and Wednesday, however, we saw a larger increase in leisure groups coming Thursday through Saturday.

Thursday and Sunday were our largest increases in occupancy during the first quarter. Fridays and Saturdays actually increased as well, 2% over prior year. I feel very good about how all those days performed. This is a solid reminder of what our brand represents to families in this region ... in these regions which is a short duration, high quality vacation.

With the Easter shift, our leisure guests came out of first quarter, we wanted to normalize January and April though to show you the impact. The good news is that overall same-store RevPAR improved to a negative 7.5% using constant dollars and our Generation II Resorts declined approximately 6% for the same four-month period.

We exceeded estimates for our first quarter adjusted EBITDA of $15.1 million. This was accomplished by meeting our forecast of RevPAR for consolidated resorts but also refined our expense model at the resort.

We believe that our operations team did a great job of accomplishing our goals as well as making adjustments to reflect the changing environment and being more efficient for the future. Some specific data that we're happy to share is overall resorts labor was down 3.3% for Q1, which included the increase in labor for additional 200 rooms for Grapevine. We also opened the Grapevine Conference Center and our new Concord Resort.

Some of the Easter shift for the savings that allowed us as the expense model that we've recently deployed. And customer service scores are on par with prior year at 84%, though the effects of these changes are not being felt by the guests.

Food commodities continued to rise. But our F&B team was able to keep cost of sales constant and down just a little bit at prior year at 32%. They continued to look at consolidated buying power and menu function to manage these costs effectively.

We announced last month that we were the first and only national hotel chain to be completed Greenfield certified. While Project Green Wolf touch at every part of operations, highlights of this initiative include waste minimization and recycling, energy efficiency, management of fresh water resources and, of course, purchasing. With this initiative, we were able to realize a saving of 10.1% in energy cost over prior year for first quarter with the effects from implementing Project Green Wolf as well as the decrease in gas costs.

As we look at second quarter, we've provided adjusted EBITDA guidance for Q2 in the range of 14 to 16 million, which is a 8 to 10% decrease in RevPAR. This reflects the impact of the shift of Easter into April, but the historically slower quarter and macro-economic environment are still a challenge for us to forecast. 70% of our leisure reservations come within a 28-days booking window and we are seeing a shift to a 14 and even a 7-day decision time. So it's giving us limited visibility, especially as we look at June.

Sales and marketing has spent a lot of time on our second quarter and early booking plans for the summer. We feel like we have a solid plan and have been willing to increase spending in areas that we feel have a likely return on investment, locations like Dallas and New York.

We're able to make our marketing dollars go further this year and we continue to drive our repeat guest back to our resorts with early booking discounts and value added packages. We will also continue to fill week day business with groups. And the second quarter group pace is within 10% of prior year pace for our same-store resorts. The Generation II Resorts are ahead of group pace versus prior year.

We feel that we're very competitive on the group side with our convenient location and state-of-the-art conference centers.

In development news, we opened our 20,000 square foot conference center expansion at our Grapevine Resort in January and it has been very well received. Between the conference center and the additional 200 rooms, Grapevine was able to increase their prior year occupancy by 4000 rooms in Q1.

Our new 402-room Concord, North Carolina Resort with 20,000 square foot conference center, opened just in time for a successful spring break with Raleigh-Durham as our primary market and Charlotte equals second.

The rooms on the books for May and June are almost consistent with the other Gen II Resorts at this point. So while we don't have repeat guests or a lot of groups on the books, the special little (ph) for the local market are supporting this time period, and we look forward to seeing that ramp up as well.

While we are not making any material commitments to develop future resorts, we do continue to make progress on our previously announced LOI with Mashantucket Pequot Tribal Nation for a Great Wolf Lodge near their Foxwoods Resort Casino. As we know, these markets will now continue for forever and we would like to have our next deal ready to go.

Now, I'll turn it over to Jim to discuss capital markets.

James A. Calder

Thanks Kim. As we discussed in today's release, we have only a small amount of capital commitments related to construction and development activities as of the end of the first quarter. As of March, 31, we had approximately $2 million of cost remaining to pay from our cash for construction related cost for the Grapevine Resort expansion and the Concord Resort construction.

Concord will have some other costs to be paid over the next two months but those all will be funded from the construction loan in place for that resort. So it's only about $2 million off of our balance sheet.

Like a lot of companies in the current capital markets environment, we are quite focused on strategies to increase liquidity and manage or extend our debt maturities. On the liquidity front, clearly the item most on our sphere of influence is maintaining strong cash flow from operations. We are very successful on that front in the first quarter, converting adjusted EBITDA above the top end of our earning guidance range.

We've also looked at for specific opportunities to increase equity further such as the announced sale of our 30% ownership interest in Dells Sandusky joint venture, a transaction we announced late last week. While this transaction is still subject to lender approval and that is not an item in our control, if or when the transaction does close, it generates another $6 million of liquidity for us.

Our Mason loan on which we negotiate an extension to November 30, 2009 is currently the only substantial debt principal maturity that we expect to have between now and mid 2011. Assuming we reach a resolution on further extending the Mason loan, this will hopefully give us adequate time to wait for some stabilization and recovery of the lending markets. As you know, the debt markets for nearly all sectors of real estate have been minimal to non existent for more than six months. While we expect to start to see some recovery in those markets later this year, we don't expect to see meaningful lending activity until 2010 or possibly later.

On the Mason loan, we are engaged in discussions with the lenders regarding a possible extension of the loans maturity date. We hope to be able to announce something further on this in the second quarter. Our current agreement with the Mason loan's lenders requires us to make a $15 million principle pay down on the November 30, 2009 maturity date. Based on our projections for 2009, we currently expect to be able to generate sufficient cash flow from operations to make this required principle pay down.

Certain another liquidity producing events also requires these one-half of the net proceeds toward the $15 million principle pay down. But even if we do not have one of those liquidity events we project to have sufficient cash flow available from operations to make the required principal pay down.

As we have said previously and reiterate in today's release, we do not plan on making any material equity commitments or beginning construction on future development projects until we have both equity and debt capital fully committed.

With today's chaotic capital markets, this makes the timing of future projects uncertain and somewhat/largely out of our control.

As we've discussed over the past year, although this may slow our long-term growth plans, we feel that it's clearly the prudent course in today's uncertain capital market environment.

Maintaining high quality operations and managing our capital structure by building liquidity and managing debt maturities are two primary objectives. Based on the information in today's release and our other comments, here's a high level look at our cash flow projections for the remainder of 2009 and this is similar to what we walked through for the full year at our last earnings call in late February.

The midpoint of our adjusted EBITDA guidance for the full year is about 63 million and we had $15 million of adjusted EBITDA in Q1. So we project about $48 million of adjusted EBITDA for Q2 through Q4.

For Q2 through Q4, we project total debt service interest and principle, including the required $15 million principle pay down on the Mason debt, of about $47 million.

We project having about $7 million of maintenance or routine CapEx of our existing properties during Q2 through Q4. And our total cash outlays already due completing the Grapevine expansion cost, that I mentioned at the beginning of my comments, is about $2 million. These items represent all the major cash inflows and outflows we currently project for the remainder of 2009.

We entered Q2 with unrestricted cash of about $18 million and the items described above totaled an estimated approximate cash outflow of about $8 million for Q2 through Q4. So again, absent any significant downturn in our expected operating results, we believe we will have sufficient liquidity to operate our business for the remainder of 2009.

And operator, we're now ready to take questions.

Question-and-Answer Session

Operator

Thank you, sir. (Operator Instructions). The first question comes from Steve Wieczynski. Please state your company name followed by your question.

Steven Wieczynski - Stifel Nicolaus & Company, Inc

Yes, Stifel Nicolaus. Good morning guys.

James Calder

Good morning.

Kimberley Schaefer

Hi.

Steven Wieczynski - Stifel Nicolaus & Company, Inc

I guess the first question, just any news on the Pocono property in terms of what's going on there?

Kimberley Schaefer

The same sort of question. The property is visited for sales but as a high performing asset we would expect a transaction to reflect that value. So while we are not in any need to sell the resort, we've looked that as a potential liquidity option back in October mainly because it's is an assumable loan and we knew it's a performing asset. But really there is no update at this point on that.

Steven Wieczynski - Stifel Nicolaus & Company, Inc

Okay, got you. Then what's going to be a good run-rate here for SG&A because that did come in a little ahead of what we were looking for; is that due to Concord?

James Calder

Yeah, SG&A ... Steve, this is Jim. SG&A is a little bit higher due to Concord. We had the Grapevine expansion that opened during this period as well. So we've an additional 200 rooms there. I think ... and also with some of our changes in SG&A, I think the good run-rate will be probably should better here in Q2, which I think will be slightly below our Q1 level for a good run-rate going forward.

Steven Wieczynski - Stifel Nicolaus & Company, Inc

Okay, got you. And then I am not sure if you are going to answer this question but any comments on the letter that was published last week from your two board members who resigned?

Kimberley Schaefer

Steve, we filed our 8-K on that. We just don't believe it's in appropriate form to comment on it at this point.

Steven Wieczynski - Stifel Nicolaus & Company, Inc

Okay, got you. Thanks, I appreciate it.

Kimberley Schaefer

Thank you.

James Calder

Thank you.

Operator

Thank you. The next question comes from Mr. Bill Crow. Please state your company name followed by your question.

William Crow - Raymond James

Hey, good morning, Raymond James. Jim, a couple of questions for you. Just in terms of the sale of the JB assets, assuming it goes through, obviously that's $6 million of additional cash inflows for the year; I assume that's earmarked for ... you said earmarked for the debt repayment at Mason.

But take us through the income statement impact you've been reported equity in loss from the joint venture. So should we assume that this provides a boost since those assets are probably going to continue in a loss mode for a while? And then does your management fee line already reflect payments for the management fees on those assets or will that be incremental to that line item going forward?

James Calder

Okay, Bill, I'll try to add some note here, hopefully I got all your point if I don't, please let me know. On the JB sale just to reiterate, yeah, the current purchase agreement is for $6 million purchase price approximately; there are some adjustments to that but approximately $6 million.

And just to be clear, even if that transaction does not go through, we project having sufficient liquidity to be able to make the Mason pay down toward the end of this year, the $15 million pay down. Obviously if we have $6 million more that makes a little bit easier and gives us a little more cushion on that.

On the income statement impact, you are correct; we have two quite unconsolidated joint ventures that are reflected in our equity in earnings loss and affiliates line, one of which is the Dells, Sandusky joint venture, so you're correct. That joint venture currently has a GAAP net loss annually. So if we sell our ownership interest we would no longer pick up the 30% of that net loss. So the net loss would decrease on our income statement.

I think your later ... and your other question, Bill, was on management fees. We already reflect the management fees that we get from the joint venture in our other revenues line item on our income statement. So there's really no change, no significant change there.

William Crow - Raymond James

Any thought as to how much your ... the equity in loss item would help your EPS or pre-tax earnings for the balance of the year assuming the sales is confirmed? I assume that's not in guidance, is that...

James Calder

Yes, you're correct. We've not adjusted our guidance to reflect ... yeah, it's a very good point and thank you for pointing that out. We've not adjusted our guidance to reflect the potential sale of the joint venture 30% interest. Off the top of my head, if we were to close this, call it the next 60 days, I would think it would positively impact the second half of the year pre-tax by a million to 1.5 million, that's just an estimate sort of off the top of my head.

William Crow - Raymond James

That's all. That's all I was looking for. Thank you, guys.

Kimberley Schaefer

Thank you.

James Calder

Thank you.

Operator

Thank you. The next question comes from Susan Gutierrez. Please state your company name followed by your question.

Susan Gutierrez - JMP Securities

This is Susan with JMP Securities. I just had a question in terms of what kind of structures you are considering to finance any new developments. Would you consider a JV with a 20% stake or something along those lines?

James Calder

Yeah, Susan, hi, this is Jim Calder. We said, yes, you're quite right. For any future development, we don't expect to be doing whole ownership and we said this for the past year for any future development where we don't know 100% and we expect that everything we do from this point on will be structured as either a pure licensing deal in which we'd have probably no ownership interest and just license to Great Wolf lodge name and probably manage the resort as well or possibly joint ventures and this could be in varying percentage interest.

Right now, we have a JV with Dells Sandusky where we have a 30% interest, we have a joint venture with the Chehalis Tribe where we have a 49% interest. So we would definitely be open to joint venture structures for any planned developments going forward.

Susan Gutierrez - JMP Securities

Thank you.

Operator

Thank you. The next question comes from Jane Pradera (ph). Please state your company name followed by your question.

Unidentified Analyst

Hi, Jane Pradera, Clear-Sight Research (ph). Just a question, a follow up on the potential JV with the Mashantucket Pequot Tribal Nation. I'm assuming that would be a JV in which case would they be contributing land or is it contemplated that there might be some rental arrangement there?

Kimberley Schaefer

Well, we are planning on doing at this point in time being that the deal is not finalized is that we would look at that joint venture to be that the Tribe would contribute land that they have as part of the JV and then we would also look to find another equity partner as part of a relate JV deal on that.

Unidentified Analyst

Okay. So it would be three way, whereby I assume that equity partner would be contributing some cash. You might get some land from the tribe and then what would be your contribution, I presume designs, know-how, operations?

James Calder

It's really ... Jane, this is Jim Calder. Really it's too early in the process here. That's really all still under discussion. It frankly depends on who the other partners might be, what the tribe may eventually decide to do in terms of their contributions, if any, in addition to land, so it's really a little early to speculate on the exact structure of the joint venture at this point.

Unidentified Analyst

Okay. And then what would be the trigger that would ... what are the steps here, would you be looking to find the equity partner first or are you looking for macroeconomic indications before you want to move forward?

Kimberley Schaefer

I think what we're trying to do on this transaction is, we like this location, we like this deal, so what we want to do without committing capital is try to move as much as we can forward which would be finding an equity partner. But of course, we're not going to do anything until the capital markets open back up. You can ... we can secure whatever we would need for contribution to this partnership and we need to be able to get a loan, a construction loan for this.

So we do think that that's going to take some time. And I think mentioning this on our call right now is to let people know that we understand we still have a growth story at some point in time, we just want to be ready for when it happens and it turns.

Unidentified Analyst

Okay. Thank you very much.

Kimberley Schaefer

Thank you.

James Calder

Thank you.

Operator

Thank you. The next question comes from Phil Ryan (ph). Please state your company name followed by your question.

Unidentified Analyst

Good morning, Hilco Trading. How are you guys doing this morning?

James Calder

Good morning, Steve (ph).

Unidentified Analyst

I noticed on the 8-K that you had released a week ago regarding the JVs that you had concluded in your 10-year management agreement with the Wisconsin Dells Resort but that was absent with the Sandusky Resort. Is there a concern that they may not renew the management agreement with you?

Kimberley Schaefer

I think what we're working on right now is the Sandusky Resort will operate at the Great Wolf Lodge in a short-term while other long-term options are being considered by seeing the owner of this property.

Unidentified Analyst

Okay. And then as it relates to the Foxwoods site, regardless of the structure and if that ultimately happens, what are your internal expectations for the return that you can expect on the resort. So regardless of what capital that you contribute on the overall project size, what type of returns that you were talking about 3 to 5% on the Concord asset, I mean is the Foxwoods side more attractive or what type of returns will you expect on the overall project size?

James Calder

Yeah. Hi, Steve, it's Jim Calder. Just a couple of points on that. The 3 to 5% on levered return that we spoke about I think on ... in previous comments possibly on our new stuff at Grapevine and Concord is sort of a first year in a ramp-up stage in the worst economy in 75 years frankly sort of scenario.

On Foxwoods, we would think without being too specific, we obviously have projections and models that we run and we have run with the tribe. We talked about, I think consistently, that our targeted returns are low mid-teens unlevered returns on cost over a long-term stabilized performance of an asset.

We clearly think that Foxwoods is a premier location being in the Northeast. It's a target market for us. But frankly that's a long-term expectation, certainly not a year one expectation.

Unidentified Analyst

Okay. Sounds good, thanks for the clarity.

Kimberley Schaefer

Okay.

Operator

Thank you. The next question comes from Jeffrey Thomison. Please state your company name followed by your question.

Jeffrey Thomison - Hilliard Lyons

Good morning, from Hilliard Lyons. Two quick questions, first, any changes to the competitive landscape in terms of land entry either short-term or long-term.

And then secondly, could you touch on the position of Managing Director of Business Development, which seems like a recent employment. Then how this relates to the elimination of a similar standing position last year that being the former position held by Mr. Martinez, I believe?

Kimberley Schaefer

Great questions. To the best of our knowledge, I think that on the competitive landscape, I think you're going to see a shut down of just about any new projects getting on. We're not aware of anything. I think that there was two projects in the recent Water Park Resort that we're opening this year and we were one of them. I don't remember who the other one was, but it's not one of our competitive markets. So I think that these things are not inexpensive to build and as specialty assets. We do feel that, that's probably going to get shut down for quite some time.

On the Managing Director, what we did is we combined, I think last year, we had talked about the fact that knowing that the slowdown of development was coming, we had gone and reduced about 30% of our corporate overhead. So Nikki Nolan as our Managing Director is overseeing both international, domestic opportunities for licensing, JV as well as helping to further all of our future development growth in the pipeline.

Jeffrey Thomison - Hilliard Lyons

And how long has she been with your company?

Kimberley Schaefer

Nikki joined us...

James Calder

July of 2007.

Jeffrey Thomison - Hilliard Lyons

Okay. Okay, that's all for now.

James Calder

Thank you.

Operator

Thank you. The next question comes from Hayley Wolff. Please state your company name followed by your question.

Hayley Wolff - Rochdale Securities

Hi there, Rochdale Securities.

Kimberley Schaefer

Hi, Hayley.

James Calder

Good morning, Hayley.

Hayley Wolff - Rochdale Securities

Hey, how are you guys?

James Calder

Good.

Hayley Wolff - Rochdale Securities

Could you just go through the marketing programs and how they've changed in this environment? What you're finding the consumer has been responding to? I know you put in place a 20% off promo for repeat guests for the summer bookings. Can you just review that landscape for me?

Kimberley Schaefer

Sure, you need some color on that. What we've done is we take a look, as we always do, on what is the best opportunity to define our value proposition for the gas. I think that has probably been more the messaging for this year is to make sure the guests understand when they come, what they get for their value at Great Wolf Lodge.

So I think from a messaging standpoint that's been one of our key messages. But as always we tend to focus on new guests by doing things you're direct marketing, radio. But we do very little TV anymore expect in our brand new markets because we do have such awareness and our dollars do tend to go a lot further if we're not having to do a lot of TV.

So I think that what it's really been, Hayley, is we've been fairly consistent; we did not cut marketing this year. We decided that when we saw that the guests in January and February were still using Great Wolf as an option for their vacation, we decided that it was money well spent to make sure that we advertise to capture those guests.

We have won and done a little bit of sweetening for our repeat guests, because once they're there, we want to make sure that the higher repeat and the referral is prominent for us. So we did offer a little bit deeper discounts than we have in the past to that segment of guests. And I think that's part of the reason why you are seeing the increase in that.

We've also done a large shift on to ... into the online segment. We know that are consumers is online looking at deals and transactions. So we are very fortunate that that has also played out very well this year. So I think that when we look at like this year and going into second quarter increasing some of our marketing, the New York market responds very well to Poke-a-Nose if we do increase things like radio and direct mail. So we feel that's really a good opportunity for us.

I think the other think that's important to us is we're trying a few new markets, whether its Grapevine or even in our new Concord we are going to some new markets just to ensure that we're reaching as many segments as we can and as many markets as we can.

So in fact we've got a very, very good plan for 2009.

Hayley Wolff - Rochdale Securities

Okay. And do you think Mason gets any boost from the new ride at Kings Island? Or is it a relative account?

Kimberley Schaefer

I am glad that you asked that. The second quarter in summer for the resort are really chasing well for Mason. And I think the new roller coaster Kings Island is going to be a huge opportunity for both of our companies. And we are ... we do have a cold marketing plan with them, so we are part of all of their advertising this summer. So I would expect that both of us are looking forward to a good summer.

Hayley Wolff - Rochdale Securities

Okay. And the last question, in terms of asset sales, when you ... there are couple of buyers out there for resort properties, whether it's CNL or entertainment properties. What are they looking for in terms of the ability for you to monetize another asset?

James Calder

Yeah, Hayley, it's Jim. Obviously, I think, clearly, it's a very choppy market right now for real estate sales. It's clearly a buyers' market. There isn't a lot of clarity frankly in terms of what people are looking for. I think it's more a sort of non-traditional loss cases, opportunistic in many cases buyers buy more so characterize that way than any time previously. I think there's a fair amount of this confusion around frankly going on now in the market.

But having said that, I think there is a little more overall activity clearly than it was three or six months ago. But that sort of at least my personal opinion for the flavor of the market right now.

Hayley Wolff - Rochdale Securities

But does the performance of Sandusky and Dells sort of muddy the water for future sales to CNL or I mean how do they look at it?

James Calder

I don't think so; I think really they are looking for an opportunity to control 100% of the asset in those particular cases. I think ... and I think the fact that they're interested in 100% of those assets, I think, is a positive statement.

Hayley Wolff - Rochdale Securities

Okay. All right, thanks a lot.

Kimberley Schaefer

Thanks Hayley.

Operator

(Operator Instructions). There appears to be no further questions at this time. Please continue with any points you wish to raise.

Kimberley Schaefer

Thank you. Thanks everyone. We know that we will continue to operate 2009 in an extremely challenging environment but we are pleased that Great Wolf Lodge brand continues to offer value propositions for families to enjoy and that our 5000 pack members are committed to delivering that experience. As always, I thank them for their passion and dedication to the company. We certainly couldn't do this without them.

Thank you for your interest in the company and we look forward to updating you on our progress again next quarter.

Operator

This concludes the presentation. Thank you for participating. You may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!