Issued in Response to Vail’s Unwillingness to Address LAP’s Proposed Changes, Despite Broad Shareholder Support
Publishes Ten Questions on Vail’s Performance for the Company to Address Publicly
Remains Prepared to Evaluate All Available Shareholder Rights to Effect Change
CHARLOTTE, N.C., March 17, 2025 (GLOBE NEWSWIRE) — Late Apex Partners, LLC (together with its affiliates, “LAP” or “we”), which has made an investment in Vail Resorts, Inc. (“Vail” or the “Company”), today released a second letter to the board of directors of Vail (the “Board”) reiterating its call for transformational change.
The letter can be found at www.lateapexpartners.com/vailadalta.
The full text of the letter follows:
March 17, 2025
Vail Resorts, Inc.
390 Interlocken Crescent
Broomfield, Colorado, 80021
Dear Members of the Board:
We write to reiterate the numerous concerns outlined in our letter dated January 27, 2025. Despite our good faith attempts at constructive dialogue—including multiple requests for a direct phone call, all of which the Company has repeatedly ignored—the Company has offered instead hollow reassurances, via e-mail, that they “value the feedback of all shareholders.” Your perfunctory response exemplifies your mismanagement of Vail over the past several years—superficial, short-sighted, and self-defeating.
Others have been more receptive, however. In recent weeks, we’ve spoken with not only numerous Vail stakeholders, but a critical mass of MTN shareholders who, we believe, share our view that complete transformation of both the Board and C-Suite is overdue. Since CEO Lynch took the reins, shareholders have seen every dollar of their investment turn into less than $0.50 while Vail has evaded accountability. That ends now. We agree with Warren Buffett:
[If] the board is functioning well and must deal with a management that is mediocre or worse. Directors then have the responsibility for changing that management, just as an intelligent owner would do if he were present.1 Why have intelligent and decent directors failed so miserably? The answer lies…in what I’d call “boardroom atmosphere.” It’s almost impossible…to raise the question of whether the CEO should be replaced. Getting rid of mediocre CEOs…requires actions by owners… In my view, this kind of concerted action is the only way that corporate stewardship can be meaningfully improved.2
The Board must understand that Management cannot take back the narrative. They have already written themselves out of the story. Confront the brutal facts.
Our action plan is simple: Reset and Refocus.
- Reset: Reset the management team, the board, and the strategy to drive long-term growth with clear financial targets.
- Refocus: Refocus on the customer experience by investing time, energy, and capital into things the customer actually cares about—a world-class skiing experience—while driving higher productivity on the current asset base via operational excellence. As Henry Ford said, “Money comes naturally as a result of service.”
We are fully committed to seeing Vail realize its full potential. To that end, it remains our sincere desire to work constructively with the Board. Yet, if the Board resists action, we are also ready to utilize all available shareholder rights to prompt the long overdue wake-up call. Action solves everything.
Given you, the Board, will not speak with us privately, we have a few questions that are critical for the Company to address publicly:
- Given the foundation of Vail’s business is destination visitors and skier visits are down year-over-year for the 2024/25 season driven by destination visits declining (and industry rumors of Alterra achieving record KPIs), how should shareholders judge management’s ability to manage the business? How much market share has Vail already lost to Alterra’s IKON Pass in the destination visits customer segment?
- Why has the IKON Pass been able to add incremental pass partners (and thereby increase the pass value for the customer) while the Epic Pass has not? Does Vail simply not care about driving value for its existing customer base?
- How does the Board evaluate Vail’s competitive position relative to Alterra (who have, in our opinion, assembled the best pass network, built the industry’s A+ team, and are executing at an unbelievable pace)?
- Why should shareholders trust management to provide a best-in-class guest experience when (a) there are no disclosed KPIs, (b) the current team oversaw the PCMR disaster (in our view, the worst PR event in Vail’s history & cemented the “Evil Empire” status in the minds of many), and (c) both Epic pass sales and skier visits declined?
- Why are no Vail-owned resorts on SKI Magazine’s Reader Survey Top 10 Resorts list? What if neither the experience nor the value are Epic anymore?
- What are employee satisfaction scores for the 2024/25 season? How does that compare to the last 5 years? What is the trend over the last 10 years?
- What evidence is there that Management’s spending of shareholder’s capital, particularly on expensive M&A and “growth” capex, is generating any return when free cash flow—the only metric that matters—is declining?
- How much capital is required to achieve Vail’s desired scale in Europe? How many resorts does that imply? What is the expected incremental ROIC contribution (free cash flow divided by capital deployed)? Why should shareholders trust current Vail management with this undertaking, given their horrendous track record?
- With the (a) declining productivity of assets (free cash flow generated relative to fixed assets), (b) declining ROIC contribution from M&A, and (c) declining stock price: why should shareholders think that the next 5 years will be different from the past 5 years?
- If Vail’s Board and Management have conviction in the current strategy, why are you not buying significant amounts of MTN stock today at multi-year lows?
- Our conclusion is either: (a) you do not have conviction in the future prospects of the business, or (b) you don’t care about the performance, or (c) are checked out regarding the company’s performance. These conclusions are condemning.
“Mediocrity is always invisible until passion shows up and exposes it.” –David Senra
Sincerely,
Taylor G. Schmidt
The fun is just beginning
Contact:
info@lateapexpartners.com
About Late Apex Partners:
Late Apex Partners, LLC (“LAP”) is a best ideas fund founded in 2024 by Taylor G. Schmidt. LAP is a highly concentrated fund that invests with an operating mindset.
1 Berkshire Hathaway’s 1993 Annual Letter to Shareholders
2 Berkshire Hathaway’s 2002 Annual Letter to Shareholders
