Struggling Wintergreen announces firings, restructuring

Wintergreen Resort on Wednesday announced the broad outlines of a plan to combat financial challenges that includes the elimination of fewer than a dozen full-time jobs as part of an overall restructuring of operations.

The initiative is expected to reduce annual labor and benefit costs by $600,000, according to a statement from Wintergreen Partners, Inc. on Wednesday. Rob Sullivan, Wintergreen’s chief financial officer, would not specify the type of jobs to be eliminated or the exact number.

“Of all the steps we’ve considered in dealing with our current situation, there is nothing nearly as difficult as informing associates who have made contributions to Wintergreen that they no longer have a job,” Hank Thiess, Wintergreen’s general manager, said in the statement. “It affects them, their families and ripples through the community. It is a very painful process to go through.”

Wintergreen employs around 350 people year-round. During the ski season, its staff size increases to more than 1,000 workers.

The financial difficulties – outlined in a letter to 1,700 property owners last week from the chairman of the board of directors – stem from the unseasonably warm winter, ongoing negotiations between the Virginia Department of Taxation and the resort over conservation easement tax credits, and the termination on Feb. 2 by Bank of America of a $3 million line of credit.

Wintergreen had drawn on its line of credit once or twice in the past few weeks. However, Wintergreen did not owe the bank anything when the line was terminated, Sullivan said on Wednesday.

Wintergreen plans to begin implementing cost-saving measures throughout the resort over the next few weeks, with the net effect of saving about $1.5 million a year starting July 1. Among these efforts are modifying operating hours for some resort amenities, using less consultants and contractors, possibly consolidating some resort operations and using Wintergreen employees in multiple areas on the resort, according to the statement.

No specifics of these initiatives have been released.

Sullivan said in an email on Wednesday, “We are analyzing all our lines of business and haven’t made any final determinations at this time.”

Along with reorganizing to curtail costs, the resort also is working to generate money. Wintergreen began mailing dues renewal notices to its approximate 1,700 member-owners for 2013 on Tuesday, about four months before they usually are sent out. About $3 million to $3.5 million in cash receipts is expected to be generated from this over the next 30 days, according to Wednesday’s statement.

That money will be used to provide liquidity and help cover the projected $4 million to $4.5 million revenue shortfall from the warm winter and reduced skier traffic, the statement said.

In addition to sending renewal notices, Wintergreen also is creating a private debt offering for its members, which is expected to raise $6 million from March 1 through April 30, according to the statement.

In the meantime, the resort will continue to operate on a normal business schedule through the winter season.

Colder weather is forecasted for the next several days and the statement reports that snowmaking operations are “at maximum capacity.”

On Wednesday, the resort’s website said 14 of the 26 slopes and trails were open, and in the statement the resort noted it “anticipates the best trail conditions of the season for the upcoming weekend.”

Koerting reports for the (Lynchburg) News & Advance.