Ouimet outlines future for Cedar Fair

Posted | Contributed by Jeff

[Ed. note: The following is an excerpt of a press release. -J]

Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, hosted an investor meeting in New York City today at which its president and newly named chief executive officer, Matt Ouimet, outlined his long-term growth strategy – known as "FUNforward" – and the corresponding financial goals for the Company.

"This is truly an exciting time for Cedar Fair," said Ouimet. "Given our favorable industry dynamics – including significant barriers to entry and a loyal, high-repeat customer base – as well as the significant momentum we have created for the Company over the past two record-setting years, we see several attractive strategic growth opportunities in both the near and long term. We believe there are many compelling reasons for investors to choose Cedar Fair, and we are committed to rewarding them for their confidence in us with meaningful and sustainable value creation through a balanced approach of distributions, growth investments, debt reduction and unit repurchases."

Ouimet cited Cedar Fair's high-quality, well-maintained parks, its recognized stature within the industry as an innovation leader and its strong brand positioning as the core drivers of the Company's financial and operational momentum.

"We are very proud of our properties and the men and women who ensure families and thrill-seekers alike have the 'best-day-of-the-year' experience they expect when they visit one of our parks," Ouimet said. "It's not an accident that we enjoyed our second straight year of record attendance – 23.4 million guests – at our 17 locations across North America in 2011."

Cedar Fair's award-winning parks – including Cedar Point, which was named the number-one amusement park in the world for the 14th consecutive year, and Kings Island, which was voted "Best Kids' Area in the World" for the 11th straight year – are home to four of the top 11 steel coasters in the world and top-rated Halloween events.

"We believe we offer our guests compelling value by providing wholesome, exciting, quality experiences with the greatest thrill rides and family attractions, which is an especially strong entertainment proposition in today's discerning consumer market," Ouimet added. "Likewise, our goal is to continue to be a total return investment for our unitholders. Our recession-resistant business continues to generate strong free cash flow, which has allowed us to further strengthen our financial flexibility and make meaningful distributions to our unitholders while at the same time experiencing appreciation in our unit price."

Components of the FUNforward strategy include:

Enhanced guest experience – Maintaining an unwavering focus on delivering compelling value for the price paid, at every park on every day. In the near term, the Company will continue to add new rides and attractions while at the same time expanding evening event activities to provide enhanced value and extend the length of each visit.
Improved consumer messaging and relationship management – Modernizing the marketing and sales strategy and execution to ensure the Company is most effectively segmenting its customer base and speaking to each audience with messages that "break through the noise" and create the proper emotional connection that drives action within the operating season.
Dynamic pricing and advance purchase commitments – Incorporating a new e-commerce platform common to other industry players. The new platform will provide real-time data and dynamic pricing modification, while supporting incremental programs such as season pass installment sales and up-sell of benefits and value.
Premium product offerings – Expansion of premium experience offerings for benefit-oriented guests. Examples of this will include premium parking and dining experiences, "fast lanes" at various high-demand attractions and "Fright Lanes" during Halloween events, among other things.
Strategic alliance fees and promotional leverage – Industry benchmarking indicates an opportunity for the Company to expand its strategic alliances while still protecting the integrity of the guest experience.
Capital and expense productivity – Prioritizing capital to the highest return-on-invested-capital opportunities across the Company's portfolio, encouraging manufacturers to innovate at lower costs and remaining disciplined in the management of costs. The Company will also look to utilize its undeveloped land to drive additional park admissions through activities and investments that leverage its installed asset base.

"It's important to have a balanced mix between thrill rides and family attractions," said Ouimet. "We are investing approximately $90 million across all of our properties and have a very strong rides and attractions menu for the 2012 operating season."

OUTLOOK

According to Ouimet, the Company's preliminary results project 2011 net revenues to be approximately $1.028 billion, and project Adjusted EBITDA of approximately $375 million. Both projected net revenues and Adjusted EBITDA are at the high-end of the Company's most recent guidance of net revenues between $1.015 billion and $1.025 billion and Adjusted EBITDA between $365 million and $375 million.

"By 2016, we believe Adjusted EBITDA will be in excess of $450 million," he said.

The Company anticipates a 2012 annual distribution rate of $1.60 per unit, to be paid in $0.40 per unit cash installments, and a record 2013 annual distribution rate of more than $2.00 per unit. "As this record-setting 2013 target distribution would suggest, we are very excited about the future of Cedar Fair," said Ouimet.

Read the entire press release on PR Newswire.

Comments: 16