Cedar Fair 3Q revenue up 5% on higher per cap, slightly lower attendance
Posted
Net revenues for the quarter ended September 30, 2007, which included additional operating days when compared with the prior year’s third quarter, increased 5%, or $25.4 million, to $567.5 million from $542.1 million in 2006. Net income for the quarter was $54.1 million, or $0.98 per diluted limited partner unit, versus net income of $132.9 million, or $2.42 per diluted limited partner unit, a year ago. The decrease in net income is largely attributable to two non-cash items totaling $70.5 million. The first item is a non-cash charge for impairment of assets relating to the Geauga Lake restructuring previously announced. The second item is an increase to provision for taxes, which is a non-cash item that is expected to substantially reverse in the fourth quarter.
Consolidated adjusted EBITDA for the quarter, which management believes is a meaningful measure of the company’s park-level operating results, increased $5.8 million to $291.4 million from $285.5 million for the same period a year ago. See the attached table for a reconciliation of adjusted EBITDA to net income.
“While attendance trends were soft through August, operating results during the month of September improved,” said Dick Kinzel, Cedar Fair chairman, president and chief executive officer. “The increase in revenues for the third quarter of 2007 is due to a 5% improvement in in-park guest per capita spending across all of the parks and an increase in out-of-park revenues, including resort hotels, of 4%, or $2.2 million. This was offset somewhat by a decrease in attendance of 1%, or 150,000 visits, primarily in our southern and western regions.”
For the month of October, successful execution of late season programs across our parks, along with favorable weather conditions in the Company’s northern region resulted in an increase in revenue of 11%, or $8.6 million, from the same period a year ago. This increase was the result of a 9% increase in attendance, or 160,000 visits, a 2% increase in average in-park guest per capita spending, and an increase in out-of-park revenues of 8%, or $494,000.
Read the rest of the press release from Cedar Fair.
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Comparing Geauga Lake to the Paramount Parks isn't a fair comparison. They thought they could turn GL around, but the PP's didn't need to be turned around. They could be made more efficient, and they have, but they weren't some drag on CBS or Viacom before them.
Cedar Fair has for the last decade or so been about growth through acquisition (and arguably the resort business). Six Flags got crushed by doing that and combining it with a "build it and they will come" strategy, which we know doesn't work. I'm no fan of Dick, but the company's history of conservatism to me says that they haven't encountered anything in the Paramount Parks acquisition that was unexpected.
I agree that it's a cop out that they wouldn't explain what their covenants are, but where in the numbers do you see that they're going to fail to meet them?
Jeff: Blackstone is referring to the LONG RUNNING gripe fest on the Yahoo Message Board for the Stock Symbol "FUN". There is a person there who has (for all the wrong reasons) been crusading and pointing out all of the absolutely correct information as to why FUN is a bad investment, and the impending financial disaster for the company. He references part of those discussions, and is inserting them into this thread.
Also, the linking of Geauga Lake and Paramount IS a fair comparison, because they both show a HORRIBLE management misstep by Kinzel. Failing to see that GL could not be turned around AND overpaying on the Paramount assets (yet (while being the only bidder) are two disasters directly engineered by him.
"Paramount didn't need to be turned" around is a true statement. However you fail to mention that if you overpay for it by half a billion dollars, and you have a HUGE bill to pay, and if there is nothing to turn around, then where are you going to get the money to pay for it.
Blackstone conveniently shows you the math (post-Paramount), although, the numbers are tweaked just enough to disguise their origin.
*** This post was edited by CreditWh0re 11/7/2007 2:15:41 PM ***
CreditWh0re said:
Mr. Blackstone: Me thinks you are too clever by half. It's hard to maintain two distinct personas, they eventually get tripped up.
CreditWh0re, give it up. I've never posted on a Yahoo Message board and not sure why it even matters. If the best argument you have is to attack me and accuse me of being someone I'm not then there is no point in continuing this discussion.
With the stock hitting fresh 5-year lows I think the market has spoken, even if you don't like anything I have to say.
Its clear that any sentiment that questions Cedar Fair's management, operations, or publicly available financial statements isn't welcome here. I get the hint and I'm out of here. Have fun agreeing with each other that Cedar Fair can do no wrong.
If the DIck tells me to ignore GAAP, I will be sure to do it. Who wants to be accountable when you can be EBITDA(EBITDA) (!!) bad weather?
I think the best thing this company ever did was rip the EBITDA out of Geauga Lake. Now they can use the money to pay back the loan... .. EBITDA IS UP(!!)((E)(B)I(T)(D)A)
In 1989 Cedar Point built the tallest roller coaster on the planet and because of that I think this stock is a buy. Furthermore Cedar Fair will pay down the debt and be successful for many years to come. $1.7B is a fine amount of debt for a company that expects $10,485,394.49 of free cash over the next 4 consecutive years. I believe there is so much room for Paramount to grow, since those parks were previously owned by another company that made profit but clearly had its head up its ass. EBITDA anyone?
I know Cedar Fair is the smartest EBITDA in the entire world and I can explain why in a few simple statements. If you look at the EBITDA company, you will see it did well for so many years. Now that it's going down, IT IS STILL DOING WELL, since it did before. Henseforth look at all that EBITDA and you will know for years to come. Cedar Fair is the one you need!!
I'm no CF Fanboy, far from it.
It's obvious that you are the same poster on the Yahoo board. Just admit it. I could care less, I just called you on it. You reference the same issues, the same incidents, and even the same minutiae on the conference call just reinforces it.
Your running away, after posting only in this thread, proves my point.
The popular opinion among people who give investment advice is that debt shouldn't exceed five times EBITDA, which is where they are today. Today is the first year in, so to me it makes sense that they'd be at that ceiling. If we're having this same conversation next year with the same ration, then yeah, it's time to be concerned.
My continued concern remains the drop in attendance offset by higher per cap spending. That trend isn't going to last forever, and I ask, then what?
How much of that is due to inflation anyway? It's not that people stayed in the parks longer and bought more stuff, it's just that they bought the same stuff as last year, which happens to cost a bit more this year. Your no-longer discounted bag of cotton candy can account for quite a bit of difference in that per cap increase.
Higher spending per person with fewer people to do the spending = flat revenues. Saying at least your revenue didn't go down isn't a whole lot to brag about.
It may not be a long-term solution, but neither was the attendance growth approach. At least this still puts the bottom line ahead and shows growth.
I think we can all agree that the higher per caps are coming from higher prices. The key question to me is did the prices go up because people quit coming or did people quit coming because the prices went up?
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