Posted
[Ed. note: The following is an excerpt of a press release.]
Cedar Fair Entertainment Company (NYSE: FUN), today reported results for its first quarter ended March 25, 2012.
Highlights
Commenting on the Company's first quarter results, Matt Ouimet, Cedar Fair's president and chief executive officer said, "Historically, our first quarter represents less than five percent of our full-year revenues as the majority of our parks and facilities are not yet opened for the 2012 season. Therefore, we typically operate at a loss during this period. It is important to note that our current results are consistent with our expectations.
"While it is too early to see definitive trends at this point in the year, we are encouraged by the positive momentum we've seen in season pass sales and group business at our parks, thanks in large part to our new marketing strategies, sales initiatives and e-commerce platform," added Ouimet. "These initiatives are designed to reinforce the outstanding value we offer in a full day of entertainment. At the same time, the level of public interest in our new rides and attractions thus far has also been very good."
First Quarter Results
Cedar Fair's net revenues increased to $28.2 million for the first quarter, up $1.3 million, or 5%, from $26.9 million in the first quarter ended March 27, 2011. The increase in net revenues for the first quarter was due primarily to an increase in both attendance and average in-park guest per capita spending at Knott's Berry Farm, the Company's only year-round park.
For the first quarter of 2012, costs and expenses increased $3.2 million, or 3.6%, to $93.4 million from $90.2 million in 2011. The year-over-year increase in costs and expenses, while largely anticipated, is the result of incremental costs to support the Company's 2012 initiatives including a new e-commerce platform and general infrastructure improvements. Both operating and maintenance supplies and expenses are also higher due to favorable weather conditions in many regions that have allowed certain park-opening projects to be accelerated into the first quarter. These increases were somewhat offset by a decrease in first-quarter Selling, General & Administrative expenses due primarily to a reduction in expenses related to litigation and unitholder special meeting requests.
Net loss for the current quarter was $65.2 million, or $1.18 per diluted LP unit, versus a net loss of $84.7 million, or $1.53 per diluted LP unit, for the same period in 2011. The smaller net loss is a result of the favorable operating performance and lower interest expense resulting from an overall improvement in the Company's average cost of borrowing. The improved average cost of borrowing is due primarily to favorable interest rate spreads on its existing derivative contracts, compared with the prior contracts that expired in October 2011.
Cash Flow and Liquidity Remain Strong
As of March 25, 2012, the Company had $1.16 billion of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $400.4 million of fixed-rate debt, $155.0 million borrowed under its revolving credit facilities and $7.3 million in cash on hand. The Company believes its credit facilities and cash flows are sufficient to meet working capital needs, debt service, planned capital expenditures and distributions for the foreseeable future.
Distribution Declaration
The Company also announced today the declaration of a cash distribution of $0.40 per LP unit. The distribution will be paid on June 15, 2012, to unitholders of record as of June 5, 2012. "This distribution is consistent with our targeted annualized distribution rate of $1.60 per LP unit for 2012," said Ouimet. "Based on our current expectations for the upcoming season, we continue to project a record distribution of more than $2.00 per LP unit in 2013."
2012 Operating Season and Outlook
Ouimet said the Company expects to build upon the record-setting momentum it created in 2011 as its parks begin opening for their 2012 operating season. "We are confident that our growth strategy - which we refer to as 'FUNforward' - will allow us to continue to maximize our value-creation potential in 2012 and beyond."
The Company currently anticipates net revenues for the full-year 2012 to be between $1.055 billion and $1.075 billion, and Adjusted EBITDA is anticipated to be between $385 million and $395 million.
"The recent investments in new, leading-edge attractions, as well as the addition of new family-friendly shows and premium guest experiences will be key drivers to the Company's 2012 success," Ouimet noted. "In this complicated world, if we can get people to laugh and smile, we've done something important. Our employees have worked hard to prepare the parks for the season, and we work diligently every day to provide our guests with an outstanding experience. Our commitment to the 'best-day-of-the-year' experience is what will continue to drive Cedar Fair's record-setting performance year-after-year. This is why we believe consumers will continue to choose to spend their discretionary entertainment dollars in our parks for years to come."
Read the entire press release from Cedar Fair.
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