Cedar Fair posts small net loss for 2007, largely attributed to Geauga Lake
Posted
Cedar Fair today announced results for its fourth quarter and year ended December 31, 2007. The 2006 comparable figures include the results of the Paramount Parks since their acquisition from CBS Corporation on June 30, 2006.
Cedar Fair’s combined operations generated full-year revenues of $987.0 million, with income before taxes of $9.7 million and a net loss of $4.5 million, or $0.08 per diluted limited-partner (LP) unit. In 2006, combined revenues for the company were $831.4 million, with income before taxes of $126.6 million and net income of $87.5 million, or $1.59 per diluted LP unit. Included in the 2007 results is a non-cash impairment charge of $54.9 million, or $1.00 per diluted LP unit, relating to the Geauga Lake restructuring.
Adjusted EBITDA, which management believes is a meaningful measure of the company’s park-level operating results, increased 9.8% to $340.7 million from $310.3 million a year ago. See the attached table for a reconciliation of adjusted EBITDA to net income.
For comparison, excluding the effects of the acquisition and corporate costs, Cedar Fair’s 2007 full-year results generated adjusted EBITDA of $224.1 million compared to $203.6 million in 2006, on a same-park basis. The increase in adjusted EBITDA is the result of a $19.1 million, or 3%, increase in revenues to $584.2 million, and a $1.5 million decrease in cash operating costs to $360.1 million.
The increase in revenues is the result of a 5% increase in average in-park guest per capita spending and a 1%, or $1.3 million, increase in out-of-park revenues. These gains were offset slightly by a 2% decrease in combined, same-park attendance. “Our Northern Region produced solid increases in guest per capita spending and out-of-park revenues, largely due to the successful introduction of world-class roller coasters at both Cedar Point and Valleyfair,” said Kinzel. “Attendance at these two parks, as well as Dorney Park, was also up between years, which more than offset attendance shortfalls at our other parks in the region. Revenues on a same-park basis in our Western Region were also up from a year ago, the result of solid increases in guest per capita spending levels at those parks.”
The decrease in cash operating costs between years was primarily attributable to reduced cash operating costs at Geauga Lake in 2007, offset somewhat by higher cash operating costs at Knott’s Berry Farm.
Read the press release from Cedar Fair.
I'm willing to wait a couple more years to see how the new properties turn out.
I'm not spinning a conspiracy theory, I'm just well aware of how numbers can be manipulated to show pretty much anything you want them to show.
*** This post was edited by Rob Ascough 2/7/2008 10:59:17 AM ***
Why is it so difficult to believe the park wasn't making money?
If you take out that charge, you're looking at a $50 million profit instead of a loss. Are you suggesting they're going to tank the business by $50 million next year?
"'Restructuring' means 'divesting and relocating assets.'"
It also includes the hit for unemployment payouts, any penalties for early termination of contracts, and--big time--probably a huge write down for "asset impairment" i.e. they have to admit that GL was not worth what they paid for it. My guess is that is the overwhelming % of the restructuring charge.
The numbers say nothing about whether GL was making or losing money
Where did that other loss of $37.10 million at the bottom line come from?
If revs were up 19%, how come costs were up 24% - making ebitda up only 10%.
To me, anyway, it seems as though the Paramount Parks are still not making any money for Cedar Fair. Then take into the account the 65% raise in interest expense from that same acquisition and things seem worse.
Sorry to be all doomandgloom but these numbers make me feel iffy.
Mike
For the year, interest expense increased $57.3 million to $145.6 million due to a full year of interest on the acquisition financing compared to only six months in 2006.
Well, that explains some of it. But only some.
The real question they aren't answering...what were the attendance numbers per park? Where did the 'what's good for Cedar Point is good for the Paramount chain' approach hit a brick wall? That's what I'd like to know.
-CO
UPDATE: When asked directly, they DID say GL lost money.
-'Playa
*** This post was edited by CoastaPlaya 2/7/2008 2:27:40 PM ***
A couple major points:
• 22.1 Million guests entertained last year.
• Softness in attendance at some parks – attributed to pricing adjustments.
• Cedar Point hit record revenues this year.
• Geauga Lake did lose money last year.
• Season pass sales are down so far, but revenue on those sales is up.
I was very surprised by the lack of questions. I was really hoping someone would ask them to break out attendance and revenue on a park-by-park basis.
I guess the big story is that Geauga Lake did lose money. From my visits to the park, I would have guessed that this was their turn-around year. I wonder how much of their Geauga Lake loss was attributed to taxes paid to the city of Aurora and the county/township.
Read the table. Do the math. At least for me, numbers make more sense in tabular form instead of reading paragraphs.
Interesting that it appears the "impairment charge" seems to have been spread out over the full year. (Only 15 of the 54 million is applied for the 4th quarter). Don't know if it means anything-- but then wouldn't that charge have showed up in previous quarterly reports? Or can they just apply it now and spread it over the full year, in effect revising the previous reports?
You're not terming that right. It wasn't net revenue, it was net income, which is the money left after expenses. There isn't a loss if you take away the GL charge, there's just less profit. Why? If I had to guess it would be because they did not get the margins they wanted out of the Paramount Parks, due in part to their wholesale change in ticketing strategies.
So take away the Geauga write off and you get 2007 net revs of $50.4 million. 2006 net revs were $87.5 million.Where did that other loss of $37.10 million at the bottom line come from?
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