Cedar Fair reinstates distribution, announces long-term financial plans

Me likey distribution.

Apparently so do others. Price is up $0,40 or nearly 3 percent so far today.

Jeff, can you get the conference calls to play on your mac?

Some good news here. Strong attendance for Halloween related operating days can only help them.

The market didn't really react to the news. The whole market was up today.

I rather someone else distill the conference calls than listen to them myself. That, and I'm at work, where as you might suspect, I am not on a Mac.

You're not? You should look into that... :)

So does the reinstatement of the distribution simply make the whole "the sky is falling/we're dead in the water/we can't get credit/we gotta sell ourselves now and for short cash" thing look that much more silly/stupid/suspicious?

Admittedly, restoring the distribution is pretty important for tax reasons. But I thought there was no chance of the distribution coming back "for the foreseeable future"... :)

--Dave Althoff, Jr.

Yes, I'd say that reinstating the distribution that we all wanted to see does in fact reinforce the fact that the executives have no idea what the hell they're doing. How's that for irony?

Actually CF had 4 times its normal trading volume today. And it opened $0.39 above yesterday's close, so I would say the dividend reinstatement had at least something to do with that.

I still don't feel it means anything, as it's a low trading stock in the first place. It didn't outpace the market in a significant way.

Using SIX as a comparison, it also went up 3.2%, but only ~50% additional volume vs. 3month average. Looks like CF did mostly ride the market, but the announcement may have contributed to the volume spike. Heck, maybe some others agree the execs are clueless and sold? :)

CF only gained $0.03 from opening (9:30) to close (4:00). It hit its high at $14,00 just after opening. That wasn't exactly mirroring what the market as a whole did.

Well of course there were no dramatic movements in the overall market, because the indexes are all based on averages and enormous volume of trading. Cedar Fair has dramatic swings every day, when there isn't any news.

They are going to grow revenues by building new rides and cut costs which keeping customers happy thereby increasing profits. And take some of that extra cash and pay down debt, further reducing our costs and allowing them to grow revenues further by buying more parks. And I am sure they had some really nice color slides for the presentation showing all of that. How can the market not be happy with that?

I listened in on the call because I'm just goofy that way. Some highlights I captured:

Revenue is up 4% on a 5% attendance increase while out of park revenue is up 6% (take note of that).

The southern parks are up 444k visits and the northern parks are up 83k visits. Western parks are up 378k visits.

With 15% of the season remaining they have made up 900k of the 1.6 million visitors they lost last year.

To me this tells me that they realized the huge mistake they made with the Paramount Parks in uprooting their season pass program and their decision to go back played a huge part in the "recovery". Season pass and group sales make up 50% of the attendance at all parks.

While their main focus is going to be on reducing debt they see some long term strategies of adding hotels to parks such as Carowinds and Kings Dominion.

Perhaps the most telling moment of the call, in my mind was when an investment manager asked Dick up succession planning. Dick sort of danced around the issue, telling the listeners that succession planning is always on the minds of the Board. The questioner stated, "it is on the minds of investors as well." Now, I want go so far as to say the questioner said that in a derogatory manner but I think the message was both delivered, and heard.

Of course, Dick touted the many years of experience within the management group, particularly with his Regional VPs and the General Managers. That tells me that he believes his successor will come from within the company. I'm still not convinced that is the avenue to take.

Either way, I suspect we are going to be hearing more about Dick's future, and that of the future leader, in the next 12 months or so.

No mention of the departure and non-replacement of the COO, eh?

Can they legally get away with doing that? Seems to me being a publicly held corporation there ought to be some sort of reporting requirement about firing/hiring officers and high officials. Then again, I'm not an attorney.

There is, and there was. It was a nondescript filing with the SEC that said virtually nothing.

All of these financial goals seem very nice and very achievable, assuming the economy (continues to?) recover. If we do go into a double dip, I think they have trouble achieving even these moderate goals. They didn't talk about anything particularly innovative with regard to new ways to get peoples money. Some of these things have been talked about on these boards for years and implemented by other companies to the point where they can no longer even be considered innovative.

They invested big bucks on new rides in two of their better weather spots this year and had some nice results, but it will be difficult to even maintain those results next year at those parks. Not sure how Halloweekends have been going at CP, but the weather has looked less that stellar on a couple of Saturdays so far. That can turn an 83k increase into "flat" pretty quickly.

That's pretty awesome about the guy asking about succession plans though. :)