Cedar Fair revenue and attendance down slightly in 2023
Posted
From the press release:
SANDUSKY, Ohio--(BUSINESS WIRE)-- Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and immersive entertainment, today announced its 2023 fourth-quarter and full-year results, ended Dec. 31, 2023.
2023 Fourth-Quarter Highlights
- Net revenues totaled a record $371 million, an increase of 1%, or $5 million, compared with Q4-2022.
- The Company recorded a net loss of $10 million compared with net income of $12 million in Q4-2022. The decrease was due primarily to $17 million of transaction costs related to the proposed merger with Six Flags.
- Adjusted EBITDA(1) totaled $89 million, an increase of 1%, or $1 million, compared with Q4-2022.
- Attendance totaled a record 5.8 million guests, an increase of 9%, or 466,000 guests compared with Q4-2022. The increase in attendance was primarily attributable to increased season pass visits resulting from the strong start to the 2024 sales program.
- In-park per capita spending(2) was $58.61, a decrease of 7% compared with Q4-2022. The decrease was primarily due to a shift in attendance mix to lower-priced ticketing channels and higher attendance levels.
- Out-of-park revenues(2) were a record $43 million, an increase of 7%, or $3 million, compared with Q4-2022.
2023 Full-Year Highlights
- Net revenues totaled $1.80 billion compared with $1.82 billion in 2022.
- Net income was $125 million, a decrease of $183 million from 2022, primarily the result of a $155 million prior year gain recognized on the sale of the land at California’s Great America and $22 million of transaction costs in 2023 related to the proposed merger with Six Flags.
- Adjusted EBITDA was $528 million compared with $552 million in 2022.
- Attendance totaled 26.7 million guests compared with 26.9 million guests in 2022.
- In-park per capita spending was $61.05, a decline of 1% compared with 2022.
- Out-of-park revenues were a record $223 million, an increase of $10 million, or 5% compared with 2022.
Balance Sheet and Capital Allocation Highlights
- On Dec. 31, 2023, net debt(3) totaled $2.2 billion, calculated as total debt before debt issuance costs of $2.3 billion less cash and cash equivalents of $65 million.
- Cedar Fair’s Board of Directors today declared a cash distribution of $0.30 per limited partner (LP) unit, payable on March 20, 2024, to unitholders of record on March 6, 2024.
CEO Commentary
“With the return to more normal operating conditions in the back half of 2023, the strength and resiliency of Cedar Fair’s business model was on full display,” said Cedar Fair CEO Richard Zimmerman. “We remained nimble and successfully adapted to an evolving marketplace to offset the effects of anomalous macro-factors, including weather, on demand during the first half of the year. In the second half of the year, in addition to more normalized operating conditions, we made mid-year adjustments to our marketing and pricing strategies that successfully drove increased demand while our park teams effectively implemented cost-saving measures to expand operating margins.”
“In addition to our outstanding performance over the second half of the year and record fourth quarter results, I’m encouraged by the pace of our long-lead indicators heading into the 2024 season, particularly sales of season passes and related all-season, add-on products,” added Zimmerman. “With unit sales of season passes through January up approximately 20% versus last year, we expect season pass sales to serve as a tailwind for attendance and revenues all season long.”
Commenting on the proposed merger with Six Flags, Zimmerman concluded, “Since announcing the proposed merger transaction in early November, we have been pleased by the strong support we have heard from unitholders and others in the investor community. We look forward to completing our combination with Six Flags and delivering on the compelling value creation opportunities ahead, which we believe are greater than what either company can achieve independently. Cedar Fair and Six Flags continue to work constructively with the DOJ in its review of the merger and continue to expect it will be completed in the first half of 2024. We look forward to capitalizing on the opportunities ahead for the combined company.”
2023 Full-Year Results
Operating days in 2023 totaled 2,365 compared to 2,302 in 2022.
For the year ended Dec. 31, 2023, net revenues totaled $1.80 billion on attendance of 26.7 million guests, compared with net revenues of $1.82 billion on attendance of 26.9 million guests in 2022. The decrease in net revenues reflects the impact of a 1%, or 247,000, decline in attendance and a 1%, or $0.60, decrease in in-park per capita spending, offset in part by a 5%, or $10 million, increase in out-of-park revenues. The decline in attendance was attributable to a year-over-year decrease in season pass sales and lower demand during the first half of the year due to inclement weather. The decrease in in-park per capita spending was attributable to a decrease in admissions spending, reflecting a mid-year reassessment of pricing strategy at several key parks, as well as the recovery of lower-priced attendance channels over the second half of the year. The decrease in admission spending was partially offset by higher levels of guest spending on food and beverage, as continued investments in food and beverage offerings led to increases in both the number of transactions per guest and the average transaction value. The increase in out-of-park revenues reflects the strong performance of the Company’s resort properties, highlighted by full-year operations of Castaway Bay Resort and Sawmill Creek Resort at Cedar Point following temporary closures for renovations during 2022.
Operating costs and expenses for 2023 totaled $1.32 billion compared with $1.29 billion for 2022. The approximate $27 million year-over-year increase was primarily attributable to $22 million of transaction costs related to the proposed merger with Six Flags, which are classified as SG&A expenses. Excluding the merger-related costs, operating costs and expenses for the year increased $5 million, or less than 1%, the result of a $14 million increase in SG&A expenses partially offset by a $4 million decrease in cost of goods sold and a $4 million decrease in operating expenses. The decrease in operating expenses was primarily due to cost savings initiatives resulting in a reduction in seasonal labor hours and less in-park entertainment costs. These cost-savings were somewhat offset by six incremental months of land lease costs at California's Great America, higher early-season maintenance wage costs at several parks, and increased insurance claims and related costs. Excluding the merger-related costs, the increase in SG&A expenses was primarily attributable to higher planned advertising costs in 2023.
Depreciation and amortization expense in 2023 totaled $158 million, up $5 million over the prior year, due to the reduction of the estimated useful lives of the long-lived assets at California's Great America following the sale-leaseback of the land at California's Great America. During 2023, the Company also reported a loss on impairment/retirement of fixed assets of approximately $18 million, compared with a $10 million loss in the prior year.
After the items noted above and a $155 million gain on the sale of the land at California's Great America in 2022, operating income for 2023 totaled $306 million, compared to operating income of $520 million for 2022.
Interest expense for 2023 totaled $142 million, a decrease of $10 million compared with 2022, the result of the repayment of the Company’s senior secured term loan facility and related termination of interest rate swap agreements during 2022. The reduction in interest expense was partially offset by interest on additional borrowings on the Company’s revolving credit facility in 2023. Prior to the termination of the Company’s interest rate swaps, the net effect of the swaps resulted in a $26 million net benefit to earnings for 2022. Finally, during 2023, Cedar Fair recognized a $6 million net benefit to earnings for foreign currency gains and losses compared with a $24 million net charge to earnings for 2022. Both amounts primarily represented the remeasurement of U.S.-dollar denominated notes to the functional currency of the Company’s Canadian entity.
Accounting for the items above, and after a $16 million decrease in the provision for taxes driven by the sale of the land at California’s Great America, net income for 2023 totaled $125 million, or $2.42 per diluted L.P. unit. This compares with net income of $308 million, or $5.45 per diluted LP unit, for 2022.
Adjusted EBITDA, which management believes is a meaningful measure of the Company’s park-level operating results, totaled $528 million in 2023, compared to Adjusted EBITDA of $552 million for 2022. The $24 million decrease in Adjusted EBITDA was primarily attributable to a decrease in net revenues driven by a decline in attendance caused by extreme weather during the first six months of 2023, and to a lesser extent by higher advertising, land lease and insurance related costs.
See the attached table for a reconciliation of net income to Adjusted EBITDA.
Balance Sheet and Liquidity Highlights
Deferred revenues on Dec. 31, 2023, including non-current deferred revenue, totaled $192 million, compared with $173 million of deferred revenues on Dec. 31, 2022. The $19 million increase was due to strong sales of advance purchase products, including season passes and related all-season add-on products.
As of Dec. 31, 2023, the Company had cash on hand of $65 million and $280 million available under its revolving credit facility, for total liquidity of $345 million. This compares to $381 million of total liquidity at the end of 2022. Net debt on Dec. 31, 2023, calculated as total debt of $2.3 billion (before debt issuance costs) less cash and cash equivalents of $65 million, was $2.2 billion.
Distribution and Unit Repurchases
Today the Company announced the Cedar Fair Board of Directors has approved a quarterly cash distribution of $0.30 per LP unit, to be paid on March 20, 2024, to unitholders of record on March 6, 2024.
During 2023, the Company repurchased approximately 1.7 million limited partnership units at a total cost of approximately $75 million – representing approximately 3% of its total units outstanding at the beginning of 2023.
I miss that Nemo show, it would have been mentioned in the runners up list, as would have Aladdin at DCA if it was still running.
2022 Trips: WDW, Sea World San Diego & Orlando, CP, KI, BGW, Bay Beach, Canobie Lake, Universal Orlando
It's sound liking Dreamland Drive-In won't be returning for this season. If that is the case the show had a tremendous run. It really was something special.
Celtic Frye is pretty amazing as well. The finale is indeed pure joy.
"Thank the Phoneticians!"
It’s still on Dollywood’s website and typically is only in the summer? Where did you hear it’s not coming back?
2022 Trips: WDW, Sea World San Diego & Orlando, CP, KI, BGW, Bay Beach, Canobie Lake, Universal Orlando
On Don Helbig's theme park blog he mentioned "Even as the long-running and beloved Dreamland Drive-In show takes its bow after a successful 16-year run..." when discussing the show improvements for 2024. Also, the Hall Sisters posted on their site and social media that they will be playing at the Pines Theater during the Flower & Food Festival which runs until June 9th.
From what I gather the new show From the Heart at Celebrity Theater will be running until June 9th as well, so it is possible still that the cast from that show could switch over to Dreamland with a later start than the show typically does.
"Thank the Phoneticians!"
That’s a big upgrade for the Hall Sisters. If memory serves they were playing the chapel steps during last year’s Festival. Part time. They did draw well though.
On its Facebook page today Dollywood confirmed that Dreamland Drive-In has indeed been retired and will not have any performances in 2024.
"Thank the Phoneticians!"
Wouldn't it be funny if super7 was actually Dolly Parton herself with the Cedar Fair/Carowinds bashing of operating hours while comparing/contrasting to Dollywood's expanding hours and offerings.
Dolly Parton has yet to issue even a strongly-worded yelp review but she gets the job done without bashing.
She was responsible for the return of Mexican Pizza to Taco Bell and for that we are thankful.
Fun Cedar Flags updates;
The folks at Knott's have been told that the Saloon stage (pic below) will not be hosting any Live-E this season. I'm not even a Knott's junkie (we went there once 2 years ago), but that's a cryin' shame.
And also no more Snake River Expedition at Cedar Point. The ride was a shell of its former self since Forbidden Frontier was removed, but with all the hoopla the park made about this attraction when it opened, it's beyond silly that it's already gone.
I would love to ask the still-relatively-new GM Carrie about this, but she never leaves her office. I'm starting to think she died two seasons ago.
Promoter of fog.
That's really unfortunate about the Calico Saloon at Knott's. It's the kind of quirky and intimate setting that gives Knott's such a unique soul among the major theme park and the live entertainment was key to it all.
Elsewhere on the Cedar Fair live entertainment front, it appears Grand Carnivale will only be happening at three or four of the parks instead of seven like previous years. I'd imagine this will be the last year for the event in any form.
"Thank the Phoneticians!"
When we were there two seasons ago we just went in to grab a drink (boysenberry beer, of course). While we sat there someone just started playing honkey-tonk on the piano (it didn't appear to be a formal show, just someone having fun). Just a neat moment to have as we were winding down our day.
The Palace Theater at Cedar Point will also (again) not be having any shows.
Museum still just a waste of space.
Promoter of fog.
The news about Snake River Expedition hits me even harder than when the park removed my old ride, Paddlewheel Excursions.
I really liked what they did with Snake River Expedition. Then last year, they removed all the live entertainment from the ride. It was very similar to what it used to be when it was Paddlewheel. A lot of the same jokes, some even naughtier jokes too.
Maybe it didn't get the ridership they expected. Maybe it just wasn't worth the extra costs. maybe they couldn't find enough talented people to run the ride/show. Either way, it's a damn shame, pardon my language.
-Travis
www.youtube.com/TSVisits
As far as saloon venues go, they were copycats of Disneyland’s immensely popular and iconic Golden Horseshoe Saloon in Frontierland. Walt loved the Old West. Then in the 60’s copycat regionals included the saloon in their line-up. SFoT had their Crazy Horse Saloon and Georgia had Crystal Pistol Music Hall. Some of these venues were larger than others but all offered table seating, a western stage show, and authentic but family friendly bars that only served soft drinks.
Along came more copycats, like Cedar Point (the Disneyland of the Midwest) with their Golden Palace and Silver Dollar City’s Silver Dollar Saloon.
Some of those shows endure to this day, SDC’s has run over 50 years and gets a long line with sell-outs at every show. I’m not surprised if parks recognize modern day disadvantages to such venues. Staffing is high, there’s a cast of characters, bar keeps, kitchen staff, and house managers, and all for a relatively small venue. (Georgia’s music hall seated a 1000, probably the largest for this kind of show). But some have closed. Cedar Point having had two, probably feels that Red Garter is enough for now. I always had the bright idea for CP to reinvent that end of the Palace building by expanding the theatre to the rear making more of a proscenium-style legit theatre and then updating the saloon next door for the beer drinkers.
We’ll see what happens next.
Maybe Matt Ouimet should visit with his family this summer and make note of his observations on Linkedin
LostKause:
Maybe it didn't get the ridership they expected.
Nothing will get high ridership if you run it at half capacity or have a bunch of mechanical/weather downtime. :)
I noticed in that TT2 live stream with Tony and Mike, Tony said they no longer release ridership numbers because people obsess over them. I remember the days when the management at the park obsessed over them too. :( They're probably getting rather embarassing to release at this point.
-Matt
Imagine comparing 80s-90s Gemini numbers with six non-stacking trains and 2010s-2020s Gemini numbers with only four and stacks that can last almost as long as the ride cycle. Not to mention the number of empty seats on each dispatch despite full areas of queue that hadn't been used in a long time.
MDOmnis:
Tony said they no longer release ridership numbers because people obsess over them.
That’s ridiculous. No one obsesses over stuff like that.
They talk about a decline in in-park spending...
Maybe it's because they are making it very difficult for me to give them any of my money while I am in the park?
Going cashless absolutely destroyed casual gameplay. A game that once cost $0.50 and offered progressive prizes (hint: http://facebook.com/@oneandonlywhitebear came from such a game...) became "$10 play until you win" and the prizes actually got worse. The all-day and all-season meal plans, by the same token, have destroyed casual snacking. Now every food item costs $20 and lower cost options don't even exist. Not necessarily because I am cheap, or because I don't think the meal platter isn't worth the $20...it's because that's not what I want! Why can't I get a snack item that isn't French fries? Or for that matter, why can't I get a $10 sandwich without the nasty make-it-a-meal food-service fries, then go to the fry stand down the midway and get the good ones later? Why can't I get a funnel cake sized to serve one person? Why is the entire food service infrastructure designed to only serve whole meals?
Of course part of that is certainly that people with meal plans are more likely to go for the full meal and ignore other options entirely. But why couldn't that program be restructured to encourage using it on a wider variety of options, maybe by offering a point system rather than a number-of-meals system? Right now the entire system is designed to cater to the dining plan customers, with the rest of us basically completely ignored and often simply priced out completely. I have to think that offering some opportunities to spend less money more frequently might actually benefit the in-park spending numbers. Instead of selling me the $16 sandwich platter, sell me a $9 sandwich now and an $8 basket of fries later.
--Dave Althoff, Jr.
/X\ _ *** Respect rides. They do not respect you. ***
/XXX\ /X\ /X\_ _ /X\__ _ _ _____
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I’m pretty sure the days of Cedar Point management walking the midways are over..I personally have never seen Carrie on the midway nor any of the other “higher ups” like I would in days of Kinzel and Ouimet. They have been relegated to being paper pushers and that’s about it. Zimmerman/Fisher have destroyed what made Cedar Fair parks work so well, the authority to manage the business at the park level. My only hope at this point is Knott’s and Cedar Point are sold to Herschend after the merger, they fit that brand of parks much better than SIX.
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