Cedar Fair same-park numbers flat with fewer operating days for Q2

Posted Tuesday, July 31, 2007 9:40 AM | Contributed by Jeff

Operations, including the acquired parks, generated revenues of $274.0 million in the second quarter and net income of $5.5 million, or $0.10 per diluted limited partner unit. For the same period last year, which does not include the acquired parks, the company reported net income of $11.1 million, or $0.20 per diluted limited partner unit, on revenues of $145.4 million.

Consolidated adjusted EBITDA for the quarter, which management believes is a meaningful measure of the company’s park-level operating results increased $47.7 million to $85.8 million from $38.1 million for the same period a year ago. See the attached table for a reconciliation of adjusted EBITDA to net income.

Consolidated operating income for the second quarter was $40.2 million compared with $19.9 million in 2006. Operating costs were $188.2 million versus $107.3 million in the prior year, while interest expense was $36.2 million, up from $8.0 million last year. The increased interest expense primarily reflects increased borrowings to fund the Paramount Parks acquisition and the refinancing of existing debt at the time.

Excluding effects of the acquisition and corporate costs, Cedar Fair’s second-quarter results on a same-park basis improved from the same period a year ago. For the second quarter, same-park net revenues increased 1%, or $1.2 million, to $146.6 million. This increase was attributable to a 5% increase in per capita spending across all of the parks, offset by a 3% decrease, or 105,000 visits, in attendance primarily in the southern and western regions. Out-of-park revenues, including resort hotels, decreased 3%, or $757,000, during the second quarter. This decrease was due to 15 fewer operating days, including seven fewer operating days at Cedar Point and five fewer operating days at Geauga Lake.

On a same-park basis, second quarter adjusted EBITDA increased 11%, or $4.4 million, to $44.3 million. Operating costs and expenses were 3% lower at $102.3 million versus $105.5 million a year ago. The decrease in operating costs is attributable to the fewer operating days compared with the prior-year period as well as the continued focus on bringing costs in line with attendance trends at our northern region parks, particulary at Geauga Lake.

Read the entire press release from Cedar Fair.

Tuesday, July 31, 2007 10:42 AM
Year to date attendance is down 7%. That is concerning considering the unusually amazing weather this spring and summer.
Tuesday, July 31, 2007 10:56 AM
That's what happens when you take away the $0.25 cotton candy. ;)
Tuesday, July 31, 2007 12:23 PM
Pagoda Gift Shop's avatar Where are you getting 7%? I see 3%.
Tuesday, July 31, 2007 12:37 PM
Mark Small's avatar If you read the full press release, it's in the 2nd paragraph under July Operations.

“July is the first month we have internal year-over-year comparisons to operations at all of our parks,” Kinzel said. “For the past four weeks, consolidated revenues were down 1%, or $3.1 million. This is a result of a 7% decrease in attendance, or 363,000 visits, due to the changes in our pricing methodology including the elimination of many complimentary tickets.

*** This post was edited by Mark Small 7/31/2007 12:39:34 PM ***

Tuesday, July 31, 2007 4:25 PM
Jeff's avatar His comment though leads to a deeper story though about the discounting and comp programs that Paramount Parks had in place. I'd be willing to bet that the average price paid to enter the park, even accounting for season passes, is dramatically higher.
Tuesday, July 31, 2007 7:57 PM
I thought that too. If revenues are down only 1% on a 7% decline in attendance, that's really good news for the long term---you've effectively gotten rid of the almost-freeloaders.
Tuesday, July 31, 2007 8:17 PM
john peck's avatar Cedar Fair have done a lot of elimanating of free tickets.. even the KI bonus weekend last year was canceled.

When CF picked up Geauga, they greatly reduced the amount of comps. And they sold less season passes.

Six Flags Ohio/WOA had been a baby sitting service for years.
GL attendence may not be as high as it once was, but I'll bet they make more at the gate than they have in the past.

Tuesday, July 31, 2007 11:44 PM
Am I mistaken in taking this as good news? From what I thought I understood, that while attendance is down, so are operating costs. The overall money generated by the park, that they actually PROFIT from, is up.

So it worked. They mode more money. That's Good right? I thought that was their objective. And if they could increase attendance next year, they'd be in even better shape. Am I wrong?

Wednesday, August 1, 2007 9:21 AM
Jeff's avatar It's not that simple. My continued concern is rising per cap spending while attendance keeps going down. Even with the fewer operating days, I'm not comfortable with that. In an ideal world, you'd also hope that overall growth in revenue at least keeps pace with inflation, which it doesn't appear to be doing on a same-park basis.
Thursday, August 2, 2007 1:38 AM
Well,Cedar Fair took away some operating days and raised food prices to sky high which caused the drop of attendance and rising revenue.

Attendance is good to keep parks in business and make profits from food and tickets but don't over raise prices then people won't come. Lesser operating days effect it too because people like a long nice season.

The consequences are dramatic but maybe true. they can't make profits if there is rarely any people around. so they can't afford to pay for the ride costs and repair bills and can signal that they have to get rid of rides or even roller coasters if its bad enough.

Yep it's that bad for any park. If they do the right decisions next time CF or any company that = great business,not BAD business.

Monday, August 6, 2007 3:58 AM
I'd say the FAR more important conference call will happen a year from now. That way we can see how the general public is reacting to the lack of comps, higher food prices, etc. Right now it's still just a matter of shifting around people and numbers.

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