Posted
[Ed. note: The following is an excerpt of a press release. -J]
Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, reported record revenues for the first quarter ended March 29, 2015 and announced new long-term growth goals.
"While still early in the season, we are pleased with the record performance from our parks and the positive trends we have experienced through this past weekend," said Matt Ouimet, Cedar Fair's president and chief executive officer. "We have seen early-season strength across all aspects of our business, including season pass sales, hotel accommodations and group bookings. Additionally, our parks that are currently in operation have produced higher attendance and guest spending levels when compared with this same time last year.
"We are particularly pleased with the early-season performance at Carowinds and the introduction of Fury 325, a world-record-breaking roller coaster," added Ouimet. "At the same time, we're also very excited about the other new rides and attractions for 2015 that have yet to open, including Rougarou, our newest coaster experience at our flagship park, Cedar Point, and the latest addition to our 'Amusement Dark' ride portfolio, Voyage to the Iron Reef, at Knott's Berry Farm."
Along with Cedar Fair's regular investment in marketable new rides and attractions, several transformative long-term capital projects are also coming on line in 2015. At Cedar Point, guests will enjoy a multi-day visit to the park by staying in its newly renovated, 500-room historic Hotel Breakers on its mile-long, sandy beach. Also at Cedar Point, large groups will enjoy panoramic views of Lake Erie in the new 1,800-seat catering pavilion located adjacent to the hotel. Finally, a new modernized front gate and toll plaza at Carowinds allows for a more efficient way to enter the park and creates a powerful sense of arrival for its guests, who will experience the sting of Fury 325 before they ever walk through the front gate.
"We expect 2015 to be another record year for Cedar Fair," said Ouimet. "More importantly, we are confident the transformative long-term capital investments we have made, and continue to make, will provide a solid foundation for us to build upon for many years to come."
First-Quarter Results
For the first quarter ended March 29, 2015, Cedar Fair's net revenues were $47 million, an increase of $6 million, or 16%, when compared with the first quarter ended March 30, 2014. Strong revenue trends were driven by the continued solid performance of Knott's Berry Farm, the Company's only year-round park, and strong opening weekends at Carowinds, Kings Dominion and Great America. In the quarter, the Company generated record attendance, along with increases in all revenue categories, including admissions, food and beverage, merchandise and games, and accommodations.
Operating costs and expenses for the first quarter of 2015 were $110 million, an increase of $3 million from the first quarter of 2014. The modest increase was primarily related to the strong unit price performance in the quarter and its impact on the reporting of non-cash equity-based compensation. The Company also saw a nominal increase in cost of goods sold due to the increase in attendance. Partially offsetting these increases, was a decrease in operating costs during the quarter, primarily related to the timing of maintenance projects and planned operating expenditures on 2015 initiatives.
The net loss for the quarter totaled $84 million, or $1.50 per diluted LP unit, comparable with the first quarter a year ago.
Distribution Declaration
The Company also announced the declaration of a cash distribution of $0.75 per LP unit. The distribution will be paid on June 15, 2015, to unitholders of record as of June 3, 2015. The distribution is a result of the Company's strong performance and expectations for continued future growth and is consistent with its targeted record annualized distribution rate of $3.00 per LP unit for 2015.
FUNforward 2.0
"In early 2012, our management team presented our FUNforward strategic plan, targeting $450 million, or more, in Adjusted EBITDA by 2016. Fast forward to today and I am pleased to say that the solid execution of this plan has produced results ahead of our original expectations," said Ouimet. "Over the last year, we have worked actively to establish the next generation of FUNforward, which we believe will elevate Cedar Fair to the next level with Adjusted EBITDA targeted to grow to at least $500 million by 2018."
Ouimet continued, "To achieve that goal, our strategy remains hinged upon offering our guests the 'best day' experience on every visit, which manifests itself in every decision our team makes. We believe our dedication to the guest experience results in even greater free cash flow generation providing ample resources to increase our distribution annually while also meeting our current investment needs."
The Company has identified five themes that will drive growth going forward. In many cases, these themes represent the evolution of the themes and initiatives that have driven the Company's success over the past three years. They include:
"We expect our focus on these growth drivers will enable us to reach our new target Adjusted EBITDA of at least $500 million by 2018, which implies an average growth rate of 4% over the next four years and is consistent with our original FUNforward growth rates," Ouimet concluded. "Our sustainable and growing distribution remains a top priority as we strive to maximize value for our unitholders in both the near and long term."
Read the entire press release from Cedar Fair.