Posted Wednesday, May 4, 2016 8:27 PM | Contributed by Jeff
From the press release:
Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced positive results for the first quarter ended March 27, 2016.
- First quarter net revenues up $12 million to $58 million compared with the first quarter ended March 29, 2015, a result of continued strength at the Company's only year-round amusement park, Knott's Berry Farm.
- Positive early-season trends for advance season pass sales, All-Season Dining sales and group bookings.
- Pre-season operating costs are in-line with the Company's expectations.
- Quarterly cash distribution of $0.825 per Limited Partner (LP) unit declared payable on June 15, 2016, consistent with an annual rate of $3.30 per LP unit in 2016.
- The Company expects to reach its FUNforward 2.0 long-term Adjusted EBITDA goal of $500 million earlier than its original target of 2018.
Commenting on the Company's first-quarter results, Matt Ouimet, Cedar Fair's president and chief executive officer, said, "Historically, our first quarter represents less than 5 percent of our full-year revenues because the majority of our parks are not open in the first quarter. While it is too early to see definitive trends at this point in the year, we are encouraged by the early-season strength across all aspects of our business, including advance season pass sales, All-Season Dining sales and group bookings.
"We are particularly pleased with the early-season performance of Knott's Berry Farm and its third annual Boysenberry Festival," added Ouimet. "This multi-week, multi-generational spring-time event is a great example of how we are leveraging the unique regional brand each park has to offer. We are equally pleased with the over-whelmingly positive public response to our capital program this year across all of our parks. In fact, today is Media Day at Cedar Point, where we are excited to be introducing our latest world-record-breaking roller coaster - Valravn - the world's tallest, fastest and longest dive coaster. We expect our investments in world-record-breaking roller coasters, water park expansions, family attractions and digital innovations to be key factors in producing another record year for Cedar Fair in 2016.
"We also continue to move forward on other long-term projects, including the introduction of our new digital imaging platform, FunPix; the expansion of our new mobile app platform and parkwide Wi-Fi at our five largest properties; and the recent groundbreaking of the Cedar Point Sports Center, which will begin hosting youth-sports tournaments in 2017," said Ouimet. "We are confident these transformative long-term investments will provide our guests with a greater overall experience at our parks, as well as produce very attractive returns to our investors for many years to come."
For the first quarter ended March 27, 2016, Cedar Fair's net revenues were $58 million, an increase of $12 million, or 25%, compared with the first quarter ended March 29, 2015. Strong revenue trends were driven by the continued solid performance of Knott's Berry Farm 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, games and accommodations.
Operating costs and expenses for the first quarter of 2016 were $116 million, an increase of $7 million, or 6%, from the first quarter of 2015. The increase was in-line with Company expectations for the quarter and reflects higher costs to support the increased attendance and guest spending in the quarter, higher labor costs due to normal merit increases and market/minimum-wage rate increases; and higher operating and maintenance supplies and expenses as the Company continues to support investments made in the infrastructure of its parks.
The net loss for the quarter totaled $48 million, or $0.87 per diluted LP unit, versus a net loss of $84 million, or $1.50 per diluted LP unit, for the first quarter a year ago.
The Company also announced the declaration of a cash distribution of $0.825 per LP unit. The distribution will be paid on June 15, 2016, to unitholders of record as of June 3, 2016. The distribution is a result of the Company's strong performance and expectations for continued future growth and is consistent with its targeted annualized distribution rate of $3.30 per LP unit for 2016.
"Our long-term strategy is working well as we continue to generate solid increases across all aspects of our business, including record attendance, in-park guest per capita spending and out-of-park revenues," said Ouimet. "We remain focused on providing the best and highest value in family entertainment at all of our parks. We are confident the record-setting trends that we have produced over the past several years will continue into 2016 and for many years to come."
The Company anticipates achieving its FUNforward 2.0 long-term growth goal of $500 million in Adjusted EBITDA earlier than its original target date of 2018.
Beyond its strong capital program, Cedar Fair continues to expand its existing initiatives that have already proved to be successful in their early development phases, and has identified many additional long-term opportunities. Over the next several years, the Company expects to benefit from an expanded Customer Relationship Management platform; new season-extending special events; improvements and expansion of its resort accommodations; a more robust e-commerce platform; new culinary experiences; and the expansion of strategic third-party partnerships. The Company will also continue to apply digital innovations in all aspects of its business to enhance the overall guest experience, promote sharing and online socialization, and provide greater capital and operating cost efficiencies.
"We are very proud of what we have accomplished and remain excited about the opportunities we have to continue to grow our business going forward," concluded Ouimet.
Read the entire press release from Cedar Fair.