Cedar Fair has weak 2Q, with decline in attendance and per capita spending

Posted | Contributed by Jeff

Cedar Fair generated net revenues of $264.1 million in the second quarter and net income of $7.4 million, or $0.13 per diluted limited partner unit. For the same period last year the Company reported net income of $14.7 million, or $0.26 per diluted limited partner unit, on net revenues of $296.2 million.

Net revenues for the fiscal six months ended June 28, 2009, which included 39 fewer operating days compared with 2008, were $290.6 million and the net loss for the period was $45.9 million, or $0.83 per diluted limited partner unit. This compares with net revenues of $336.6 million and a net loss of $29.1 million, or $0.53 per diluted limited partner unit, for the six-months ended June 29, 2008.

Adjusted EBITDA, which management believes is a meaningful measure of the Company’s park-level operating results, decreased to $32.1 million for the six months ended June 28, 2009 from $52.0 million during the same period last year. See the attached table for a reconciliation of adjusted EBITDA to net income (loss).

As mentioned above, it is important to note the Company’s 2009 operating calendar had 39 fewer operating days during the first six months of the year when compared with the same period a year ago. This will reverse itself during the last half of the operating season as the Company adds 70 operating days, for a total of 31 additional operating days in 2009 when compared with 2008.

“Our performance through the first half of the year has been a challenge for us,” said Dick Kinzel, Cedar Fair’s chairman, president and chief executive officer. “Through the end of the second quarter our parks entertained 6.6 million visitors, average in-park guest per capita spending was $39.50 and out-of-park revenues totaled $36.6 million. This compares with attendance of 7.6 million, average in-park guest per capita spending of $40.45 and out-of-park revenues of $40.5 million through the second quarter of 2008.

“The decrease in attendance was the result of a decline in group sales business at most of our parks due to the continued economic uncertainty and spending cuts at corporations and other organizations,” added Kinzel. “First-half results were also impacted by a decline in the number of season passes sold for the year, combined with a reduction in season pass visits due to fewer operating days in the first half. Finally, while weather will typically average itself out over an operating season, we believe early-season results were negatively impacted by poor weather, in particular cooler than normal temperatures at most of our parks.”

Excluding depreciation, amortization and other non-cash expenses, cash operating costs and expenses were $258.5 million for the six-month period ended June 28, 2009 versus $284.6 million for the same period in 2008. The lower operating costs were primarily due to the closure of Star Trek: The Experience in late 2008, as well as the Company’s continued focus on controlling cash operating costs across the parks in the face of decreased revenues. After depreciation, amortization and all other non-cash costs, the operating loss for the period was $15.6 million in 2009 compared with an operating loss of $1.9 million for the same period in 2008.

Interest expense decreased to $59.8 million from $67.1 million a year ago. The decrease in interest expense is attributable to lower interest rates on the Company’s variable-rate debt, along with lower average term-debt borrowings during the period. A credit for taxes of $29.3 million was recorded during the first half of 2009 to account for the tax attributes of the Company’s corporate subsidiaries and publicly traded partnership (PTP) taxes. This compares with a $39.5 million credit for taxes for the same period in 2008.

Read the entire press release from Cedar Fair.

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