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From the press release:
Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced record results for the second quarter ended June 28, 2015. The Company also provided preliminary attendance and net revenues through Sunday, August 2, 2015, and declared a quarterly cash distribution.
Highlights
- Cedar Fair reported record net revenues of $424 million for the six months ended June 28, 2015. This 5% increase over the same period last year reflects the Company's continued success in all areas of its business, including attendance, guest spending and out-of-park revenues.
- Cedar Fair is on track for a sixth-consecutive year of record results. Net revenues through this past Sunday, August 2, 2015, increased 5%, on a 2% increase in average in-park guest per capita spending, a 3% increase in attendance and an 8% increase in out-of-park revenues compared with the same period last year.
- The Company declared a quarterly cash distribution of $0.75 per Limited Partner (LP) unit payable September 15, 2015, consistent with its annualized rate of $3.00 per LP unit.
- Cedar Fair remains confident in its long-term business strategy and its ability to generate $500 million, or more, in Adjusted EBITDA by 2018.
"We are pleased with the strength we have experienced across all areas of our business during the first half of this year and into July," said Matt Ouimet, Cedar Fair's president and chief executive officer. "The combination of increases in attendance, guest spending and revenues from our resort accommodations gives us confidence that our long-term strategy of enhancing the guest experience and investing in our parks is resonating with our customers.
"Our strategy heading into 2015 was to provide experiences which would encourage our guests to visit our parks early and often," added Ouimet. "The successful launch in March of Fury 325, a world-record-breaking roller coaster at Carowinds, and the introduction in May of Voyage to the Iron Reef, an interactive dark ride at Knott's Berry Farm, were strong contributors to the record first half. We are also pleased that our guests are visiting more often and spending more while at our parks. We believe this is a direct result of our investments to enhance the overall guest experience, including more special events, midway entertainment and other targeted guest offerings. These investments provide each guest with a 'Best Day' experience, whether it is their first time visiting us or their tenth time. Finally, the grand re-opening of our historic Hotel Breakers at Cedar Point led the double-digit increase in our out-of-park revenues for the first half of 2015."
Ouimet continued by stating, "Providing a world-class experience for guests of all ages is at the core of everything we do. Our parks are not just a place to ride rides, but a place to make lasting memories with your families and friends. We believe our commitment to our guests will result in another year of record results for Cedar Fair and a greater total return for our investors."
Second-Quarter Results
For the quarter ended June 28, 2015, net revenues increased 4%, or $14 million, to a record $377 million compared with $363 million in 2014. This increase reflects a 2%, or $0.84, increase in average in-park guest per capita spending, a 1%, or 91,000-visit, increase in attendance, and a 12%, or $4 million, increase in out-of-park revenues, compared with the second quarter of 2014.
The Company attributes the increase in attendance to its strong capital program, including the introduction of innovative new rides and attractions in 2015. Guest spending has been strong across all categories of the business, including admissions and in-park spending, and are the result of the Company's continued focus on enhancing the overall guest experience. This includes new food and beverage offerings, a new all-season dining program and investments in its catering facilities.
Operating costs and expenses for the 2015 second quarter were $236 million, an increase of $12 million compared with 2014. The increase was primarily attributable to an increase in labor and maintenance costs as the Company continued to invest in its employees and its infrastructure; and, to a lesser extent, a shift in timing as some of the costs were incurred in the second quarter of 2015, as compared with 2014 when the costs were incurred in the first quarter.
Six-Month Results
Net revenues were $424 million for the six months ended June 28, 2015, an increase of $21 million, or 5%, compared with the six-month period ended June 29, 2014. Net loss during this period was $26 million, or $0.47 per diluted LP unit, versus a net loss of $40 million, or $0.71 per diluted LP unit, for the first six months of 2014.
The increase in revenues was the result of a 3%, or 220,000-visit, increase in attendance, a 2%, or $0.79, increase in average in-park guest per capita spending, and an 11%, or $5 million, increase in out-of-park revenues.
Operating costs and expenses through the first six months of 2015 were $346 million, representing a 4%, or $14 million, increase compared with the same period a year ago. The increased costs for the period were largely a result of three main drivers: 1) an increase in labor and maintenance costs; 2) an increase in SG&A expenses due to promotional activities related to park specific promotional events and the strong unit price performance during the period and its impact on the reporting of non-cash equity-based compensation; and 3) an increase in the cost of goods sold due to the increased attendance. As a percent of revenues, cost of goods sold is comparable with the prior-year period.
Adjusted EBITDA, which management believes is a meaningful measure of the Company's park-level operating results, increased 6%, or $5 million, to $84 million for the first half of 2015, compared with 2014. The increase in Adjusted EBITDA was driven by the solid revenue growth and a strict focus on cost control.
July Operations
Based on preliminary results, net revenues through August 2, 2015, were approximately $754 million, up 5%, or $39 million, compared with $715 million for the same period last year. The increase was the result of an approximate 2%, or $0.79 increase in average in-park guest per capita spending to $45.87, a 3%, or 484,000-visit, increase in attendance and an 8%, or $6 million increase in out-of-park revenues to $82 million, compared with 2014.
"The continued improvement in attendance and guest spending trends through this past weekend, as well as the growth in out-of-park revenues, gives us confidence that our 2015 capital programs and our long-term strategy are working very well and the fundamentals of our business remain solid," said Ouimet.
Cash Flow and Liquidity Remain Strong
As of June 28, 2015, the Company had $609 million of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $950 million of fixed-rate debt, $42 million borrowed under its revolving credit facilities and $35 million of cash on hand. The Company believes its credit facilities and cash flows are sufficient to meet working capital needs, debt service, planned capital expenditures and distributions for the foreseeable future.
Distribution Declaration
Today, the Company also announced the declaration of a cash distribution of $0.75 per LP unit, which is consistent with its targeted annualized distribution rate of $3.00 per LP unit. The distribution will be paid on September 15, 2015, to unitholders of record as of September 3, 2015.
Ouimet concluded, "This distribution reflects the stability of our performance and continued confidence in our long-term growth strategy. We are proud of our ability to aggressively grow our distribution over the past several years, and believe we are well-positioned with a solid balance sheet, appropriate liquidity reserve, and a positive earnings outlook to continue this trend going forward."
Read the entire press release from Cedar Fair.