Cedar Fair announces 2007 second quarter results

Tuesday, 31 July 2007

Cedar Fair Entertainment Company Press Release

• SECOND QUARTER ADJUSTED EBITDA INCREASES 11% ON A SAME-PARK BASIS

• COMMENTS ON ATTENDANCE AND REVENUE TRENDS THROUGH JULY

• UPDATES 2007 FULL-YEAR GUIDANCE

SANDUSKY, OHIO, July 31, 2007 -- Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced results for the second quarter ended June 24, 2007. The 2007 figures include the results of the Paramount Parks since their acquisition from CBS Corporation on June 30, 2006.

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.

Dick Kinzel, Cedar Fair chairman, president and chief executive officer, said the business combination is performing well, with combined attendance of 6.3 million in the quarter, average in-park guest per capita spending of $40.54 and out-of-park revenues of $27.9 million. “While attendance trends were soft due to pricing changes we have made to reduce discounting at some of the acquired parks, we were pleased with the improvements we saw in guest per capita spending at all of our parks during the second quarter,” Kinzel said.

Kinzel added, “It has been just over a year since we acquired the new parks and we have made good progress on integrating them into our existing portfolio of assets. Currently, in the second phase of integration, we have continued to develop our company-wide personnel and wage structure, begun to realize purchasing efficiencies and have introduced new pricing and marketing programs. Pricing strategy changes take time to introduce to the market place. As we begin to fully implement our capital plan on a park-by-park basis and gain additional experience in the new markets, we will be able to better optimize our pricing and marketing strategies. We believe we are on schedule to take full advantage of these new strategies over the next 2-4 years. Our overall marketing and capital investment plans continue to focus on providing a blend of thrill and family entertainment.”

Second Quarter Same-Park Comparison

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.

Six-month Results

Through June 24, 2007, consolidated net revenues were $304.0 million and the consolidated operating loss for the period was $10.7 million. On a same-park basis excluding the benefit of the acquisition and corporate costs, net revenues for the first six months of the year were 2% higher, at $172.1 million versus $169.4 million the prior year. Operating income for this same period increased $4.6 million to $1.6 million compared with an operating loss of $3.0 million in 2006.

Adjusted EBITDA for the period increased on a consolidated basis $25.4 million, with benefit from the acquisition, to $39.3 million. On a same-park basis, adjusted EBITDA was $26.1 million, $7.4 million higher than last year, reflecting improved operating results in our northern and western region parks.

“In general, we are satisfied with our results through the first half of the year,” said Kinzel. “Over the next several months we will continue to introduce new marketing programs and look forward to introducing new shows and attractions during our growing fall season.”

July Operations

For the first seven months of 2007 through July 29, net revenues on a same-park basis increased 2%, or $5.2 million, to $329.8 million in 2007 from $324.6 million through the same period in 2006. This increase is attributable to a 6% increase in average in-park guest per capita spending to $39.76, offset somewhat by a 3% decrease, or 244,000 visits, from 2006 and a decrease of 1%, or $472,000, in out-of-park revenues.

Including results from the acquired parks since their acquisition, consolidated net revenues through July 29 totaled $574.3 million compared with $426.6 million in 2006. Over this same period, combined attendance totaled 12.7 million visits in 2007 versus 9.7 million visits for the same period a year ago and average in-park guest per capita spending was $40.41 compared with $37.78. Out-of-park revenues through July totaled $60.3 million up from $58.5 million for the first seven months of 2006. “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 was substantially offset by a 5% increase in in-park per capita spending to $40.39 and a 3%, or $501,000, increase in out-of-park revenues.

“Although we have not met all of our park-level attendance objectives to this point, we remain pleased with the trends in average in-park guest per capita spending and overall guest satisfaction at our parks,” he continued. “With approximately 40% of our budgeted attendance still ahead of us, we are hopeful that we will continue to see growth in average in-park guest per capita spending and regain some of our attendance shortfalls through the introduction of new marketing programs and our popular fall events. At this time, based on preliminary results through July, we now expect to generate full-year revenues between $950-$980 million and full-year adjusted EBITDA between $320-$340 million.”

Kinzel concluded by noting that virtually all of Cedar Fair’s revenues from its seasonal amusement parks, water parks, and other seasonal resort facilities are realized during a 130 to 140-day operating period beginning in early May, with the major portion concentrated in the peak vacation months of July and August. Only Knott’s Berry Farm, Castaway Bay and Star Trek: The Experience are open year-round, with Knott’s Berry Farm operating at its highest level of attendance during the third quarter of the year.

Management will host a conference call with analysts today, July 31, 2007, at 2:00 p.m. Eastern Time, which will be web cast live in “listen only” mode via the Cedar Fair web site (www.cedarfair.com). It will also be available for replay starting at approximately 5:00 p.m. ET, Tuesday, July 31, 2007, until 11:59 p.m. ET, Tuesday, August 14, 2007. In order to access the replay of the earnings call, please dial 1-877-519-4471 followed by the access code 9016239.

Cedar Fair is a publicly traded partnership headquartered in Sandusky, Ohio, and one of the largest regional amusement-resort operators in the world. The Partnership owns and operates 12 amusement parks, five outdoor water parks, one indoor water park and six hotels. Amusement parks in the company’s Northern Region include three in Ohio: Cedar Point, consistently voted “Best Amusement Park in the World” in Amusement Today polls, Kings Island, and Geauga Lake & Wildwater Kingdom; as well as Canada’s Wonderland, near Toronto; Dorney Park, PA; Valleyfair, MN; and Michigan’s Adventure, MI. In the Southern Region are Kings Dominion, VA; Carowinds, NC; and Worlds of Fun, MO. Western parks in California include: Knott’s Berry Farm; Great America; and Gilroy Gardens, which is managed under contract. Also included in that region is Star Trek: The Experience, a Las Vegas-based interactive adventure.

Some of the statements contained in this news release constitute forward-looking statements. These statements may involve risk and uncertainties that could cause actual results to differ materially from those described in such statements. Although the Partnership believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors, including general economic conditions, competition for consumer leisure time and spending, adverse weather conditions, unanticipated construction delays and other factors could affect attendance at our parks and cause actual results to differ materially from the Partnership’s expectations. In addition, risks and uncertainties concerning the acquisition of the Paramount Parks include, but are not limited to the ability of the Partnership to combine the operations and take advantage of growth, savings and synergy opportunities.

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