Cedar Fair reports 2017 second-quarter results

Company remains on track for a record performance in 2017

Wednesday, 02 August 2017

Cedar Fair Press Release

SANDUSKY, Ohio, Aug. 2, 2017 /PRNewswire/ -- 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 25, 2017, discussed attendance and guest spending trends through July and declared a quarterly cash distribution.

Highlights

  • Cedar Fair reported record net revenues of $393 million for the second quarter ended June 25, 2017, which is $5 million higher than the record net revenues reported in the prior-year period ended June 26, 2016.
  • Attendance for the month of July was up 2%, or 106,000 visits.
  • The Company declared a quarterly cash distribution of $0.855 per Limited Partner (LP) unit payable September 15, 2017, consistent with its annualized rate of $3.42 per LP unit.
  • Cedar Fair remains confident in its long-term business strategy and expects 2017 to be another record year.

"We continue to see the resilience of our business model and the underlying demand for our products remains strong," said Matt Ouimet, Cedar Fair's chief executive officer.

"Our investments in new rides and attractions, special events and high-quality group catering facilities are further differentiating Cedar Fair from other group entertainment options.  We have also enhanced our water park business model by improving the overall guest amenities and increasing the quality and capacity of our food and beverage offerings within these venues.  These investments, combined with the expansion of our operating season into November and December with the introduction of our WinterFest celebration at three more parks in 2017, have us on track to achieve our eighth consecutive year of record results.

"Our confidence is supported by several data points, including our strong performance over the last five weeks, record advance purchase commitments including sales of season passes and our all-season dining and beverage programs, and second-quarter deferred revenues which are up $20 million, or 12%, from the prior year," added Ouimet.  "We are coming off of one of our best Julys in the company's history.  Maintaining these trends in the coming weeks, combined with strong demand for our upcoming Halloween and WinterFest events, is important to enable us to achieve our long-term Adjusted EBITDA goal of $500 million, a year earlier than originally planned."

Second-Quarter Results

For the quarter ended June 25, 2017, net revenues increased 1%, or $5 million, to a record $393 million compared with $388 million in 2016.  This increase reflects a 2%, or 134,000-visit, increase in attendance and a 3%, or $1 million, increase in out-of-park revenues when compared with the second quarter of 2016.  Average in-park guest per capita spending was comparable with the same period last year.  Excluding a non-core, stand-alone water park that was closed in September 2016, attendance on a same-park basis increased 3%, or 203,000 visits.

The Company attributes the increase in second quarter attendance to its strong capital program, including the introduction of innovative new rides and attractions in 2017, the success of its early-season multi-week special events, and the extra benefit of the Easter holiday occurring during the second quarter this year versus the first quarter last year.  In regards to average in-park guest per capita spending, the Company reported an increase in food and beverage revenue driven by the continued growth of its all-season dining and beverage programs.  This increase was offset by a decrease in admissions revenue per capita attributable to a higher season pass attendance mix and the recognition of season pass revenue over a longer period of time at three parks that will now be open in November and December for their new WinterFest celebration.

Operating costs and expenses for the 2017 second quarter were $246 million, representing a modest increase of 1%, or $3 million, compared with 2016.  After giving affect for all costs and expenses, net income for the second quarter of 2017 was $31 million, or $0.55 per diluted LP unit, versus net income of $58 million, or $1.03 per diluted LP unit, for the second quarter of 2016.  The decrease in second quarter net income is largely attributable to a $23 million loss on the early extinguishment of debt, a result of a debt refinancing in April 2017.

Adjusted EBITDA, which management believes is a meaningful measure of the Company's park-level operating results, was $150 million for the second quarter of 2017, an increase of 2% compared with 2016.  The increase in Adjusted EBITDA is attributable to the growth in net revenues in addition to the Company's continued focus on effectively managing its fixed-cost base.  See the attached table for a reconciliation of net income to Adjusted EBITDA.

July Operations

Based on preliminary July results, same-park net revenues during the first five weeks of the third quarter of 2017 were up 1%, or approximately $4 million, compared with the same period a year ago.  This increase was largely due to a 2%, or 106,000-visit, increase in attendance. During this same period average in-park guest per capita spending and out-of-park revenues were comparable with the same five-week period a year ago.

When factoring in these preliminary July results, net revenues on a same-park basis through July 30, 2017, were approximately $767 million, up  $1 million when compared with the same period last year.  The increase was the result of a 62,000-visit increase in attendance to 15.1 million guests and a $1 million increase in out-of-park revenues to $87 millionwhen compared with 2016.  These increases were slightly offset by a less than one percent decrease in average in-park guest per capita spending to $46.57 during this same period last year.

Distribution Declaration

Today, the Company also announced the declaration of a cash distribution of $0.855 per LP unit, which is consistent with its targeted annualized distribution rate of $3.42 per LP unit.  The distribution will be paid on September 15, 2017 to unitholders of record as of September 6, 2017.

Ouimet concluded, "We remain focused on delivering strong returns and will continue to prudently manage our cash flows to maximize value for our unitholders through a combination of cash distributions and organic growth opportunities."