Cedar Fair Announces Record 2012 Second Quarter Results

SANDUSKY, Ohio, Aug. 9, 2012 /PRNewswire/ -- Cedar Fair Entertainment Company (NYSE: FUN) today reported record results for its second quarter ended July 1, 2012 and provided attendance and revenue trends through this past Sunday, August 5, 2012.

Highlights

  • Revenues through August 5, 2012 were up approximately $21 million, or 3%, when compared with August 7, 2011, on a 4%, or $1.46, increase in average in-park guest per capita spending and a 2%, or approximately $1 million, increase in out-of-park revenues.
  • "FUNforward" growth initiatives announced in January continue to gain traction with guests, including a new e-commerce platform and premium benefit offerings.
  • The Company reaffirmed its full-year guidance of net revenues between $1.055 billion and $1.075 billion and Adjusted EBITDA between $385 million and $395 million.
  • The Company declared a quarterly cash distribution of $0.40 per Limited Partner (LP) unit payable September 17, 2012; confirmed it is on track to pay a record distribution of more than $2.00 per LP unit in 2013.

Commenting on the Company's second-quarter results and trends through August 5, 2012, Matt Ouimet, Cedar Fair's president and chief executive officer, said, "We are pleased with our record second-quarter results and the traction we have gained on our FUNforward growth initiatives.  Our ability to stay on pace for a third consecutive record year speaks to the strength and quality of our parks and the services provided by our employees.  While we experienced a solid increase in our attendance during the second quarter, it is equally pleasing that we reported a similar increase in our average in-park guest spend.  New rides and attractions, premium benefit offerings and a new e-commerce platform have all contributed to these positive results, and we believe they will continue to be successful into the balance of the summer as well as our fall Halloween events."   

Second Quarter Results

As a result of the fiscal calendar, which includes an extra week and an additional 106 operating days (at all parks combined), net revenues for the fiscal second quarter increased to $357.6 million from $284.5 million in the second quarter ended June 26, 2011.  Net income for the current quarter was $36.3 million, or $0.65 per diluted LP unit, versus $4.3 million, or $0.08 per diluted LP unit, for the same period in 2011.

The increase in net revenues and net income for the second quarter were in large part the result of the aforementioned 13% increase in the number of operating days in 2012 due to the timing of the fiscal second quarter close (14 weeks vs. 13 weeks).  Comparing both 2012 and 2011 on a 14-week basis, total revenues for the period were up $19.0 million, or 6%, on a 3%, or 218,000-visit, increase in attendance; a 3%, or $1.09, increase in average in-park guest per capita spending; and a 7%, or $2.3 million, increase in out-of-park revenues.

For the fiscal second quarter ended July 1, 2012, Adjusted EBITDA, which management believes is a meaningful measure of the Company's park-level operating results, increased to $135.0 million compared with $95.9 million for the fiscal second quarter ended June 26, 2011.  On a comparable 14-week basis, Adjusted EBITDA would have been up approximately $6.5 million, or 5%, as of July 1, 2012.  See the attached table for a reconciliation of adjusted EBITDA to net income. 

July Operations

Based on preliminary results, year-to-date revenues through August 5, 2012 increased 3%, or approximately $21 million, on a comparable operating week basis.  This increase reflects a 4%, or $1.46, increase in average in-park guest per capita spending and a 2% increase in out-of-park revenues.  Attendance for the seven-month period was comparable to the record-setting performance of a year ago.

"Our FUNforward growth initiatives announced in January have allowed us to continue to grow revenues during the current operating season," said Ouimet.  "These initiatives have resonated very well with our guests and they have clearly begun to pay dividends for us, as evidenced by our record season pass sales and increased guest per capita spending."

Cash Flow and Liquidity Remain Strong

As of July 1, 2012, the Company had $1.14 billion of variable-rate term debt (before giving consideration to fixed-rate interest rate swaps), $400.6 million of fixed-rate debt, $111.0 million borrowed under its revolving credit facilities and $35.9 million in 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

The Company also announced today the declaration of a cash distribution of $0.40 per LP unit.  The distribution will be paid on September 17, 2012, to unitholders of record as of September 5, 2012.  "This distribution is consistent with our targeted annualized distribution rate of $1.60 per LP unit for 2012," said Ouimet.  "Based on our current results and expectations through the second half of 2012, we are on track to have a record distribution of more than $2.00 per LP unit in 2013."

Outlook

According to Ouimet, the Company's new attractions, such as the 306-foot-tall Leviathan roller coaster at Canada's Wonderland, the water park expansion and Soak City branding at Kings Island and the Luminosity night-time show at Cedar Point, are getting strong reviews from park guests.  "We introduced a variety of new offerings this year across all of our properties and we are pleased with the response to these investments," he said.  "We are committed to providing our guests with the 'best-day-of-the-year' experience they have come to expect when they visit our parks.  By providing our guests with a collection of the industry's best thrill and family rides and attractions and continuing to add new and innovative experiences,  we continue to send our guests home happy and looking forward to a return visit.

"While we have approximately one-third of our operating season still ahead of us, we feel very good about how the year is tracking thus far as we head into the next peak vacation month of August and into the fall season," said Ouimet.  "Based on the strength of our preliminary results through July, we are reaffirming our full-year guidance of net revenues between $1.055 billion and $1.075 billion and full-year Adjusted EBITDA between $385 million and $395 million, which represents an increase of $10 million to $20 million over last year's record Adjusted EBITDA."

Correction of Depreciation Expense in Prior Periods

The accompanying financial tables reflect adjustments to depreciation expense previously reported for all prior periods, including the related cumulative impact on total assets and total partners' equity as of June 26, 2011. These adjustments relate to the Company's misapplication of certain elements of the composite depreciation method. The impact of these adjustments was not deemed to be material to the results of operations, total assets or partners' equity for the previously reported periods.  Further detail of these adjustments will be included in our July 1, 2012 Form 10-Q.

Conference Call

The Company will host a conference call with analysts today, August 9, 2012, at 10:00 a.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 1:00 p.m. ET, Thursday, August 9, 2012, until 11:59 p.m. ET, Thursday, August 23, 2012.  In order to access the replay of the earnings call, please dial 1-877-870-5176 followed by the access code 4550464.

About Cedar Fair  

Cedar Fair is a publicly traded partnership headquartered in Sandusky, Ohio, and one of the largest regional amusement-resort operators in the world. The Company owns and operates 11 amusement parks, six outdoor water parks, one indoor water park and five hotels. Its parks are located in Ohio, California, North Carolina, South Carolina, Virginia, Pennsylvania, Minnesota, Missouri, Michigan, and Toronto, Ontario.  Cedar Fair also operates the Gilroy Gardens Family Theme Park in California under a management contract.  Cedar Fair's flagship park, Cedar Point, has been consistently voted the "Best Amusement Park in the World" in a prestigious annual poll conducted by Amusement Today newspaper.

Forward-Looking Statements

Some of the statements contained in this news release constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including statements as to the Company's expectations, beliefs and strategies regarding the future.  These statements may involve risk and uncertainties that could cause actual results to differ materially from those described in such statements.  Although the Company 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, adverse weather conditions, competition for consumer leisure time and spending, unanticipated construction delays and other factors discussed from time to time by the Company in reports filed with the Securities and Exchange Commission (the "SEC") could affect attendance at our parks and cause actual results to differ materially from the Company's expectations. Additional information on risk factors that may affect the business and financial results of the Company can be found in the Company's Annual Report on Form 10-K and in the filings of the Company made from time to time with the SEC. The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

This news release and prior news releases are available online at www.cedarfair.com

Contact: Stacy Frole    (419) 627-2227

 

CEDAR FAIR, L.P.



UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)



(In thousands, except per unit amounts)












Three months ended


Six months ended


Twelve months ended



(14 weeks)


(13 weeks)


(26 weeks)


(25 weeks)


(53 weeks)


(52 weeks)



7/1/2012


6/26/2011


7/1/2012


6/26/2011


7/1/2012


6/26/2011

Net revenues:













Admissions


$

201,866



$

160,619



$

213,536



$

171,231



$

638,347



$

572,522


Food, merchandise and games


121,335



103,989



133,867



115,771



367,532



340,365


Accommodations and other


34,405



19,882



38,401



24,357



97,038



73,161




357,606



284,490



385,804



311,359



1,102,917



986,048


Costs and expenses:















Cost of food, merchandise and games revenues


32,486



27,111



36,573



31,223



97,407



87,611


Operating expenses


146,236



124,978



217,521



190,106



458,266



417,817


Selling, general and administrative


44,511



37,233



62,495



58,148



144,773



129,657


Depreciation and amortization


48,330



43,385



52,409



47,409



130,837



127,508


Loss on impairment of goodwill and other

intangibles












903


(Gain) loss on impairment / retirement of fixed

assets, net


(862)





(770)



196



1,599



62,948




270,701



232,707



368,228



327,082



832,882



826,444


Operating income (loss)


86,905



51,783



17,576



(15,723)



270,035



159,604


Interest expense


30,236



42,185



57,039



83,297



130,927



171,183


Net effect of swaps


(173)



(1,432)



(1,143)



455



(14,717)



9,040


Loss on early debt extinguishment












35,289


Unrealized/realized foreign currency (gain) loss


9,301



3,043



1,109



(3,845)



14,863



(24,404)


Other (income) expense


(2)



177



(18)



1,085



(305)



(31)


Income (loss) before taxes


47,543



7,810



(39,411)



(96,715)



139,267



(31,473)


Provision (benefit) for taxes


11,221



3,528



(10,318)



(16,071)



16,970



37,418


Net income (loss)


36,322



4,282



(29,093)



(80,644)



122,297



(68,891)


Net income (loss) allocated to general partner


1







(1)



2



(1)


Net income (loss) allocated to limited partners


$

36,321



$

4,282



$

(29,093)



$

(80,643)



$

122,295



$

(68,890)


















Net income (loss)


$

36,322



$

4,282



$

(29,093)



$

(80,644)



$

122,297



$

(68,891)


Other comprehensive income (loss), (net of tax):














Cumulative foreign currency translation

adjustment


481



798



(688)



(488)



733



(7,567)


Unrealized income (loss) on cash flow hedging

derivatives


(2,370)



(6,474)



(2,031)



5,590



(3,854)



40,528


Other comprehensive income (loss), (net of tax)


(1,889)



(5,676)



(2,719)



5,102



(3,121)



32,961


Total comprehensive income (loss)


$

34,433



$

(1,394)



$

(31,812)



$

(75,542)



$

119,176



$

(35,930)


Basic earnings per limited partner unit:













Weighted average limited partner units

outstanding


55,481



55,346



55,433



55,341



55,389



55,338


Net income (loss) per limited partner unit


$

0.65



$

0.08



$

(0.52)



$

(1.46)



$

2.21



$

(1.24)


Diluted earnings per limited partner unit:













Weighted average limited partner units

outstanding


55,818



55,825



55,433



55,341



55,844



55,338


Net income (loss) per limited partner unit


$

0.65



$

0.08



$

(0.52)



$

(1.46)



$

2.19



$

(1.24)


 

CEDAR FAIR, L.P.

UNAUDITED BALANCE SHEET DATA

SECOND QUARTER





(In thousands)

7/1/2012


6/26/2011

Cash and cash equivalents

$

35,929



$

35,679


Total assets

$

2,141,898



$

2,156,311


Long-Term Debt, including current maturities:



Revolving credit loans

$

111,000



$

85,000


Term debt

1,140,100



1,177,050


Notes

400,647



399,756



$

1,651,747



$

1,661,806


Total partners' equity

$

67,509



$

36,082


 

CEDAR FAIR, L.P.

RECONCILIATION OF ADJUSTED EBITDA

SECOND QUARTER
















Three months ended


Six months ended


Twelve months ended



(14 weeks)


(13 weeks)


(26 weeks)


(25 weeks)


(53 weeks)


(52 weeks)



7/1/2012


6/26/2011


7/1/2012


6/26/2011


7/1/2012


6/26/2011



(In thousands)

Net income (loss)


$

36,322



$

4,282



$

(29,093)



$

(80,644)



$

122,297



$

(68,891)


Interest expense


30,236



42,185



57,039



83,297



130,927



171,183


Interest income


(2)



(7)



(18)



(88)



(87)



(1,204)


Provision (benefit) for taxes


11,221



3,528



(10,318)



(16,071)



16,970



37,418


Depreciation and amortization


48,330



43,385



52,409



47,409



130,837



127,508


EBITDA


126,107



93,373



70,019



33,903



400,944



266,014


Loss on early extinguishment of debt












35,289


Net effect of swaps


(173)



(1,432)



(1,143)



455



(14,717)



9,040


Unrealized foreign currency (gain) loss


8,878



2,831



629



(4,090)



14,549



(21,554)


Non-cash equity expense (income)


568





2,268



(228)



2,257



(307)


Loss on impairment of goodwill and other

intangibles












903


(Gain) loss on impairment/retirement of fixed

assets, net


(862)





(770)



196



1,599



62,948


Terminated merger costs




80





80



150



188


Refinancing costs




161





1,150



(195)



(1,367)


Other non-recurring items (as defined)


444



847



2,165



5,271



6,420



5,271


Adjusted EBITDA (1)


$

134,962



$

95,860



$

73,168



$

36,737



$

411,007



$

356,425















(1) As permitted by and defined in the Amended 2010 Credit Agreement

 

SOURCE Cedar Fair Entertainment Company



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