Cedar Fair Reports Record Third Quarter; Increases Quarterly Cash Distribution By 10%

Nov 05, 2015, 06:55 ET from Cedar Fair

SANDUSKY, Ohio, Nov. 5, 2015 /PRNewswire/ -- Cedar Fair (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today reported record results for its third quarter ended September 27, 2015 and announced a 10% increase in its quarterly cash distribution.

Highlights

  • Cedar Fair reported record net revenues of $645 million in the third quarter.  The 8% increase over last year's third-quarter results reflects the Company's continued success in increasing attendance and average in-park guest per capita spending across all major categories.
  • Net revenues through November 1, 2015, were up 7%, driven by a 5% increase in attendance, a 2% increase in average in-park guest per capita spending1 and a 10% increase in out-of-park revenues, including resort accommodations.
  • Cedar Fair's Board of Directors declared a 10% increase in the Company's quarterly cash distribution to $0.825 per limited partner (LP) unit, payable December 15, 2015.
  • Cedar Fair remains confident in its long-term business strategy and its ability to generate $500 million, or more, in Adjusted EBITDA by 2018.

"I am pleased to say that our year-to-date results have propelled us well on our way to making 2015 the best year in Cedar Fair's history," said Matt Ouimet, Cedar Fair's president and chief executive officer.  "Our strategy to create and expand our seasonal offers and events has helped drive more visits and incremental spending by guests in 2015.  The success of this strategy, combined with our innovative capital program, has led to strong results across the portfolio this year."

"We have experienced significant attendance increases in both season pass and advance sales categories while maintaining strong front gate and group sales attendance," continued Ouimet.  "We've also experienced average in-park guest per capita spending increases across all major categories, including admissions, food and beverage, merchandise and premium offerings.  We credit this broad success to the fulfillment of our objective to make every park a place to be for FUN, not just a place to ride rides.  This expands our audience, increases length-of-stay and has a direct impact on our guests' intent to continue returning to our parks."

Ouimet added, "The quality of our business model and focus of our team has never been stronger.  Based on our current year performance, our positive outlook and our strong balance sheet, our Board has declared a 10% increase in our 2015 fourth-quarter cash distribution.  This reflects the Board's confidence that our cash flow is more than sufficient to maintain this distribution amount into 2016 and beyond, while we continue to strategically invest in our business to support long-term growth."

Third-Quarter Results

Cedar Fair's net revenues increased to a record $645 million for the third quarter, up from $595 million in the third quarter a year ago.  Net income for the quarter was $164 million, or $2.92 per diluted LP unit, compared with $162 million, or $2.90 per diluted LP unit, during the same period last year.

The increase in revenues for the quarter was the result of an increase in attendance of 6%, or 697,000 visits, an increase in average in-park guest per capita spending of 2%, or $0.91, and an increase in out-of-park revenues, including resort accommodations, of 11%, or $7 million.

The Company attributes the increase in attendance to its strong capital program, including the introduction of Fury 325, a world-record-breaking roller coaster at Carowinds, and the expansion of multi-week special events, including Bands, Brews and BBQs.  Guest spending has also been strong across all major categories, including admissions, food and beverage, merchandise and premium offerings.

Third-quarter operating costs and expenses of $302 million increased $19 million compared with the third quarter of 2014.  The increase in operating costs is consistent with the 6% lift in attendance in the period and was primarily attributable to higher labor and maintenance costs as the Company continued to invest in its employees and its infrastructure.  However, as a percentage of net revenues, costs and expenses decreased 61 basis points.

Adjusted EBITDA, which management believes is a meaningful measure of the Company's park-level operating results, increased $30 million, or 10%, to a record $346 million for the third quarter when compared with the same period last year.  The increase in Adjusted EBITDA is attributable to strong revenue growth and the Company's ongoing focus on cost control while continuing to invest in enhancing the overall guest experience.

Nine-Month Results

Net revenues were $1.1 billion for the nine months ended September 27, 2015, an increase of $70 million, or 7%, compared with the nine-month period ended September 28, 2014.  Net income was $138 million, or $2.46 per diluted LP unit, compared with net income of $122 million, or $2.19 per diluted LP unit, for the first nine months of 2014.

The increase in revenues was the result of a 5%, or 917,000-visit, increase in attendance, a 2%, or $0.89, increase in average in-park guest per capita spending, and an 11%, or $11 million, increase in out-of-park revenues.

Adjusted EBITDA for the first nine months increased 9%, or $35 million, to a record $429 million when compared with the same period a year ago.

Momentum Continues Through October

Based on preliminary results, net revenues through November 1, 2015, were approximately $1.2 billion, up 7%, or $74 million, compared with $1.1 billion for the same period last year.  The increase was the result of an approximate 5%, or 1.0 million-visit, increase in attendance to a record 23.6 million visits, a 2%, or $0.71, increase in average in-park guest per capita spending to a record $46.28 and a 10%, or $12 million, increase in out-of-park revenues to a record $127 million compared with 2014.

"What differentiates our parks from other family fun is an intensity and an immersiveness that cannot be matched elsewhere," said Ouimet.  "Our premier Halloween events are good examples of this and they are the strongest contributors to our October performance."

Distribution Declaration

Today, the Company also announced the declaration of a cash distribution of $0.825 per LP unit.  The distribution represents an increase of 10% and will be paid on December 15, 2015, to unitholders of record as of December 3, 2015.

Outlook

"We are proud of the successes we have achieved over the past few years," said Ouimet.  "In 2015, we have benefited not only from our current-year initiatives, but also from the continued returns on our programs and investments of the past several years.  These include investments in our people, in the guest experience and our commitment to the growth potential of all of our parks.  While we have accomplished a lot in a short amount of time, we believe there is still considerable upside in front of us."

"For 2016, we will have our most innovative lineup of new rides and attractions," continued Ouimet.  "Cedar Point, the 'Roller Coaster Capital of the World,' will introduce Valravn, a world-record-breaking roller coaster.  It will be the park's 18th roller coaster and will shatter 10 world records, including tallest, fastest and longest dive coaster.  We will also continue our aggressive investment in Carowinds, where we will expand and rebrand its water park to Carolina Harbor, the Carolinas' largest water park.  In addition, we have partnered with Electronic Arts to introduce two new digital attractions next season -- a new inter-active digital experience at Carowinds that will be based around the popular Plants vs. Zombies online gaming platform, and an all-new 4D holographic experience at California's Great America based on the Mass Effect video game series.

"The success of our 2015 operating season also provides us the financial flexibility to activate additional initiatives within our long-term growth strategy," said Ouimet. "Next year, we will roll out a new digital imaging program, FunPix, along with free wi-fi, at our five largest properties; we will expand the testing and implementation of our new mobile application programs; we will look to expand our operating season through additional multi-week special events; and we will continue testing a new virtual reality experience on a roller coaster at Canada's Wonderland in partnership with VR Coaster and Mack."

Ouimet concluded by stating, "I am proud of our team and their unwavering commitment to the guest experience at our world-class properties.  We remain committed to strategically deploying capital to generate the highest returns for our unitholders in both the short- and long-term.  We maintain our positive outlook and believe we are on track to achieve our long-term FUNforward 2.0 target of $500 million, or more, in Adjusted EBITDA by 2018."

Conference Call

The Company will host a conference call with analysts today, November 5, 2015, at 10:00 a.m. Eastern Time, which will be webcast live in "listen only" mode via the Cedar Fair website (ir.cedarfair.com).  It will also be available for replay starting at approximately 1:00 p.m. ET, Thursday, November 5, 2015, until 11:59 p.m. ET, Thursday, November 19, 2015.  In order to access the replay of the earnings call, please dial (877) 870-5176 followed by the access code 7851418.

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, three 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 one of the "Best Amusement Parks 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 risks 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, changes in the Company's capital investment plans and projects 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 the Company's 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.

1 Average in-park guest per capita spending is defined as the Company's total in-park revenues, including gate admissions and revenue received inside the park gates for food and beverage, merchandise, games and premium benefit offerings, divided by total attendance.

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

 

 

CEDAR FAIR, L.P.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(In thousands, except per unit amounts)

Three months ended

Nine months ended

9/27/2015

9/28/2014

9/27/2015

9/28/2014

Net revenues:

Admissions

$

361,106

$

340,101

$

591,457

$

566,126

Food, merchandise and games

201,408

184,038

347,985

322,025

Accommodations, extra-charge products and other

82,123

71,179

129,420

110,647

644,637

595,318

1,068,862

998,798

Costs and expenses:

Cost of food, merchandise, and games revenues

52,174

46,812

90,868

82,887

Operating expenses

188,565

178,649

424,020

406,191

Selling, general and administrative

61,394

57,205

133,277

125,226

Depreciation and amortization

59,059

58,244

110,175

109,525

Gain on sale of other assets

(921)

Loss on impairment / retirement of fixed assets, net

5,753

1,475

9,436

2,687

366,945

342,385

767,776

725,595

Operating income

277,692

252,933

301,086

273,203

Interest expense

22,159

21,462

64,164

74,101

Net effect of swaps

(1,439)

(1,087)

(2,962)

(1,031)

Loss on early debt extinguishment

(246)

29,027

Unrealized/realized foreign currency loss

33,891

21,515

64,198

22,597

Interest income

(4)

(16)

(49)

(95)

Income before taxes

223,085

211,305

175,735

148,604

Provision for taxes

58,934

49,403

37,834

26,340

Net income

164,151

161,902

137,901

122,264

Net income allocated to general partner

2

2

2

1

Net income allocated to limited partners

$

164,149

$

161,900

$

137,899

$

122,263

Net income

$

164,151

$

161,902

$

137,901

$

122,264

Other comprehensive income, (net of tax):

Cumulative foreign currency translation adjustment

7,688

2,975

13,144

2,279

Unrealized income (loss) on cash flow hedging derivatives

(2,978)

2,726

(3,576)

(165)

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

4,710

5,701

9,568

2,114

Total comprehensive income

$

168,861

$

167,603

$

147,469

$

124,378

Basic income per limited partner unit:

Weighted average limited partner units outstanding

55,770

55,439

55,721

55,448

Net income per limited partner unit

$

2.94

$

2.92

$

2.47

$

2.21

Diluted income per limited partner unit:

Weighted average limited partner units outstanding

56,282

55,855

56,141

55,855

Net income per limited partner unit

$

2.92

$

2.90

$

2.46

$

2.19

 

 

CEDAR FAIR, L.P.

UNAUDITED BALANCE SHEET DATA

THIRD QUARTER

(In thousands)

9/27/2015

9/28/2014

Cash and cash equivalents

$

196,323

$

189,374

Total assets

$

2,098,946

$

2,117,076

Long-term debt, including current maturities:

Term debt

608,850

618,850

Notes

950,000

950,000

$

1,558,850

$

1,568,850

Total partners' equity

$

125,142

$

153,556

 

 

CEDAR FAIR

RECONCILIATION OF ADJUSTED EBITDA

THIRD QUARTER

Three months ended

Nine months ended

9/27/2015

9/28/2014

9/27/2015

9/28/2014

(In thousands)

Net income

$

164,151

$

161,902

$

137,901

$

122,264

Interest expense

22,159

21,462

64,164

74,101

Interest income

(4)

(16)

(49)

(95)

Provision for taxes

58,934

49,403

37,834

26,340

Depreciation and amortization

59,059

58,244

110,175

109,525

EBITDA

304,299

290,995

350,025

332,135

Loss on early extinguishment of debt

(246)

29,027

Net effect of swaps

(1,439)

(1,087)

(2,962)

(1,031)

Unrealized foreign currency loss

33,889

21,503

64,143

22,523

Non-cash equity expense

1,934

1,592

7,195

8,369

Loss on impairment / retirement of fixed assets, net

5,753

1,475

9,436

2,687

Gain on sale of other assets

(921)

Class action settlement costs

177

Other non-recurring items (as defined) (1)

1,205

1,377

1,404

1,935

Adjusted EBITDA (2)

$

345,641

$

315,609

$

429,418

$

394,724

(1) The Company's 2013 Credit Agreement references certain costs as non-recurring or unusual.  These items are excluded in the calculation of Adjusted EBITDA and have included certain litigation expenses, costs associated with certain ride abandonment or relocation expenses, contract termination costs, and severance expenses.

(2) Adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in the 2013 Credit Agreement.  The Company believes Adjusted EBITDA is a meaningful measure of park-level operating profitability.  Adjusted EBITDA is not a measurement of operating performance computed in accordance with generally accepted accounting principles and is not intended to be a substitute for operating income, net income, or cash flow from operating activities, as defined under generally accepted accounting principles.  In addition, Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

 

Contact:

Stacy Frole

(419) 627-2227

SOURCE Cedar Fair



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