Tuesday, August 5, 2008

Earnings Time

Six Flags has announced their results for the first half of the year, and the results are sorta blah, in my opinion at least. They finally had a significant positive net income, however, that's because of a big exchange of debt notes the company did that resulted in a huge credit. Really, their net income was around a million dollars.

They're certainly on the road to recovery, but things are by no means sunny yet. Props to them for starting their massive corporate sponsorship program: they now estimate revenues of $56 million from these in 2008 - that's like having an extra small-ish park in the mix!

You can read all their details here, and a transcript of their conference call here, which has much more interesting information in it.

Cedar Fair also announced their 3 and 6 month results today, and although their stock price jumped up almost $3 today, I'm not as impressed as the general investment community.

The company's results are skewed by an extra week of operating results because of some calendar differences in their fiscal year. Basically, these results are padded by an extra week and so comparisons are rather hard to make. And this totally takes away results from the 3rd quarter - so that'll make those results even more interesting.

Here's their release.

I don't have a link to a transcript of their conference call, but I did listen to it:

• They have 82 acres of land next to Canada's Wonderland on the market with the same company that's sold Geauga Lake's land. Cedar Fair has received several offers on the land, including cash purchases and offers for partnership developments. (maybe like a hotel, indoor water park, or something?) Whatever they get for the land they plan to use it to pay down debit, and they said that comps for land in that area of Canada go $600k to a million an acre.
• I found it very interesting that they cover exactly what loan covenants they have that would restrict them from paying dividends. This has never been covered before... and you can't help but wonder if this was their way of being able to say "We warned you!" when they stop paying them down the road.
• For the record, the company would not be able to buy the Busch parks... but would love a management contract if someone wanted them. PLEASE GOD NO.
• The talks with the parties who put in bids on the Geauga land are ongoing, they did say that at least on bid was for one outright purchase of land, and the other was a joint venture. What kind of joint venture!? I think Cedar Fair had plans for a huge indoor water park years ago but got scared off by Castaway Bay's not amazing success ... wonder if it's one of those... I really don't know. Maybe even a joint ownership of the hotel that's already there.