Thursday, May 5, 2016

Heard On... Cedar Fair's Q1 2016 Earnings Conference Call

Almost hard to believe that another round of quarterly earnings calls have arrived, with some of our favorite park operators reporting their 1st quarter of 2016 results.  Cedar Fair announced record results for this past quarter, and as always their conference call gave more detail.  Here are some notes from that call:

• The company's latest goal was to hit $500 in ebitda by 2018, and now believe that they will hit that number before that target, possibly an entire year early.  In short, things are going very well for them.

• The record Q1 results saw $58 million in revenues (up 25%), record attendance and strong opening weekends at California's Great America, Carowinds and Kings Dominion.

• Deferred revenues, which are on the books from the sale of season passes, dining, beverage and photo passes, are up 14% or $13 million to $105 million.  That means the company has sold quite a bit more of these this year.

© Cedar Fair
• Knott's Berry Farm, the only park open for all of the 1st quarter, posted record attendance and in park spending.  The park's adjacent hotel has also posted record results.  The park has become a "regional entertainment destination" with a focus on seasonal events that draw guests back.  This year the park has already hit an all-time record for season passes sold and the revenues from them.

• The company is excited to open their new for 2016 attractions, noting that Valravn at Cedar Point is already generating a lot of publicity, and Carowinds' new water park is of "a new generation" with tons of special features and amenities.

• Cedar Fair will continue to embrace and grow each park in line with their own regional brand.  Knott's and Carowinds were studied first, Cedar Point and Canada's Wonderland were just completed, and Valleyfair and California's Great America are up next.  Based on the in-depth studies of the parks, both marketing and expansion plans will be formed.

© Cedar Fair
• The company has 1,300 acres of undeveloped land around its parks, and wants to start to use some of it for additional growth.  The new sports complex at Cedar Point is being looked at as something that could come to other properties.

• Other developments could include new hotels, camp ground expansions and shops and dining adjacent to park entrances.  California's Great America is an example of where this could first work, using Levi Stadium as a natural draw.  This development is part of a larger rezoning plan for expansion at that park, drawing off a very under-tapped market of dense population surrounding it.  They hope for expansion results on the level of Carowinds for the park.

© Cedar Fair
• More "techtainment" or the merging of technology and entertainment, will show up at the parks.  The recent additions like Wonder Mountain's Guardian and Plants Vs. Zombies are examples of this style of attraction and have been deemed a success.  The operators feel that Mass Effect will be the best use of technology in a park on a new for 2016 attraction in the U.S.