Wednesday, August 2, 2017

Heard On... Cedar Fair's 2nd Quarter 2017 Conference Call

Today Cedar Fair announced their results for the 2nd quarter of 2017.  The quarter ended with $393 million in revenues, a new record for a 2nd quarter, $5 million higher than last year.  The quarter also had a 2% rise in attendance, and a 1% increase in out-of-park revenues.  The operator doesn't sound overly happy with the results, even though they seem pretty good.  The conference call gave some additional details, let's take a look.

•  Cedar Fair also gave an update on July, the 1st month of the 3rd quarter - which had strong results.  Revenues for the month were up $4 million over last July, with a 2% increase in attendance.  For the first 7 months of the year, revenues are up only $1 million, and attendance is up 62,000 to 15.1 million.

•  This year's big capital projects are well received.  Kings Island's new wooden coaster and the return of WinterFest are projecting the park to have their best year in their history.  The water park expansions at Cedar Point and Knott's have been well received and resulted in longer guest stays, and both water park expect to post record attendance.  Kings Dominion's Planet Snoopy expansion and Pre-K pass have them on track to post their best attendance in 10 years.  The Pre-K pass will roll out to more parks next year.

•  Across all the parks, this year's upcoming Halloween Haunt festivities will feature 120 haunted attractions, more than 40 live shows, and 5,000 monsters roaming the parks.

•  Sales of season passes and similar all-season benefits (food, beverage, photos) are up 10% over last year, which was the best year ever.  The company has beat their record and sold more season passes this year than ever before.  This also created an increase of $20 million of deferred revenue that will be recognized throughout the end of the year.

•  The outdoor sports complex near Cedar Point has been a big success in its first year.  They have booked more than twice the amount of tournaments that they expected.  They're in negotiations for the indoor expansion at the Cedar Point location, and in talks for a second location.

•  WinterFest, as previously announced, will come to Worlds of Fun and Kings Island this year (joining California's Great America), and is expected to generate 500,000 visits among the parks.

•  When asked about the closure of Wildwater Kingdom in Ohio, the company mentioned that it did just over 200,000 visits per year.  It also had no big impact in loss of revenue, and an even smaller impact in EBITDA.

•  With regard to capital expansions, the company is sticking to spending about $130-$140 million per year now.  New sports complexes or hotels would be on top of that amount.  In general terms, they plan for about 9.5-10% of revenues for the figure of further out yearly capital expansions.