Heard On... Cedar Fair's 1st Quarter 2019 Earnings Call
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© Cedar Fair |
• During the 1st quarter revenues increased $12 million, based off of increases in per-capitas, attendance and out of park revenues. However, there was an extra calendar week of park operations in 2019 versus 2018, so a lot of the increase probably comes from that. The operating loss for the quarter increased to $85 million, up from a loss of $76 million last year, due to the extra operating days. They also saw a bump in depreciation and amortization costs, to $14 million up from $8 million, due to a change in the "estimated useful life" of a long lived park asset. Maybe that was Volcano at Kings Dominion?
• They also released results through the end of April, which puts this and last year more comparable due to Easter timing shift. At that point revenues were up 2% or $2 million, primarily due to strong in park spending and out of park revenues. Attendance was down around 20,000 visits over last year.
• Also through the end of April deferred revenues were up 12% or $20 million, which represent sales of season passes, dining plans, fast lane, etc. Sales of passes and of all season food plans are both up over last year.
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© Knott's Berry Farm |
• The rewards program for season pass holders is still going to be in a test phase for 2019, through I'm not sure at which parks. After testing and tweaking the program with what they learn this year, it will roll out to a larger audience in 2020. The loyalty program aims to make lifelong relationships with customers, giving them benefits for visiting often and also to keep passes being renewed.
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© Cedar Point |
• The company has several additional revenue generators scheduled to debut later this year, including a new hotel at Carowinds, the opening of the giant indoor sports center adjacent to Cedar Point, and the first Winterfest at Canada's Wonderland.
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© Cedar Fair |
• The purchase of the land under California's Great America was a "once in a generation" opportunity so the company jumped on it. They said the rezoning two years ago was the first step in a "more aggressive development program" and they are "actively deploying that strategy" and will announce more later in the year. The big plans for the park had seemed to have stalled completely, but are they back on now? It sounds like it is, now that they fully own it. I still have to wonder if they played hard ball on the big expansions in order to get the ability to purchase the land.
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The city was forced to sell the property, which it bought in 1985 with money from its redevelopment agency, as part of a state law that dissolved redevelopment agencies statewide. Bids on the property were submitted last year, Ashkenazy Acquisition, which has residential buildings, hotels and shopping malls in its portfolio, submitted the highest bid, at $158 million.
As part of the existing lease, Cedar Fair had the right to match the highest offer on the property, and exercised that option. As part of the sale, the city will transfer the billboard to Great America and come up with a new agreement for use of the city parking lot.
The old lease generated about $5.3 million annually in fixed rent, plus additional rent — an estimated $1.18 million this past fiscal year — based on a percentage of revenue generated by the park,
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