Heard On... Cedar Fair's 2019 Full Year Earnings Call

© Cedar Fair

Cedar Fair has announced their 2019 full year results, and had very good news to share pretty much all around.  As always, they hosted a conference call to discuss their results and here are some tidbits from that event:

• Including their two new Schlitterbahn parks, overall revenues for the year increased $126 million or 9% to $1.47 billion.  That came from an increase in attendance of 8% or 2 million visits to a total of 27.9 million.  The company also saw a 1% increase in per-capita spending and an 11% or $16 million increase in out of park revenues for a record amount of $169 million.

• Excluding the Schlitterbahn parks the numbers were still good.  Revenues were up 6%, attendance was up 1.3 million or 5%, per capita spending was up 1% and out of park revenues were up 8% or $12 million.

© Cedar Point

• The company has seen an amazing 40% increase in season pass sales right now over last season.  In 2019 season pass visits totaled 53% of their attendance, up from 50% in 2018.  The increase has led to deferred revenues being up $40 million at year end.  We all know that Cedar Point is killing it with their season pass sales, but sales are up double digits this year at almost every park as well.

• In 2019 the number of unique visits, aka not season pass visits, were up almost 1 million.  The company knows the benefit of growing season pass sales but also sees unique visitor count as critical to sustained long term growth.  They credit the rise in unique tickets to events like Grand Carnivale and Monster Jam.  The company plans to continue these limited run events in the future, adding more like Grand Carnivale and Summer Nights.

© Cedar Fair

• The out of park revenue segment continues to shine, and they see that fact as an item that differentiates them from other regional companies.  Out of park revenues now represent 10% of overall yearly revenue totals, which is significant.  They're currently renovating both the Knott's Hotel and Castaway Bay and hope for significant returns like they saw with Hotel Breakers.

• Food and Beverage per capita spending was up 5% in 2019, which they credit to their culinary chefs and new efficient and immsersive dining establishments.  They also see their food program as something that differentiates them from competitors in the industry.

• 2019 saw both strong consumer spending trends as well as very nice weather through the summer and fall, both of which led to the record results.  You often hear parks talk of bad weather affecting their results, it is nice to hear about good weather for a change.

© Canada's Wonderland

• Canada's Wonderland just finished their first Winterfest event and it was a success.  They had two thirds of their visitors purchase single day tickets, meaning they were probably new visitors to the park.  That's different than the chain's other Winterfest events where 60-70% of guests are pass holders.

• The Pass Perks loyalty program is rolling out to all parks (except Schlitterbahn which they hope to add in 2021) this year.  The test parks last year helped gather data to improve the program.  They use Pass Perks not only to build loyalty but also to drive more visits through limited time offers and specials.

• Cedar Fair has set a new goal of reaching $600 million in EBITDA by 2024.  This year they hit $505 million, which was up $37 million.  Without the Schlitterbahn parks it was up $21 million, meaning those two parks contributed $16 million.

© Kings Island

• There was a lot of chatter about capital expenditures, which are ride-lovers best friend.  They're still planning to move toward more OpEx oriented and CapEx efficient additions, which are more like the limited events and such.  They will also continue to spread out the major thrill ride additions at individual parks by an additional one or two years.  So if it used to be 4 years between big rides at park X, now it will be 5 or 6 (as an example, they did not give specific data).  This allows them to have something new at each park, each year.

• More on capital spending - they want to get overall spending closer to 9% of revenues by the 2021 season.  In 2020 they're spending around $190 million, for comparison 9% of the 2019 revenues would be around $132 million.  By 2021 and 2022 their large spending on hotel renovations and bringing the Schlitterbahn parks up to speed should be over, allowing them to spend less overall.

© Carowinds

• A couple final tidbits.  Two more parks will be adding a parade during Winterfest in 2020, similar to the parade that Carowinds added this year.  They confirmed no new park will add Winterfest in 2020, which we knew already.  Lastly, they did remark on how they removed two roller coasters from Kings Island in order to make operating costs balance for the addition of Orion - so they're not afraid to remove old rides to add new ones in the future... at least that's what I gather.