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© Cedar Fair
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It is once again earning release season, let's start by looking at how Cedar Fair did in the past quarter. The company sent out their press release last week,
available a this link, with plenty of detail. Lots of numbers in there too but as always, there was more to hear on the conference call and below are some of the more interesting points.
• The quarter was a bit stunted by many less operating days than in 2019, which is the year to make comparisons to since 2020 was a real dud. In 2020 they had 393 operating days in the quarter versus 726 in 2019. Also, Canada's Wonderland not opening until early July and that's a very profitable park for the chain.
• Revenues in the second quarter were $224 million and attendance reached around 70% of what was seen in 2019. Excluding group sales attendance was 80% of 2019 levels. The company squeaked out $2 million in EBITDA during the second quarter. As far as liquidity goes, at the end of the quarter they had cash on hand of $293 million and with available amounts to borrow they had in total $652 million. The second quarter had a positive $21 million of cash flow and they expect to be cash flow positive through the end of the year.
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© Cedar Fair
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• The company is continuing to offer visitors "more immersive products" such as "events that compliment our world-class attractions." These include Grand Carnivale, Cedar Point's 150th anniversary celebration and Knott's 100th anniversary celebration. These types of event are still a focus for Cedar Fair going forward.
• Season passes are making up 55% of total visits through the first seven months of the year. That's up from 53% in 2019. Year to date they're about 8% higher in season pass sales than in 2019.
• The company has made progress on staffing by raising wages at
different parks, but still are not quite where they need to be. While many parks are doing 7 day weeks there are five parks operating on 5 days a week schedules as the company tries to "maximize attendance up against those staffing challenges."
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Sawmill Creek Renovations © Cedar Fair
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• The company sees the increased wages they offered this year as the new normal for them, and is
looking to change more positions to year-round ones to better service
properties with year-round operations (like Cedar Point's Sports Center
and at Knott's). They also understand there is a big benefit to training and guest service that comes from a full time employee.
• Per caps at the parks are through the roof this year, in the month of July alone the per capita spending was $61.93, 120% of the 2019 amounts. Sales for front of the line passes and all other in park revenue categories are way up.
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© Cedar Fair
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• In terms of capital spending, which we're all keen on, the company is focused on "responsibly investing in" their parks to enhance the guest experience but also need to pay down debt. Through the first 6 months of the year they have spent $25 million in capital on "essential compliance and infrastructure requirements as well as the restarts of select unfinished 2020 projects." Two of these are named as renovations to Castaway Bay and Sawmill Creek Resort near Cedar Point. Both resorts are set to play "key roles" in expanding Cedar Point's operating calendar in the future.
• More on capital spending. For the rest of this year they plan to spend between $50 and $75 million on finishing those hotel renovations and kicking off new projects for 2022. The company, based on positive results in the first 7 months of this year, plans to spend between $175 and $200 million in calendar year 2022 to give "immersive and unforgettable guest experiences." Those are significant numbers when compared to past years. They do plan to get back to spending between 9% and 10% of revenues on capital each year in the long term.
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Backbeatque at Cedar Point © Cedar Fair
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• But wait, more on capital! They note that while they will invest in attractions they also have research to show that the significance of food and beverage having high-quality offerings is key to their guests. They also note that they had incredible guest feedback from Knott's food festival. To that end they will "invest aggressively for the 2022 season to upgrade and expand our facilities across the portfolio, while at the same time, improving the capabilities, technologies and our efficiencies of our food preparation on delivery systems." To be like Oprah, you get a restaurant, you get a restaurant, everyone gets a restaurant!!! But joking aside, I'd expect to see a lot of food and beverage changes next year at all the parks, along with possibly even more food festivals.
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