Saturday, May 21, 2022

Heard On... Cedar Fair's Q1 2022 Earnings Call

© Cedar Fair

Cedar Fair announced record results for the first quarter of 2022, with strong indicators of a busy season ahead.  It seems that theme parks are still experiencing a post-pandemic rush, which is a great thing for us fans.  Cedar Fair had their usual conference call after the earnings came out, here are some notes from that:

• The January through April period had record revenues of $193 million, a $48 million increase over the first quarter of 2019 (the last really comparable quarter).  For the first three months revenues were $99 million, per capita spending was $58.86, and out of park revenues were $16 million.  Operating loss was $84 million, up from a loss of $92 million last year.  EBITDA was a loss of $68 million, up $15 million from last year.  Attendance was 1.45 million, up 24% from 2019.

•  At quarter close deferred revenue was at $234 million, up $36 million from the end of the calendar year.  Specifically, season passes were up $59 million over 2019 at the end of April, and "add on" features to passes were up $17 million.  Resort bookings were also ahead of 2019 levels, and bookings for the Cedar Point Sports Center are "very strong."

•  This year out of park revenues will be bolstered by the reopening of both Castaway Bay and Sawmill Creek resorts, which were closed last year.


© Cedar Fair
•  The labor market so far this year is somewhat better than last year, though hourly rates are still at a history record high.  They've introduced a "wage scale based on seniority, responsibility and job specialization" and are participating in the J-1 Visa Exchange program as much as they can.  This year Cedar Fair expects 2,400 total operating days across all parks and operating hours of 23,000, which is up 60% from 2021.  In 2021 the average seasonal labor rate was just over $17 per hour, so far this year it's 2-3% above that.

• With a big focus (and big spending to match) on culinary operations at the park, Cedar Fair reports that through the first 4 months of the year they had a F&B transaction count increase of 6%, which equates to 150,000 additional transactions, over 2019.  The average value of each transaction also increased by 25%.

•  The company is spending around $200 - $215 million on capital expenditures this year, $40 million of that was for Castaway Bay and Sawmill Creek.  Another $25 million will be for a full renovation of the Knott's Berry Farm hotel over the next year.  $60 million is being used to upgrade in-park culinary offerings and food delivery systems.  The rest (around $75 million to $90 million) is for "traditional investments in new rides, attractions and events designed to drive visitation, as well as technology and park infrastructure enhancements aimed at improving the overall guest experience." 


•  The CEO commented on capital expenditures and noted that he is excited about plans for 2023 and 2024.  He explained they're contracted on rides for those years and you always have to be contracted 24 months out for a new ride, and that manufacturer slots are filling up very fast as a sign of the strong industry recovery.


© Cedar Fair
•  The company aims to reduce long term debit to less than $2 billion, and last December paid off 50% of the loans they had to take out during the pandemic.  At the end of the first quarter total debt was $2.6 billion.  They also intend to reinstate the quarterly dividend by the 3rd quarter of this year, or sooner. 

• It sounds like the company is done giving out financial guidance.  Instead they will give updated trends at earnings releases that go past the quarter end, and trends after Memorial Day, July 4th and Labor Day weekends.  So our next updated form the company will just be a couple weeks away or less.