Heard On... Six Flags Entertainment's Q1 2022 Earnings Call

© Six Flags

Six Flags Entertainment Company also had some generally good news to share when they recently announced their Q1 2022 earnings.  The company is moving ahead with their new CEO at the helm, and the bulk of their priorities have shifted to a focus on guest comfort visit experience.  To that end, let's take a look at some notes from the call.

•  In the first quarter, revenues were $138 million, up from $82 million in 2021.  That translated to a EBITDA loss of $16 million, improved from a loss of $46 million in 2021.  Attendance was 1.7 million guests, up from 1.3 million guests in 2021.  Total guest spending per capita was $75.46, an impressive increase from $56.16 in 2021.

 

•  Comparing 2022 to 2019 we see that revenue increased by $10 million, based off a $15 admission per capital increase and a $12 in park per capital increase.  2022 saw a 22% reduction in attendance when compared to 2019, and EBITDA in 2022 improved by $16 million over 2019.

•  Active pass base at the end of the quarter was 3.6 million, down 12% from last year.  They've stopped selling memberships, so that is to be expected.  The 3.6 million is split evenly between 1.8 million members and 1.8 million season pass holders.  The company expects their active pass base to decrease over time as they raise prices and legacy memberships end.

 

© Six Flags

•  However, the Six Flags leaders do recognize that someone people like to pay on a monthly basis for budget reasons, so they'll probably bring back a payment plan option for season passes this summer.  But it won't be a membership... it sounds more like how Cedar Fair lets you pay over a certain number of months.

 

•  The new CEO seems to really hate the all season dining plans that he eliminated.  He went on for a good while about how people would pay $80 for an all season plan and it was very unprofitable for the company, and made food lines super long and terrible.  And alienated day visitors who just wanted to get their family dinner.  By increasing admission prices, eliminating season dining and getting rid of free tickets they are pleased with the guest quality, noting that security incidents this year are down 80% compared to last year.

•  Interestingly, Six Flags has almost 3 million non-paid visits last year, a result of various program benefits.  They've eliminated that for this year, and are trending about 20% less attendance year to date than 2019.  However, guest scores and spending are up.  They believe that running at 30 million visitors a year is far too many guests for the parks to hold, and having all season dining attracts a certain kind of visitors that clogs the parks up.  They think that an overall decrease needed in attendance is probably between 10% and 15%.

© Six Flags

•  Progress is being made on six initiatives listed three months ago; priorities set out by the new CEO.  Ride throughput has been helped by adding single rider lines at many parks on busy days.  Second, staffing levels have been improved and more training is creating friendlier employees.  Third is the appearance of the parks, which is being worked on through brand new entrances at a couple parks, improved landscaping, renovated restrooms and improved dining facilities.  Fourth is offering better food, which a new executive chef has debuted items like rotisserie chicken, salads, and better versions of park staples like hamburgers and pizza.  They also debuted their own brand of coffee shop - Roller Coasters Coffee.  Fifth is guest amenities, and more benches, sun covers, more dining areas, seat cushions and improved wifi.  Sixth is upgrading park apps for guests to use, allowing them to reserve a parking spot, plan which lines to pay to skip, order food on their mobile, and in the park actually posting digital sign with ride wait times listed.

•  The park has been able to bring up the daily ticket price, part of their strategy of not giving away the gate, and that resulted in an $5 or so average increase per visitor in admission revenue.  They note that their competitors, Cedar Fair and SeaWorld, have 25-30% higher ticket prices across all types.  But, they expect to close that gap this summer or by the start of 2023.

•  2022 full year capital expenditures should be a bit higher when compared to 2021, as they have a balanced approach of "several exciting roller coasters and a focus on guest facing technology and amenities" that they are spending on.  I could not find any updates on what they plan to spend next year and moving forward.

•  The company has opted to no longer just try to grow attendance, now they're focusing on their premiumization strategy and improving guest experience to build a base to grow from.  That means reducing attendance for more comfortable visits that in turn create higher guest pending on premium products - everything from reserving lounge chairs to being able to sit and buy fancy coffee drinks and pastries.  The new CEO does a lot of defending of how that is a good plan, which makes sense, since it is his plan.  There was even a lot of justifying how parks will be busy since people want to get out of the house post-pandemic... things we already well know.  But he says that his plan is working, referencing how they plussed up the France area of Six Flags Over Texas and added a shop to buy coffee and pastries and the guests are loving it and spending money. 

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.

Heard On... Six Flags Entertainment's Q4 2021 Conference Call

© Six Flags

Better late than never, I wanted to take a look at what came from Six Flags Entertainment's Q4 2021 earnings conference call, which took place after the quarter and full year results were announced.  This was the first call for the latest CEO, Selim Bassoul, which is important as they took some time to explain how they see the company moving forward.  So while this took place a few weeks ago, it's definitely still worth visiting.  Here we go!

• In Q4 2021 Six Flags had revenues of $317 million, up from $261 million in 2019.  Attendance was 5.8 million, down slightly from 2019 mostly due to a reporting calendar change.  EBITDA was $95 million, up from $72 million in 2019, and net income was a loss of $2 million compared to a loss of $11 million in 2019.  Total guest spending was up to $53 a person compared to $40 in 2019.

 

• In Q4 2021 the company says attendance was at 98% of 2019 levels on an exactly day to day comparison, and when taking out group business it was at 100%.  They also had $9 million of employee termination costs in the quarter, matching up to some large layoffs we read about months ago.  Active pass base represented 66% of attendance vs. 71% in 2019 as the company focuses on single day visitors again.

• For all of 2021 total revenues were $1.4 billion, up just $9 million from 2019.  EBITDA was $498 million, down from $527 million in 2019, and net income was $130 million, down from $179 million in 2019.  Attendance for the year was 27.7 million, down from 32.8 million in 2019.  Guest spending for the whole year was $52 per person, up from $42 per person in 2019.

 

© Six Flags

• At the end of the year the company's active pass base was 8.3 million - 2.1 million members and 6.2 million season pass holders.  In 2019 at year end there were 2.6 million members and 5.1 million season pass holders.  You can count on those trending toward season passes in the future as memberships have been stopped being sold.

• Lots about the new CEO Selim Bassoul, who noted he has 7 children and has spent a lot of time at theme parks in the past.  He wants to create a "customer-obsessed culture" with leaders who are empowered to think like company owners.  He also believes in a decentralized business, where corporate office exists to serve the parks, and parks exist to serve visitors.

• Even more, Mr. Bassoul wants to execute their plans faster, creating a performance oriented culture and ridding "corporate bureaucracy" and not relying on their brand alone.   They want to be the "most innovative and customer-obsessed theme park company in the world."  They have reduced layers of management from 7 to 3, downsized corporate headquarters and given more autonomy to the parks.  The main focus for guest experience is "premiumization" of the experience.

© Six Flags

• In 2021 Six Flags spent $122 million on capital expenditures.  They expect the amount for 2022 to be "slightly" higher than 2021.

• The plan for the future is based on three areas of focus - improving the guest experience, pricing and capital allocation.

• To improve the guest experience they have six initiatives: 

1 - ride efficiency will be improved by reducing wait times, ride downtimes and opening rides with the park each day.  Single rider lines will also be added and they will experiment with virtual queuing. 

2 - create fun through employee friendliness, treating visitors like family.

3 - park cleanliness including better curb appeal, better landscaping and better restrooms.  

4 - better quality food.  They hired a new executive chef and the CEO has tasted hundreds of burgers, pizza and chicken tenders.  They will also add healthy options and more beverages like coffee and alcohol.  F&B was 21% of their revenue last year and they want it higher.

5 - adding more guest amenities like more benches, more shaded areas and parent lounges.

6 - improve guest facing technology, mainly the Six Flags app.

It seems like these items are basic no-brainers that have been touted by previous management time and time again, so let's hope they stick with the plan this time and make improvements as listed above.

© Six Flags

• To improve the company's pricing they will rely on the fact that they have done surveys that show guests will pay more for a better experience.  The CEO said the company has long ignored that and packed the parks full of guests with cheap tickets and passes.  They will focus on attracting guests who will pay more for a less crowded park that is easier to navigate with shorter lines and less pressure on park operations.  They've also removed memberships and changed the season pass system to three levels that have higher price points and more opportunities for upselling.

• Changing capital allocation is the last area of focus, and they will be focused on reinvesting in the business, but not only on thrill rides.  In the past they spent about 60% of capital funds on rides which added capacity and were marketable but short lived on bringing guests.  Now they have a ton of rides and will still add them, less frequently, but focus more on spending on guest-facing technology, food and beverage and park infrastructure improvements.  The 2nd focus is to use cash for paying down debt.  For spending on the parks they used to look at it as a percent of revenues, and now they think more of a static amount to spend each year, though that amount was not disclosed.  They note that what they will focus on (technology, F&B, infrastructure) costs much less than thrill rides.  So, more bang for their buck.  Finally, they do plan to try to attract families to the parks again, by working on children's areas, kids meals, etc.

• When asked if mergers and acquisitions were part of the new plan the CEO said that they're only focused on creating a better experience and paying down debt, and that mergers and acquisitions are not a part of the "foreseeable future."  Also, it does not seem that they have any plan to start to pay shareholders a dividend again any time soon.

Heard On... Cedar Fair's Q4 2021 Conference Call

© Cedar Fair

Cedar Fair recently held their Q4 and year end 2021 conference call after their earnings report came out.  You can check out the company's full press release at this link.  As in the past the conference call is used to go over their figures, but there are always some other tidbits in there too - some notes from which are below.

•  On a high level view of financials, revenues in 2021 were $1.34 billion, compared to $1.47 billion in 2019 - the last pre-pandemic year.  Attendance was 19.5 million guests, down 8.4 million from 2019.  Out of park revenues of $168 million was comparable to 2019.  Per capita spending hit a new record of $62.03, 28% higher than 2019.  Full year EBITDA was $325 million in 2021, compared to $505 million in 2019.  Net income, however, in 2021 was a loss of $49 million compared to a gain of $172 million in 2019.

•  Digging into attendance a bit more, in 2019 the parks had a total of 2,224 operating days, in 2021 they did 1,765.  Overall totals in 2021 were about 70% of 2019 attendance, but on a day to day comparison closer to 85%.  In the 4th quarter of 2021 there were actually 21 more operating days in total than in 2019, as Cedar Fair extended park schedules "where appropriate."  They expect to increase operating days 35% in 2022, to almost 2,400 days (more than in 2019) and operating hours will be nearly 60% higher than in 2021.

© Cedar Fair

•  With regard to the record per capita spending, they note that all revenue channels saw increases - especially admissions, food and beverage and extra charge attractions.  Cedar Fair points out that while consumer spending was strong this year, they also credit the food and beverage lift to "building a more robust culinary infrastructure capable of delivering higher quality" offerings over the last 5 years.  

 

•  Looking just at Q4 of 2021 when compared to 2019, the results were good.  Revenues were up 36% or $94 million over 2019, attendance increased 5% or 246,000 visits and out of park revenues were up $6 million to $34 million.  Per capita spending for the quarter was up 34% as well.  EBITDA for the quarter was $73 million, a record, up $19 million over 2019.

 

•  At the end of the year the company's cash was at $61 million with $359 available on credit.  The revolver credit had no balance at year end, and no large maturities are due until 2024. 

© Cedar Fair

•  The labor market situation is still evolving and they expect to see higher labor costs again this year, mostly due to having more days and operating hours.  They do see the return of visas for international workers, which can help with staffing.  Having return employees from 2021 will also help, as 2020 was so fragmented there were much less returning workers in 2021.

•  Going cashless has helped guests to utilize apps to pay and also reduced lines in the parks.  It has also increased the number of sales per hour which is meaningful for the company.  They are also leaning on technology to continue to market to guests better and to help with labor costs.

 

•  Cedar Fair again confirmed that SeaWorld Parks & Entertainment made and offer to purchase the company, starting at $60 a unit.  They said they then "informally" upped the offer to $63 a share, however after due diligence that still wasn't an offer that was deemed "in the best interest of the company and its unitholders."  

© Cedar Fair

•  Due to the performance in the 2nd half of 2021, Cedar Fair anticipates returning the quarterly distribution to unitholders as soon as Q3 2022, possibly sooner.  No work yet on at what level it will return, but they want to make sure it is sustainable and able to grow over time.

•  Capital spending plans for 2022 include between $170 to $175 million on "new rides, attractions and other park improvements to support future growth at our parks."  That's a sizable number, which is good news for park fans.  Considering timing, a lot of that is probably to start projects for 2023.  They will also spend another $40 million to complete renovations at Sawmill Creek Resort and Castaway Bay.

•  The company will also continue to pay down long term debt until they are below $2 billion.  In December they redeemed bonds due in 2024 using $450 million cash on had, removing close to half of the debt taken on during the pandemic in 2020.

•  2022 season pass sales are strong, with a 8% increase in average season pass price and "higher penetration rates" for all-season add-ons.  Deferred revenues at year end, which is mostly from season passes, was at $198 million, up $37 million from 2019.

Heard On... Cedar Fair's 2nd Quarter 2020 Earnings Call

Cedar Fair had their 2nd quarter 2020 earnings release and subsequent call last week, just after Six Flags Entertainment released theirs.  As was found in Six Flags' numbers, things weren't especially great for Cedar Fair - all of which is expected in these troubled times.  Here are some of our notes from the call:

• 2nd Quarter results include only Worlds of Fun and the two Schlitterbahn parks in Texas.  Net revenues were $7 million, which comes from a decrease in attendance of 8 million and a $44 million decrease in out of park revenues.  The operating loss for the quarter was $142 million, and the EBITDA loss was $85 million.

• With regard to liquidity, Cedar Fair is using about $30-$40 million per month through the end of 2020.  They also reaffirmed that they have enough liquidity to last until the end of 2021 even if all parks are forced to close until then.

© Kings Island

• The company is trying to keep its brand reputation strong by staying engaged with visitors and employees, using this season to base future investment decisions, operating strategies and park programming in the future, revising marketing to be as efficient as possible, using scalable technology based initiatives to improve safety, maintaining a disciplined approach to cash use and investing in new capabilities to capitalize on changes in consumer behavior and preferences.

• Overall season pass sales for the year are down more than 30% or 900,000 passes.

• For the rest of the season that the parks are open the company expects them to have 20% - 25% of historical attendance (which translates to 15% of theoretical capacity).  On some good days some of the bigger parks have seen attendance hit closer to 40% of historical attendance.  These rates have been affected by COVID-19 case spikes in markets.  The 7 parks that have been able to open so far this year represent 40% of historical attendance and revenues.

• The company has proceeded to "defer or eliminate" 2020 capital expenditures as they move into 2021.  They reduced 2020 capital expansion by $75 to $100 million.  While the call did not say this, I think a big part of that was cancelling many special limit time entertainment events and festivals.

• Regarding 2021 capital expenditures, the company is "reactivating certain capital projects to ensure the properties that should be fully operational for the 2021 season are prepared and ready to maximize revenue opportunities."  They promise to provide more visibility into those plans and their outlook on the 2021 capital program later in the year.  This sounds encouraging.  They also mention that they still believe strongly in experience based additions, like Grand Carnivale and other similar attractions that will help differentiate the parks from the competition.

© Canada's Wonderland

• There is still a chance that we could see Winterfest celebrations this year, but if so they will be at Knott's Berry Farm and Canada's Wonderland... if those parks are able to open.  Those are the two most profitable parks during winter so if they are able to open it sounds like Cedar Fair might jump at the chance to operate this winter.

• Operators are dedicated to keeping parks that couldn't open this year in the minds of visitors, including the use of social media and getting feedback on a variety of topics.  They want to continue to grow the consumer loyalty while they can't open.

Heard On... Cedar Fair's 1st Quarter 2020 Earnings Call

© Cedar Fair

Cedar Fair has held their 1st quarter of 2020 earnings conference call, just like we saw from Six Flags this past week.  The company's call is more focused on the pandemic and Cedar Fair's reaction to it, and as usual what follows are some notes from the call.

• Revenues for the quarter were $54 million, down from $67 million last year.  Attendance was down 239k from last year, and out of park revenues were also down $3 million.  This of course is because of the parks closing in the middle of March.

• Before the parks, which was really just Knott's Berry Farm, closed in mid-March attendance was up 149k visits or 19%, and revenues were up $8 million - a really record strong start to the season.  During the last two weeks of March with no parks open Cedar Fair estimates it lost 388k in visits and $20 million in revenues.

© Knott's Berry Farm

 • At the end of the 1st quarter season pass sales were still up 30% over the prior period, even considering the pandemic.  Deferred revenues were $195 million at the end of the quarter, up $33 million over last year.

• After a recent bond sale and expanded revolving credit lines, Cedar Fair has liquidity is around $821 million, with a monthly cash burn rate of $30 - $40 million.  However if the parks stay closed a long time they will reduce more monthly expenses.  Specifically that is if the parks can't open at all in 2020.

• As far as the Cedar Fair parks reopening, the CEO had a somber take on things: “We continue to work closely with local and state health authorities to monitor the COVID-19 pandemic. Based on the best information we have currently, we do not anticipate resuming operations at any of our parks in the near term. This projection remains fluid and subject to change as the situation evolves, including if state and local guidelines are modified.” 

• More on reopening.  They understand that due to their seasonal nature, "it is important that we’re able to restart the parks with a reasonable number of operating days remaining in the year."  They will need two to three weeks to open a park once they are given the go ahead.
 

© Cedar Fair

• When parks reopen there will be employee wellness checks, increased sanitizing and disinfecting on all surfaces, social distancing on rides and in all food and retail locations, extra hand washing stations for guests and expanded use of mobile apps to create contactless transactions.  I did not see anything about face masks.

• Similar to Six Flags, the Cedar Fair parks will also use a reservation system to limit daily attendance.  They potentially will also utilize virtual queues and a broader rollout of food and beverage ordering through the park's app.  Most of the parks operate normally at about 50% of theoretical capacity, even when Cedar Point does 50k guests a day that isn't full theoretical capacity.  This will allow them to operate parks at dramatically less than theoretical capacity and still be operationally profitable.

• They were asked which parks might open first, but didn't really give a specific answer.  Just that each park will be different, probably at a different time, and all depends on local officials and their plans.

© Cedar Fair

 • They were asked about the big 2020 celebrations of Knott's 100th and Cedar Point's 150th, if they would be pushed to next year, and Cedar Fair said they're still studying that and waiting to see when the parks can open.  They did however say that they already "announced" that some of the limited time events like Grand Carnivale won't take place this summer.  No parks were mentioned specifically, but after a light search I did notice that Grand Carnivale is no longer on Dorney Park and Kings Dominion's special events page.

• As stated previously, the company has deferred or eliminated $75 - $100 million in capital expenditures for 2020 and 2021.  The call mentioned that in 2020 they will spend $85 - $100 million on capital expenditures and note that the majority of that will be spent by the end of the 2nd quarter.  To me, that means a very lean 2021 roster of new items in the parks.

Heard On... Six Flags' 1st Quarter 2020 Conference Call

© Six Flags

Late last week was Six Flags Entertainment's 1st Quarter 2020 earnings conference call.  This one was a bit different since we're in the middle of a pandemic, but there were still some interesting items to note from the call.  Here is a link to the company's press release about the quarter.

•  Revenues for the quarter were $103 million, a decrease of $26 million from the prior year.  They had 1.6 million guests, down 584k from last year.  However, prior to the park's closing attendance was up 255k over last year.  The park also had $10 million less revenue due to the international licensing agreements in China and Dubai which were cancelled.

•  The company's active pass base decreased 10% over the prior year.  The company attributes that to the pandemic, causing deferred revenue to be $149 million, down $29 million from the prior year.

•  Prior to closing the parks in March, single day paid admission at the operating parks was up 38%, something important as that metric failed last year and was going to be a big push for the operator in 2020.

© Six Flags

•  The Six Flags branded park in Saudi Arabia is "on track" and is still planned to open in 2023.

•  Reaffirming their plans to save cash, they clarified that they have deferred $20 million of "increased investments" they planned to help the guest experience, and found $10 - $20 million of extra non-labor operating costs to cut.  They are also "taking steps to defer or eliminate at least" $40 - $50 million of capital expenditures for this year.

•  More on the active passholder base - at the time of the call the program was down 20% over the prior year.  Six Flags is working to retain the current passholders.  They have offered guests the ability to pause payments on their passes, get a free tier upgrade if they keep paying, and get an extension for the time the parks are closed.

•  Six Flags is working with their active pass base to understand what they expect to see once the parks are able to open.  This is helping them plan to operate the parks in a way that will make the customers feel comfortable.  50% of guests said they would visit a park right now if it were open, and 80% said they would visit this year if the park includes social distancing and increased disinfecting standards.

© Six Flags

•  They are also turning to technology to allow for virtual queues, cashless transactions for payments and mobile food ordering, all of which are designed to help with social distancing.  As for other methods, there will be temperature checks, hand washing stations, and plenty of hand sanitizer among others.

•  Once a park is deemed okay to be opened, they will need two to three weeks to prepare.  They also note that they know how to operate a park with small attendance so that it is still profitable, so they are prepared if attendance is weak.

•  When asked about what parks could open first, the company made it clear it's all up to local governments, however the parks in Georgia, Texas, Oklahoma, Missouri and Mexico appear to be the first in line at the moment.

Heard On... Cedar Fair's 1st Quarter 2019 Earnings Call

© Cedar Fair

Last week was the earnings call for Cedar Fair Entertainment Company's first quarter 2019 results.  There wasn't a ton of super exciting news, but a lot of updates about the health of the company... which seems strong.  Here are some notes:

• 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.

© Knott's Berry Farm

• Generally speaking it sounds like Knott's Berry Farm is continuing to do extremely well, having their strongest-ever start to the 2019 season with their Peanuts Celebration and Boysenberry events.  They are continually booking year over year revenue increases, and the same with their season pass program.  They said again that the park surpassed 6 million visitors last year (not clear if that's the park AND water park or just the theme park).

• 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.

© Cedar Point

• No change to the company's long term goal of hitting $575 million in EBITDA by 2023.  They still plan to get there by "enhancing guest experience, expanding the season pass program, increasing market penetration through targeted marketing and pursuing developing land adjacent to the parks."

• 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.

© Cedar Fair

• The 2019 capital has a heavy mix of entertainment and experience in it, but also big roller coasters at Carowinds and Canada's Wonderland.  The Grand Carnivale and Monster Jam Thunder Alley events feel like they were created from a push right from the CEO's office. (they again say that the partnership with Monster Jam is the "first installment of a strategic collaboration between the companies)  They're also excited to generate the excitement felt at Knott's Ghost Town Alive at Cedar Point's Forbidden Frontier this year.

• 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.

Heard On... Cedar Fair's 3rd Quarter 2018 Conference Call

Better late than never, let's take a look at Cedar Fair's 3rd Quarter 2018 earnings details and conference call.  Under the headline of posting record 3rd quarter revenues, the company released earnings that showed improvements from where they stood at the end of the 2nd quarter.  The market didn't necessarily love the results, however, so let's dig in and see what was noteworthy.

• For the 3rd quarter revenues were up to $664 million, up 2% over the prior year.  Out of park revenues increased $5 million or 8% and in park spending was up 2% to $49.47.  Attendance was down less than 1%, or 57,000 visits to 12.4 million.  In the end, EBITDA was up 1% or $4 million, to $338 million.  The company has also increased the annual dividend by 4%.

•  Looking at year-to-date results through the end of October, when most of the chain's parks are closed for the season, revenues were up $9 million or 1%.  The in-park per capita spending stayed up 1%, out of park revenues were up 5% or $6 million and attendance was down 1%, or 185,000 visits.

© Cedar Fair

•  With continued success from Winterfest, the company hopes to post record attendance, making up the 1% they were down at the end of October.  This year will be the first season for Kings Dominion's event, joining four existing parks.  The company has already seen their test park, California's Great America, grow each year since the event started.

•  Cedar Fair has been trying to mitigate bad weather (they noted this year has had plenty of it) by working with groups to reschedule events.  Kings Dominion, for instance, rescheduled two park buy outs when Hurricane Florence closed the park for an entire weekend.  They also saw pent up demand from especially bad weather in July which led to some increases in August and September.

•  Focusing on costs has helped lead to the quarter's results.  The parks have hit higher "net promoter score" ratings while keeping costs below budget during the bad weather periods.  Cedar Fair is currently working on a new workforce management system to more efficiently utilize labor during the year.  That will first roll out at Knott's Berry Farm and California's Great America.

•  Season pass sales continue to be up for Cedar Fair.  At the end of the 3r quarter deferred revenue was up 20% from last year, to $102 million - every park is ahead in season pass sales versus last year.  In the past 5 years the percentage of overall company visits by pass holders has gone up from one third to over one half currently.

© Cedar Fair

•  The 2019 capital plan seems nearly fully announced at this point, with the star attractions being roller coasters at Carowinds and Canada's Wonderland.  Other additions include "more immersive, multi-week special events, including nighttime spectacular celebrations in the first-half of the year."  I have not seen details of that type of event released yet for any park, should be interesting to hear more.  Winterfest will also open in 2019 at Canada's Wonderland.

•  Cedar Fair still has 1,400 developable acres of land adjacent to its parks.  It is still working to develop more of that, with three projects opening in 2019/2020: the indoor sports center near Cedar Point, and hotels adjacent to Carowinds and Canada's Wonderland.

•  This is the first year some parks (only a handful) are offering a 12 months payment period for season passes.  The response is significant, and they're looking at it closely as the passes potentially move to a membership plan like Six Flags does.

Heard On... SeaWorld Entertainment's Q3 2018 Earnings Call

This past week SeaWorld Entertainment released their 3rd quarter, 2018 earnings and it looks like the turnaround of the company continued through the summer season.  The park put out a press release covering the news, but also held their usual investor conference call with some additional information.  Here are some notes on both:

•  During the third quarter of 2018 the company had 8.3 million visitors, up from 7.6 million in the period the year before.  Total revenues were $483 million, up 10% from last year.  Perhaps most importantly, EBITDA was up 22% for the quarter to $212 million.

•  This quarter helps cement a solid year so far.  Looking at the first 9 months of the year, attendance stands at 17.98 million, up 8.7% from last year, revenues are up 9.5% to 1.09 billion, and EBITDA is up 35% to $337 million.

•  SeaWorld believes the improved results are from a combination of "new strategic pricing initiatives, new marketing and communication initiatives and the positive reception of our new rides, attractions and events."  The EBITDA margin grew even further through continued cost reductions and more efficient operations.

© SeaWorld Parks & Entertainment

•  Special events appear to be aiding in the company turning the corner.  This summer saw Electric Ocean at SeaWorld Parks and Summer Nights at Busch Gardens parks.  Bier Fest debuted in Texas and Tampa Bay and returned again to Virginia.  The free beer promotion was also a home run at the Florida parks and is returning in 2019.

•  Season pass sales have remained strong.  The company debuted new pass structures for 2019 just a few weeks ago with the aim of giving "more value, flexibility and the most comprehensive benefits package they've ever offered."  Through 2018 revenue from season pass sales has increased at least 10%, with deferred revenue currently up 15%.

© SeaWorld Parks & Entertainment

•  Specifically regarding Infinity Falls at SeaWorld Orlando, while very late the company has seen "outstanding" guest ratings of the ride.  The lateness really seemed to make them take a look at their attraction development, to make sure that new attractions open on time in the future.

•  In-park revenue per cap also continues to grow as the parks hold special festivals that have resulted in higher product demand of both retail and culinary items.

•  When pressed about the search for a new CEO, the company didn't give much of an answer other than saying the Board is still searching.

© SeaWorld Parks & Entertainment

 •  The company sees their 2019 new attraction line-up as their biggest ever, with some new at nearly every park.  These include the Tigris roller coaster at Busch Gardens Tampa, Sesame Street at SeaWorld Orlando, Tidal Twister at SeaWorld San Diego, the new Turtle Reef area with two rides at SeaWorld San Antonio, a new thrill slide at Aquatica San Antonio, Finnegan's Flyer thrill ride at Busch Gardens Williamsburg and the Cutback Water Coaster at Water Country USA.

•  With increased results comes more cash on the books and SeaWorld was asked if they plan to start paying a dividend again, or complete stock repurchases.  The company said they're working on what the best plan is but haven't committed to anything yet.

© SeaWorld Parks & Entertainment

•  SeaWorld is still planning on changing the presentation of the Orca show in Texas and Florida as they did in California.  However, they learned that they can't close the show in between and are still planning the change it next in Texas in a year or so.

•  The company has revamped their capital expenditure budgets to make sure that each park gets new attractions more often.  The company seeing lodging as a long-term priority, but for now it is not and has actually dropped their deal to build a hotel at SeaWorld San Diego.

Heard On... Six Flags' 2nd Quarter Earnings Conference Call

Today was Six Flags Entertainment's second quarter earnings release.  The news for the quarter itself was good, with the company posting increased revenues by $15 million, and a 5% increase in attendance to 9.5 million guests.  Single day ticket sales declined, however, decreasing per capita figures - blamed on poor weather.  The full 6 months of the year give more info on the company's performance, which was detailed on their conference call.  Here are some notes:

•  Looking at the first six months of the year, revenue was $522 million, slightly down from 2016.  This was a result of a 2% decrease in per cap spending, offset by a 2% increase in attendance and a 7% increase in sponsorship revenue and licensing revenue.

 •  The company's plan to continue to increase the number of passholders has worked, as the total number of Active Pass members is up 12%.  This also resulted in a 12% increase in deferred revenue from season pass, season food and other purchases.

•  Due to the "soft" results during the first six months of the year, the company does not expect to reach their Project 600 ($600 million in EBITDA) goal for 2017.  The company reversed around $28 million in stock options that will not be paid this year due to not reaching the goal.

•  Expect to see more international licensing deals in the future.  Six Flags says they have several new deals in the works, to be announced over a few years, and more interest regularly received from around the world.  The deals require no capital investment so they are especially lucrative.

•  Adding water parks to the company that are located near existing theme parks is already a hit, with only two added.  In Mexico season pass sales are up 40% due to them being bundled with their newly acquired Hurricane Harbor water park.  The company has had several operators reach out to them about potential deals.

•  The plan to add licensed parks in Vietnam is still moving forward, but more slowly.  The originally partner developer is still working to acquire land for the park, but Six Flags is also already talking to other potential partners in the country.  They seem positive that eventually Six Flags parks will open there.

•  Six Flags is still interested in expanding its footprint in the U.S., but it all depends on the deals making sense for their growth.  There sounds like there will be no buying parks for the sake of owning more.  Water parks remain a high focus, but they did mention they have a team that works on potential deals with water parks, groups of water park, and even theme parks.  So you never know.

•  Increasing season-long dining pass sales is a focus that they will work on growing for the next five or even ten years.  They have a low penetration so far into their market, so see a ton of room for growth on these plans. 

Heard On... Cedar Fair's Q1 2016 Earnings Conference Call

Almost hard to believe that another round of quarterly earnings calls have arrived, with some of our favorite park operators reporting their 1st quarter of 2016 results.  Cedar Fair announced record results for this past quarter, and as always their conference call gave more detail.  Here are some notes from that call:

• The company's latest goal was to hit $500 in ebitda by 2018, and now believe that they will hit that number before that target, possibly an entire year early.  In short, things are going very well for them.

• The record Q1 results saw $58 million in revenues (up 25%), record attendance and strong opening weekends at California's Great America, Carowinds and Kings Dominion.

• Deferred revenues, which are on the books from the sale of season passes, dining, beverage and photo passes, are up 14% or $13 million to $105 million.  That means the company has sold quite a bit more of these this year.

© Cedar Fair

• Knott's Berry Farm, the only park open for all of the 1st quarter, posted record attendance and in park spending.  The park's adjacent hotel has also posted record results.  The park has become a "regional entertainment destination" with a focus on seasonal events that draw guests back.  This year the park has already hit an all-time record for season passes sold and the revenues from them.

• The company is excited to open their new for 2016 attractions, noting that Valravn at Cedar Point is already generating a lot of publicity, and Carowinds' new water park is of "a new generation" with tons of special features and amenities.

• Cedar Fair will continue to embrace and grow each park in line with their own regional brand.  Knott's and Carowinds were studied first, Cedar Point and Canada's Wonderland were just completed, and Valleyfair and California's Great America are up next.  Based on the in-depth studies of the parks, both marketing and expansion plans will be formed.

© Cedar Fair

• The company has 1,300 acres of undeveloped land around its parks, and wants to start to use some of it for additional growth.  The new sports complex at Cedar Point is being looked at as something that could come to other properties.

• Other developments could include new hotels, camp ground expansions and shops and dining adjacent to park entrances.  California's Great America is an example of where this could first work, using Levi Stadium as a natural draw.  This development is part of a larger rezoning plan for expansion at that park, drawing off a very under-tapped market of dense population surrounding it.  They hope for expansion results on the level of Carowinds for the park.

© Cedar Fair

• More "techtainment" or the merging of technology and entertainment, will show up at the parks.  The recent additions like Wonder Mountain's Guardian and Plants Vs. Zombies are examples of this style of attraction and have been deemed a success.  The operators feel that Mass Effect will be the best use of technology in a park on a new for 2016 attraction in the U.S.

Heard On... Six Flags 2012 Earnings Call

It is now safe to say that 2012 was a good year for amusement and theme park operators.  With earnings previously in from the other big chains, Six Flags Entertainment Corporation has also announced that they've had a record year as well.

The full details can be accessed from this press release put out by the company, and just like Cedar Fair did earlier this week Six Flags also had a conference call to discuss the results.  Here are some highlights from that.

• For 2012 total attendance grew 6% to 25.7 million guests - that's an extra 1.4 million visitors across all parks.  The chain also reports having record high safety metrics and guest satisfaction levels in the areas of safety, cleanliness, and value perception.

• Total revenues for the year were $1.070 billion, an increase of 5.6% over 2011.  EBITDA hit a record high of $383 million, at a margin of what the company calls an "industry high" of 39%.  The company has increased their margin from 24.4% in 2009 to 39% in 2012, which is pretty impressive.

• Much like Cedar Fair's recent focus, much emphasis has been placed on season pass sales.  Six Flags sold a record amount of them in 2012 and also have double digit increases so far in 2013 over last year.

• Individual per capita for 2012 was $39.41, seven cents more than last year.  The gain was from an increase of eleven cents from admissions and a loss of four cents for in park revenues.  Season pass attendance reached 40% of overall visits, which Six Flags says weakened their per caps.  Interestingly Cedar Fair also hit 40% of their attendance from season pass visits, but saw substantial gains in admissions and in park per caps last year.

• The 4th quarter saw record attendance levels for Halloween and Christmas celebrations.  The quarter saw revenues increase almost 5% and attendance up 3%.  The company credits this with investments in the promotions - and did not mention bad weather in the quarter like Cedar Fair did as a reason for their softer results.  The Halloween and Christmas events will continue to expand in the future.

• In park spending was up for the 4th quarter, due mainly to "premium attractions" like haunted houses and mazes, which are pay extra at Fright Fest.  It sounds like the parks depend on that revenue, so I would not look for the pay-extra aspect of the haunts to go away any time soon.

• Six Flags Mexico had several record days during their Halloween events, which were a first for them in 2012.  The park overall sounds like it is thriving, and they talked up the spinning coaster they are about to open there in a few weeks.

• The roll out of season pass dining passes is taking place this year, after being tested in two parks last year.  The tests were very successful and the company sees this as a potential solid revenue stream this year.