Well you certainly can not credit Six Flags with the decision that Cedar Fair made.
For about $100 you can buy a pass that allows entry into every Six Flags park, the same can not be said for Cedar Fair. SF is not willing to bite that bullet but does get credit for their various upcharges in membership options.
Last edited by larrygator on Fri Dec 27, 2019 1:41 pm.
As usual, my analysis is free of charge! Original enough to not steal someone else's quote as a signature
larrygator wrote:Well you certainly can not credit Six Flags with the decision that Cedar Fair made.
I wouldn't want to give Six Flags credit there since I think it probably loses Cedar Fair more money than they make with the uniform pricing of Platinum passes. Certainly though there's not much argument that Six Flags was ahead of the curve when it came to advance pricing things like meal/drink/photo plans and that everyone else has followed. Certainly you'd agree there.
Jew wrote:Of course they do. I'm not suggesting otherwise. I'm just saying a healthy theme park business is not based solely on attendance. I am sure that Disneyland has to be experiencing the highest per cap spending in the history of the park and I would also guess that their guest satisfaction is pretty high as well. Would not be surprised at all in the next Disney earnings call to hear theme park revenue is through the roof.
I don't know how to over emphasize this point for people. The biggest "problem" with attendance at DLR right now is the PR spin, not revenue. Attendance, while important, is NOT DLR's primary driver of revenue, assuming a healthy minimum base of attendance exists (which I promise does). It's everything else (F&B, Merch, Hotels) that really drives revenue. And THAT revenue is directly influenced by in-park experience and Guest mix (Intl Tourist/Domestic Tourist/Local/AP/Non-Revenue).
The satisfaction of Guests directly drives their spending at the Resort and it's further amplified by the Guest mix (For example, Intl Tourists when happy spend WAY more than non-revenue Guests). While this metric can over simplify things, DLR's key metric in this area has been "rides per cap (RPC)," or number of rides each Guest experienced. RPC tends to directly align with in-park spending and is closely watched, predicated, and used to drive park operations. When the RPC hits a certain number, you see spending per cap start to spike and whatever revenue did or didn't come through the gate no longer matters as long as your baseline attendance is decent.
We always made WAY more money on summer days when everyone was blocked out but the attendance was ~35k and we surpassed our RPC goal than we did on days when no one was blocked out and attendance was 60k+ but we couldn't come close to our RPC goal due to crowding and lack of hours in the day. As a bonus, the park infrastructure was taxed way less on those ~35k days too, which wasn't something we objectively quantified back then but understood to be a factor.
You can, literally, spend semesters of college courses studying this but TL:DR:
Cedar Fair Announces 2019 Second-Quarter Results and Reports Record Performance for First Seven Months Business Wire•August 7, 2019 SANDUSKY, Ohio
Declares quarterly cash distribution of $0.925 per LP unit payable September 17, 2019
Cedar Fair Entertainment Company (FUN), a leader in regional amusement parks, water parks and immersive entertainment, today announced results for the second quarter ended June 30, 2019, and year-to-date performance trends through August 4, 2019. The Company also announced the declaration of a quarterly cash distribution.
Due to a shift in this year’s fiscal calendar, the second quarter of 2019 included an additional 64 operating days (combined across all parks) when compared with the second quarter of 2018, significantly impacting the Company’s quarter-over-quarter comparisons. The 2019 second quarter ended June 30, 2019, while the 2018 second quarter ended June 24, 2018.
For the second quarter ended June 30, 2019, Cedar Fair’s net revenues totaled $436 million, an increase of 15%, or $56 million, compared with the second quarter of 2018. The increase in net revenues was due in large part to a 10% increase in operating days in the period and reflects improvements in attendance, in-park per capita spending and out-of-park revenues, all of which were up meaningfully in the quarter. Net income for the 2019 second quarter increased $44 million to $63 million and Adjusted EBITDA1 increased $36 million to $163 million, compared with the second quarter 2018. The improvements were largely due to the additional operating days in the 2019 period. On a comparable operating calendar basis, net income in the period increased 50%, or $21 million, and Adjusted EBITDA2 increased 5%, or $7 million. Year-to-date preliminary net revenues through August 4, 2019, totaled approximately $877 million, an increase of $59 million, or 7%, when compared with the same period in 2018. On a same-park basis, excluding the Schlitterbahn water parks acquired on July 1, 2019, preliminary net revenues totaled a record $850 million, up $31 million or 4%.
1For additional information regarding Adjusted EBITDA, including how the Company defines and uses Adjusted EBITDA, see the attached historical reconciliation table and related footnotes. 2Adjusted EBITDA for the three months ended July 1, 2018 was calculated as net income of $42.1 million plus interest expense of $21.3 million, provision for taxes of $13.7 million, depreciation and amortization expense of $57.4 million, net effect of swaps benefit of $0.9 million, non-cash foreign currency loss of $15.7 million, non-cash equity compensation expense of $3.2 million, and loss on impairment / retirement of fixed assets of $3.2 million.
Commenting on second-quarter results and the strong trends through August 4, 2019, Cedar Fair President and CEO Richard A. Zimmerman said, “We are very pleased with our year-to-date performance and the momentum built around the strategic initiatives that underscore our long-range plan. Our commitment to broaden the guest experience and invest in more immersive attractions is successfully expanding our audience and improving the value perception of our parks. Immersive attractions, such as Forbidden Frontier on Adventure Island at Cedar Point, and limited duration special events, such as Monster Jam Thunder Alley and Grand Carnivale, are just a few examples of how we are successfully encouraging guests to visit more often.
“We are pleased to see an upswing in attendance, particularly over the past month as weather conditions improved, and equally pleased to have generated meaningful revenue growth through increases in both in-park per capita spending and out-of-park revenues,” said Zimmerman. “As noted in our July 4th update, continued growth in in-park per capita spending (most notably as a result of our enhanced food and beverage options), combined with record sales of season passes and the all-season dining and beverage options, indicates the financial health of our consumer remains solid. It also gives us confidence our new attractions and other in-park entertainment initiatives will continue to drive incremental, long-term growth and profitability for our unitholders.”
Zimmerman concluded by stating, “We feel very good about how the year is tracking as we move into the month of August, followed by the increasingly important and very popular Halloween and winter holiday events. The strength of our core business, combined with the positive early returns we are seeing from the two recently acquired Schlitterbahn water parks, makes us confident that everything is in place this year for a strong finish.”
Net revenues for the 2019 second quarter increased $56 million, or 15%, to $436 million from $380 million in the second quarter last year. The increase in revenues reflects a 10%, or 802,000-visit, increase in attendance, a 4%, or $1.82, increase in in-park per capita spending, and a 14%, or $6 million, increase in out-of-park revenues. On a comparable operating calendar basis, net revenues in the second quarter of 2019 were up 3%, or $14 million, on a 4% increase in in-park per capita spending, a 4%, or $2 million, increase in out-of-park revenues, and a 47,000-visit, or less than 1%, decrease in attendance.
Operating income for the 2019 second quarter totaled $102 million, up $34 million, or 50%, compared with $68 million for the second quarter last year. The increase in operating income was the result of the 15% increase in net revenues noted above, offset by an 8%, or $21 million, increase in operating costs and expenses compared with the second quarter of 2018. The increase in operating costs and expenses in the quarter was in line with the Company's expectations and was largely the result of the additional operating days. On a comparable operating calendar basis, operating costs and expenses in the period were up $8 million, or 3%, with the increase primarily due to higher labor costs driven by wage-rate increases and incremental operating costs associated with the Company’s new immersive events.
The net effect of the Company’s interest rate swaps resulted in $12 million of additional expense for the quarter ended June 30, 2019, reflecting the change in fair market value movements in the Company’s swap portfolio. During the current period, the Company also recognized a $9 million net benefit to earnings for foreign currency compared with a $15 million net charge to earnings in 2018, both amounts primarily representing the re-measurement of the U.S.-dollar-denominated debt held at our Canadian property.
After these non-cash items, depreciation and amortization, interest expense and provision for taxes, net income for the second quarter totaled $63 million, or $1.11 per diluted LP unit. This compares with net income of $19 million, or $0.34 per diluted LP unit, for the 2018 second quarter. On a comparable operating calendar basis, net income for the period totaled $42 million, up 50%, or $21 million.
Adjusted EBITDA, which management believes is a meaningful measure of the Company's park-level operating results, increased 28%, or $36 million, to $163 million for the 2019 second quarter, compared with $127 million in 2018. On a comparable operating calendar basis, Adjusted EBITDA was up 5%, or $7 million, compared with the second quarter of 2018. The 5% lift in Adjusted EBITDA was the result of the increases in in-park per capita spending and out-of-park revenues during the quarter, offset, in part, by the planned increases in operating costs and expenses. See the attached table for a reconciliation of net income to Adjusted EBITDA.
Including the results from the Schlitterbahn parks since their acquisition on July 1, 2019, preliminary net revenues for the seven-month period ended August 4, 2019 totaled $877 million. Over this same period, combined attendance totaled 16.5 million visits, in-park per capita spending was $48.59, and out-of-park revenues totaled $104 million.
On a same-park basis (excluding the results from the Schlitterbahn parks), combined attendance was up 1%, or 213,000 visits, from the comparable seven-month period ended August 5, 2018. Over this same period and on a same-park basis, in-park per capita spending was up 3% and out-of-park revenues were up 4%, or $4 million. Overall, preliminary net revenues through the first seven months of the year increased 4%, or $31 million, to $850 million in 2019 from $819 million through the first seven months of 2018, on a same-park basis.
The Company also announced the declaration of a cash distribution of $0.925 per LP unit, which is consistent with its targeted annualized distribution rate of $3.70 per LP unit. The distribution will be paid on September 17, 2019, to unitholders of record as of September 4, 2019.
As usual, my analysis is free of charge! Original enough to not steal someone else's quote as a signature
Potential upsides: We can ride Fury, Orion and Leviathan during Winterfest... so there's that.
I honestly like Six Flags more now than ever. I can see how this makes sense by allowing the Six Flags power vacuum to clear out with Zimmerman coming in as the combined CEO in the deal. But Six Flags is the bigger company and the one making the acquisition. I don't know how their managers would deal with Cedar Fair style management. I don't know who would win the battle of liability questions between Six Flags and Cedar Fair. I don't know if Cedar Fair would convince the chain to go upmarket in terms of maintenance or if it would take everything back down below even Kinzel levels of "Just buy trashcans." Most of all, I want parks that look and feel different.
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