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Cedar Fair 3rd Quarter Earnings

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Cedar Fair announced Q3 earnings a few days ago. As expected, things aren't pretty. I'm not a finance guy so I'll let others comment on this in more detail.



Net revenues for the third quarter ended Sept. 27, 2020, totaled $87 million versus $715 million for the third quarter of 2019. The decrease in net revenues was the direct result of an 11.9 million-visit decrease in attendance and a $47 million decrease in out-of-park revenues, both shortfalls due to COVID-19-related park closures and operating calendar changes in the current period, as well as soft demand upon reopening.

In-park per capita spending decreased by 5% to $47.29 compared to $49.94 in the third quarter of 2019. In-park per capita spending increases in food, merchandise and games, collectively up 18% in the period, were more than offset by decreases in guest spending on admissions and extra-charge attractions, primarily front-of-the-line Fast Lane products. The decrease in admissions spending was the result of a higher mix of season pass visitation in the quarter (55%) compared to the same period last year (46%). Excluding the impact of season passes, non-season pass admission spending on all other ticket types was up 4% in the quarter.


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I'll say it...it ain't pretty. But if and when we can put the virus behind us altogether things are going to snap back in a big way. The entire entertainment and hospitality industry will see a massive snap back to life in a hurry. Key question being "when?". Nevertheless Cedar Fair is doing everything they can to be in the right spot when it happens.

It's all debt-driven optimism which is never great, if I'm honest. But many huge companies roll this way. See also > Netflix.

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I missed a few details when I read this in the other thread, but re-reading this full report...ouch.  A 78% drop in revenue is just...wow.  

The fact that they were able to make what they did, with the shortened calendar, some parks not evening opening, and significant attendance drops is good--it was worth it for CF to get open what they could (with as minimal costs as possible, more later).  At least some revenue was realized.

I think this goes into why there wasn't Haunt/Winterfest at KI (yes I know Haunt is over, but CF has ongoing visibility into their numbers, while we only get post quarter data).  There is a lot of labor/cost turning the park over for various seasons.  So for these events to be financially successful, there must be enough revenue to cover operational costs (just covering the days the park is open), all preparation costs (physical transformation labor, marketing, hiring/training, etc.), overhead, and have positive revenue at the end to justify the effort (cashflow to pay down ongoing debt).  Keep in mind that 78% revenue drop (from recent data they have on-hand), that hangs heavy.  Compared to the "regular season" how many people going through the gates would be Season Pass holders for Winterfest 2020?  Season Passes were extended, so no additional incentives for people to pre-buy next year's tickets.  So how many would pay gate prices for tickets to Winterfest this year?

From a business perspective, that is going to have big impacts for future park decisions.  There are going to be many eyes watching the expenses closely (debt load, costs, etc).  I agree with other's thoughts, anything that is going to drain the budget (big ticket maintenance) may get pulled.  Unfortunately, nostalgia doesn't pay the bills for a publicly traded company.   Also, they've already mentioned reduced Capex spending, but I wouldn't be surprised that any major expansion is indefinitely on-hold until revenue turns around.

From the report: "Zimmerman concluded by adding, “Our teams are fully committed to executing upon a strategy for 2021 that taps into what we believe will be meaningful pent-up consumer demand to visit our parks and experience what’s new and improved since their last visit.'"  If they already believe there is pend-up demand, there is no immediate incentive for major spend.  

Sorry, that has a heavy downer vibe... :(

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5 hours ago, Maddog said:

Sorry, that has a heavy downer vibe... :(

I believe there is pent-up demand. At some point the entire entertainment/fun/vacation industry is going to see a huge---likely extraordinarily quick---bounce-back. The only question is "when?". And that's a question nobody can answer yet. I think your assessment is spot-on. It's ugly---really ugly---right now. 

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It was sad to drive past Clermont Steel Fabricators and only see a half dozen pieces of coaster track, probably from an order that was cancelled part way through.  But when Covid finally passes, we will see the Roaring Twenties all over again, at least for a couple of years.  Next big coaster at a major theme park?  2022 perhaps, maybe for the KI 50th?

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