Cedar Fair Reports Attendance & Revenues Through Labor Day

[Skywriter]

Cedar Fair REPORTS ATTENDANCE AND REVENUES THROUGH LABOR DAY

http://www.cedarfair.com/ir/press_releases...mp;story_id=132

SANDUSKY, OHIO, September 13, 2007 -- Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced that combined 2007 revenues at its parks through September 3, 2007, were $828.4 million, on 18.5 million guest visits and average in-park per capita spending of $40.30. The 2007 results include the operations of the Paramount parks, which the company acquired from CBS on June 30, 2006.

On a same-park basis, excluding the effect of the newly acquired parks, total revenues through the Labor Day weekend were up 2%, or $7.8 million. The increase in same-park revenues is the result of a 5% increase in average in-park guest per capita spending to $39.54, offset somewhat by a 3% decrease in attendance, or approximately 319,000 visits. Out-of-park revenues on a same-park basis were up slightly through the Labor Day weekend.

Including results from the acquired parks, revenues for the month of August, including the Labor Day weekend, decreased 1%, or $2.6 million, from a year ago. The decrease in revenues for the month is attributable to a 5% decrease in attendance, or 315,000 visits, substantially offset by a 4% increase in average in-park per capita spending to $40.11. Out-of-park revenues during this same period increased 3%, or $573,000. The decrease in attendance and revenues during the month is primarily attributable to a significant decrease in complimentary tickets and season pass visits at the newly acquired parks.

“During the month of August we eliminated approximately 120,000 complimentary tickets that had been issued in prior years at the newly acquired parks,” said Dick Kinzel, Cedar Fair’s chairman, president and chief executive officer. “We also experienced a decrease of 110,000 visits from season passholders at the same parks, which resulted from increasing season pass prices at the new parks to bring them in line with the Cedar Fair pricing strategy. The resulting decrease in season pass visits, combined with the elimination of complimentary tickets, accounts for more than 70% of the year-over-year decrease in August attendance.

“We are somewhat disappointed with our August results at the newly acquired parks,” said Kinzel. “However, we believe that we are still on track with our integration plans for these parks. As I have mentioned in the past, the 2007 operating season is a transition year for the Company. We continue to build integrity into our pricing structure and have been able to reduce our operating costs at the same time. This is the long-term strategy of the Company and we believe we will see the benefits of this strategy over the next few years.”

Kinzel noted that based on the preliminary August results, the Company anticipates it will be at the lower end of its 2007 expectations of full-year revenues between $950-$980 million and full-year adjusted EBITDA between $320-$340 million.

The Company also reported that it will invest $21 million at Canada’s Wonderland for the 2008 operating season, highlighted by the addition of a new roller coaster. The new thrill ride, to be named Behemoth, will be the park’s biggest investment in its 27-year history and will be the longest, fastest and tallest roller coaster in Canada. Behemoth will climb to a height of 230 ft. or 70 m., followed by an 85-degree drop with speeds reaching 77 mph or 125km/h. Riders will experience high speed twists and turns while enjoying the roller coaster’s new open-air seating that will allow all riders to experience unobstructed views of all the thrills and excitement. “Behemoth will be a great addition to our Canadian park and will bring a whole new type of thrill riding to the area, something we hope to introduce at the newly acquired parks over the next several years,” said Kinzel.

Kinzel concluded by explaining that additional capital expenditure and marketing plans at the Company’s other parks for next season are in the process of being finalized and will be announced at a later date.

Cedar Fair is a publicly traded partnership headquartered in Sandusky, Ohio. The Partnership, which owns and operates twelve amusement parks, five outdoor water parks, one indoor water park and six hotels, is one of the largest regional amusement park operators in the world. Amusement parks in the company’s northern region include three in Ohio: Cedar Point, Sandusky, consistently voted “Best Amusement Park in the World” in Amusement Today polls; Kings Island, near Cincinnati; and Geauga Lake & Wildwater Kingdom, Aurora; as well as Canada’s Wonderland, near Toronto; Dorney Park, Allentown, Pa.; Valleyfair, Shakopee, Minn.; and Michigan’s Adventure, near Muskegon, Mich. In the southern region are Kings Dominion, Richmond, Va.; Carowinds, Charlotte, N.C.; and Worlds of Fun, Kansas City, Mo. Western parks in California include: Knott’s Berry Farm, Buena Park; and Great America, Santa Clara; as well as Star Trek: The Experience, an interactive adventure in Las Vegas.

Some of the statements contained in this news release constitute forward-looking statements. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Although the Partnership believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors, including general economic conditions, competition for consumer leisure time and spending, adverse weather conditions, unanticipated construction delays and other factors could affect attendance at our parks and cause actual results to differ materially from the Partnership’s expectations. In addition, risks and uncertainties concerning the acquisition of the Paramount Parks include, but are not limited to the ability of the Partnership to combine the operations and take advantage of growth and synergy opportunities.

[Vortex]

So all or most of the Paramount Parks have attendace and revenues. I hope Cedar Fair can get this turned around soon.

[tigellinus]

Blah!! Sell KI back to Linder!

[CoastersRZ]

Gee, higher season pass prices and less comp tickets leads to LESS revenue. I know that Cedar Fair is all about maintaining their pricing integrity, but it seems to me that if the decrease in revenues as a result of less comp tickets is in the order of $2.6 million, then those guests are contributing quite a lot to the bottom line.

Also, not mentioned in this release is the fact that while overall per caps is up, season pass visits for the month of August were down. They attributed this to higher pass prices. But I personally think that it might actually be tied to higher in park prices. Yes, the passes were a little bit more expensive this year, but the fact that the food prices are so outrageous at Kings Island (and the quality certainly not in line with the pricing strategy) may have prompted some of the pass holders to spend less time and money at the parks this summer. Also, while the per caps may be up, that does not necessarily mean guests are buying additional products. Rather, they are buying the same things that they used to buy. But due to the price increases, they are having to fork over more money.

I have to wonder how high will the in park prices go before Cedar Fair realized that they could potentially make more money off of the guests if the guests don`t feel like they are going for a ride everytime they buy some food or drink. Alright, enough with my insights and opinions.

[WooferBearATL]

It's such a basic concept.

Less People in the park, less people to spend money in the park.

Why is this such a difficult concept?

[DropZone99]

I really hope KI get bought by either Paramount, or just is a solo park so we could could get more rides! I don't really like CF...

[Nate]

Haha I just eat in the car (packed lunch) i don't want to spend $20 in mediocre food at obsurd prices.

Ohh and I rode Xtreme Skyflyer but only because the price was slashed from $20 to $5!

[Captain Picard]

Happy people will spend more money in the park.

[The Interpreter]

a. Paramount Parks has left the building. Neither CBS nor Viacom is interested in re-entering the domestic theme park business.

b. I frequently hear from people around me that they were SHOCKED at how high the prices were at Kings Island and/or Kings Dominion and/or Carowinds this summer. I honestly believe attendance will be down more next year than this, as many have said (and yes, I know many of those will not follow through) that they are NOT going back next year.

c. As for me, the prices would not bother me so much if the food were at least hot, not to mention appetizing. Most of the time, it has been neither.

[TH13TEEN]

c. As for me, the prices would not bother me so much if the food were at least hot, not to mention appetizing. Most of the time, it has been neither.

I have your anwser don't eat their food

[The Interpreter]

Apparently a lot of other guests have come to the same conclusion....and at least some of them, as season passholders, are making fewer park visits. People who don't come to the park don't spend money in the park. Darndest thing!

[WooferBearATL]

a. Paramount Parks has left the building. Neither CBS nor Viacom is interested in re-entering the domestic theme park business.

And we can all be thankful for that.

[The Interpreter]

As for CBS, I whole-heartedly agree. As to Viacom, the jury is still out on whether Viacom or Cedar Fair would be the better steward for the former KECO properties....

[cholderfield]

i wouldn't be too worried....Cedar Fair, LP is a business and businesses want to make $$...they are not too far off from last year's numbers, and considering they more than doubled their company with the purchase of Paramount Parks', they probably aren't doing a horrible job...

we can comment day in and day out what we think the best way to run a park is...but to be honest, most of us don't have a clue...as Kinzel said, this is a "transition"...give it time....in five years if the numbers are not up, then you may have a reason to complain....

[The Interpreter]

You seem to forget the company is deeply in debt, and has covenants with its lenders that it MUST meet, or refinance, in this credit crunch. Unless they meet those covenants (which typically require certain revenue, profit and attendance targets be met), they won't have the luxury of five years.

Know, too, that Six Flags faces similar hurdles, but Red Zone has structured its debt such that serious liquidity problems won't hit until after the end of next season.

It's also NOT Cedar Fair LLC, but Cedar Fair LP. There is a tremendous difference.

[CoastersRZ]

Actually, it is Cedar Fair, LP not LLC. An LP is a limited partnership. An LLC is a limited liability corporation. There are differences in the way each is set up.

A limited partnership is similar to a partnership. Each of the unit holders, or limited partners, has a limited stake in the company, and thus shares the profits and liabilities for their stake of the partnership (or the amount of units they control).

A limited liability corporation is a form of a corporation, that offers limited liability to its respective owners. SmaI don`t know the exact differences beyond what I stated above, but am sure that there are tax implications for each system.

[cholderfield]

Actually, it is Cedar Fair, LP not LLC. An LP is a limited partnership. An LLC is a limited liability corporation. There are differences in the way each is set up.

A limited partnership is similar to a partnership. Each of the unit holders, or limited partners, has a limited stake in the company, and thus shares the profits and liabilities for their stake of the partnership (or the amount of units they control).

A limited liability corporation is a form of a corporation, that offers limited liability to its respective owners. SmaI don`t know the exact differences beyond what I stated above, but am sure that there are tax implications for each system.

my mistake ( i know the differences, though)

[cholderfield]

You seem to forget the company is deeply in debt, and has covenants with its lenders that it MUST meet, or refinance, in this credit crunch. Unless they meet those covenants (which typically require certain revenue, profit and attendance targets be met), they won't have the luxury of five years.

that's also a good point...i guess what i'm saying is this the first year...if it's still this rough next year, yes, something certainly needs to be done....

[PKIVortex]

The whole point about prices though can be seen in either way. Cedar Fair seemed to go in favor or the Paramount Pricing this year, remember CBS was the one who raised prices for the most part in the Paramount Park last year. Cedar Fair actually lowered prices last year. But Cedar Fair did raise prices even more this year. I think they need to lower the prices a bit and see what happens. I'm not saying dirt cheap, it's a theme park, you should except to pay higher then normal prices while inside the gate. But It shouldn't be as high as they are now.

[The Interpreter]

It's NOT just prices, at least not in my book. Food service has been poor, with cold food, long lines and uncaring, apathetic employees for the most part. And it's not just Kings Island. I've seen the exact same thing at Carowinds. I have never seen so many people eating in the parking lot as I have this season.

[PKIVortex]

Oh I agree with you.

[hauntguy]

I think the food at KI might be changing though... A friend of mine just came home from Culinary School (Cordon Bleu) in Pittsburg and KI offered him a FULL TIME, year round pro. chef job! Maybe KI is getting a nice, sit down restaurant... or at least some better food options! -Hauntguy

[Browntggrr]

We complained about food pricing before CF took over.

We complained about customer service before CF took over.

While CF did not do much to help the situation this year, making drastic changes at the park before you learn about each parks' demographics would not help either.

CF was not built over night. They already has a template set on how to operate a successful park(s). Now trying to get all the parks to follow the same idea is a challenge. One that will not happen in 15 months.

Yet already, CF has changed one big issue reguarding 2008 season passes where not only did they make it cheaper, it is also more uniform. I expect more changes to come.

It is easy to sit back and second guess the decisions (or non-decisions) that CF has made.

Now if we have the same complaints in 2010 that we have in 2007, then CF is in trouble.

But as of right now, I'm going to give them the opportunity to change things before I write them off.

[KIBeast]

^Couldn't have said it better myslef. All of those things you say are true. We were complaining about these high prices and poor food service well before CF entered the picture. I grow tired of hearing all of the negativity towards CF. They have definitely not had enough time to mold the old "Paramount" parks to their specifications. Look at Geauga Lake...CF has owned it for a little longer and that park is still not where they want it to be. Rome was not built in a day.

[flightoffear1996]

I don't mind paying the higher prices but the higher prices need to result in better food which it doesn't.

[coasterville]

I have to wonder how high will the in park prices go before Cedar Fair realized that they could potentially make more money off of the guests if the guests don`t feel like they are going for a ride everytime they buy some food or drink. Alright, enough with my insights and opinions.

But it's an amusement park, don't they WANT their customers to think they are going for a ride? Afterall, isn't that what it's all about, the rides? :) :)

Seriously though, the only time I have seen ride and food at a park combined is Dollywood where they sell concessions ON the train before it leaves the station!

Well wait, no, there is that free chocolate bar I received as I stepped off the Chocolate World dark ride at Hershey.

[PKIVortex]

I don't think it's going to take as long to get the Paramount Parks in line as it's taken from GL. GL is still suffering major from it's Six Flags days. Even though some people didn't like Paramount, Paramount actually did a pretty fine job running it's 5 parks, with the exception of CBS. I think things will get better at KI in 2008, they are just some things that need to improve.

[WooferBearATL]

I don't think it's going to take as long to get the Paramount Parks in line as it's taken from GL. GL is still suffering major from it's Six Flags days. Even though some people didn't like Paramount, Paramount actually did a pretty fine job running it's 5 parks, with the exception of CBS. I think things will get better at KI in 2008, they are just some things that need to improve.

Yeah, I'm confident that CF will be able to pull it together. After all they will need some time as Paramount did much worse in their management than did Six Flags with GL.

[PKIVortex]

I don't agree with that. I know you hate Paramount Woofer but can you honestly say that Six Flags did better running GL then Paramount did KI? I somehow don't believe that. Paramount wasn't all that bad, and yes I did visit the park before Paramount came along.

[standbyme]

The only thing I see most people complain about (including me) on this board is the high food prices and mediocre quality. Why should it take anytime at all to get those "right". It is not as if CF is not already in the park business. They should already know what the market value & quality of food should be. It's as if they were using us as guinea pigs..."Let's see if they'll pay THIS much for food"!

I can see where some things need time to get the bugs out...but food service seems like they already should have that down...but maybe i'm wrong.