BoddaH1994 Posted November 6, 2014 Share Posted November 6, 2014 Cedar Fair reported record net revenues of $595 million in the third quarter. The 1% increase over last year's record results reflects the Company's continued success in increasing average in-park guest per capita spending1 across all categories.Net revenues on a comparable-park basis through Sunday, November 2, 2014, were up 2%, driven by a 3% increase in average in-park guest per capita spending, which was offset somewhat by a less than 1% decline in attendance.With more than 95% of its operating days complete, the Company expects to achieve full-year net revenues at the low end of its current revenue guidance range of $1.15 billion to $1.17 billion. It also anticipates being at the low end of its current Adjusted EBITDA guidance range of $425 million to $435 million. The Company continues to believe in the strength of its business model and, with an Adjusted EBITDA CAGR of 4% since 2012, is on track to achieve its FUNforward long-term growth goal of $450 million or more in Adjusted EBITDA by its original target of 2016.Cedar Fair's Board of Directors declared a 7% increase in its quarterly cash distribution to $0.75 per limited partner (LP) unit, payable December 15, 2014. http://ir.cedarfair.com/newsroom/press-releases/news-release-details/2014/Cedar-Fair-Reports-Record-Third-Quarter-Revenues-Increases-Quarterly-Cash-Distribution-By-7/default.aspx 4 Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted November 6, 2014 Share Posted November 6, 2014 With all the attendance initiatives, attendance was still down? Wow. I really don't understand why...but part of me thinks a good part of it is changing school calendars and their effects on family vacations. 6 Quote Link to comment Share on other sites More sharing options...
BoddaH1994 Posted November 6, 2014 Author Share Posted November 6, 2014 They also lost a VERY busy weekend at Cedar Point. 7 Quote Link to comment Share on other sites More sharing options...
CoastersRZ Posted November 6, 2014 Share Posted November 6, 2014 I would like to know if one area geographically is being hit harder with attendance issues over other areas. Like the Cedar Point issue that Ryan mentioned. How much of the attendance can be attributed to weather, etc. Unfortunately, they do not typically break out numbers like that anymore. They used to before the Paramount acquisition. It seemed like they were discounting the gate pretty heavily at times. How much higher can in park spending go? Sure, they can keep raising food prices, etc. 3 Quote Link to comment Share on other sites More sharing options...
TTD-120-420 Posted November 6, 2014 Share Posted November 6, 2014 "For the third quarter of 2014, operating costs and expenses were $283 million, up $8 million from the prior-year third quarter. The increased costs for the quarter were largely the result of budgeted increases in operating expenses, which included: 1) an increase in both seasonal labor hours and rates; and 2) initiatives focused on enhancing the overall guest experience, including the introduction of more midway entertainment throughout the parks and a new policy offering complimentary admission to the Dinosaurs Alive! attraction for the Company's most loyal season pass customer base." This makes me happy. Maybe I have been too close to Busch Gardens and have read about the old Disney, but there have been too many instances of cutting costs. While it works in the short run, it hurts the company in the long term, and I am very happy to see Cedar Fair continuing to go all out for operations. 13 Quote Link to comment Share on other sites More sharing options...
RailRider Posted November 6, 2014 Share Posted November 6, 2014 I would expect in park spending to be up with reduced cost of admission. Just seems logical to me Also something else to consider regarding attendance being down is with the improving economy more folks took real vacations this instead of staycations. Rather than visiting your local park twice you may have only visited once because you took a trip out of town this year? Something to consider. 2 Quote Link to comment Share on other sites More sharing options...
BoddaH1994 Posted November 6, 2014 Author Share Posted November 6, 2014 How much higher can in park spending go? Sure, they can keep raising food prices, etc. They can't. Part of the responsibility of running the parks is knowing what can be charged vs. what people won't pay. The true trick to this is to give patrons more opportunities to spend money in different ways. A good example is more games, special events (Dinos After Dark, etc) and upcharges. I would expect in park spending to be up with reduced cost of admission. Just seems logical to me That's a "maybe" too. Do people have the mentality of "I only spend $15 to get in, so I have extra money for a t-shirt." or does that price point draw the type of patron that wouldn't spend that extra money regardless? I'm willing to say that it's an offsetting mix of both. I DO know that the in-park spending is an unpredictable beast. For example, the restaurants didn't see a drop off on Dollar Days, but rather they were busier with people later in the day with people who felt that they had extra discretionary cash for an extra meal because they spent so little on food earlier in the day. Also something else to consider regarding attendance being down is with the improving economy more folks took real vacations this instead of staycations. Rather than visiting your local park twice you may have only visited once because you took a trip out of town this year? Something to consider. Paramount used to say that gas prices worked to their advantage. Cedar Fair was adamantly against that. I, however, think you're correct. 5 Quote Link to comment Share on other sites More sharing options...
thekidd33 Posted November 6, 2014 Share Posted November 6, 2014 Thus the hotel renovations at Cedar Point, the rumors of hotels being added at other properties, and the expanded entertainment offerings. I think they are hoping to be the destination for more of the vacations as well as the 'staycations'. 2 Quote Link to comment Share on other sites More sharing options...
Leland Wykoff Posted November 7, 2014 Share Posted November 7, 2014 Significant news concerning hotel investments and returns were covered in the Q&A portion of the call. Steve Litt of 4010 Capital inquired about rate opportunities and possibilities of completion delays and the direct and indirect benefits associated with the renovations. CEO Matt Ouimet expressed confidence the Breakers project was progressing on or near schedule despite surprises which have been encountered when opening the walls within a 120 year old property. Ouimet reiterated the hotel project(s) were projected to have returns below the generally expected range of 15 to 20 percent. He referred to "primarily an episodic investment" and catch-up capital investment. The CEO indicated the occupancy gains would be minimal as they run near full already. He hinted any gains would come from rate increases and the gains of extended stays with additional on park time and spending. This represents a pulling back from earlier statements when Cedar Fair indicated rate increases tied to the three tiered strategy of "good, better, best." Also of note was the lack of any mention of hotel refreshment progress at any Cedar Point properties other than Hotel Breakers. Room inventory at Hotel Breakers will be reduced modestly following the renovations. Major surprise was in the answer to a question by Ray Cheesman of Anfield Capital concerning early bookings for Hotel Breakers. Ouimet indicated they do not see significant hotel bookings until spring. This may suggest rates are not yet set or are under review given the trends from this past season. The sudden pull back from dynamic, tiered, increasing, pricing is puzzling and perhaps troubling. One wonders if the extensive Hotel Breakers rebuild project was necessitated by new regulations which would not allow for the removal and replacement of the hotel on the current foot print so near shore. Cedar Fair seems intent on anchoring the underutilized mile beach front with the Breakers. No doubt additional investments will be necessary to monetize the beach given the lack of positive guidance for hotel revenue increases. Please see the Seeking Alpha transcript of the 3rd quarter conference call, page 6, for more information: http://seekingalpha.com/article/2651655-cedars-fun-ceo-matt-ouimet-on-q3-2014-results-earnings-call-transcript 6 Quote Link to comment Share on other sites More sharing options...
BoddaH1994 Posted November 7, 2014 Author Share Posted November 7, 2014 He also mentioned that the upgrades to the hotel were for "rate protection." I could see that too. Part of it is protecting the asset and the brand. Of course, that, in this instance, is at a cost of tens of thousands of dollars. It's an unfortunate but necessary cost. 2 Quote Link to comment Share on other sites More sharing options...
PhantomTheater Posted November 7, 2014 Share Posted November 7, 2014 ^The Breakers opened in 1905, making the property 110 years old and not 120. https://www.cedarpoint.com/media-center/park-history 2 Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted November 7, 2014 Share Posted November 7, 2014 Continued refurbishment and reinvestment is a must in the lodging industry. Mr. Kinzel and Co. took the Sears, Roebuck approach--and did very little of it. You see the results of that at Sears. See also The Kings Island Inn... 5 Quote Link to comment Share on other sites More sharing options...
BoddaH1994 Posted November 8, 2014 Author Share Posted November 8, 2014 “Two of our largest parks — Kings Island and Knott’s Berry Farm — will deliver record profitability and in spite of a challenging year weather-wise, our flagship park, Cedar Point, will have its second best year ever,” said Cedar Fair President and Chief Executive Officer Matt Ouimet in a statement. http://www.daytondailynews.com/news/business/new-roller-coaster-leads-kings-island-to-record-pr/nh3KQ/ 1 Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted November 8, 2014 Share Posted November 8, 2014 Record profitability is making the most money ever. It is also in nominative dollar terms. I truly doubt that either park had its most profitable year ever in constant dollar terms. Much also depends on how the company expenses capital expenditures compared to past practices. Generally accepted accounting principles (GAPPs) have certainly changed dramatically over time. 1 Quote Link to comment Share on other sites More sharing options...
jcgoble3 Posted November 8, 2014 Share Posted November 8, 2014 ^ I'll bite: what is the difference between nominative and constant dollar terms? Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted November 8, 2014 Share Posted November 8, 2014 Constant dollars are each stated in the same reference year. A nominative dollar is stated as the same in any year. But....a nominative dollar from 1972, for instance would be worth far more in 2014 dollars. Example: Nominative: 1972: $1 2014: $1 Constant, a 1972 dollar would take $5.69 to purchase the same now. Or a 2014 dollar has the same purchasing power on average that 18 cents had then. http://www.usinflationcalculator.com/ 3 Quote Link to comment Share on other sites More sharing options...
jcgoble3 Posted November 9, 2014 Share Posted November 9, 2014 Let me see if I've got this straight: Constant is adjusted for inflation, while nominative is not? 2 Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted November 9, 2014 Share Posted November 9, 2014 Correct. You will normally see constant dollars stated as, for example, in constant 1972 dollars or constant 2014 dollars. 1 Quote Link to comment Share on other sites More sharing options...
jcgoble3 Posted November 9, 2014 Share Posted November 9, 2014 Got it. Thanks! Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted November 9, 2014 Share Posted November 9, 2014 So, as you can see, to say that 2014 was Kings Island's most profitable year ever without defining what dollars we are talking about is somewhat misleading. If all years' profit/loss were stated in constant dollars, I highly doubt that 2014 was the most profitable season ever. And that's without even taking into account how capex is expensed and depreciated now compared to seasons past. 1 Quote Link to comment Share on other sites More sharing options...
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