2023 Q2 quarterly report

[BeeastFarmer]

It looks like a blood bath is coming tomorrow.  This is a projection. 

[MrSourNinja]

Not surprising given the lack of investment post covid. They also lost all of the season passholders that don't buy every year since the most likely bought in 2021 or 2022. That combined with inflation hitting American families hard means less misc expenditures. 

I had season passes from 2017-2022 but did not renew this year. Lack of investment across the chain, but more specifically KI was my reason. 

[disco2000]

2 minutes ago, MrSourNinja said:

Not surprising given the lack of investment post covid. They also lost all of the season passholders that don't buy every year since the most likely bought in 2021 or 2022. That combined with inflation hitting American families hard means less misc expenditures. 

I had season passes from 2017-2022 but did not renew this year. Lack of investment across the chain, but more specifically KI was my reason. 

Um....they sold a record number of season passes for 2023...but people aren't attending or spending...

[MrSourNinja]

6 minutes ago, disco2000 said:

Um....they sold a record number of season passes for 2023...but people aren't attending or spending...

Can you link? I know about the record number for 2022 but not this year... Maybe I missed something, but I would be VERY surprised to see this year's numbers top last year.

[BeeastFarmer]

Maybe, had our communication director made inroads with the media, people from areas outside of Cincinnati would have visited more and spent more money this year. There has been nothing on local news in Lexington or Louisville this year about Kings Island. My friends and coworkers who ask me for advice have told me that they aren't going and instead have gone to Dollywood and Kentucky Kingdom, because they are featured regularly on our news or news-life pre news shows. I have a coworker who is a season pass holder to both ki and universal and she's taken her family to ki twice this year and universal 4 times, thanks to cheap flights on allegiant.

Anecdotal, yes.  But conjecturing, I think this is just one more piece of the puzzle that has lead us to this point.

Let's see how they attempt to shine this turd tomorrow.

[disco2000]

2 minutes ago, MrSourNinja said:

Can you link? I know about the record number for 2022 but not this year... 

Yeah i guess you are correct - it was the year end report for 2022 - I guess the unknown is were that passes for the 2022 or 2023 season or both?  They leave it open to interpretation. I would assume a large chunk of the season pass sales for a given year comes from the early sale the year prior?

But either way, attendance was down in 2022 if that record number of passes was solely for 2022 and if it included 2023 then the downward attendance trend has continued this season.

[CoasterJack]

3 hours ago, BeeastFarmer said:

It looks like a blood bath is coming tomorrow.  This is a projection. 

 

Just a heads up, those earnings are for this past winter. If you look at the very first screenshot, it shows that the earnings for the 2nd quarter are still scheduled to come out August 3rd. I haven't seen any official projections as of now, but I'll monitor to see if anything appears before tomorrow

[BeeastFarmer]

Yes, I realize that but the brief article discussed that analysts predict a downward trend because of greatly decreased attendance in Q2.

[SonofBaconator]

Is this just an issue at Cedar Fair or are other companies in the industry taking a similar hit?

[Benjamin22]

1 hour ago, BeeastFarmer said:

Maybe, had our communication director made inroads with the media, people from areas outside of Cincinnati would have visited more and spent more money this year. There has been nothing on local news in Lexington or Louisville this year about Kings Island. My friends and coworkers who ask me for advice have told me that they aren't going and instead have gone to Dollywood and Kentucky Kingdom, because they are featured regularly on our news or news-life pre news shows. I have a coworker who is a season pass holder to both ki and universal and she's taken her family to ki twice this year and universal 4 times, thanks to cheap flights on allegiant.

Anecdotal, yes.  But conjecturing, I think this is just one more piece of the puzzle that has lead us to this point.

Let's see how they attempt to shine this turd tomorrow.

From what I’ve heard KI isn’t one of the parks whose performance has been bad, not sure how its chads fault for the entire chain performing poorly. 

[Kenban]

This is not only a problem with Kings Island or Cedar Fair.  This is an industry wide problem.  Almost all parks and chains in the US are seeing attendance and revenue declines.  Universal, Disney, and Sea World have all reported difficulties.

The cuts in personal, hours, and experiences we have seen are directly caused by the problems the chain is experiencing.  Trying to tie this to a single person or park is a mistake.

[BeeastFarmer]

1 hour ago, Benjamin22 said:

From what I’ve heard KI isn’t one of the parks whose performance has been bad, not sure how its chads fault for the entire chain performing poorly. 

The park doesn't provide numbers, so it's anecdotal, but 7/9 of my visits this year the park has been dead. Besides the PTE merch, there has not been a compelling reason to buy merch. And given the low crowds, daily and per ride Fast Lane sales surely are down.  I didn't say the company or industry woahs lie o. Choad's shoulders, I said it could be one piece of the puzzle.  I mean, Kings Island is not just Cincinnati.  Other parks are biting on the heals in the periphery markets like Lexington and Louisville.  If they haven't gone after that fruit, do you think they are going for Charleston, Columbus, Indianapolis etc ?  How many turnstiles and money has left the park because of those missed opportunities...and how many of those could have been recovered had they reached out instead of clocking out?

 

1 hour ago, Kenban said:

This is not only a problem with Kings Island or Cedar Fair.  This is an industry wide problem.  Almost all parks and chains in the US are seeing attendance and revenue declines.  Universal, Disney, and Sea World have all reported difficulties.

The cuts in personal, hours, and experiences we have seen are directly caused by the problems the chain is experiencing.  Trying to tie this to a single person or park is a mistake.

See my response to @Benjamin22.  It's not unique to Kings Island or Cedar Fair. But when people or organizations are not taking advantage of every opportunity, that is a failure. Let's say the report says we are down 100k unique visits across the portfolio tomorrow. Had Kings Island reached out and got 10k, Canada the same, Cedar Point 5k, Carowinds 4k, KD 2k, and on and on, to total let's say 30k, that's allot easier to digest. I'm on those 30k unique visits, if per caps is $30, that's 900,000 to the credit. 

They knew this day was coming yet instead of trying to get people in, they cut things which is pushing people away. That's a poor strategy. 

[brenthodge]

1 hour ago, BeeastFarmer said:

The park doesn't provide numbers, so it's anecdotal, but 7/9 of my visits this year the park has been dead. Besides the PTE merch, there has not been a compelling reason to buy merch. And given the low crowds, daily and per ride Fast Lane sales surely are down.  I didn't say the company or industry woahs lie o. Choad's shoulders, I said it could be one piece of the puzzle.  I mean, Kings Island is not just Cincinnati.  Other parks are biting on the heals in the periphery markets like Lexington and Louisville.  If they haven't gone after that fruit, do you think they are going for Charleston, Columbus, Indianapolis etc ?  How many turnstiles and money has left the park because of those missed opportunities...and how many of those could have been recovered had they reached out instead of clocking out?

 

See my response to @Benjamin22.  It's not unique to Kings Island or Cedar Fair. But when people or organizations are not taking advantage of every opportunity, that is a failure. Let's say the report says we are down 100k unique visits across the portfolio tomorrow. Had Kings Island reached out and got 10k, Canada the same, Cedar Point 5k, Carowinds 4k, KD 2k, and on and on, to total let's say 30k, that's allot easier to digest. I'm on those 30k unique visits, if per caps is $30, that's 900,000 to the credit. 

They knew this day was coming yet instead of trying to get people in, they cut things which is pushing people away. That's a poor strategy. 

Agree on the less is less school of thought. Given this year, events like CARNIVALE should’ve been AMAZING bc and hyped to the 9s and provided an experience worth the hype to make it a CANT miss event instead of the begrudging “we have to do some watered down version of the thing for the passholders feel we have this year. Honestly even if I had nothing to compare it to, it barely lives up to what minimal hype they created around the event. I wouldn’t talk it up to anyone who had to pay to go, as it’s really just not a value added event this year. Years past -even as a passholders I’ve gotten a tasting card and gone multiple evenings and even brought others (ticket buying) guests. This year the event doesn’t seem to have a purpose beyond the parade at (too bright) 7 and nothing really has motivated me to spend money beyond my meal plan for food. Cheap t shirts to commemorate an event that I’m pretty apathetic to (that I’ve LOVED in the past) just don’t motivate me to spend. So much bottom line motivated, short sighted thinking this year. And that’s just around one event. There have been so many misses around Adventure Port and other ideas. Sad. 

[BeeastFarmer]

Yes , I agree with you @brenthodge.  The things you bring up are operational challenges but had the event been more promoted, it might have brought in more people for q3.

That is not to say that the people working the event are lackluster. They are nothing short of phenomenal. They are smiling, performing and giving it their all.  I mean to go from the extreme make up and characters in phantom theater encore to an opening ceremony to a parade in 8 hours, all with 200% performance shows their dedication.  And that translates to the other performers in other shows.  I haven't bought a tasting card, so I can't speak to that.

And the ride operators... working hard with less coworkers...they deserve praise. 

Given the constraints with maintenance, landscaping and the park service team has been put under, I commend them. 

 

[brenthodge]

11 minutes ago, BeeastFarmer said:

Yes , I agree with you @brenthodge.  The things you bring up are operational challenges but had the event been more promoted, it might have brought in more people for q3.

That is not to say that the people working the event are lackluster. They are nothing short of phenomenal. They are smiling, performing and giving it their all.  I mean to go from the extreme make up and characters in phantom theater encore to an opening ceremony to a parade in 8 hours, all with 200% performance shows their dedication.  And that translates to the other performers in other shows.  I haven't bought a tasting card, so I can't speak to that.

And the ride operators... working hard with less coworkers...they deserve praise. 

Given the constraints with maintenance, landscaping and the park service team has been put under, I commend them. 

 

Oh no-the staff, cast and even support crew for Carnivale, and the entire season hove been great. Even with things like decor. I’m sure the team would LOVE to put out more of the elements the park owns in storage. It’s not that they don’t have it, it’s that that they aren’t allowed the hours to do it. I’m sure it pains everyone knowing they aren’t delivering what they are capable of, but simply what they are budgeted to provide. 

[Timchat2]

With the return of WinterFest to the original Grand Carnivale and then the Golden Celebration, Kings Island has really elevated the guest experience so it will be unfortunate if these "budget" seasons undermine what the park has built up recently. I hope those passionate associates can weather the times and keep pushing to make the park all it can be.

[FUN&ONLY!]

8 hours ago, Benjamin22 said:

From what I’ve heard KI isn’t one of the parks whose performance has been bad, not sure how its chads fault for the entire chain performing poorly. 

I have heard the exact same. From what I have heard, Kings Island has not been having as bad of a year as people seem to think. Unfortunately, Kings Island is still being affected by budget cuts because of the chain’s poor performance as a whole. If a park isn’t pulling its weight, Cedar Fair cannot just close down half the park to recoup costs. Instead, all parks have to suffer a little to minimize the effects across the board.

[DispatchMaster]

14 hours ago, BeeastFarmer said:

It's not unique to Kings Island or Cedar Fair. But when people or organizations are not taking advantage of every opportunity, that is a failure.

So Cedar Fair should pour money into the industry-wide problem of cooling demand that followed the pandemic? Oh, come on. If Disney and Universal's marketing can't get folks through their turnstiles, no amount of ad spend or anything else is going to get folks through CF's turnstiles, and it would be financial malpractice to try and spend their way out of an industry-wide problem. Life isn't RCT, where you can magically goose attendance with an ad campaign.

[BoddaH1994]

• Net revenues totaled $501 million, a decrease of $9 million, or 2%, from the second quarter of 2022.
• Net income was $54 million, an increase of $3 million, or 5%, from the second quarter of 2022. Net income per diluted LP unit increased to $1.04, up 17%, or $0.15, from the second quarter of 2022.
• Adjusted EBITDA⁽¹⁾ totaled $151 million, a decrease of $19 million, or 11%, from the second quarter of 2022.
• Attendance totaled 7.4 million guests, a decrease of 6%, or 0.4 million guests, from the second quarter of 2022.
• In-park per capita spending⁽²⁾ was $61.46, a 3% increase from the second quarter of 2022, driven by higher levels of guest spending on admissions and food and beverage.
• Out-of-park revenues⁽²⁾ totaled $62 million, representing a $3 million, or 5%, increase from the second quarter of 2022.

https://ir.cedarfair.com/news/news-details/2023/Cedar-Fair-Reports-2023-Second-Quarter-Results-and-Provides-July-Performance-Update/default.aspx
 

**This is not intended to be investment advice. For further information about Cedar Fair L.P. (FUN) please see the company’s Investor Relations page. 

[DispatchMaster]

At first glance, increased net revenue, coming by way of higher per caps from fewer guests is a pretty solid result all things considered.

[Browntggrr]

I am not a finance person but I don't believe it as bad as it looks.  Things are still balancing out post-pandemic.  2022 was such a massive increase in net revenue to top those #'s would have been quite staggering.

Below is the 2022 2Q results with 2021 & 2019 results.

Second Quarter 2022 Highlights

• Net revenues totaled a record $509 million, an increase of $285 million from the second quarter of 2021. Compared to the second quarter of 2019, net revenues increased by $73 million, or 17%.
• Net income was $51 million, an increase of $110 million from the second quarter of 2021. Compared to the second quarter of 2019, net income decreased by $13 million.
• Adjusted EBITDA⁽¹⁾ totaled $171 million, an increase of $169 million from the second quarter of 2021. Compared to the second quarter of 2019, Adjusted EBITDA increased by $7 million, or 5%.
• Attendance totaled 7.8 million guests, an increase of 4.4 million guests from the second quarter of 2021. Compared to the second quarter of 2019, attendance declined by 654,000 guests, or 8%.
• In-park per capita spending was a record $59.52, a 6% increase from the second quarter of 2021. Compared to the second quarter of 2019, in-park per capita spending increased 26%, driven by double-digit percentage increases across all key revenue categories.
• Out-of-park revenues were a record $60 million, representing a $19 million increase from the second quarter of 2021. Compared to the second quarter of 2019, out-of-park revenues increased by $10 million, or 21%.

[Rivertown Rider]

Worthy of note in the press release is that KI and CP were actually up in attendance.

[DispatchMaster]

And not by a trivial amount, either. Up a significant 7%.

But that must be a misprint, because I have it on good authority that attendance is down because they fired Don and someone experienced short lines during their visits to the park. 

[jzarley]

Not a great earnings report, but not a disaster either. The industry is cyclical, and we’re just in a down cycle right now—but it’s been a while since we’ve been in one. (In a “normal” world we most likely would have had a mild recession in mid-to-late 2020 which would have been a normal down cycle—of course 2020 shot everything everything to Hell…) FUN’s results are pretty much on-par with SEAS and what the Orlando parks are reporting.

I wonder how SIX will fare? After all, they were having attendance/revenue issues in 2022 when everyone else was booming… (Of course, maybe that just makes their YTY comps easier to hit.)

One item of note that didn’t get a lot of discussion, but actually makes the attendance and revenue numbers even worse in comparison—2022 had 28 fewer total operating days during the period than 2023—meaning attendance and revenue was lower even with almost a full month more of park operating days.

[BoddaH1994]

35 minutes ago, jzarley said:

Not a great earnings report, but not a disaster either. The industry is cyclical, and we’re just in a down cycle right now—but it’s been a while since we’ve been in one. (In a “normal” world we most likely would have had a mild recession in mid-to-late 2020 which would have been a normal down cycle—of course 2020 shot everything everything to Hell…) FUN’s results are pretty much on-par with SEAS and what the Orlando parks are reporting.

I wonder how SIX will fare? After all, they were having attendance/revenue issues in 2022 when everyone else was booming… (Of course, maybe that just makes their YTY comps easier to hit.)

One item of note that didn’t get a lot of discussion, but actually makes the attendance and revenue numbers even worse in comparison—2022 had 28 fewer total operating days during the period than 2023—meaning attendance and revenue was lower even with almost a full month more of park operating days.

$1 billion senior debt note due in 2025.

What will the prime rate be then?

[DispatchMaster]

54 minutes ago, BoddaH1994 said:

$1 billion senior debt note due in 2025.

What will the prime rate be then?

Who cares? That has absolutely nothing to do with the current earnings report and the present day economy. When the time comes to deal with the note the prime rate will be relevant. Seems like you're bringing it up to continue your "doom and gloom" narrative given that the Q2 report wasn't sufficiently "doomy and gloomy" for you.

[Benjamin22]

The quarterly report didn’t seem that bad at all, not the gloom and doom some here were taking about. Increased revenue per guests is a major win for the chain.

 

[BoddaH1994]

47 minutes ago, Benjamin22 said:

The quarterly report didn’t seem that bad at all, not the gloom and doom some here were taking about. Increased revenue per guests is a major win for the chain.

 

What was the increase in park per capita spending?

What was inflation rate for the period?

[standbyme]

Revenue is probably down just because I haven’t bought nearly as much merchandise as I “had” to do last year for the 50th Anniversary. 

[BoddaH1994]

9 hours ago, DispatchMaster said:

Who cares? That has absolutely nothing to do with the current earnings report and the present day economy. When the time comes to deal with the note the prime rate will be relevant. Seems like you're bringing it up to continue your "doom and gloom" narrative given that the Q2 report wasn't sufficiently "doomy and gloomy" for you.

This note was addressed on the call and is and will be very relevant. The next two years will very much be gearing up for it. In fact, I could see an argument that it’s already happening. They need to pay down in the short term to avoid revolving the full amount at an interest rate that cuts deeply into the bottom line. 

By the way, I don’t want you to think that I’m talking down to you or anything. It’s just that I say what I say for a reason. Trust me - I do not want doom and gloom for the park or the company. I’m just worried that people will look at the results and think, “oh good, not as bad as we thought” and get blindsided when the cuts continue. Believe me - I hope I’m wrong.