Cedar Fair CEO Discusses Q3 2010 Results – Earnings Call Transcript
Cedar Fair, L.P. (
)
Q3 2010 Earnings Conference Call
November 2, 2010 11:00 AM ET
Executives
Stacy Frole – Director, IR
Dick Kinzel – President & CEO
Peter Crage – VP, Finance & CFO
Analysts
Joe Rachel – Wells Fargo
Mike Pace – J.P. Morgan
Scott Hamann – Keybanc Capital Markets
Jane Pedreira – FBR Capital
Presentation
Operator
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Cedar Fair Entertainment Company Q2 2009 Earnings Call Transcript
Ladies and gentlemen, thank you for standing by. Welcome to the Cedar Fair third quarter 2010 earnings conference call. During today’s presentation, all parties will be in a listen only mode. Following the presentation, the conference will be open for questions. (Operator Instructions) This conference is being recorded today, Tuesday, November 2 of 2010. I’d now like to turn the conference over Miss Stacy Frole.
Stacy Frole
Thank you Alisa. Good morning and welcome to our third quarter earnings conference call. I’m Stacy Frole, Senior Affairs Director of Investor Relations. Earlier today, we issued our third quarter earnings release. A copy of that release can be obtained on our corporate website at cedarfair.com or by contacting our investor relations offices at 419-627-2233.
On the call this morning are Dick Kinzel, our Chairman, President and Chief Executive Officer and Peter Crage, our Executive Vice President and Chief Financial Officer.
Before we begin, I need to caution you that comments made during this call will include forward-looking statements within the meaning of the Federal Securities laws. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. You may refer to filings by the company with the SEC for a more detailed discussion of these risks.
In addition, in accordance with Regulation G, non-GAAP financial measures used on the conference call today are required to be reconciled to the most directly comparable GAAP measures. During today’s call, we will make reference to adjusted EBITDA as defined in our earnings release. The required reconciliation of adjusted EBITDA is in the earnings release and is also available to investors on our website via the conference call access page.
In compliance with SEC, Regulation FD, this webcast is being made available to the media and the general public as well as analysts and investors. Because the webcast is open to all constituents and prior notification has been widely and unselectively disseminated, all contents of the call will be considered fully disclosed.
Now let me turn the call over to Dick Kinzel.
Dick
Kinzel
Good morning. Thank you for joining us on the call today. Following my opening remarks, I’ll turn the call over to Peter for a discussion of the financials. Then I’ll come back for additional comments about our business outlook and other matters before we take your questions.
Cedar Fair’s strong momentum continued into the third quarter and the first nine months of 2010, as we achieved revenue growth in all of our regions. This is was due largely to the effects of innovative marketing programs, continual investments in our business, favorable weather conditions throughout the region and a modest recovery of the economy.
Attendance improved by approximately 5% or 547,000 visitors in the third quarter compared with a year ago. Our aggressive marketing efforts helped increase season pass sales and restored group sales to pre-2009 levels.
Competitive pricing and the attraction of our new roller coasters at King’s Dominion, and Carowinds also combined to bring a greater number of visitors into our parks. This gain in attendance and a 10% improvement in out of park revenues were responsible for our overall increase in revenues, as average in park guest per capita spending maintained relatively unchanged during the quarter.
For the nine month period we had approximately one million more visitors to our parks than we had for the comparable period last year, an increase of 6% to $19.8 million. Out of park revenues were up 7% or approximately $6 million to $92.2 million, while average in park guest per capital spending was down by approximately 1%.
The slight decrease in average in park guest per capita spending was anticipated due to the increase in group sales as well as repeat visit by seasons pass holders.
Our group visits increased as many of our parks saw the return of group bookings that did not occur in 2009, presumably due to spending cut backs by businesses and organizations. Visits by seasons pass holders significantly increased as well.
This improvement continued in October as we produced record results for our Halloween events. During this five week period, in park revenues increased by more than 25% or approximately $21 million. Attendance increased approximately 29% or 553,000 visits while average in park guest per capital spending was down roughly 1%. Out of park revenues were up approximately 3% for the month.
Throughout the year, our entire team has continued to do an excellent job in serving our guests and controlling our costs. I would like to quickly congratulate our team at Carowinds, and Michigan’s Adventure for achieving record attendance this year, something they should be very proud of.
Now I’d like to turn the call over to Peter to discuss our financial results in more detail.
Peter Crage
Thanks very much Dick. As we go through these numbers, I would like to mention that the fiscal nine month period ended September 26, 2010 included 40 fewer operating days at our parks than in the same period of 2009. This is because the Memorial Day weekend fell a week later in 2010 and several of our parks opened later, resulting in a shorter operating season for those parks.
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