Cedar Fair LP Q1 2010 Earnings Call Transcript

Cedar Fair LP Q1 2010 Earnings Call Transcript
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Cedar Fair LP (FUN)

Q1 2010 Earnings Call

May 06, 2010 10:00 am ET

Executives

Stacy Frole - Director of IR

Dick Kinzel - Chairman, President and & CEO

Peter Crage - Corporate VP of Finance & CFO

Analysts

Scott Hamann - KeyBanc Capital Markets

Hayley Wolff - Rochdale Securities

Presentation

Operator

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Welcome to the Cedar Fair First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. (Operator Instructions). I would like to remind everyone that this conference call is being recorded on May 5, 2010 10:00 A.M. eastern time.

I would now like to turn the conference over to Stacy Frole. Please go ahead.

Stacy Frole

Good morning and welcome to our first quarter earnings conference call. I’m Stacy Frole, Cedar Fair’s Director of Investor Relations. Earlier today, we issued our 2010 first quarter earnings release. A copy of that release can be obtained on our corporate website at www.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 Corporate Vice President of Finance 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 more detailed discussion of these risks. 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 content of the call will be considered fully disclosed.

Now, I will turn the call over to Dick Kinzel.

Dick Kinzel

Good morning everyone and thank you for joining us on the call today. We appreciate your interest in Cedar Fair. It’s been sometime since we’ve spoken with you and we are well aware that this has been rather busy off season. But I want to emphasize that we are very excited about where we are now and where we see things going. Not just for the operating season that is getting underway and over the longer terms well.

So let me take a few minutes to discuss some positive trends that we’ve seen contributing to our momentum as we head into this all-important spring and summer months. I will then address our long-term strategy and targets as we continue to move forward as an independent public company.

Following that, Peter will give you more detail on the first quarter results. And I will return to give you a brief summary of our ongoing capital and marketing programs which we believe will help drive improvement for the remainder of 2010.

Although, it is much too early to determine the kind of year we will ultimately have. We are encouraged by the trends we have seen so far.

As noted in today’s release, net revenues for the quarter were 3% higher than a year ago, primarily due to increase in the tenants in our Western and Southern regions. In other parts, we have signed that our overall seasons passed sales were offering compared to this time last year. This is primarily due to our aggressive marketing campaign, competitive prices, hopefully consumer confidence in the economy and of course, better weather.

Our focus is to get people to make their plans early in the year and buy their season’s passes now at a great value, which will hopefully lead to a greater number of visits throughout the year.

In addition, our groups business booked to date is up slightly compared to this time last year. While it is still too early to call this a trend, we are hopeful that this important segment of our customer base continues to improve as the economy recovers from last year’s recessionary levels. Again, it is still very early in the season but attendance is up at the parks that have opened while average in part for capital spending continues to be soft.

This slowly but steadily improvement environment will be the backdrop of our strategic efforts to continue growing as a public company. That end we will manage Cedar Point with a focus on strengthening our balance sheet generating long-term profitable growth and thereby increasing value to our investors.

We have engaged JPMorgan to assist us and over the next few months we will addressing our capital structure particularly focusing on our debt and creating a stable structure that we can maintain through economic cycles.

Evaluation of our capital structure will consider total return to our unit holders to individually or in a combination debt reduction, growth of the business and the introduction of a distribution at an appropriate level, at the appropriate time. We believe this balanced approach will provide the highest long term value for all of our unit holders.

The combination of well run properties, improving business conditions, our ability to generate significant cash flows and a stronger balance sheet will support our plans to grow the value of our company over the long run.

Before I turn the call over to Peter I would like to briefly comment on yesterday’s news release. We are pleased; we are able to reach an agreement with our largest unit holder Q Funding III, Q4 Funding which will increase our board from seven directors to nine immediately following our 2010 annual meeting of the unit holders.

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