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Cedar Fair, L.P Q2 2010 Earnings Call Transcript

Cedar Fair, L.P Q2 2010 Earnings Call Transcript

Cedar Fair, L.P. (FUN)

Q2 2010 Earnings Call

August 03, 2010 10:00 a.m. ET


Stacy Frole - Director, IR

Dick Kinzel - President & CEO

Peter Crage - VP. Finance & CFO


James Hardiman - Longbow Research

Michael Walsh - Wells Fargo

Mike Pace - JPMorgan

Ross Haberman - Haberman Management Corp

Jane Pedreira - FBR Capital

John Maxwell - Jefferies & Co

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Jeff Kauffman - Sterne, Agee



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Good day ladies and gentlemen and thank you for standing by and welcome to the Cedar Fair's Second Quarter 2010 Earnings Conference Call, (Operator Instructions). This conference is being recorded today Tuesday, August 3rd, 2010.

I would now like to turn the conference over to Ms. Stacy Frole, Director of Investor Relations.

Stacy Frole

Thank you Joe, good morning and welcome to our second quarter earnings conference call, earlier today we issues our 2010 second quarter earnings release, a copy of the release can be obtained on our corporate website at 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 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 our SCC Regulation FD, this webcast is being made available to the media and the general public, as well as analyst 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'll turn the call over to Dick Kinzel.

Dick Kinzel

Good morning everyone and thank you for your joining us one the call today, we appreciate your interest in Cedar Fair. It's been three months since we last talked, a lot of good things have happened since then.

In June we added two new members to our Board of Directors, last Thursday we announced the successful refinancing of our debt, which provides us with a more secure capital structure and more importantly, as you read in the morning's earnings release, results through July are positive.

So I'd like to take a few minutes to discuses the trends we have seen that are contributing to these results as we heard into the second half of operating season. I will then address our long term strategy and targets as we continue to move forward with our plans to strengthen our balance sheet, reinvest capital into our properties and restate a distribution at an appropriate time in the future.

Finally Peter will give us more details on the second quarter and six months results. He will also provide more color around the terms of our recent refinancing. We are encourages by the trends we have seen so far in 2010, however we still have a lot of the 2010 season ahead of us.

As noted in today's release, net revenues for the quarter were 4% higher than a year ago and it's important to point out that we're able to generate that increase on over 40 fewer operating days, due to Memorial Day falling a week later this year.

The improved results are primarily due to increased attendance in our western and southern regions coupled with improved out-of-park revenues. The positive attendance trends are a result of an increase in seasons pass visits this year.

This is primarily due to our strategy of continuously reinvesting in our parks, including new rollercoaster's at Kings Dominion, and Carowinds, coupled with aggressive marketing campaigns, competitive pricing and of course better weather so far, which is always helpful.

In addition, attendance to the six -- for the first six months of the year, benefited from a modest increase in early season group sales. This is a result of a more targeted sales program, focusing on business and industries that appeared to have withstood the recession well, along with the return of some group bookings that did not occur in 2009. These trends have already continued into July.

Revenues are up year-over-year by approximately $23 million for the first seven months, in fact through the last weekend, we have already entertained more than 13 million visitors. This is 752,000 more visitors than at this time last year. A large portion of these increased visits continues to be in the form of improved seasons passing group sales, which have admittedly placed a little bit of pressure on our average in-park guest per caps, which are down approximately 2%.

We anticipated per caps may be lower due to over all marketing strategy at certain parks this year. Our goal however, is to maximize revenues and operating profits, which is achieved through an optimum mix of attendant and in-park spending at each individual park.

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