Loading…
Friday, August 01, 2014
Current Weather
Loading Current Weather....
Published: Friday, 2/9/2007

Cedar Fair predicts revenue of $1B

BY JON CHAVEZ
BLADE BUSINESS WRITER
Last year's acquisition of Paramount Parks, owner of Kansas City's Worlds of Fun, above, bolstered revenue. Last year's acquisition of Paramount Parks, owner of Kansas City's Worlds of Fun, above, bolstered revenue.
Enlarge

SANDUSKY - One of the nation's largest amusement park and entertainment companies, Cedar Fair LP, said yesterday its revenues soared last year but its profits slumped.

Still, the owner of Cedar Point and 11 other amusement parks and five water parks country-wide beat several analysts' estimates. Further, the company's chief executive, Richard Kinzel, said the firm will have revenues this year of $950 million to $1 billion.

"In an industry that's really monopolized by two other park owners [Disney and Six Flags], these guys are knocking the cover off the ball," analyst Robert Routh, of Jefferies and Co., said of Cedar Fair.

"They had everything working against them and they beat our estimates easily."

For 2006, Cedar Fair had revenues of $831 million, up from $568 million a year earlier, because last summer it acquired Paramount Parks Inc. for $1.24 billion, adding five amusement parks.

Its profit was $87 million, or $1.59 a limited partner unit, down 46 percent from $160 million, or $2.93 a unit, a year earlier. It benefited in 2005 from unseasonably warm and clear weather that boosted attendance.

In the fourth quarter, the company had a loss of $30 million, or 56 cents a unit, compared with a profit of $2 million, or 4 cents a unit, in the same period a year earlier.

Wall Street was not overwhelmed. The firm's stock rose 38 cents a unit, closing at $28.73 on the New York Stock Exchange.

Cedar Fair executives were excited as they talked to analysts.

"We finished 2006 in very good shape financially," said Mr. Kinzel. "We had a busy year acquiring parks, and 2007 will be just as busy as we continue integration."

Needed now is combined purchasing, pricing, brand, and marketing strategies, plus changing wage structures, he said.

Mr. Routh, the analyst, said the Sandusky company does well at integrating new parks. "This proves that these guys are experts at it," he added.

Analyst Tim Conder, of A.G. Edwards, gave the firm a "buy/ag-

gressive" stock rating based on its beating his profit expectations. The firm, he said, is poised for growth.

Mr. Kinzel said the company's parks attracted more than 19 million visitors last year and spending by each visitor increased by 3 percent to $38.71.

At the parks it owned at the start of 2006, attendance decreased 1 percent, mainly because of soft regional economies in Michigan and Ohio as well as higher gasoline prices, the company said. But officials said they persuaded lenders to reduce the company's long-term debt rate, which will save $8 million annually.

Revenues this year, said Mr. Conder, should hit $1.01 billion.

Said Mr. Routh, of Jefferies and Co.: "They seemed very, very comfortable giving a $950 million to $1 billion estimate just based on what they know so far. I'm predicting $1.02 billion for next year, and I believe they'll hit it."

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.



Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. If a comment violates these standards or our privacy statement or visitor's agreement, click the "X" in the upper right corner of the comment box to report abuse. To post comments, you must be a Facebook member. To find out more, please visit the FAQ.