Despite bad quarter, amusement park firm Cedar Fair still on track for record year
11/7/2012SANDUSKY — Cedar Fair LP reported a third-quarter decrease in both profits and revenues on Tuesday, but the owner of Cedar Point and 10 other amusement parks was in a celebratory mood because its nine-month financial results showed that it is on pace for record profits and revenues by year’s end.
In conjunction with the release of its financial results, Cedar Fair president and chief executive Matt Ouimet announced the company had raised its expected dividend for 2013 to $2.50 per share from an earlier $2 a share, citing the company’s outstanding nine-month performance.
“As we are on pace for a third straight year of record results, our cash flow is more than sufficient to cover this increased [dividend] rate, while we also steadily pay down debt and strategically invest in our business,” Mr. Ouimet said. The first of four 2013 dividend payments will be made March 15, according to the company, which is based in Sandusky.
For the third quarter ending Sept. 30, Cedar Fair had a profit of $140.7 million, or $2.51 a share. That was a 7.6 percent decrease from the third quarter a year ago when profits totaled $152.2 million, or $2.73 a share. But because of a quirk of the calendar, the fiscal third quarter had just 13 weeks instead of last year’s 14 weeks.
As a result, Cedar Fair’s quarterly revenues across its 11 amusement parks, six water parks, and five hotels totaled $553.4 million, down 3.3 percent from revenues of $572.3 million in the third quarter a year ago. Had this year’s third quarter been 14 weeks, the company estimates revenues would have been up 4 percent.
In its financial report Tuesday the company chose to focus on its nine-month results, which includes the bulk of its operating season. Ten of its amusement parks and five of its water parks largely shut down after Labor Day. The amusement parks are open only on weekends from Labor Day to Halloween. Only one park, Knott's Berry Farm, operates year-round.
Through September, Cedar Fair reported revenues of $939.2 million, an increase of 6.3 percent from $883.6 million in revenues for the same period a year ago. Its profits totaled $111.6 million, or $2 a share, up 56 percent from $71.6 million, or $1.28 a share, for the first nine months of 2011.
Cedar Fair said the improved nine-month performance was largely because of the strength of the company’s operations this year, plus the addition of an extra week of operation for the year (39 weeks in 2012 versus 38 weeks in 2011) due to the timing of the close of the fiscal third quarter.
Comparing 2012 and 2011 on a 39-week basis, Cedar Fair’s total revenues were up $41 million or 5 percent, while its average spending per guest increased 4 percent. Attendance increased 1 percent, while out-of-park revenues (hotels) were flat compared to 2011.
The company stock, which trades on the New York Stock Exchange under the ticker symbol FUN, rose $1.19 to close at $36.99 on Tuesday.
“We experienced another outstanding quarter and are well on our way to delivering record results for the third consecutive year,” Mr. Ouimet said. “Our management team and employees have successfully executed the first-year implementation of the …initiatives we identified in January, enabling us to increase our average in-park guest per capita spending by 4 percent while maintaining our record attendance base. We remain confident in the strength and stability of our business model.”
As the company heads into the fourth quarter, typically one of decreased revenues because of the shutdowns of all but one amusement park, Mr. Ouimet said the company feels good about both the near-term and its long-range prospects.
“Based on our performance to date and our expectations through the end of the year, we are confident in our ability to deliver a third consecutive year of record results with revenues between $1.055 billion and $1.075 billion,” he said.
Earlier this month Cedar Fair announced its new capital expenditures for the 2013 season. During a conference call with analysts Tuesday, Mr. Ouimet outlined other changes not listed earlier on the expenditures budget.
For example, the company plans to invest between $15 million and $20 million annually over the next three years to refresh its hotels at Cedar Point. The company says it has an opportunity to enhance the resort guest experience by offering rooms at various levels — a good, better, best philosophy.
Also, Cedar Fair said it will look to relocate and modernize its employee dormitories at Cedar Point, freeing up highly valuable space on the peninsula for development.
Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.