Cedar Fair, L.P. (FUN)
Q1 2011 Earnings Call
May 5, 2011 10:00 am ET
Stacy Frole - Director of IR
Dick Kinzel - President and CEO
Peter Crage - EVP and CFO
Michael Walsh - Wells Fargo
Scott Hammond - KeyBanc Capital Markets
James Hardiman - Longbow Research
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I would now like to turn the conference over to Ms. Stacy Frole. Please go ahead.
Thank you, Douglas. 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 2011 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 this call this morning are Dick Kinzel, our President and Chief Executive Officer and Peter Crage, our Executive Vice President and Chief Financial Officer. We also Operational Executive Vice Presidents with us this morning, Richard Zimmerman and Philip Bender who will be available for comments during the call.
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 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, like to turn the call over to Dick Kinzel.
Thank you, Stacy. Good morning everyone. Thank you for joining us on today's call and we appreciate your interest in Cedar Fair. Today's call will focused on our first quarter performance, our outlook for 2011 operating season, our recently refiling and current capital structure, as well as our distribution expectation going forward.
Before discussing first quarter results I would like to remind everyone that the first quarter represents les than 5% of our full year revenues. So it is not material to our full year operating results. Therefore, it is always risky to jump to any conclusion based on the first quarter numbers alone.
Overall, first quarter results were in line of our expectations. Net revenues for the first quarter of 2011 decreased $400,000 to $26.9 million compared to $27.3 million for the first quarter of 2010. The decrease in 2011 was primarily due to fewer operating days in the southern region and a dip in attendance in the western region, which was partially offset by an increase in park guest per capita spending in the western region.
Our pre-season operating costs were in line of our expectation for the quarter where only three of our seven key properties when operation. The other parks including our largest seasonal parks Cedar Point, Kings Island and Canada’s Wonderland were idle as those teams finalized their preparations to open for their operating seasons.
Peter will review the details behind the financial results with you in just a bit, but first I would like to discuss our view on the upcoming 2011 operating season in a little more detail. Although it's much too early determine the kind of year we will ultimately have, we are encouraged by the initial positive trends season's pass and group sales at our parks.
Overall, seasons pass sales were up when compared to this time last year in terms of both units sold and total revenue. This was primarily due to our aggressive marketing campaign, competitive pricing and hopefully continue to improve it in the economy. Our focus is to convince people to make their plans early in the year and by their seasons passes now at great value, which we hope will lead to a greater number of visits throughout the year.
Approximately, 50% of our budgeted sales have taken place to-date. In addition, our group business book to-date is up slightly compared with this time last year. While it is still true only to call this a trend we are hopeful the important segment of our customer base, we continue to improve as the overall economy continues to recover from the 2009 recessionary levels.
We believe we will be able to build upon the record setting momentum we created for Cedar Fair in 2010 as our parks begin opening for the 2011 operating season. Our continuing the focus on improving the operations and the distinctive public draw of our parks, as well as strengthening the balance sheet we expect to generate significant cash flow to support our ongoing efforts to reward our unit holders with steadily increasing value creation through a sustainable and growing distribution.
Our recent investments in several new leading-edge attractions coupled with the addition of new family friendly shows will be key two drivers to the company’s 2011 success. Currently, seven of our ten seasonal amusement parks are in operation and have strong marketing programs underway. In just another two weeks all ten seasonal parks will be in operation.