Call Start: 10:00
Call End: 10:25
Cedar Fair, LP (FUN)
Q4 2011 Earnings Call
February 21, 2012 10:00 am ET
Matt Ouimet – President and Chief Executive Officer
Brian Witherow – Executive Vice President and Chief Financial Officer
Stacy Frole – Director, Investor Relations
Tim Conder – Wells Fargo Securities
Sri Rajagopalan – Deutsche Bank
Previous Statements by FUN
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Now I would like to turn the conference over to Ms. Stacy Frole. Please go ahead, ma’am.
Thank you, Barbara. Good morning and welcome to our year-end earnings conference call. I am Stacy Frole, Cedar Fair's Director of Investor Relations. This morning we issued our 2011 fourth quarter and year-end 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 Matt Ouimet, our President and Chief Executive Officer, and Brian Witherow, our Executive Vice President and Chief Financial Officer, who will walk you through the particulars of our financial results.
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 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 web site via the conference call access page.
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 Matt Ouimet.
Thank you, Stacy. I’m pleased to report 2011 was another record year for Cedar Fair. We achieved record revenues of $1.028 billion and record adjusted EBITDA of $375 million. As mentioned in our last call, we firmly believe our continued investment in creating a compelling entertainment experience for the whole family and our disciplined management of both costs and revenue drivers was a catalyst for the solid increases we achieved in attendance and per capita spending this year. During the year we had the pleasure of entertaining a record 23.4 million guests at our parks, an approximately 3% increase from our then-record 2010 performance.
As we’ve mentioned in the past, our attendance is divided between season pass customers, group business, and advance and front gate purchases. This year we experienced solid increases in both our season pass and group business while seeing a slight decrease in our front gate business as we successfully transitioned some of these customers to season passes. I will note here that season passes provide the best value to the guests, allow guests to enjoy our parks at a more relaxed pace, and season pass holders tend to be some of our best goodwill ambassadors.
Despite the fact that season pass guests typically spend less per visit than other guests, we were quite pleased to see our average in-park guest per capita spending increased 2% during the year as well. The strong increase in attendance and the in-park guest spending combined with an 8% improvement in out-of-park revenues were responsible for our overall increase in revenues. Total revenue per attendee, which I know is tracked by some of you on the call today, increased approximately 3% to $43.98 per guest.
Our record results this past year were in large part the direct result of another solid fourth quarter. In the quarter we generated strong top line growth on the strength of our Halloween events that complement our peak summer season. This organic growth opportunity will remain a strategic priority for us going forward and we are challenging ourselves to identify new ways to recreate this event-driven attendance at other times of the year.
Our performance over the past two years clearly reflects the inherent strength and stability of our distinctive parks and attractions. This could not happen without our dedicated and hard-working employees at all levels of the organization. I continue to be impressed with the teamwork that takes place throughout the company and the continued focus everyone has on providing the best possible experience for every guest at every park every day.
I’m extremely proud of the collective efforts our employees have put forth to make this another record-setting year for Cedar Fair.
Now I’d like to turn the call over to Brian to discuss our financial results in more detail. Brian?
Thanks, Matt. From a financial perspective, we continue to strengthen our position within the marketplace. Through the past year, we’ve achieved record levels of attendance, revenues and adjusted EBITDA, we’ve amended our debt providing additional financial and operational flexibility, we’ve reduced our average cost of debt by more than 3%, increasing free cash flow by approximately $50 million per year going forward, we’ve reduced our total leverage ratio to 4.2 times compared with 4.9 times as recently as two years ago, and lastly, we have no borrowings outstanding under our revolving credit facility at year end.