Constructive 1st quarter outcomes for Dorney Park proprietor Cedar Truthful

SANDUSKY, OHIO – Some very attention-grabbing occasions occurred just lately and within the first quarter of 2022, to Cedar Truthful Leisure Firm, the proprietor of Dorney Park and Wild Water Kingdom.

Nonetheless, monetary outcomes for the quarter, which ended March 27, weren’t very attention-grabbing as a result of, traditionally, first quarter outcomes symbolize lower than 5% of the corporate’s full yr income as a result of most parks and amenities are closed throughout the quarter.

Among the many attention-grabbing objects was the unsolicited supply in early February from Sea World Leisure to amass Cedar Truthful for $3.58 million. The bid was rejected inside a couple of days.

On a extra constructive be aware, Dorney Park introduced that it was becoming a member of many of the different Cedar Truthful parks in going cashless for the 2022 season when the park opens in Might. Dorney Park was one of many take a look at websites for this system, referred to as Quick Pay, final summer season.

The park accepts both bank card, debit card or sensible gadget with Apple Pay or Google Pay. Dorney accepts Visa, Mastercard, Uncover and American Specific bank cards, and most debit playing cards.

Different parks owned by Dorney Park guardian firm Cedar Truthful additionally introduced they may cease accepting money for the 2022 season, together with Cedar Level in Ohio and Kings Dominion in Virginia.

Within the earnings name with analysts, CEO Richard Zimmerman, mentioned that the cashless system will scale back prices by decreasing the labor necessities on the parks. it’s additionally serving to per capita spending development, he famous, by making transactions extra environment friendly.

A much less constructive be aware, nevertheless, was the choice in late April by a choose in Sandusky, Ohio to permit the lawsuit to proceed towards Cedar Truthful concerning season passes throughout the COVID-19 pandemic.

Plaintiffs argued that in 2020, when Cedar Truthful’s parks closed early or didn’t open in any respect, the corporate saved 100% of the cash paid up-front by season passholders. Cedar Truthful argued that they honored 2020 season passes by the 2021 season by offering a substitute of equal or larger worth.

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The plaintiffs, nevertheless, argued that the 2021 season was not of equal or larger worth due to COVID-related restrictions.

The lawsuit was not a matter of debate throughout the analysts’ name.

Working Outcomes

Presumably to provide added shade to analysts and traders, Cedar Truthful consists of preliminary outcomes for the 4 months ended Might 1 of their first quarter report. These preliminary outcomes present document internet income of $193 million pushed by robust attendance developments, continued document ranges of in-park per capita spending and improved out-of-park revenues.

As an organization that noticed excessive disruption brought on by the COVID-19 pandemic, Cedar Truthful compares outcomes with 2019, the final time enterprise operated on a traditional foundation. In comparison with the primary 4 months of 2019, the corporate’s outcomes symbolize a 33%, or $48 million enhance in internet revenues.

“As a consequence of our excellent latest efficiency, we’ve got accelerated our post-pandemic restoration and are on tempo to outperform our 2019 working outcomes,” mentioned Zimmerman in a press release. “As we head into a very powerful stretch of the 2022 working season, we’re happy that the momentum that fueled our document first quarter revenues continued by April.

“Moreover, our whole group is worked up to maximise the total potential of our portfolio as we put together to entertain visitors throughout our properties with out restrictions for the primary time since 2019.”

Outcomes for First Quarter 2022 In comparison with First Quarter 2021

In Might 2021, the corporate opened its U.S. properties for the 2021 working season on a staggered foundation with capability restrictions, visitor reservations, and different working protocols in place. The corporate’s Canadian property, Canada’s Wonderland, reopened in July 2021, and the park operated with capability restrictions in place all through 2021.

By comparability, Cedar Truthful at present anticipates that its parks will return to their full working calendars for the 2022 season with none working restrictions. 5 of its 13 properties opened, as deliberate, for the 2022 working season within the first quarter of 2022.

Working days within the first quarter of 2022 totaled 130, in contrast with zero working days within the first quarter of 2021 as a result of pandemic. For the primary quarter ended March 27, 2022, internet revenues totaled $99 million versus $10 million for the primary quarter of 2021. The rise in internet revenues is attributable to a 130-operating-day enhance within the current-year interval.

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In the meantime, in-park per capita spending within the quarter totaled $58.86, which displays the continuation of very robust ranges of visitor spending throughout all key income classes. As a result of amusement park operations had been suspended within the first quarter of 2021, there was no comparative in-park per capita spending for the prior-year interval.

Out-of-park revenues for the primary quarter totaled $16 million in contrast with $10 million for first quarter of 2021, which included prior-period revenues from a culinary pageant hosted by Knott’s Berry Farm in March 2021.

The working lack of $84 million for the quarter was according to the corporate’s expectations and compares to an working lack of $92 million within the prior-year quarter. The lower within the first-quarter working loss displays an $89 million enhance in first-quarter internet revenues offset by a $73 million enhance in 2022 working prices in contrast with the prior-year quarter.

Cedar Truthful reported a primary quarter internet lack of $89 million, or $1.56 per diluted LP (Restricted Partnership) unit. This compares to a primary quarter 2021 internet lack of $110 million, or $1.95 per diluted LP unit.

Adjusted EBITDA (Earnings Earlier than Curiosity, Taxes, Depreciation and Amortization), which administration believes is a significant measure of the corporate’s park-level working outcomes, for the 2022 first quarter was a lack of $68 million, an enchancment of $15 million, or 18%, when put next with an adjusted EBITDA lack of $84 million for the primary quarter of 2021.

As of March 27, 2022, the Firm had money available of $50 million and $234 million accessible beneath its revolving credit score facility, internet of $125 million of excellent borrowings and $16 million of letters of credit score, for complete liquidity of $284 million. The $284 million of complete liquidity on the finish of the primary quarter compares to $420 million of complete liquidity on the finish of calendar yr 2021. Internet debt as of March 27, 2022, totaled $2.6 billion.

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This bears watching.

“On account of our group’s wonderful efficiency and the resilience of our enterprise mannequin, we’re advancing our strategic targets of decreasing internet leverage and reinstating a quarterly distribution to unitholders by the third quarter of this yr, if not sooner.” Zimmerman added, “We’re rising from the pandemic stronger than ever, and the strategic selections revamped the previous yr place us properly to resume Cedar Truthful’s long-term monitor document of development and worth creation for our unitholders.”

2022 Outlook

By the top of Might, the corporate expects that every one parks inside its portfolio can have opened as deliberate, at full capability, and with out working restrictions for the primary time for the reason that 2019 season.

As a part of the corporate’s deliberate 2022 capital funding program of $200-215 million, Cedar Truthful expects to make enhancements to each park in its portfolio.

Resort bookings are trending properly forward of pre-pandemic ranges, and gross sales of season passes and different advance-purchase merchandise are robust. By way of the top of April, season cross gross sales had been up $59 million versus comparable 2019 ranges, whereas gross sales of all-season “add-on” merchandise had been collectively up $17 million.

“We anticipate compelling income development in 2022 as we construct on our beforehand introduced initiatives to drive robust attendance and in-park purchases, value into demand, and create a extra versatile, resilient Cedar Truthful,” mentioned Zimmerman. “We anticipate to proceed growing margins with income development outpacing working prices and bills, at the same time as we additional enhance our parks and keep staffing ranges.”

Cedar Truthful Leisure Firm (NYSE: FUN), one of many largest regional amusement resort operators on this planet, is a publicly traded partnership primarily based in Sandusky, Ohio. The corporate owns and operates 13 amusement parks, together with two outside water parks, one indoor water park and 5 resorts. It additionally operates an extra theme park beneath a administration contract. Its parks are situated in Ohio, California, North Carolina, South Carolina, Virginia, Pennsylvania, Minnesota, Missouri, Michigan, Texas and Toronto, Ontario.