Article published August 6, 2008 in the Toledo Blade
Profit nearly triples for Cedar Fair in quarter
Picture marred by flat attendance, lower spending
The firm's parks, including Cedar Point, above, drew 7.6 million customers in the second quarter, compared with 6.7 million in the year-ago period.
By LARRY P. VELLEQUETTE
BLADE BUSINESS WRITER
SANDUSKY - Amusement park operator Cedar Fair LP seems to be doing all right with the "staycation," reporting second-quarter results yesterday that more than doubled analyst estimates and drove its share price up significantly.
However, company officials cautioned that with just under half of their season to go, park attendance at their properties was relatively flat, and in-park spending was down slightly.
In addition, "During these trying economic times, people just aren't playing the games or taking a souvenir home with them," said Dick Kinzel, chairman of Cedar Fair, parent company of Cedar Point and 10 other regional amusement parks and other properties.
The firm reported a second-quarter profit of $14.7 million, or 26 cents per limited partner unit, up 167 percent from $5.5 million, or 10 cents per unit, for the same period a year ago.
The amusement park company said it had sales of $296 million for the quarter ending June 29, up 8 percent from $274 million for the period a year earlier.
The results reflect an additional 75 operating days at its 11 amusement parks, 6 outdoor water parks, 5 hotels, and one indoor water park during the second quarter of 2008 over the same quarter in 2007, the company said.
Wall Street responded to the report favorably, lifting the price of shares 13.5 percent to close at $22.60.
In a conference call with analysts, Mr. Kinzel said that Cedar Fair, which purchased Paramount Parks for $1.2 billion in 2006, isn't in a financial position to pursue the purchase of the regional amusement parks owned by Busch Entertainment Corp.
Analysts have speculated that Belgium-based beverage giant InBev NV would sell amusement parks like Busch Gardens as part of its purchase of Anheuser-Busch for $52 billion.
"If someone needed a management company to go in there and manage those companies, we'd be interested in talking with them," Mr. Kinzel said.
The company said it is exploring the sale of land it owns outside Toronto and Cleveland, and said the 82 acres outside Toronto could provide proceeds of up to $82 million, which would be used to pay down debt.
All of the firm's parks had a total of 7.6 million customers who spent an average of $40.45 each in the second quarter, compared with like-park attendance of 6.7 million and average spending of $40.68 a year ago. Mr. Kinzel said the soft economy in the Midwest is hurting Cedar Point and Kings Island in Ohio and Michigan Adventure in Michigan.
Contact Larry P. Vellequette at:
lvellequette@theblade.com or 419-724-6091.
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