ThrillNetwork.com :: Cedar Fair reports 2006 results and 2007 outlook

News: Cedar Fair reports 2006 results and 2007 outlook

By Chris L

Feb. 8th, 2007 -- Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement resorts, water parks and active entertainment, today announced results for its fourth quarter and year ended December 31, 2006. The 2006 figures include the results of the Paramount Parks since their acquisition from CBS Corporation on June 30, 2006.

Together the combined operations generated full year revenues of $831.4 million, with income before taxes of $126.6 million and net income of $87.5 million, or $1.59 per diluted limited-partner (LP) unit. In 2005, combined revenues for the company were $568.7 million, with income before taxes of $111.6 million and net income of $160.9 million, or $2.93 per diluted LP unit. Included in the 2005 results was the reversal of $62.6 million of contingent liabilities recorded from 1998 through 2004 related to publicly-traded-partnership taxes.

Adjusted EBITDA, which management believes is a meaningful measure of the company’s park-level operating results increased to $310.3 million versus $194.2 million last year. See the attached table for a reconciliation of adjusted EBITDA to net income.

“I am pleased to report that 2006 was another successful year for the company,” said Dick Kinzel, Cedar Fair chairman, president and chief executive officer. “We completed the acquisition of the Paramount Parks while maintaining the operations of our existing parks. In 2006, the combined parks entertained more than 19 million visitors and increased average in-park per capita spending 3% to $38.71. The result of this was a record $310 million in adjusted EBITDA.”

Kinzel added, “The integration of the new properties into Cedar Fair is on schedule and going extremely well. It was a significant benefit to take ownership of the new parks during the operating season. We were able to see the parks in operation and see first hand what it was like on the front lines. Because of this, we are on track to meet and possibly exceed our planned cost savings and synergies.”

On a combined basis, operating income was $219.5 million compared with $137.3 million in 2005. Cash operating costs were $521.1 million versus $374.5 million in the prior year, while interest expense on a combined basis was $88.3 million, up from $26.2 million last year. The increased interest expense primarily reflects higher borrowings to fund the Paramount Parks acquisition and the refinancing of existing debt.

For the 2007 season, Kinzel reported that the company will be investing $83 million in capital improvements at its 18 locations, highlighted by the addition of a new world-class roller coaster at Cedar Point and new thrill rides at Kings Island, Knott’s Berry Farm and Valleyfair. The company will also expand the water park at Kings Dominion by adding three new water attractions. “We will continue our long-term strategy of continually reinvesting in our parks to improve the guest experience,” Kinzel said. “We remain in solid shape to invest capital in our parks as planned, while maintaining our regular quarterly cash distributions to our unitholders and managing our debt levels.”

From Press Release