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Cedar Fair L.P. Depositary Reports Operating Results (10-Q)

August 06, 2010 | About:
10qk

10qk

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Cedar Fair L.P. Depositary (FUN) filed Quarterly Report for the period ended 2010-06-27.

Cedar Fair L.p. Depositary has a market cap of $723.1 million; its shares were traded at around $13.07 with a P/E ratio of 15.9 and P/S ratio of 0.8. Cedar Fair L.p. Depositary had an annual average earning growth of 9.5% over the past 10 years. GuruFocus rated Cedar Fair L.p. Depositary the business predictability rank of 2.5-star.FUN is in the portfolios of Louis Moore Bacon of Moore Capital Management, LP, Louis Moore Bacon of Moore Capital Management, LP, Pioneer Investments, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Excluding depreciation, amortization and other non-cash expenses, operating costs and expenses increased $17.9 million, to $276.4 million for the period ended June 27, 2010 versus $258.5 million for the same period in 2009. This increase was largely attributable to $10.3 million of costs incurred in connection with the terminated merger with Apollo and $2.5 million of legal and other costs incurred with efforts to refinance our debt. In addition, the increase in operating costs reflects the negative impact of exchange rates on our Canadian operations ($2.9 million) in the period.

Depreciation and amortization expense for the period increased $687,000 due to an increase in depreciation expense of $1.3 million due to new fixed asset additions being offset somewhat by lower amortization expense in the current period resulting from accelerated amortization in 2009 of the intangible asset related to the Nickelodeon licensing agreement, which was not renewed at the end of 2009. During the second quarter of 2010, we recognized a $1.4 million non-cash charge for the impairment of trade-names originally recorded at the time of the PPI acquisition. Although the acquisition of the PPI parks continues to meet our collective operating and profitability goals, the performance of certain acquired parks fell below our original expectations in 2009, which when coupled with a higher cost of capital, resulted in the impairment charges recorded in the second quarter of 2010. It is important to note that each of the acquired parks remains profitable, and that trade-name write-downs do not affect cash, adjusted EBITDA or liquidity. After depreciation, amortization, loss on impairment of the trade-names, loss on impairment / retirement of fixed assets, and all other non-cash costs, the operating loss for the period increased $7.2 million to $22.8 million in 2010 from an operating loss of $15.6 million in 2009.

For the six-month period, adjusted EBITDA, which management believes is a meaningful measure of the companys park-level operating results, decreased $5.6 million to $26.5 million compared with $32.1 million during the same period a year ago. The decline in adjusted EBITDA is entirely attributable to the $12.8 million of incremental cash costs associated with the terminated merger and the debt refinancing efforts (as discussed above). Excluding these merger and refinancing costs, adjusted EBITDA would have totaled $39.3 million, up 22% from 2009 as a result of increases in both attendance and revenues during the first six months of 2010.

Excluding depreciation, amortization and other non-cash expenses, operating costs and expenses for the quarter increased 7%, or $12.3 million, to $192.5 million from $180.2 million in 2009 due primarily to $6.5 million of costs incurred in connection with the terminated merger with Apollo and $2.5 million of legal and other costs incurred on our debt refinance efforts during the quarter. As mentioned in the six month section above, we recognized a $1.4 million non-cash charge for the impairment of trade-names originally recorded at the time of the PPI acquisition. After depreciation, amortization, loss on impairment of goodwill and other intangibles, and other non-cash costs, operating income for the quarter totaled $37.8 million, down $2.9 million from $40.7 million for the second quarter of 2009.

During the quarter, a provision for taxes of $7.2 million was recorded to account for PTP taxes and the tax attributes of our corporate subsidiaries, compared to a provision for taxes of $2.6 million in the same period a year ago. After interest expense and the provision for taxes, net loss for the quarter totaled $4.2 million, or $0.08 per diluted limited partner unit, compared with net income of $7.4 million, or $0.13 per unit, a year ago.

For the quarter, adjusted EBITDA decreased less than 1% to $83.2 million from $84.0 million in 2009. The $793,000 decrease in adjusted EBITDA was entirely attributable to the $9.0 million of incremental cash costs associated with the terminated merger and the debt refinancing efforts (as discussed above). Excluding these merger and refinancing costs, adjusted EBITDA would have totaled $92.2 million, up 10% from 2009 as a result of increases in both attendance and revenues during the second quarter.

Read the The complete Report

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