On May 9, 2024, Cedar Fair LP (FUN, Financial), a prominent player in the regional amusement parks sector, disclosed its financial outcomes for the first quarter ended March 31, 2024, through its 8-K filing. The report highlighted a net loss of $133 million, which, although substantial, marks a slight improvement from the $135 million loss reported in the same quarter of the previous year. This period included a planned extra week due to a fiscal calendar shift, providing a unique year-over-year comparison.
Operational and Financial Highlights
Cedar Fair reported a record first-quarter net revenue of $102 million, up 20% from the previous year, driven by a significant 27% increase in attendance, which totaled 1.3 million guests. However, in-park per capita spending saw a decrease of 6%, settling at $60.53. Out-of-park revenues also reached a new high of $23 million, reflecting a 21% increase. These figures come despite the company experiencing 44 fewer operating days compared to Q1 2023.
The adjusted EBITDA loss was reported at $97 million, an improvement from a loss of $101 million in the prior year. This metric, crucial for assessing operational efficiency, indicates a slight easing in operational losses despite the challenges posed by fewer operating days and ongoing merger-related expenses.
Strategic Developments and Capital Structure
Significant during this quarter was the company's strategic debt refinancing actions. Cedar Fair entered new credit facilities, including a $1.0 billion senior secured term loan and a $300 million revolving credit facility, aimed at enhancing financial flexibility. These moves are particularly noteworthy as they prepare the company for a proposed merger with Six Flags, expected to close by the end of Q2 2024.
The Board of Directors declared a quarterly cash distribution of $0.30 per LP unit, underscoring a commitment to shareholder returns despite the net loss position.
Management's Perspective
CEO Richard Zimmerman commented on the quarter's performance, emphasizing the strong attendance figures and pre-season excitement generated by new capital investments. He remains optimistic about maintaining positive trends throughout 2024. Regarding the merger with Six Flags, Zimmerman highlighted the approval from Six Flags shareholders and positive reception from credit markets, expressing confidence in the strategic benefits of the merger.
Looking Ahead
While the first quarter traditionally accounts for a smaller portion of annual results, the performance sets a cautiously optimistic tone for the rest of the year. The increase in season pass sales and strategic pricing adjustments are expected to continue bolstering attendance and revenues. However, the ongoing expenses related to the Six Flags merger and the adjustments required in operational strategies to accommodate fewer operating days will be critical areas to watch.
As Cedar Fair navigates through these operational and strategic challenges, the outcomes of these initiatives will be crucial in shaping the company's trajectory in the competitive amusement park industry.
For detailed financial figures and further information, refer to the full earnings release and additional disclosures provided by Cedar Fair LP.
Explore the complete 8-K earnings release (here) from Cedar Fair LP for further details.