Successful year despite net loss, Cedar Point parent says; people spend more inside parks
Cedar Fair officials say 2007 was a good year, despite a net loss.
The company's operations generated increased revenues of $987 million, compared to $831.4 million in 2006. Net loss in 2007 was $4.5 million, or 8 cents per limited partner unit, compared to a net income of $87.5 million, or $1.59 per limited partner unit the previous year.
"We're very pleased with what was a successful year," said Cedar Fair spokesman Brian Witherow.
In 2007 the parks entertained more than 22 million visitors who spent an average of $40.60 inside the parks -- an increase of 5 percent compared to 2006.
Cedar Fair does not disclose year-end figures for individual parks, but Witherow said Cedar Point had a good year.
"Cedar Point had a very strong 2007, and that was a big part of why the company had a strong 2007," he said.
Cedar Fair officials say EBITDA -- the adjusted earnings before interest, taxes, depreciation and other non-cash items -- is a meaningful measure of park-level operating profitability. Last year's EBITDA was $340.7 million, up from $310.3 million in 2006.
The increase in EBITDA was a record performance.
Witherow said the company is looking to build on that record performance. For 2008, officials would like to achieve an EBITDA between $340 to $355 million.
"We look at EBITDA as the best approximation of cash flow before all of our cash requirements," he said.
Although not all of the new parks performed up to expectations, in-park guest per capita spending increased, and officials continued to meet planned cost savings and synergies, said Cedar Fair chairman, president and chief executive officer Dick Kinzel in a news release.
Net revenues for the fourth quarter fell to $115.4 million from $119.9 million a year ago. Operating loss for the same period was $19.6 million, compared to $1.9 million in 2006. Officials attribute the high operating loss to a $15.7 million non-cash charge for impairment of assets related to the restructuring of Geauga Lake amusement park.
Kinzel explained the operating results for the fourth quarter, which began Oct. 1, were negatively impacted by fewer operating days. In 2006, the fourth quarter began almost one week earlier. With the additional days in 2006, the company's seasonal amusement parks that were open weekends only and year-round properties generated about $14 million and entertained 304,000 guests.
After depreciation, amortization and other non-cash costs, operating income for 2007 was $154.6 million, compared to $219.5 million in 2006. Cash operating costs in 2007 were $646.3 million compared to $521.1 million in 2006. Non-cash costs, including the $54.9 million charge for impairment of assets, were $186.1 million compared to $90.8 million in 2006.
In 2008, officials will invest $88 million in capital improvements including the addition of new world-class roller coasters at Canada's Wonderland, Knott's Berry Farm, Kings Dominion, Dorney Park and Michigan's Adventure. The company also plans to expand its waterpark at Carowinds, introduce a new thrill ride at California's Great America and unveil a new children's area at Cedar Point.
For the year, officials expect to generate revenues between $990 million to $1.02 billion.
"We believe we are off to a positive start in 2008. We are now a more geographically diversified company. After our first full year of operating the new parks, we have learned from what worked and what didn't work, and we have a marketing program in place at each of our parks for the upcoming season, which reflects those conclusions," Kinzel said.