Cedar Fair ends 2006 well; continues to integrate new parks

By BRANDI BARHITE brandibarhite@sanduskyregister.com SANDUSKY
Sandusky Register Staff
May 24, 2010

By BRANDI BARHITE

brandibarhite@sanduskyregister.com

SANDUSKY

Cedar Fair Entertainment Company finished 2006 in good financial shape.

But the northern parks, which include Cedar Point, continued to struggle because of the soft economy and high gas prices, according to Dick Kinzel, chairman, president and CEO.

The plan for the upcoming summer season is shaping up, though.

It includes growing revenue and improving the fall seasons at its newly acquired Paramount Parks.

Kinzel said the first stage of the integration is complete. It included combining the management teams from both companies and closing the Paramount corporate offices in Charlotte, N.C.

Stage two will include looking into pricing and marketing and establishing a company personnel wage structure.

Stage three, which will take three to five years, will include optimizing marketing and building up parks with thrill rides and family fun, Kinzel said during Thursday's conference call.

This season, the company will invest $83 million in capital improvements at its 18 locations, highlighted by new "world-class roller coasters" at Cedar Point and new thrill rides at Kings Island, Knott's Berry Farm and Valleyfair, Kinzel said.

The 2006 figures include the results of the Paramount Parks since their acquisition from CBS Corporation on June 30. Kings Island, near Cincinnati, was a Paramount Park.

The combined operations generated full-year revenues of $831.4 million. In 2005, combined revenues for the company were $568.7 million.

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.

The increased interest expense primarily reflects higher borrowings to fund the Paramount Parks acquisition and the refinancing of existing debt, according to a press release also issued Thursday.

Excluding the effects of the acquisition, Cedar Fair's full-year results on a same-park basis yielded $190.4 million compared with $194.2 million in 2005.

In 2006, the combined parks entertained more than 19 million visitors and increased average in-park per capita spending 3 percent. The company did not break out individual parks, however, stated in the press release that attendance was down 1 percent on a same-park basis.

Attendance at Geauga Lake, Aurora, Ohio, is still below expectations, according to Kinzel. Cedar Fair acquired Geauga Lake in 2004.

Kinzel said the company believes its off to a positive start in 2007. The company is more diversified financially and geographically, operating in eight states and Canada. For the full year, it expects to generate $950 million to $1 billion revenues.

Cedar Fair is a publicly traded partnership based in Sandusky. The partnership owns and operates 12 amusement parks, five outdoor water parks, one indoor water park and six hotels, which includes Cedar Point in Sandusky.