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Despite higher revenue and guest spending, Cedar Fair profits fall

By Jon Chavez • Updated Nov 7, 2019 at 11:01 AM

SANDUSKY — Even with significantly higher revenues and an increase in guest spending, Cedar Fair LP said Wednesday that its profits for the third quarter decreased 11 percent to $189.9 million, or $3.34 a share, from $213.3 million, or $3.76 a share, a year ago.

The earnings fell short of estimates of $3.46 a share, according to a consensus of six analysts surveyed by Zacks Investment Research.

Despite the drop in profits, top officers of the Sandusky-based amusement park chain were upbeat during a conference call with Wall Street analysts.

Cedar Fair, which has five water parks and 11 amusement parks, including its flagship Cedar Point in Sandusky, said its adjusted earnings for the quarter were $355 million, up 5 percent year over year. The company views adjusted earnings as a more meaningful measure of its financial performance.

Revenues rose 7 percent to $714 million, attendance climbed 6 percent to 732,000 visits, and per person spending jumped 21 cents, or just under 1 percent. It all combined in a "best-ever post-Labor Day performance," CEO Richard Zimmerman told analysts.

Also, the figures "have us well on our way to making 2019 the best year in the company's history," he added.

Cedar Fair benefited in 2019 from record-low unemployment, healthy consumer spending, and weather patterns that were largely fair at critical portions of its season compared to 2018, especially in July, Mr. Zimmerman said.

The success occurred despite 53 fewer operating days due to a shift in the 2019 fiscal year, the company said.

Continuing the good news, the CEO said Cedar Fair is off to its best start ever in season pass sales, which are up 50 percent over last year at this point.

"Not only are we well ahead of last year's record pace, but we are also seeing solid increase in the sales of related all-season products, such as all-season dining and all-season beverage," he said.

Mr. Zimmerman would not comment on a reported merger offer of $4 billion by rival Six Flags Inc. Wire services reported that their sources indicated Cedar Fair turned down the offer.

"As a matter of policy, we don't comment on rumors or speculation in the marketplace, particularly around [mergers and acquisitions]," the CEO said.

However, Mr. Zimmerman did break policy when addressing a rumor that Cedar Point closed on a Saturday in October due to high demand. "I can say that Cedar Point never closed. I want to clarify: the park did not close," he said.

Besides earnings, the Company declared a quarterly cash dividend 93.5 cents a share, payable Dec. 17, to shareholders of record as of Dec. 4.

On the New York Stock Exchange, Cedar Fair shares gained 44 cents on Wednesday to close at $56.09.

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