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Cedar Fair(FUN) - 2024 Q4 - Earnings Call Transcript
FUNCedar Fair(FUN)2025-02-28 01:09

Financial Data and Key Metrics Changes - For Q4 2024, the company generated net revenues of 687millionwithattendanceof10.7millionvisits,reflectingstrongperformancecomparedtothepreviousyear[17][18]−AdjustedEBITDAforQ42024increasedby687 million with attendance of 10.7 million visits, reflecting strong performance compared to the previous year [17][18] - Adjusted EBITDA for Q4 2024 increased by 120 million to 209million,withamodifiedEBITDAmarginimprovingby650basispointsto30.4209 million, with a modified EBITDA margin improving by 650 basis points to 30.4% [25][26] - The company ended the year with 83 million in cash and cash equivalents and approximately 5billioningrossdebt,indicatingasolidliquidityposition[29][30]BusinessLineDataandKeyMetricsChanges−LegacySixFlagsoperationscontributed5 billion in gross debt, indicating a solid liquidity position [29][30] Business Line Data and Key Metrics Changes - Legacy Six Flags operations contributed 324 million in net revenues and 5 million visits in Q4, while legacy Cedar Fair operations saw a decrease of 8millioninrevenuesdueto115,000fewervisits[17][18]−In−parkpercapitaspendingincreasedby38 million in revenues due to 115,000 fewer visits [17][18] - In-park per capita spending increased by 3% to 61.60, with a 3% rise in average transactions per guest, indicating positive guest spending trends [19][21] Market Data and Key Metrics Changes - Early trends for 2025 show a 2% increase in attendance and a 3% increase in season pass sales, suggesting strong consumer demand for entertainment experiences [11][12] - The company reported a 117millionincreaseindeferredrevenues,primarilyfromlegacySixFlagsparks,indicatingpositivesalesmomentum[31][32]CompanyStrategyandDevelopmentDirection−Thecompanyaimstodrivehigherattendance,improveguestspending,andoptimizeoperatingefficienciesthroughastrategiccapitalprogram,withsignificantinvestmentsplannedfornewattractions[40][41]−Ongoingportfoliooptimizationeffortsarefocusedondivestingnon−corepropertiesandenhancingtheoverallassetbasetoreduceriskandcomplexity[45][46]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementexpressedconfidenceinthehealthyeconomicenvironmentforconsumers,withexpectationsforcontinuedstrongdemandforhigh−qualityentertainmentexperiences[12][36]−ThecompanyiscloselymonitoringpotentialimpactsfromrecentwildfiresinCaliforniaandforeigncurrencyexchangerates,whichcouldaffectperformancein2025[36][37]OtherImportantInformation−Thecompanyachievedapproximately117 million increase in deferred revenues, primarily from legacy Six Flags parks, indicating positive sales momentum [31][32] Company Strategy and Development Direction - The company aims to drive higher attendance, improve guest spending, and optimize operating efficiencies through a strategic capital program, with significant investments planned for new attractions [40][41] - Ongoing portfolio optimization efforts are focused on divesting non-core properties and enhancing the overall asset base to reduce risk and complexity [45][46] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the healthy economic environment for consumers, with expectations for continued strong demand for high-quality entertainment experiences [12][36] - The company is closely monitoring potential impacts from recent wildfires in California and foreign currency exchange rates, which could affect performance in 2025 [36][37] Other Important Information - The company achieved approximately 50 million in gross cost synergies in 2024, with plans to deliver another 70millionin2025throughvariousoperationalefficiencies[27][28]−CapitalexpendituresforQ4totaled70 million in 2025 through various operational efficiencies [27][28] - Capital expenditures for Q4 totaled 93 million, with a full-year CapEx spend of 475to475 to 500 million planned for 2025 [33][34] Q&A Session Summary Question: Guidance for the year and assumptions embedded - Management discussed the importance of driving top-line revenue growth while maintaining efficiency, emphasizing the role of capital investments in market penetration [57][58] Question: Portfolio optimization and monetizing smaller parks - Management highlighted the strategic nature of portfolio optimization, focusing on the value of unique assets and the potential for cash flow generation from non-core properties [72][74] Question: Update on cost synergies and revenue synergies - Management noted that while cost synergies have been realized, revenue synergies are still being developed, particularly through system integrations and new ticketing platforms [83][84] Question: Attendance growth drivers and season pass sales - Management indicated that higher attendance levels lead to increased guest spending and emphasized the importance of season pass sales in driving overall performance [99][100] Question: CapEx allocation between maintenance and structural changes - Management expressed confidence in the 2025 capital lineup, focusing on consistent investment to enhance guest experiences and drive revenue growth [134][135]