FUN - Earnings call transcript Q4 2018 | Six Flags Entertainment Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Cedar Fair Fourth Quarter 2018 and Year End Earnings Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Stacy Frole, Vice President of Investor Relations. Please go ahead.

Stacy Frole

Thank you, John. to year welcome conference and morning our end XXXX call. Good Vice Stacy Investor Frole, am President Cedar I Fair’s of Relations. Investor found This morning earnings our or be yearend our XXX-XXX-XXXX. Investor quarter fourth at Relations corporate by on Officers contacting we issued release our which XXXX Relations ir.cedarfair.com website at and can Officer; this Chief our Witherow, Executive President and With call Richard our Brian morning me on President and Zimmerman, Officer. Financial are the and Chief Executive Vice

during caution Federal results Before will uncertainties this statements we made need described that the call the cause to to forward-looking of you may from those begin, Securities in within statements actual and materially that could include comments statements. I such differ These involve meaning risks Laws.

SEC detail of You may refer to filings the a these discussion for by [Indiscernible]. with the more company

with accordance be required are G, GAAP measures. Regulation call measures most comparable non-GAAP to conference the used directly in addition, In on today reconciled the to financial

defined today’s will our the call, access earnings is release and unselectively the analysts compliance website will disseminated, to all In media required make also release. the webcast reference During available considered notification of the conference EBITDA well via widely Regulation we Relations disclosed. page. with been of on EBITDA posted in be is to in call and prior fully has SEC’s is the The being earnings presented our this Investor all reconciliation adjusted call as as made open and adjusted general public FD, webcast and Because to as investors. constituents the and content

Richard? the Richard turn call CEO, will Zimmerman. Now, to I over

Richard Zimmerman

you Thank you, thank for us. joining Good Stacy. everyone morning and

$XXX I adjusted well some overview including target will a our a few to fourth today of new slightly our sheet take as call five-year our year balance different will end EBITDA brief approach. expectations and as we’re address begin time goals Brian then our a and million. and take discuss XXXX quarter For XXXX results going with of to longer-term strategy items. our

the call our we Following for open will questions. remarks,

the take a moment truly to guests They turn though, dedicated Cedar memorable I team experiences. I fun Fair. call and Brian are by immersive Before happy over our making providing and to our at here committed thank want and to

Our the truly our regional of business model our exceptional offerings. employees parks differentiate are other backbone and entertainment generic from

for behalf and results Our and all fourth record leadership we the thank is for carry drove year this on we employees be the to our in to momentum On fun. great team’s quarter make to continue tenacity of what team expect another into this the Brian? us everyone our of year. for place

Brian Witherow

and Richard good morning. Thanks,

key challenges, ; want all out-of-park to revenues with including While drivers, a record a increases the I we across moment per achievements accommodations. spending of average XXXX to resort our cheer presented of in-park guest highlight revenue parks. take generated In XXXX attendance capita impressive revenue and

weather park, Importantly, at of year. our Kings we the the in celebration parks Dominion. early experience this WinterFest new despite accomplish introduce our our challenging We fifth many

December. Sandusky effective and parks number forward. increase $X.XX now our with and Ohio, these rate to open quarter the overlooking Point and open in indoor that This which Carolina many additional in distribution this X% annualized announced XXXX, facilities to our are facility Cedar and yield XXXX parks for increase with December a new an in consistent We X% the for of we we And a growth distribution long-term when is ground became XXXX going on future, from also XXXX. growth passholders few our represents expect visitation November we we to to year. the total operations initiatives of payment during for have In near six North visitors key Charlotte in Carowinds are to during of prices. unique fourth expected season So both compared adjacent sports attractive that the including today’s the hotel at advanced expectations breaking

at including passes a products off season advanced strong all commitments lead start this season Looking our are already indicators purchase and sales key of year. to long

must I had increase when caution our than same very the sales than as year more While sales, forecasted one-third a recorded a of little Sunday that pleased of with the period past with compared more this today pass ago. are total season we XX% we

in to performances year attributed record X% be XXXX record or billion, Full $X.XX areas. to on $XX compared result to Now, net when with increased million can up a the three This financials. revenues XXXX.

XXX,XXX by primarily XX.X First, attendance visit or a in to an season increase pass in during increase X% million visits visitation.

as Second, increase XX% per park $X.XX million. increase spending in capita in and revenues $X.XX to or and $XX a $X $XXX in or out-of-park average million to X%

to of across of We’re popularity parks offerings in-park spending The pleased achieved to areas beverage our have new continue programs. by purchase driven growth peer season dining our highs and our and business. the guest all of push to food all beverage

pass and also product group saw to value non-season facilities. entertainment offerings attractions guest our in We in strength continue our our per particularly the reflecting capita spending place admissions new rides

mentioned, vacation properties average great our extends parks guest allows locations convenience us stay properties of and destinations. I broadly our out-of-park to we increase resort revenues market room of demand, our in and As more and attributable resort as generate which The daily achieve largely occupancy resort higher length higher to and our XXXX rates appeal our strong rates. both

of a of season immersive which season In of result pass again advanced on from a attendance expect As visitations continue more same XX% than more opportunities Hotel last time of our evidenced XX% the resort attendance in grow our commitments investment sales to seek Charlotte the the is strong significant and pass to we offerings. year represented and events. expand believe program purchase than we growth. of total by we our XXXX XXXX capital success will accommodations driver our more be will Based our

will provide how next the Just information years. over program Richard evolve a will few minutes, some this we few on additional

cost we from the supplies in Park which costs for anticipated operating up totaled X% lesser expenses increased a the largely labor and Dominion Winterfest front On for cost or the new increases operating from million, at our and extent Virginia. Richmond event in higher resulted million $XXX costs XXXX $XX to XXXX, an

labor across in our costs; put workforce. addition competition increases Regarding to for market in is board wage U.S. minimum labor rates tightening increasing seasonal on continue wage the pressure the

rolling similar additional anticipate workforce. out manage and and season the systematically we system we our new to us tools Although seasonal will a efficiently with through equip more are that management workforce pressures XXXX better

down right impact of rising mitigate and operations. overall is on we the the labor meaningful steps to than are growth was $XXX confident costs Full with The are year. offset which year X% We have measure EBITDA when right decrease or attendance $XX the results believe and tools XXXX. our expenses million the the impact reflects which a costs of we compared operating taking park-level operating in our higher more adjusted of million the the

of importantly vacation record pleased was XXXX month weather half and attendance were of attendance we’re first lower disruptive during in year with than in While the for patterns the growth year the our We peak most affected the July. anticipated. by

year fourth of record was calendar quarter growth than levels and attendance. lower produced attendance in Although anticipated the August the

coasters when parks strong several immersive in new that to in introduce of signature create we expect in the multiweek roller well to We we demand entertainment new two as year. visit generate we the half will second expect an XXXX the our as XXXX urgency offerings to continue earlier

of season, did maintaining marketing the This XXXX, teams discipline early-season we contributed a preserve our our While the an greatly excellent broader high the dedication a managers They general half to our second integrity performance. and cost certainly to first not impacting and throughout trend. felt level representative that guest maintain about the were guest price to and record-setting recognizing consumer pressure overall of experience. half operating job manage in experience during discipline challenges

we that is continue to to promoter our our all important Importantly, the almost an recommend metric to of This our net measures others. higher guests willingness score as evidenced by our delight parks of parks. guest in

compelling fourth the quarter results few of enhance new to plan revenues validates as be our our and expanded year early winter for the worth Richard In five-year most EBITDA strength adjusted will commenting million record up of and quarter of quarter million, $XX The our $XX also year. fall opportunities Fair is investments year. quarter a increase of a million Cedar fourth during of popular opportunities we growth ago, and X% $XXX an $X the Our commitment XXXX, some part as noting offerings plan. fourth fourth last of or strong events. reported these the from on of ongoing expand record or of we stages from and million, XX% entertainment This represents and late and

needed delivering to business strong reminder, a are protect current and our teams what a results the mandate in is and going to year forward. As grow committed dual doing

We high the focused our to on and margins guest are while maintaining enhance continuing overall EBITDA in adjusted invest historically experience.

the the balance to sheet. Turning of are with sheet, strength extremely pleased we balance the overall,

company. strong borrowings we and have of a facility. Our liquidity, the opportunities million Cash-on-hand with credit cash and to our degree totaled flexibility no of growth capital benefit the and $XXX outstanding enhancing December pursue flow structure profitability will remain that revolving high under at XXst value

range based is our conditions. leverage X.X comfort consolidated of market ratio times Our well within current on

is option debt XXXX visits in X% season last or in We enhancements of clearly XXXX increase introduced and Deferred when well reflects of Our pass of products. all these sales robust weighted is with compared $XXX maturity XXXX. XX-month were new This cost unlimited payment XX% and revenues at up average year-over-year XXXX and received. were end season to our million, new passholders, nearest $XX the and million for the installment very currently year. season XXXX

be I first which first want March costs of being when pre-opening have same additional will third week of removed where highlight days the This second that XXXX. this in compared March the XX. quarter will one modeling on operations additional week there less with will approximately additional operating quarters. shift The the of quarter in the calendar days the respective quarter when when week when compared in result XX calendar also fourth with XX, Also quarter the XX in first operations quarter of additional ended in and operating purposes to from one the offset ending the approximately fourth to to our fiscal into reported will week be XXXX quarter fiscal XXXX quarter For prior this year quarter compared because shift year compared fiscal operating ago. one

to that structure year summary, in revenues flexibility net in value our while total pursue XXXX model significant to they With us XXXX attractive in continues to got the position over continuing growing allows number flow, to full market turn affords and investing In arise should momentum For comparable us financial assets creation Richard. generate delivered I’ll our be attractive drive in cash sustainable to we and anticipate operating our pay to back XXXX. business our is We’ve distribution record with [Indiscernible] We opportunities is the of our the XXXX. that, it days for unit holders. strong. which strong and

Richard Zimmerman

you, Thank Brian.

immersive mentioned to mission We’ve is happy earlier, on make time this building experiences. and memorable doing I our that been our our As we track success. record fun, a long in our indicates people by for providing

entertainment consumer sparks, celebrating and generation. and their respectively will Cedar Farm be all anniversaries largest Knott’s Point of two our These have changing fact, generation XXXth Berry offerings to and our from XXXX. XXXth adapted taste parks in to their In

with family of is all the ages Our come. the attractions, be and nostalgia enhance will ability many what while of and and key it years experience to overall modern evolve generations maintaining past brings guest our the for success the to And families together. engaging to

our details want key long-term touch consumer I the insights some into Before I of the that of strategy. to go on inform strategy, our components

to senses that consumers continue strong Today’s all a place something array over their consumer there of experiences prioritize enjoy. with want has entertainment. possessions. desire for where and everyone of group to impact activities their a experiences diverse multidimensional in is They one for First, in

been we catalyst shift a other are our where a clearly the consumers we replicated beneficiary entertainment an easily immerse provide at claim can’t for not can offerings. platform scale While by behavior, themselves parks entertainment experiential to is consumer to in the

encompassing, while connected offer products the guest thrill has in per on premium season maintaining adjacent developed visiting bifurcated program, pass development. scale guest broadest the believe simultaneously more the long-term attendance introduction of the approach profitability, products to often. disciplined targeted four at opportunity our families Second, growth poverty. expertise hours we increasing opportunities and to passholders Based With and And The appeal consumers to tend through of relevant for our market over customer more of and and and guests, guest an that our allowed a their our unmasked broadening us and a XXXX, a assets driver; and capita we marketing research next growth issue in in compelling and insights have through for many time target X% our offer in overall rate and annual integrity exists management interactions value-oriented amenity over broadening audience live has of demands us leverage is found season accelerate live more by our the four as achieve yield scheduling on challenge to To bite-size and to a management a years. to expanding consumer five a believe million all technology spectrum, we due to our in XXxX. more categories. regard to for that our efforts the implies continue experience, a time we experience, to spending closer experiences we lives. there’s Interestingly these to and seeking, especially higher-end intend that and to Continuing to This consumers loyal compound quality reach to strategy innovative pursuing interest we finally, grow who experience are guest on first focus constraints XXX possible now up consumers all we parks to many market or in craving has capture lives us to entertainment have our This is with have which others. to experience. due placed particularly the others allowed preferring EBITDA alike penetration agile enable an this economy. target the by adjusted most growth less are our will

visit out family in near-term thrill and Our over increasingly interactive attractions, our space larger focus new of inventory period existing rides while basis, time, times spaces. and longer of to concerts a These provide investments weather an disruptive a may less occur. all our patterns urgency for create spend gathering special our of the outdoor attractions investments immersive against hedge capital-intensive a an throughout more on across us allow consistent allows and will rides will on to and that annual parks investments events, multiple year greater

guest further Berry we we at at we’ve in on more already an season to visits California the example, basis our and five to help annual to X sales in growth and pass park million fuel initiatives In that location XXXX, several exciting The these continue. guest expect at broaden For achieved introducing events events. success driven experience. than this the of this of fun Knott’s success Farm broadening has attendance seasons great Southern experience by property have

just three. Let me highlight

the of expand fun multilayered more our of concept with seasons interactive events. parks introduction will more to We

at in where launch part the skills challenging during guest day. of Cedar a real island will and story, encounters at inhabitants unfolds the mystery the with of become adventure interactive we’ll their the Point. experiences island Frontier realistic be Forbidden immersed problem-solving This life

value open including December, and increase near parks parks We that value season. they of the to to selling visit our season visitors will e-commerce obviously parks, our This to us will time, with from These us It in platform. through with Canada’s payment achieving concerns attract during the We goal and unique new to payment long-term Wonderland me years pass products several existing program provide and area infrastructure leads our A paradigm evolution passes allowed this installment payment the with XXXX second will offerings take season over operating season new value-oriented only and celebration increased that into based pass This our installment the on with installment price also the guest our holiday opportunity; bringing proposition magnitude Winterfest a on to add seven have season program but to next focus program most November our new our enhancing and of program new option. to season of began are for Toronto a our XXXX, of multiple is passes expand passholders your will begin also focused transaction-based an introduction retention program. of progress not lifetime address at winter often. a and to to-date. affordability, Since we of benefits. us the guest. our program transition our new XX-month our options be our visitation. the affordability shift seasonal upsell The to introduced more pleased season from we expansion encourage recently relationship a of for the of

Over as pacing doubled time. systems, we driving right offer with introduction household, the of the our at were Since year-to-date message are sales last we to the consumer right well the right and earlier, XXXX the the have we Brian most as e-commerce And also the or us In Customer investing purchase All-Season platform, simplify images Management This which new such began relevant guest and by multiyear All-Season data Fast All-Season Lane, communications Beverage, has have numerous system. into to cohesive messages products customizing year. time and pass particular season Dining, one advance CRM to revenues from a introduced FunPix. mentioned compiles the of right our where XXXX, we same All-Season at allowed ahead Relation nearly her in CRM consumer years sales.

program begin parks -- of loyalty the and throughout best this resonates the higher, even parks technology rewards and and program the renewal XXXX new This at motivate and enhancing motivated rewards we As talent have when our season which will passholders an we passholders several to active order to place rewards to in infrastructure our drive opportunity are We’ll the to rates pass in aspects redeem what new in best program. even operating season earn introduce determine guest with program now look closed. testing provide to during times evolve of and our value behavior.

then plan the rollout broader XXXX. of will a program We in

our average encourage increasing base rewards offerings average our passholders We Growing long-term than year. our our visit to me believe efforts. often plan. season more of This our further count while passholders the the passholders Increasing more program targeted to our broad loyalty increasing as new penetration unique of and of focus, million will season be will visitation of important. our combined are also X.X need with our parks our third per area entertainment visitation elements through market marketing brings increasing equally important visitor season

currently right our targeting Over our guest the we incremental market and under attractive spend. consumer are and communication increase segments penetrated Through goal the and and we and growing markets. next growing utilize growing returns if data segments years by along unique five to within require research under believe will is segments produce parks it visits analytics that Penetrating reach audience them. within identified several have could penetrated distribution we channels to these our marketing with

long-term as dollars currently XX of will allocate penetration. between X% this in admissions million to an However, advertising understanding in marketing the Orange overall more give To has a X% of we on host visitors there less market County use mature you begin Beginning annual California our of segments tourism XXXX, let targeting than revenue. opportunity, area. Farm which me for a Berry to area our reallocate opportunities expected XX% Knott’s marketing keep of spend basis an are additional example. and this budget some better to approximately This

XXX,XXX an the the by You at simply math. can But penetrating additional do basis park. additional we by XXX points this entertain guests market an could unique

that Springhill and opportunity and to amateur Park maximize other our revenue in excited of of adjacent our Suites sports our open Park our acres Sandusky, value in entertainment fourth than XXX,XXX undeveloped is North Carolina can quarter We area about Cedar facilities the Finally, parks. represent respective streams indoor and overlooking new in their out-of-park the foot concepts. in expand scheduled Amusement for of have existing Hotel during a through extremely XXX adjacent square new Ohio. our Both land utilized currently of amateur to and our fourth XXXX these that facility process more the be currently Charlotte, portfolio both opportunity Point room, we’re sports projects Carowinds expansion, are Projects development including resort XXXX to to markets.

business our keeping beverage key coming over brands, support assets, flow, our of demand the drive growth While for in free next quarters. to our resilient over excited in creation. regional that look primarily you progress attendance focused prospects more that the to we updated five on We continued make about model our on additional I expect summary, years. we facilities assure In about have demands significant confident to to park forward want a are and add all cash out-of- our very popular streams, best-in-class in areas growth strong food, we guest investments generates you value the our across I our With parks the attendance capacity today revenue continue opportunity at parks. merchandise growing we to are four and and from that

call to forward the Brian? for key open the I turn Brian call which Now, on questions. would back uses up outlook after free flow for we’ll of over like going to cash

Brian Witherow

Thanks, Richard.

taxes, tried cash on areas; for We’re transparent primarily primarily business being use for model allocated cash unitholder for capital a use easy four including cash allocation to for fairly investments and use cash for return for for debt is cash with use our obligations cash interest the is distributions. payments, This ourselves as respect flow.

effective fixed this our payments rate annual Cash rates It’s we swap to million projections and majority or to forward. be our to expected of Based rates million. cash approximately were taxes an taxes year. the expect are $XX long-term current that be note, Going million approximately the going interest interest notes rate approximately tax agreements. important forward, be annuity been $XX for $XX have on cash $XX are XX%, and between structure expected million performance to fixed

the investment we believe long-term front in investing to business is capital driving prudently On critical our to growth. continue

$XXX believe adjusted will in XXXX of the our we forward, to such business million the the target appropriate in Going investment $XXX around EBITDA that be quarter. million million our the investment within be opportunities level with level acres parks range. aligns activation of will of plus as development land developable Investment $XXX non-core of incremental to this the

XXXX, including investing several million Indoor rise will development be housing projects the anticipate approximately our parks. $XXX and employee of attractions. the million additional For Sandusky million investing in to Charlotte at infrastructure We $XX Center facilities Sports Hotel, marketable in in incremental new we and another $XX

We emphasis for to will in business protect as of our to we an continue of building parks scale model our place our to believe years integrity to projects, come. all on the helps and differentiates it

remainder unitholders the cash steadily our has importantly distributions historically. free be done Cedar just most to Fair and increasing will Finally through returned of flow that

over We’re proud grow and of a forward. sheet, the earnings and continue reserve distribution appropriate liquidity with believe positive past well-positioned going outlook we this aggressively solid years ability a we trend are our balance several to our to

turn a it linear Our a goal growing over remains path. and Richard. to in steady I’ll back to distribution provide

Richard Zimmerman

key our to attendance, Thank in XXXX per spending Brian. and be I record even revenues. produced In expect out-of-park park revenues in of we revenue driving average XXXX three channels; all better. capita you, growth guest summary, by in

are For fundamental clear. our mandates strategy of long-term

progress. Over me now increase to plan let lies the operator open years broaden guest I’m the market pursue excited questions. the that your pass our our experience, look next what we who reporting ahead season to adjacent the turn penetration for over and several program, that, expand forward development and line on call With opportunities. will

Operator

Instructions]. Thank you. [Operator

first from Stifel. We our Wieczynski ahead. go Please question Steve of will now take

open. line Your is

Brian Witherow

Hey, guys. Good morning.

Richard Zimmerman

Good morning, Steve.

Steve Wieczynski

of in EBITDA. attendance us, question. the embedding the built guidance. couple not I give growth those growth guess kind there? kind terms things there know about don’t are have what your obviously of I of of a But think and maybe percentage four you’re you’re like like like going – of of Maybe projections. I number us you’ll are stuff and you’re over. help essentially kind first how And into long-term around the know to But going certain much questions economy that. rolls So, thinking kind is just in I way

people increase recessionary to think see type are period are into continue – your of years? I like we market? have well would it, good that exactly, what the And maybe as assumptions might next, going also go some call some bid some there your over then a given labor four labor across of

Richard Zimmerman

Steve, is Richard. good morning, this

thought seen about and LRP we We’ve we As to driving -- about out plan. build at longer-term what the the attendance. of we’ve look how continued evolution our approach to

trying we’re it about to think we as balance. So,

also across but markets. my all our in said remarks Unique’s driving pass of season driving I sales, As

all business And forwards So, we’ve to attendance. the is a ask got through constantly Brian manage as of it model. But tools is, driving the and conversations testing base about as more labor. we as and what we talk as our stress see look backwards lot at we assumptions a we stable one second next right consumer look of board look to few the always years. test on over our now of the forward in emphasis I’ll a we just stress

system. are about got So, add sophisticated We’ll management we’ll platform. lot ability attendance about Also leverage a capita the the to and talk up much then them more in revenue looking of our We’ve grow and focused guest, I behavior would understanding to top business of putting tools per a that and talk in finding systems. our that e-commerce sizing CRM do our a at on of way that. the markets we that to on

So, Brian?

Brian Witherow

Yes.

work our the of And going metrics, the an in on Steve, we revenues in off way three of And key are years. dovetailing to -- the differ -- all that’s LRP. comments. the about remarks, capita to important he top performance line Just play five out-of-park spoke prepared role the next just going per Richard’s as attendance and through as

you part of have momentum the a some volume-based. of as taken around of lot year, of X% near think Clearly, have pass Richard XX/XX July of around pricing think think up Uniques attendance that going the I drive and a early attraction bit of than that I that more on, season way little XXXX initiatives at maybe as the underscore more that And through. that end the we half just volume. early based. little plan we as volume [ph] mean from the of doesn’t -- over the of per comments the strength our some capita to be last the commented a up and strategic will challenges pick strength more on. But been away may That through that spite the in last expanding years. couple broadening I be won’t in will offerings over the to early Even is work volume-based the

what in about make market. labor markets think or have around if been there, the know any on market wage labor. around stay we As order pressures the to Shangri-La, minimum will adjustments in haven’t in we’ve We hikes cost a some tightening the assumed competitive of we the to you either various pressures

labor And a Steve, similar relates pacing well, if to so, as forward. it you we’ve assumed going

I system fruit. that that workforce I new we process prepared around implementation particularly mentioned bear think going have the to initiatives are of or in think of number I there in management are place remarks as in a my a

assumed necessarily that. haven’t the wins all from We

bit want will. of icing leave that we a I little on some to if think, the to cake of you be

several amount of last that seen plan so pressure now comparable XXX, labor target And our and over a the from right of years. that we’ve assumes

Steve Wieczynski

I bit? softening years assume right, -- them terms in in the -- economy, assumed normal-ish I you disruptions that, type next as assuming as -- to no heard are he/she kind where of might events, helpful the of at stays be a terms couple have the well? is if like well. of I of crazy you up you – look assume any and if weather, you Do for of consumer today? And, little you That Is that also,

Richard Zimmerman

ever going there Year that XXXX to of at a sit and occur to X plan. right, that would is the another I years look Yes. it’s five say, in and hard, say

And is consumer the you where that said is assumes about appropriately that stays at right now. and weather so economy It normalized. the it aggressive as target. the It an LRP assumes

about talked normalize what many not anymore challenges necessarily Although of sure quite last the has is because as weather years. internally couple there we we’re been so in

basically of of macro sort our this outside assume course are have So, on lot control. factors those you a normal that of yes,

Brian Witherow

in we Winterfest the of we’re when to as broadening add, create we going that think I experience can particular to go give the look scale. use we events of at example rollout, you guest urgency Haunt one Halloween And and would to Steve, of things events and I the an how

people rollout As about spring just in in early of events, seen the a give the going the keys we forward. immersive we’re duration to Festival, events events. use time, be create the think the think limited think year key events to with We And will in economic success economic one that that rolling out reason cycle. we of any out we with as driver we’ve and at conditions come urgency irrespective the point that Knott’s works is Boysenberry that the

Steve Wieczynski

question, I about what as somewhat this best, And yourselves you mean I you’ve it’s think bigger the take to kind spending the want that way might your biggest, question. past? like in reading the as change you. little you goes changing around it does I’m And coasters. you I you has race envision question spending price that how build maybe to the second customer. of changing roller that if a -- capital too Will Does And then have from to easily of make terms seems to you the focus is arms this, of capital? your it I fastest And about in guys seemed got Got that able kind still is What the on bit the be of into guys the might you guess and still a be by historically spend do an sense? an it as push way much capital? think but like price be able you being you of picture I guess, guess Okay. to or way you

Richard Zimmerman

renovation last into capital we The there capital Point. at you of our a facilities Wi-Fi appeal impactful marketing When leverage in our regions. we From group Steve. here of program, continue perspective the many -- for during yes, really or significant years water coasters our our about -- our broaden question, continue number to the look season were to expansions that examples passholders a roller Great When to we think made Vengeance years Steel Cedar can park all the catering leverage but at at year, we’ve to the several great investments coasters Breakers of and families over scale sales the efforts Hotel parkwide which Charlotte significant group those future. large broadly Fury our in at were parks, like think I campaigns. supporting XXX that

leveraging what is the in we on emphasis capital driving demand going the we’ve call to and already and always think capital I the our made. investments be marketable

got to we as cadence price, go to promote that we’re still able price sure of in market we can be significant going drive out year. to investments that in within that while also stretch to to regards take create we’ve to and ability to in markets that an significant to think events But our ability with going seen the make given more demand each we any our something investments the make So, urgency. we’re our of to we’re increasingly trying we

you internally give is price town best demand that So have our going we revenue is to Haunt, event which we’re see system example When not that into a now. behind management we coaster. Halloween the I demand. with an The can in

and -- And I cab it together. days it and October. some any more think the our demand the on our highest of how per And on underlies focus are product busiest each year ties than of given year any days in

Steve Wieczynski

Great guys. quarter. great. it. Appreciate Thanks Okay,

Richard Zimmerman

Steve. Thanks,

Brian Witherow

Steve. Thanks,

Operator

Securities. our question go not will next We Fargo take Please from ahead. Tim Conder of Wells

is line Your open.

Tim Conder

us you going have go other And on the pay change how months? nine-month to than despite more gentlemen things, into plan, controlling into the circle the XX-month on speak?? great to to the And offer to revenue for is so do of also accounting congrats maybe the and your you recognizing wraps you, Thank want what’s a the three plan. installment ability, to going breakage, that the consumer I couple there on Thank you a I that Can remind first of half. then a premium? color. and does year, And

Brian Witherow

Brian. and plans similar last month indicated originally nine out migrate months you to very years the months. it’s The back. four several and up to several and Tim, payment these XX evolution done where we’ve plan Yes, that plans, with to what the was as We started three years over gradually we roll payment

accounting twelve you Going just to months articulated. change doesn’t than as other necessarily the

spreading over the We’re payment easier the for installments. consumer, guest the twelve

would And so the there’s necessarily more we do recognition. a in to as subscription plans characterize have opposed We’ll other as model. change still visits those on what payment our no we like draws accounting much with of

as year-over-year. remarks deferred significantly new the by payment the their said -- time value consumer being unlimited was evidenced not even only from aren’t is as added prepared plan I them aggressively. up our his of but plan in also it affordability guest many revenue of past guess broader comment remarks, the the benefit said paying and the be Richard prepared as over would a the extremely to in as so, to visits and well, for with more pleased one, with terms had and more with reaction option payment that even two, sales a address the And it in test when what And window with in reaction And XX-month intent our parks the operation. my of as Richard the our to the as our

Tim Conder

Okay, up okay. the to revenue deferred And then it clear; units wanted was XX% were again, or up just XX%?

Brian Witherow

are The of combination price. of sales north up both XX%, dollars and units

Tim Conder

get Okay, this. okay, Brian, metrics whoever wanted And wants to of annual into Richard, maybe some your okay. to here, take

than talked four your number I that pass As little little gives the five about as a your more came in the that? to specific alluded comes. then customer it annual over specific XXXX XX% visits to think gives of Competitor that visitation; and where the was your passes. attendance a to to Can past frequency relates the Maybe season color that in we as appreciate you season you also times of that? from number. of And be attendance you an

Richard Zimmerman

the Thanks Tim, it’s for Richard. question.

that an can’t our is look can’t But a at time XX% year last in our exact And you at pass than I As while said attendance. remarks we same Brian we -- increased you season visitors. we give we more number, it on pointed of from his unique also as as of percentage. tell out terms increased the I

six a to visits excited average, than perspective we’re parks system of around we’ve about on of So but do ago less got years our five I that four pass. many or I’m average our we’ve From think visits now really very visitation those. in more excited. personally several on from their both gone visits

our grow business, to that future. at plan, at will our continue think and look we look as our the we into long at look So range that

Tim Conder

penetration pass, and your the And then visitors one grow color Okay. then what’s group of talk you passes give and unique your can that uniques across maybe there? and of about, season base can day you the din. season both also your Any

Brian Witherow

Yes, Tim, it’s Brian.

tell Richard I which add to uniques were us our bring So in season not can non season existing a we’re and you channels guests. both the constantly up to visits as for pass pass in critical looking is metric new guests continue said to just has

lot every you continue I as that of of Those year primarily overall penetration number the two the on of units up and As tell terms and are we to the dollars. the it products are will most improve. in continues out rates and rates products specifics those. of beverage material awareness to don’t the all each season a that to dining go relates penetration give on

programs. or make As enhancements to we the products

think levels to. And we so lot get but rates those there’s pleased can anywhere we’re very runway aren’t we still know that of penetration near a they ultimately because the

Tim Conder

Gap] I given lastly [Audio if then And Okay. may,

Operator

ahead. Please question from Hardiman next of our James Wedbush take now will We Securities. go

Your open. line is

James Hardiman

morning. Good

Brian Witherow

Hey, James.

James Hardiman

doing? How there. we guys Hopefully, cut off kind you didn’t of

despite is my question other do in actually assuming EBITDA the able the you hope doubling question like do growing the grew to helped something line me repeat we to distribution. bit weren’t grow that another get Obviously but would things have that’s that had which to last Maybe X% down target was is Obviously, you the you going X% you that Sounded how could help EBITDA a to to I’m some surrounding XXXX this XXXX. be you X%. that. the bad cut but if might question? Would dividend with year. distribution little not question, force the that distribution taxes to Obviously with would a that parameters be be of you moot around in need would forward. able

Richard Zimmerman

at season came Hey, the James, our you time it our here. and as what increase confidence X% in year. the the reference season were let we up will end at system. sales in of sales as the percent the jump as model showed every In we we’re I’m revenues particular, We in When at and our just strength very of business pass I we in one distribution pass tell me pleased with. seeing our of spark our we deferred look have things you into we that

So broad based. very our in growth demand is

highest know cash investment decisions against our we have off sustainability our to distribution. we we and the of the plan use all that model our they The all you the distribution. prefer increasing talked as investors, the our priorities, sustainability distributions MLP, a the one And so look and quality of we bounce we’ve steadily told supports in at against continued our and of up business as distribution. So the growth always, us an our investors of built

Brian Witherow

and at board’s dovetailing the urging Richard’s really year in not Brian, six last a Yes. the consumer, a seven because of months saw comment. urging we June balance underlying for key disruptive there sustain to but event over business the just macro weeks sheet the because of where the of a the a rebuilt change James, growth on wasn’t of like July. like several was sort XXXX shift the management’s or to it’s a weather EBITDA years and in fundamental The in that during

the of discussion. our in distribution minds. risk. terms to the out at or isn’t a sustaining the So, a the believe distribution year to in but Minus one where as Growth as But happen model confidence, a said, deliver that of question a say is we business that, strong good if terms would up our available it it’s one isn’t the in at good is for reviewed we distribution to would in as is as would at be would underscored growth confidence indicated need XXXX us. that. turn to going Richard should be your not be, I be XXXX, that the But were growing point risk in it’s of board’s we’ve that not to be it

James Hardiman

That’s circle even asked times couple seems really back relevant. And but I to more it question a helpful. the maybe wanted in a to past, I’ve then

disappointing was off strongly where then coming strongly. this season the finished in very year pretty somewhat row peak third We’re certainly you year the a and

come the of more broadly comes WinterFest the you you better been time with And question season? a preferring summer parks, peak winter the the the plan versus fall in as seeing of back to to that just are what word go your cannibalism to not from opting and people going to you guess they’re parks season? maybe I of seeing data or people has lack trends sort peak various for historically open guess So that I a you when that collect are your on WinterFest

Richard Zimmerman

the they is guests and both strength our events think in our we’re of half season means Again, come. Haunt the to seeing programming I the also a James, they our urgency what back but in passholder and WinterFest. of base, both drive And what event for drive year of creating uniques. that reason Halloween giving those

scale, time announced can and weeks. marketing number are events approach that thunder the our prime Festival of of two uniques, one our term incremental, Knott’s think of that back or to happens of you’re Berry to than earlier will at two our don’t steal at the of Farm. to weeks, in of our Those of as and in bad several the and in -- event strategy our back plan. from the year part to embedded rather at shift new the out looking at it’s early we grow the grow and something we’ve in hear can grow cannibalize announce that roll We of attended in the year the course can Boysenberry spring at year. has the the folks. Knott’s our three the strength look I and I that are limited the earlier range long the how next next We year those the year highest of several attendees us long be as the are of -- the -- as parks us, It’s want strategy that the over out the targeting year immersive, reference laid that those going examples half we’ve the half of time. think again, weeks the specifically in targeted our the as the in view So driven is validates Knott’s we validation events that our

James Hardiman

Okay. And clarification. quick then real just

remind offset quarter, how that? Is an this this some me getting you’re you Easter first guys like year year? but that the not negative in maybe of Sounds impacts a for week extra

Brian Witherow

Yes.

I as the the based quarter quarter on up close. definitely in fiscal are So first operations the call, extra on of timing we mentioned an picking week the of

the that’s more, we be operating with. are it’s of cost up and what of their James, that parks March end calendar, going to or ramp downtime Given associated of call the our most outside

QX. of will opportunity, perspective out Easter those shift will little QX? bit the that falls more and on the swing way in incremental with including QX And days – from So, will and us operating of benefit in calendar pressure that the of results some

James Hardiman

That’s helpful. it. Got

costs that about I you given extra that week is an think negative have and revenues. quarter that there’s I misunderstood. first not it’s the The point a

Brian Witherow

Correct.

James Hardiman

Good guys. Thanks it. luck. Got

Brian Witherow

James. Thanks

Operator

take Goldman Sachs. Prykull will go question We ahead. next Please from now of our Chris

is open. line Your

Chris Prykull

for taking Thanks just wanted… questions. morning. Good the I

Brian Witherow

Chris. Hey,

Chris Prykull

Good those change first in call the don’t morning. want to test to spend. with spend just cases I or markets? and to I about capital heavier more more Can we still drove based a to instead certain as events these attraction wanted And guess a what in has push a more ask the of OpEx that? little efficient bit I longer spending in of two switched your customer CapEx maybe you’ve view, price intensive capital term launch the expect where from even plan. sort maybe What of strategy. or been some on Could point you maybe advertising? components of should capital view, become to but maybe you markets more reaction events you less the then, to

Richard Zimmerman

a targeted Ghost immersive, very in best Alive! million Farm Berry year. give but theme we’ve Chris, is attractions, best most and Knott’s example I’ll was world at not in has of and it’s we that give the signature you site have Probably great most the the been the invested we park. we’ve Knott’s grown middle one large as of family park our -- that over regional was now. have people events was invested a I’ll successful a question. you our of the attended very though steel our summer, interactive. in said But coasters. this really immersive, has six example product Town

we’ve market, while one So, strategy things able increase Knott’s the very also a and in very of and to been attendance volume is competitive successful we’ve at highly we’ve price. generated get seen gotten

validation guest quality and our guests that a on. our value that’s the put think we So of the of experience

Brian Witherow

Richard’s comment. Yes, Chris just and dovetailing on

wrapping areas reflective of or that in that last coming little it of about of we’ve think a six maintaining. not earlier are years at we’re investing checking a like several was we capital park two we Richard all the the inexpensive is There the borne much year. the shift forward pavilion one things areas, essentially as rehabbing of they’re it in wide not we an or least a is now CapEx And spend. clarify spent reflective one investment efficiencies questions. box our Wi-Fi for are investments also the bit where us at completely lot this last things of of up think and reinventing as let’s this I there’s that should just down and going are point in guest alluded a we’re years say the and that is on seven the catering last And done that a around over our parks bit to necessarily little fundamental how

those So as near off there as the things scenes. in coming fall the many aren’t or anywhere as of big list dollars behind

a marketable is I XXXX us in Park Toronto big think in as terms in of coasters; new opportunities Richard said, two attractions signature from still of wide range the for Charlotte. to there and parks. one one is got just

ride, fair on your to from I They’ll those its tend think say new The as talked around not a hits be little heavier we OpEx to but that the the a you as outlay by to of And initial question complemented isn’t be a if So ride. the events about OpEx walking split away a will. investments. bit events a we’re great capital little as bit the call. XX/XX than

is unique on is a its pass a years of attracting both of visitors. term season growth margin three well strategic long that as is in company, at example ongoing critical doubt best that that think first to puts So, I as where pressure the no WinterFest initiative little our bit there’s it the in but WinterFest

are in don’t lot of these heavy. model little they the CapEx And so within some years, the our assume one why bit at big expansion we plan. a in more a initiatives strategic new OpEx early it’s margin heavy least of of the than are because A reasons

Richard Zimmerman

broad circle you me one based a let back how site. example give of approach help we’ve Chris seen more on And I’ll a particular

to renovated limited Breakers. beach a water years Hotel go renovated mile several years we’ve Several year long the really steps historic ago Cedar got the we there open traffic, limited we’ve activity the ago, Point We you taken to the If here beach. was beach. up and on we’re park. Last

And with now and it it’s beverage activated type we’ve beach. kinds food all the all during packed daylong of day. Now the activities; just on family

our can year so. this So higher off we that to really we do later quality experience, show type to that the by has anything in a our way, to experience, think appealing to we broader guests. a all investors And a term give of hope long benefit of

Chris Prykull

Great. perspective, of second the helpful then That’s maybe enhanced marketing it. targeting segments just demographics? penetrated. focus Is feel on examples in a that really appreciate initially of it from in I color. Southern you then really give And just are where can some the regions on or topic marketing us you that vein decision you to under certain along factor And marketing the what California? better certain the was or

Richard Zimmerman

out Gen of or but world with Moms number a is we kids done target a now through out we’ve bit audience at Generation Tourism demographics. robust jumped a Chris, should to at based a our we up around opportunity. all that California to markets, looked coming research lot of we’ve studies the we’ve of at different and looked so differently. Z economy when there and such different because that what Z we’ve mean on quickly done got little the at But our gone market our Gen Z, look good heavily Millennials, segments. and Southern us. updated at the sizing is and looks the the

in. we’re we looking into that what think generation Z fold of and experience we the like really how So at guest their Generation wants about experience experiences overall coming the can up as and out that we fold our

hear you’ll why that’s about So talk places. us gathering

It’s food that the price of lifestyle. program of food more quality is it beverage quality entry are overall as and enhancements making and choose both and the or the We they somebody it’s part be and the when we’ve else of continue a just to set important their beverage. the much our their not our to of put important part more part beverage of go a to see guests revenue someplace, and more decision but us and and food generator just

identify, about can what and them. how communicate looking the to segments start we So as we’re we Those think those can the to to what out we importantly, start understand more things. do are we for, is expectations reach and are

Chris Prykull

and good so Thanks Great. much luck.

Brian Witherow

Thanks Chris.

Operator

from will now We our Barton take [ph]. DCF next question ahead. Crockett Stock of [ph] Please go

open. line is Your

Unidentified Analyst

moving the us parks you core happened flagged growth was. out, winter There pricing, more that fourth Okay, in a wondering penetration. a pricing per was great. as that in but unpack season question terms you of per accrual I pricing was mixed was of a because growth quarter, the trend know season what you for I pass. of Thanks some a going about with in cap of was I of question. pass bit -- pass also pass if But had stretched trend what issue for I season wondering taking the think, and little in there that cap could non-season little were adding know had talk festivals well. from which the if a could some skews was on bit kind there the what down you about park was in there year-over-year. unpack lot the I -- the accounting quarter, I

Richard Zimmerman

Halloween a won’t instance, in of a slightly nighttime get October for with It’s some Having But stay the said the you length then multigenerational. you WinterFest we at question. morning. in at Barton, jump length that, you when that, let the event. WinterFest shorter Haunt by and look and stay, look get specifics. Brian do for of I’ll growth here impact good WinterFest. Thanks our event. same nature is is of the the answer as so of we its attendance

come seeing We’re grandparents with grandchildren.

maybe an on we pressure speak great It and driving can mechanically we it’s audience. cap, So, example per a in think our incremental bringing of to think that. it’s broadening not put Brian only our audience, in the and unique key does

Brian Witherow

caps. WinterFest one very per stay, hit attractive per just those of And the events basis some the while smaller. October is is in much lot in Richard the length cap highest for overall hour per November/December, per components dollar quarter, good, had on of Barton, a Yes, of of cap right. a terms there event, the a In shorter fourth our the

I very So, a successful when down. beverage of and that bit you meaningfully like is focus channel. for will tell WinterFest, mechanical there in Dominion of fourth one a line, it effect a there’s the and strength quarter, event, pulling the big was little Kings the up which food add us, event, of you reflective another that

kind noise mixed down a out that into there’s pulls consumers that’s well doubt we dilutes pass the it. WinterFest park shouldn’t that’s the draws a play and little at no look the a another because, of into we closely theory, affect want that as that behavior around it. kind bit But fourth -- And then, in season that that it. something want, can we accounting very purchasing lot of bit So, quarter of if adding of something or little number of we have

Unidentified Analyst

of core describe your Is access pricing would pricing is that? different? But typical growth it or Okay. you kind how mix, something it’s

Brian Witherow

getting No, offer to bit a right pricing more right prepared it’s his offers we’re internally Richard or the in said terms The tickets, of about the really the that in yield net are little on time remarks, like person. because, right as out to of there. Yes. the talk about -- to we

the all to parts terms those or discounts the lack or offers, higher pricing, break pricing advertised a yield. very apart thereof so, And aggressive two the I of -- continue quarter, net -- in were of either If the consistent. pushing of Haunts the we be

the Island, were year. around that Kings in there. been, it’s four very -- second event. and starting to it. August Great -- in normalize a continue that profitability four Worlds year by along -- And parks its out But pricing we’ve more little into at was to record So, our Carowinds, the coming are August we’re year, aggressive rate as run had maybe pricing America’s They’re then, so their five September. and the a pricing this -- gradually WinterFest further September we Haunt it’s said and as we before, to taking part step momentum WinterFest, around year of fueled in of to Fun three large third ever as strong and

a parks when so, comes a little at pricing point it different maybe around And each bit to of in WinterFest. cycle life

Operator

remaining question the in one queue. have We

will ahead. question of Fargo take Tim Conder go our Please Securities. from Wells next We

is Your open. line

Tim Conder

apologies of number lengthy My questions the for earlier.

So…

Richard Zimmerman

problem. No

Brian Witherow

No problem, Tim.

Tim Conder

let’s be we’ve reasonable assuming "normalized" weather back could be a year? snap depressed the least at here in seen? growth, a years little a see essentially, to it rubber potentially it band Would say of that X% XXXX the call in bit above And could -- that we from XXXX

Richard Zimmerman

call. transparent debate impact with saw shared and impact you. that it the on in we we year, The an as weather as on shared we’ve internally clearly, we the Tim, evident -- any with everybody We’ve be on was given possible. numbers to all tried

in As Tuesday Saturday. higher revenues. don’t that, evidence we a it’s from you the June, where a deferred of do the look strong demand weather If lot important see most know tell that is we where. know and as at we about when perspective, July I weather will than a XXXX, a impact. thing demand less impact’s will We

-- it’s going got very I that for about this our ever two Canada’s the Carowinds capital Charlotte. stronger and good our in lineup think going to is event be than signature down I year. we’ve two feel and coasters programming been important Wonderland us parks into

and years really the also So, to in fuel same long-range remarks plan, hit this come. we’ve we I driving of prepared growth by will in in a want in our can about think the demand. things But and invest we’re for token, positioned the poised as terms we our in But that as we’re year. good to much

So, making great the will optimizing sure the of is that given have also grow while any things the we’re as year, is that a balance example well. laying foundation future. for we that we’re WinterFest in

events, second heavy. just we’ve cost costs. year of referenced There’s as get his to a the you third in those is see second remarks you first and And a -- as growth. little as start-up The lot a ago, year of Brian seen

So, year. not their off pay that will to more the in shy first marketing sure be years in efforts, to which than in investing we’re going targeted come like making will things we’re about they

system. is the I balance the making given in of in balancing us that sure year, for about So, any we’re always, terms thinking think tension

Tim Conder

during anticipating later Okay. you And analyst an the event year? then, are on having

Richard Zimmerman

I to after to want a out pointing think get shortly toward We second quarter Yes. everybody park. Likely, we’re call. our

be So, in mid-August. it’ll to likely early

Tim Conder

good again, luck And the gentlemen. year. for you, Thank Great.

Brian Witherow

Thanks, Tim.

Richard Zimmerman

Thanks, Tim.

Operator

to are appears conference the back I’d this there additional turn It no further to for like remarks. you time. any or questions at closing

Richard Zimmerman

you all at interest ongoing Cedar for your Thank Fair. support and

expect visit to our what’s the to you XXXX, Fair. back all other what we our and store certainly offerings. from year As tell five outstanding we’re can the today, years, about I’m be Thank in our to for differentiates parks sure I over firsthand comments summer from encourage including all, you Cedar another excited you which entertainment parks over of experience and Stacy. next

Stacy Frole

for our XXX-XXX-XXXX. please to free everyone, We XXX-XXX-XXXX, us Relations any Investor questions, to you feel you in forward me our follow-up first with or months about look at call have three you, Thank Department to today. on at discuss results. quarter again contact Should the speaking joining

Operator

call. this Thank gentlemen, participation. concludes conference your and today’s for Ladies you

You disconnect. now may

Six Flags Entertainment (FUN) 13 Feb 192018 Q4 Earnings call transcript