Earnings call transcript Q2 2023

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Operator

Hello, and welcome to the Cedar Fair Entertainment Company 2023 Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]

I will now turn the conference over to Cedar Fair. ahead. go Please

Michael Russell

Earlier XXXX Loi, Michael John Cedar morning, June ir.cedarfair.com. My a review wire of everyone. release, morning, we of Welcome for our Thank News tab which Corporate and Director is our to call Russell, is today's for Investors the service XX. quarter distributed of earnings name results to you, earnings at our good period this end second the website Investor press Fair. copy via available Relations under

call with Fair and the Executive Brian me On Richard this President Zimmerman, President Witherow, morning Cedar CFO. Vice and are and CEO; our

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

risks, filings refer a of may to more you SEC. Company's these the the discussion detailed For with

Regulation this is the well compliance this and investors. considered all been analysts general and widely public notification open all prior disclosed. being the be on to and constituents Because FD, media and to In content made as webcast as available call has is will the with SEC's the fully disseminated, webcast

With that, Richard CEO, I'd like to Zimmerman. Richard? introduce our

Richard Zimmerman

season past along provide XXXX on this morning, of the for through our balance thanks Michael. early On results, with as our and for will revenue well. expectations and some thoughts call, perspective everyone, on trends we context the Thanks, this second Good joining provide year, us the morning's for today. update some quarter weekend

quarter at normalized. while improving. strengthened saying back as conditions conditions that fully would where improved that the disruptive impacted have weather Let me by Demand were like second to operating in not weather them by and latest has we our trends, are parks begin

XX% last remained but July Preliminary unprecedented July's performance revenues July the up down compared pre-pandemic levels. reflect versus to of year, net results XXXX revenues X%

Our when the our we improving fundamentals revenues our head the of adjusted year historically underlying of we X/X than and are EBITDA. of into business XX% more attendance as generate and second half annual

moment, trends the through on With factors In negatively XXXX first challenge seen will constraining half details exogenous last results recent that performance. more a Brian has on provide been and and we've said, quarter with weekend. second several just the additional demand impacting operating of levels a

the headwind over disrupted earlier temperatures parks the poor First, quarter extreme as as attendance plagued including persistent the half the continue meaningfully rainfall in Coast to will parks of first The passes, during rainfall on weather be of demand conditions, sales East well of balance a second the year. the year unprecedented XXXX over and as season. well California our our as which

on in typical quarter springtime Point temperatures Soak cooler-than-normal Cedar our more the of to Second, impact stretch where major had prior were City Texas at the a Not Shores, our water days. recent attendance two four stand-alone second Waterparks XXX-degree in cool including Schlitterbhan unseasonally temperatures and parks,

quarter, public the Canadian of parks impacted Canada's over negatively Wonderland was health in our Finally, attendance by ongoing wildfires. and quality and air most unexpectedly, the by poor several caused concerns U.S.

continued solid experiences been performance California, demand and of most in of in key strength have our benefit underscores under notably consumer persistent resilience over the last initiatives normal two challenges certain business for years. the of our demand strategic While parks markets, our conditions at the the operating model,

occurs the by on have poor especially difficult to Midwest on at performances peak months pleased park affected conditions our operating combined were last extent the For was parks of X% least performance, instance, solid by weather Coincidentally, to demand. we six can the up to attendance six six where compared over date the weather, parks, are when these first demonstrating year. days which of year

are report of trending booking first trends guest levels in including and half per performance, spending spending within year, and to the food X% Through resort spending in-park capita of by Meanwhile, key pleased at beverage, the up year-over-year, areas admissions is and other and the our led improvements properties. on we group channel improved merchandise.

growth consistent for their enhance spend our of The buy experience caps indicate up to per guest items. and to their higher-quality to willingness willingness

facilities are and new continue mobile is on under this currently including further a our in momentum to can build we consumer-friendly guest app We confident that through investments amenities, development. park

expand in options achieved. The technology we guest This attendance drive our experience, spending. new time guest just investments to of payment build latest to ongoing wait beyond minimize the app is the the the being and simplify improve loyalty higher is and and experience, expedite improvements already in-park and streamline designed and example have

new year We this full spring later will out begin app with rolling of the planned our parks mobile in 'XX. rollout for

half signs is year of two share and recovery. increase group second group for prospecting including attendance the excellent team's a work deeper is expectations, into of of group our Finally, our improved first pace strong the wallet going our XX% performance by in continues with season events proactive a that channel strong school show the youth groups shift higher This of and early of sales process I'm group and youth per has the over their potential. events. pipeline of as expanded of up our with Through proud to corporate quarters, year. line group from period led to sales and bookings channel school cap key the last drive sales, and to leads quite

perspective second results we me months this where in reviews with five remaining in Brian season. detail, more put quarter stand let Before our

remain demonstrate to spend strong, we deliberate generate performance a and we business decisive financial urgency, are have While fundamentals Therefore, our demand, and of action higher. that satisfied our sense results heightened not with incremental our revenues increase with year-to-date. taken drive guest

of activated marketing parks through promotions we ahead season pass of season ticketing generate incremental One our have to channels still accelerated and at largest efforts the marketing us, of mid-season the and single-day attendance. our biggest our days

teams and are cap have by short-term notably We basis. be with any Meanwhile, extra-charge attendance seasonal spending levels, these food and labor. than in costs align already better second attractions. increased guest variable our to believe These most managing of will tightly more per merchandise operating a costs levels attendance have impact per actions offset park around reduction X% higher admissions to beverage, a quarter in-park on and and contributed operating on day expenses on efforts may

show be progress has results to is work more recent done. While made, been there

initiatives sleeves for top to the to XXXX, rolling and of performance prepared committed to continuing our improved and margin XXXX expansion priority. We for being are up with remainder drive our advance strategic a

for demand also post entertainment To The our remains and reiterate in healthy we on we when pandemic of XXXX I'll XX% remarks, EBITDA. our are most adjusted After and actions up my for strategic of more I strong. our XXXX some beyond. period and our comments, come compared thoughts that We spending levels Brian's back remainder us guest incredibly opening returns levels. wrap we consumer XXXX. even the generate want belief that X-month to is emphasize to want remain are profitable with over to I taking experiential believe of to position the than consumer approach maximize midst elevated to the better

Brian?

Brian Witherow

quarter the good Richard, I'll preliminary reviewing our start balance up for discussing period priorities. wrap before results operating then update ended second off by X-week and capital July with on results morning. allocation and an our Thanks, XX sheet

at of with quarter days The XXXX. of and During days reflects operating in mid-tier our primarily accommodate the the school second added the compared this to second season. quarter quarter, the XXX youth we operating groups parks days had in XXX increase return back

free calendars flow park generation. and As optimize maximize always, to we cash to continue will review our operating

in are parts XXXX. as quarter, with revenues the period. impacted X.X during in and decreases the guests park primarily we in generated entertained from net continued weather compared revenues $XXX in of Canada, guests well the revenues $XXX million the and of second wildfires quarter of Toronto attendance that During demand net X.X to The as first which several attributable million of net and million along in disruptive with our our U.S.-based quarter the patterns million

in approximately we weather that estimate The visits privileges during historical sold of second visitation. year. accounted a of pass on Overall, and pass impact of the the decline quarter for carryover XXX,XXX decline season fewer smoke the attendance result based last and of results on average loss in attendance parts the from passes quarter also season days the wildfires and The impacted. reflected the on

carryover the of loss Meanwhile, XXX,XXX Canada's accounted pass visits the period. at visits for Wonderland in Farm that we Berry during Knott's another estimate

to roughly prior the would XXX,XXX period. we estimate that attendance year, impact in the operating large due part of been factors, in the have days second over visits up the Excluding these incremental quarter in

on the some guest in for including was or strength $XX.XX, at attendance $X noted, up in the XXXX. quarter group compared pressure areas, spending booking capital on and and Richard of second almost performance quarter resort trends As properties for levels outings spending offset helping other totaled part quarter the continued our key the in of X% to

where from admissions on the levels channel, X%, last over the and F&B respectively, per was but spending biggest lift the year. cap Guest X% merchandise up within came and increased X%

transaction transaction increase accounted and the attributable pricing counts value. is spending, lift both to in most the in of year-over-year guest While the for F&B average of some growth per

and improve the dining made in helped The are to the million Meanwhile, expand increase returns. an performance yielding few the revenues to compared of to contribute options our X% of years $X strong or XXXX. investments over when of quarter second outstanding resort properties we've last out-of-park

associated variable costs days anticipated higher to higher second reflects planned million land sale costs front, and last $X tax up operating $XXX programs. related the the or to at operating expenses cost incremental costs higher California's increased lease The year's capital Great and XX property the million, expenses support the increase to the operating year. advertising year-over-year On X% to this and in compared America in with leaseback quarter period

food, quarter. XX revenues basis a with cost inflationary pressures, merchandising cost decreased second of last points sold compared Despite goods games as of percentage year's

improving remain operating out and costs laser-focused variable the expectations. are of Richard As mentioned, below when we taking system reducing costs levels including margins, attendance on

hours, in rate X% quarter, seasonal hours hours day. and operating costs per decrease decrease day. seasonal reduction X% labor our and reduction with labor average During these a in seasonal a X% the efforts labor X% set contributed operating decrease expenses in a in seasonal a in to total The combined for operating labor

on result we relative direct to totaled Today, with and Adjusted than shortfalls margin of the business the is level consistent with second year. million expenses million for the more we results, focus the will $XXX and year-over-year increases continue attendance with the trends. operating is park optimize operating to a last ever compared we revenue expenses. and to believe the combined $XXX quarter quarter, which expansion, Company's anticipated EBITDA the nimble manage quarter, revenue measure our are meaningful The the attendance in costs of in decline for operating actively

attention this our XX. preliminary Turning to past Sunday, through July results

the revenues X-week million from year decline For of million $X revenues or period same of month the net ago. X-week a a we $XXX delivered July, X% net for

July capita attendance. was in spending a or revenues flat in out-of-park performance decrease XXX,XXX per increase Our revenue driven X% by X% a visit and

and entertained higher Despite Based seven preliminary of results by XX.X million guest billion. XXXX, of through XXXX, now attendance for first preliminary for $X July guests spending. remaining $XX we have were preliminary pre-pandemic compared our on below the revenues to levels XX% million months July significantly or net up revenues of month the generated levels, driven of

This billion and comparable year. $X.XX attendance net of last XX.X revenues the guests million of period for to compares X-month

we As costs, season, the including labor the of continue attendance mentioned, to over operating will adjust we've variable trends. to best our align seasonal with balance

calendars, and that Additionally, we I've park when operating to highlighted both appropriate. adjust reducing days will continue adding

will As fourth we in days compared same balance third have quarter. with year's in currently falling period stand, in XXXX, this additional days our three project of to quarter the the the half park second added calendars those the XX and

Now turning balance the sheet. to

and to fund of was solid second condition, end cash with Fair's Cedar near-term obligations ample the the maturities. debt no future of liquidity financial sheet balance quarter, As in

of we $X.X of under total million debt facility. cash including June net borrowings $XXX of credit on available of had and XX, $XXX revolving liquidity hand million $XX our of million As billion and

product in This The $XXX Our of XXXX. million $XXX California compares second compared approximate the our of in revenue Canada's the particularly on through light X% at units X.X quarter Wonderland passes variance COVID-related part to the the deferred included that second extensions XXXX end weather to record the in year, totaled quarter which endured approximately had of second an the XXXX. impact last in at conditions season monsoon at first of quarter. in quarter million. the early balance deferred XXXX million end at parks $X season sold of large in revenues, million resulted reflects total shortfall the sales sold which passes, into This

capital Regarding expenditures.

During on of half the our total CapEx, quarter, million. to XXXX bringing we $XXX investment $XX the million first spent through

expect We $XXX full be spend $XXX million. year capital our million will to

our now more approximately was fully authorized last XX% this year, Cedar second our which million quarter July, approximately Through exhausted buyback under or than XXX,XXX in calendar $XX authorized Board million program. cost with have a total equity original outstanding program. units we've in buyback and May, Combined approximately Lastly, units program, of the repurchased new a limited equity. August Fair's buyback million we partnership at of the new $XXX repurchased X.X

the call outlook. to Richard to With that, on some I'd our back business to like commentary provide turn additional

Richard Zimmerman

Brian. Thanks,

today's call season, primarily aggressively foundation a season lay working the the importantly, current and most XXXX program. pass capital the operating addresses strong for including that our also our program are initiatives strategic we While will on season

launch XXXX Pass our work Season As of marketing and up pricing analyzing has last the season's strategies. much into for program, gone we gear imminent sales

pass previously although matching XXXX of the goal million XXXX we sold in units program, fell July, program did sold. effectively year's pass of largest As the the season, units X.X end season for terms represent noted, of second record up of season short wrapped at our ever this the our which

strategy starting out markets on in will key build the more in sales XXXX earlier focus with demand season, pricing our the attractive cycle. For to

purchase season We XXXX sales evolve next volume the with will weeks we in our been the the Most after specific price pass for will passes. compelling drive continuing demand. start are parks then season our plan reached of to that of be take pricing thresholds early of have couple pricing announcing to confident strong dynamic program model

to this parks next announcing of first launch the see the reimagined the wait will may one-of-a-kind and most Thrill for experience. many Over earlier and Point ever XXXX of version our the our guest iconic announcing roller season's this things feet new next week go attraction of weeks, introduced, coaster. world-class be kicked fastest Top launch few tallest The anticipated coaster have to ever to and we attractions triple the world's XXX also season. planned Cedar rides new can't above reaction this we X, off be

and you place the properties of to visited offer. has the in in our who Those entertainment our industry invest or rides company safe, finest keeping on our know while offering the fresh we thrill parks inviting family importance

have alike. again for that families a once We store should in seekers delight surprises additional season next and thrill few

stay please tuned. So

thrill With for those offer are the the investments family past have and confident our we several planned parks combination and made of years industry. in have XXXX, in we entertainment our over we unmatched a

underway, we visits experiences initiatives business the of our strength drive we parks, the unique a and have appeal audience. of to are adding appeal the broader that can further model expand underlying more repeat confident the and our enhance Given we

incremental our challenged develop experiences addition I've areas. offerings. more to water to in these the We and through in programs traditional upside drive believe awaits amusement and meaningful premium potential team demand and to revenues customized park

revenue driving greater We committed to flow-through from generate. incremental we are the also

inflationary most around past flattened of we years. the a over the faced our We stark growth two curve have pressures costs contrast to to successfully the significant three operating have

been average where has we effectively this rate. achieved hourly reducing seasonal our expense largest labor, importantly, largely through single the Most been have

and structure. both of reducing our hours streamlining our We staffing the also while cost are models further now overhead for rate size park focused on

of to maintaining return the efforts, execution successful with cost guest to XX of a progress. track attendance cost are that levels. would efforts, priority million while believe combined us margins us reduction pre-pandemic We a spending margin levels produce a for current key EBITDA our these most million pre-pandemic XX is to top guests, Improving metric continued our recent for near and operating levels

a equity cash capital of Growing improving us combination investors say first our allow of extremely cash million will capital to and cash flow last than and returned while distributions to investors the fuel quarterly pleased to August implementation program to allocation September. distribution payments through free the last returning margins I'm buybacks. priority more since we've $XXX buyback reinstatement of of equity our our

compelling The Board Cedar Fair Cedar team high-return management our and believe Fair's that significantly of an is that opportunity. units extremely are Directors and units repurchasing undervalued investment

deploying in remain capital. however, will, opportunistic and disciplined We unitholders'

Looking we plan, plan for in metric performance call earnings targets review during new long-term ahead, including of to November. key details third our our new quarter strategic

open open call. the we'll please Jean-Louis, the for that, call With questions. up

Operator

Your of line Steve the from comes Stifel. first Wieczynski question of

Steven Wieczynski

of noted a been weather, well Richard, documented. this you've obviously, the season, that lot to which it aggressive And marketing even maybe sounds demand. the in want guys in of the the of So order But you like attendance you and to couple been year. drive of discounting things months been for get was it side has on like that more disappointed sounds last

I So am hurt there? my is, near you over tickets if time? eventually just demand stimulate discount for your to to term. I of totally start price single-day question Does take kind philosophy that your misunderstanding to Or ability guess the

Richard Zimmerman

-- month of looked approach. marketing reach. our our through broadened end, And through month half at we and the we the of have July, June of On digital-heavy latter the the

gotten in markets. wanted connect in with in make we customers. sure key expanded as region, we to traction that our to seen ability a broader we've our that our So We've our little

On the to you're means front, points pricing. pricing all the dynamic different testing we're Dynamic committed time. pricing price

leaning take our we discounting. approach and into would are I deep think I don't that say

strongest take periods. in able what I'm to when capitas good, we're the with where dynamic do weather is per the But good the particularly pricing some really the translate demand weather-wise as July to days, of higher well. percaps. demand drive into what of trying really peak us, year. pleased we're weather can seeing was assess we month think on I we're our we days a we and as how pleased that with saw choppy was are

Steven Wieczynski

clear So levels good, is should weather normal and what normal better, than to would as guys be attendance not to think exactly be? would them absolutely you on here, be if spend a are where expect it day -- guys you crystal

Richard Zimmerman

the particularly but good were we at As we I'd I strongest system across the weather had days. and where there up of July, few say of look put month Saturdays really very some our

the we yes, in expect the where bright covering a would sunny summer the without half middle were trending So Coast. be zone rain to of the East of of we day on in

Operator

Your of the question next comes Citi. line of from Hardiman James

James Hardiman

cap per answer to I And is like of run July in what talked sounds a trends month were XQ benefit, better you of clarify, about down better basis. know Maybe July down part on maybe it days. the July? of I July, think the picking park it worse is seems -- about I July. bit getting way sounds amount attendance revenues just it up. operating benefit maybe if want day operating -- to year-over-year that about revenues like maybe little little were had I like guess feel a in better you an a XQ

So maybe those through some walk items. us of

Richard Zimmerman

take Yes. Brian, want do that? you to

Brian Witherow

James. sure, Yes,

days a are it comparable on benefit the some we which the while the said the was trends a of in call basis, So the is revenue towards bit, trends percent lift, period. of you the right, end, there yes, that July hit on think incremental the QX the I on as overall,

Steve's on you as demand noted, certainly tying operations the we're demand to you think perfect, As general to tickets, in July normalize. sort break through been apart, saw pleased back hasn't demand and and have better the when bit single-day we little question, it I began channel Richard a July

that a the season their disrupted still for a terms them There's not parks part. California pass That maybe certain of on will that of the of in at channel for drag we most as well of a a answer the drag. drag said in parts season balance part bit little always be in sales bit a for But right? bit down And a America, were this pass Great that the year, are different year, by sales, is two call. the

but seeing perfect, So in not everything relative a quite improvement July on certainly basis.

Richard Zimmerman

me attendance saw EBITDA we our thing operating highest July, in our chime would look and other and three the last That's months. highest at October revenues month year our here, we in to the The opportunity generate months. those that as are margin James, August generate I do We October. -- and calendar and in meaningful most what of let significant our

is these months. what of against when because different So comparison. it's versus second we is we're our only meaningful the comps why same quarter not number And days, at more a up are look but that's it's much July, operating stronger biggest

James Hardiman

helpful. Got you bridge XXXX, comment levels And gap big it. But margin, that in out then to can Brian, back if know help margin how somewhat margin, I QX. and think the point. can attendance the get pretty effectively guys could that in think you we back to of pieces I that 'XX back to to the where figure remember get if 'XX ultimately, versus maybe the maybe, us I levels case we get to That's you that if at of there? we think you're was I bridge can this made, the the we're dilutive going were acquisitions

Brian Witherow

Yes.

the right, in in terms acquisitions dilutive. of So we did I you're think of were some 'XX James, make

there pro on margin 'XX So we mid- a margin from the basis. high them somewhere opportunity believe an system. on said, was the did do we in That at the Parks as into the Schlitterbhan as and to time example, that basis, been forma we believe that growth a forma pro have XX.X% at integrated XXs might

that not term. being going on rest dilutive longer So to

taking front, more we before, combination. have have it about our efficient think this pleased operating down the QX, Park, and we're to cost what and we and in and We forward, operating with It's said a wouldn't the know As been Richard's on do even per numbers. were tax costs comments related we've get expenses, it. last with to in, which all property day, very in going X% on the and added we to hit lease expense able year's America Great

that But million gap while system, getting of And seem those back, a because on just it's to Richard visits also the does big, leverage XX-plus ago, about attendance minute attendance hit the those July, pretty August, getting right? in back cost pretty there's are and it structure lot move -- a the visits those of can is incremental attendance in months the quickly. busiest recovery October, fixed those on that's our a months putting pretty when you're of needle it top

haven't about When we balance fixed. have for first to the the out half of gotten expected, fixed much while particularly this part It's parks of the parks, would some first the in four we maintaining have is we off-season the of challenge much maybe our there as cost cost for with as the our think seasonal associated -- or five of very months year open. cost of structure or the preparing for the year,

during $XXX that cost 'XX. million lot year of SG&A including of the the more XXXX incurred operating going skinny last the we second half the run our half costs roughly and There's to the half those over of And over goods the spring. the parks are of those on we would expenses, expect second be inside cost pretty and properties So time fully in prep open of in that opportunity downtime or structure we before a year. the second the

to to think the not activated and I have driving begin is We more costs and as a efforts to the take structure lot more out out. a already done. it's system. taking of lot reducing Richard question answer ultimate volume. your costs We've the leverage But of We're noted, There's to go. cost initiatives both

Operator

line question Stanley. Morgan Thomas the of Yeh comes next Your from of

Thomas Yeh

admissions. Just more seems running following Chris' a but a of question potentially discounts someone's bit barrier. up like strong on been admissions has pricing when there is in It the on park, spending for the

sale. think Just health curious are that from what a point you initial limiting of the drivers perspective, that of what's consumer

Brian Witherow

Yes. this Thomas, Brian. is

reasons the this I seen is a of booking just a them people lot is isn't of and cycle. new What think It's right? many XXXX, try macro certainly earlier. push shortening commit factors, at to ticket pass get change of like that why behavior to in the the the we've one list top developing it's season as years been we consumer the those products to over multi-day and

when weather But buying driven unpredictable play by I the you but what make that's so weather purchase, purchase. just point is year. much in the saw weather certainly are that and were disrupts out purchase, time isn't to Attendance we people initial a this think that in what moment, later, the during the going

passes is of for headwind year sales So quarter, around was the out particularly a this impact weather part what we first of year. us for of season saw the play early the on the in the quarter balance second the and

is little easier as for summer winding kids this that bit that going always out that deeper because well back anticipate some sense worked of a it would to there's is gets some has for We folks front get markets. year it about you little our again plays Our very efforts, a more stimulate limited that us get working noted, Richard of marketing to as That to into and It our strategic key to with school. to in down, be of year. a of increase a urgency activate. promotions some get well to them in few the trying always are duration natural urgency us.

Thomas Yeh

Coast it expectation into for Great. July Okay. helpful. Is maybe super XXXX East was guess than was it I weather just And sales August, that like include picking on for now season August XQ. from the you sounds That's I better interpretation passes. some catching there the the comment the pass impact West. weather-related that the And from looks helpful on on up back heading sizing Is made again right? headwinds up September getting the versus July?

Brian Witherow

factor. still say would Yes, a certainly that I was weather

right? in us days. and rain Dorney lot helped where That country, East in Carowinds parts. Park other certainly the of XXX-degree hasn't working a heat Now Kings benefit Schlitterbhan dealt across the that we're a they've us Coast the with dealing has up the the Southeast with Dominion, parks where than Water Texas, and rainfall maybe from extreme bit some more The heat the South helped

That West a scenario was has the Coast shifted in earlier from year. what

drag many fact more bit that July, Coast the little pass the mentioned just that continued season tied as they the in has is West as I outstanding. just to think sales will I parks on have -- don't a

out that past Now year's your and an what the is pain we've year's this of seen to maybe next in part becomes the latter play is question gain. this answer

And We sales, this sales up and become play pass had season I that Farm weather-wise, seen is past out time. XXXX at for some record saw what season to we've buyers California's the pass. they and buyers 'XX XX Great our of elected skip often pass a that passes out XXXX earlier season America 'XX the -- the year missed by ramp in mean they Knott's purchase at in tough fact the a that, heard of in traditional or was the 'XX. our season of play Berry pass out point

parks, August. expect really that with our strong we're So at here sale West now Coast of particularly pass for those some a in sales number on season the demand we going early parks

Operator

Securities. from comes of of Swartz next line Michael question Your the Truist

Michael Swartz

understanding million James' it, is earlier, question the that bridging of call levels, XX%, question we back coming of kind that And Is of attendees margin, get to generate if makes back a what to a big needed would part XX%, get way EBITDA maybe be kind leverage to there XX% up following in reduction in if on margin attendance XX -- of XX so. kind just pre-pandemic how back looking Just to the of cost we a on or sense. million XX%. that to

Brian Witherow

of in terms Here we're what targeting.

our all I that the at aiming number. streamlining, levels, one structures with characterize critical taking what out-of-park operations, we to overhead operating a to to back other drive variable your XX%, It's the both have are few made locations back the a a getting that costs where but to not comes get operating guest are at. continued that think, doubt park to system noted, is interplay the Ultimately, it to factors number of the as there the of We the only to inside get lot we is XX%, no the able I it are getting out faster. a are back faster attendance the as faster question, Richard and and if are it XX% in another. at, more costs those -- get down out, to some is speed and the answer, spending out to might we that the XX%. part the we quicker costs and we can we

Michael Swartz

of saw Okay. guest mean I system Great. And that experience? question. not versus of the guess, a in how balance place adding I to then impairing mean seasonal just in doesn't of you the quarter that the in and lot put maybe happen. the ensure out costs reducing to I do that, What costs. improvement do the you second hours those taking on we labor cost was some

Richard Zimmerman

a good It's right the Mike, question. question. it's

NPS We quality experience, records have guest always customer. prided our look on the at the most now, near I engagement parks. of of are OSAT scores our they right at And when with scores ourselves and the our

don't, tremendously take tell us value mindful very be valuable We're guest out, cost we them got trying a we've we to as experience. but guests and what the what let that. So they

guests on sampling that. like extensive just do market but research in continue to also So doing post we things groups, not our focus visit,

we'll research guests the understand we value. sure what expand efforts to So make our

really X strongly in And we Top and like attractions this demand believe driving and putting in then to in week the as fueling get marketable number you lastly, to out. people Thrill juices attendance of come everybody's terms saw get flowing

of the are experience really along combination of the high-quality to capital thin We a disciplined there's to So what our provide systems that telling us. known monitoring we're the think costs way in while with a for. program, guests continuing strong out

Operator

comes line Goldman Lizzie Your of from next Dove question Sachs. the of

Lizzie Dove

allocation. capital may, Two, start if I on

historical to how EBITDA guys more flow the last into half year. versus leaning in the probably you is getting versus where we back the half? first second going buybacks a half. think closer to maybe at generate buyback in second think had free year, second half no significant You cash level I curious In to that may you're pretty more matter want for kind of to levels where in Leverage of prioritizing this back the distribution this

Richard Zimmerman

It's Richard.

got and want Let significantly the capital cash and by mindful create debt that market. my at senior are we looking understand, undervalued But me how that think we things capital We a our keep trying to in remarks, we with Brian? capital units take to to at continuing the where due want allocation when to balance timing this is value. to in the return our billion unitholders. benefit all those the maintain and We've healthy and 'XX. then get sure most watching comes we the markets I return we the we're and structure. Brian can right. unitholders, most strong the and go structure along We're prioritize to opportunity note $X weigh said to making in. to we secured can a of think while as look of capital will priorities We seize We're

Brian Witherow

Yes.

last we to year, that. of quick, place the that in buyback to 'XX. add put really August The Just in program

bit the ability Great to was Our at the America. aggressive of more by sale from aided a with that little program the cash be land

of tends cash program half which going start We cash this cash out the this more much core summer, to operating right. when we And season, in funded Memorial year, Day, second you're tends put summer start -- now place, As which we really we into flow. exactly to the to around roll be generation. said start of is building as

And so of we prioritize noted, our that Richard a in continue sees we're think that returns to what value to but understanding part going base investor a core we're distribution. are as -- best lot the of there is just the

want value of does for conversations. remain sure, also But we as those to of it front and distribution. make getting sort center So Richard noted, the we're

Lizzie Dove

something increase That's back you year. you're on this your more year. little to be of Season year at Is on prestige new that if the that path this that bit three relatively you the your It well? you maybe like that testing Pass. of price had and going kind have update in as into one helpful. to curious an lean maybe a you properties Also single-digit And pulling were on high earlier even mid- just sounds expand

Brian Witherow

Yes.

But Pass. Gold is are to market. the testing path for where segment properties. sell. very the we from that reason ever get in bit that need our product believe and three a also pass, base it parks continue components early that with at. into core that the of more feedback of know don't exactly prestige reaction to hitting the was saw intend been on what we pleased and value prestige of pass we lean at there the evolve tested Part it we product. do the the the certainly a more that expand that into -- benefits It's slots in We yes, that to is got product, to of and never of the to So make the We've Lizzie, consumer becomes we sure the guest that we the

make we'll product adjustments we at, the some it. at parts will did test the so expand and And we that three

that try dynamic past of pass, mid-single-digit used to pricing to chase terms returns. we've pricing In going and use season the to continue more in still techniques the broadly. We're

a and program, aggressively. take volume approach it's predetermined past. where a in bit then pricing earlier emphasizes targets then little I to deviation We've always building used and pass going from Our sort and season more we've around program of won't been to or a say the getting thresholds that complete certain the starting

got hindsight, little if out we a early in in anything, back, our markets. over looking in be bit a bit or may went too believe so little of couple skis And a we

more a as may And pass. And value play still first believe, the on the continue but in pass of bit. but a little was still we believe goal But we year best the second be year, product. get so go to for much price. focused Richard we bit is more price then little volume pulling terms disruption, of said, There's to that back we that the in disruption take driven, ever that of of bit a season this and them weather to little lot want sales with

Operator

Eric Wold line Your B. the Securities. of next question Riley of comes from

Eric Wold

couple So back kind of going of to a questions. previous

kind to prepandemic million, pushing maybe you you versus parks feel view you not million about but the at XX that think how level. straining system. about million the back ultimately talk guest XX where go, You margins mentioned XX level XX you guest million, where attendance capacity, Can that comfort can of max comfortable getting

cost of kind you opposite the experience. of take earlier without So how to out impacting the where want question much the

Richard Zimmerman

Richard. it's Eric, for Yes, question. Thanks the

operating at look then each you factors what's evaluate we As each lot opportunities optimal different for we through that the But We regions, on as of do look sort we can at think cycle in we park of life days. different each how go generate. of what we park. think the about park, of and a into park a basis the macro go changes that

wanted not But then round, of year to Winterfest this got certainly trial an us or calendar days. impactful go some our and seen opportunity. going we a and whether expand were back out sizing look December, the even November, first aggressively You've take those much think at parks gave in with as They we year, we about value as attendance. as us optimal up we're

those coming plan, factor precise our of back we'll with and As strategic through everybody this long-term in, things view we clear a we'll call and to out address much and in all more targets think coming that. on our

in tell than August those still now, July, biggest days, And are to to them months. October in calendar. high attendance operating our more But days level. always that we've bring any of run We we've opportunity right parks I XX% other there's which is bigger a at guests you XX%, think and service referenced would we peak continue the said always

So we've the all parks, our got of during plenty at capacity through Monday summer. Friday

Eric Wold

Maybe coming talk of employment handle managing system of How question. have would get kind going forward? then on better? things benefit what And better of postpandemic. now kind do how as a of would of think the before in but procedure the kind the just you're on the maybe you -- labor you or that focused wage out weather you were you what the kind it. about think kind hourly think how days was number around Got put difficult impact Obviously, did much at you it? Maybe been better last versus of Maybe versus about pre-pandemic? the just now handle you

Richard Zimmerman

resources management capita, experience. call was to the but went it's We functions: it time, we primary built two the amount set right we make sure also the that had our our we through at you've really right making what pandemic, guest of built of out per question. was and a looking optimizing translate a at day the really ramping labor revenue pricing right sure and first, seen ability up we on function management intelligence great as business workforce out Eric, to that we're the into

and we're of far far that's that aggressive the the done it is always of disciplined it but more getting more labor. on workforce -- analytics part drive But and I bad levels the we've is in also decision-making data now. really using that, days part and think scheduling weather our aggressively of So to managing around

I scientific there's and we're lot getting while data getting have. using about art a to a it, the we're science more we more -- think the lot So and analysis

and hats the It's team level workforce but So also management every off of week. in focus. everybody about to we something talk that field, within the for

Operator

comes question Markets. of line Aurand Capital of next Your KeyBanc the Robert from

Robert Aurand

up kind when enough on guess margin. of next kind million XX.X% the XXXX back ask I again look year, margin of relative timing if that levels? a I you to to back weather there those margins, EBITDA wanted be Can million the that lot cost and to XX.X% assuming about the to savings? year next that to kind XX and wanted front. XX the could kind of just we but get color you for takes recently versus to good A put kind of of of the by And guys pre-pandemic of margin get of would attendance. did to more I puts talk attendance below point

Brian Witherow

Brian. Robert, Yes, it's

an as So possible We the as reopened swung area at may parks as much I we over with up we could as could. opened of experience best coming like look pandemic. or attendance the out the around right delivering focus in quickly back we pendulum think we keen have a were seasonal we in on where labor. getting And hindsight,

We labor talk us. biggest about much for it item so the single cost because is

system, look versus average we system quite frankly, even of very seasonal so hourly lot also We've we're that rates base. than back managing do where elevated for more successful. been were. And these when we were at the of more where a hours out because at out the and staff hours now, have where We're we're we to than managing prepandemic that's we what

on rate. a rate to the call function again down outcome a we or It flat just seasonal it, we've $XX, continuing we base an to we hour $XX bonus, at rate plus step you it took around of look that from wage premium to hour. call of as done that As push and $XX how built an an It wasn't maybe, a was closer the noted to it. however want when

the system, we're dialed we've hours dialed we've done any back not and as so as And that bonus out means. by of

more the done work where biggest that front. comes noted, to that's But Richard of be chunk on there's out. it As

of in Now more our efficient get we also as have said, costs. fixed overhead some we to

eliminating levels nature. consulting from efficiencies So things that fees staffing and third-party to for of reviewing and more also looking everything that's

So but of cost labor lot it a of in XX% to because it's multipronged a lies structure. there, effort our get overall that's

Robert Aurand

X.X stand saying the called in group pre-pandemic X.X been that of we Understood. can versus here. group, previously of ask any you had quickly stronger relative to still of know I and on has Kind you how update gap wanted I of out that back? million think kind you're levels. to there where terms kind visit million come

Brian Witherow

Yes.

of small the we're as the As call, recovery. business really gets the we a some the well. lost bit, that It pleased perfect. disrupted XX,XXX Richard school we've a side to lost factors is East visits macro of by related wildfires. It's been as this pace with warnings to in seen quality hasn't Coast example, because but our the at We've that air close of an the on on the said maybe parks of couple a of days, Canadian

next mid- in schools we won't were them once for so year. of hitting lost back that the timing those And season, late to get done we June, until the the group,

So percent a where completely school we've youth it it back what and up was XX-plus come seen hasn't to year but probably ago.

is step will function back So big Corporate that. continue. and for coming

done corporate continue the for X.X buyouts bringing to back. million job the park events all will The to has We balance an at get and team that to going level book excellent to of year. the of the We're X.X the way not year. this back million

take the when direction or certainly As we but the said at group three side of moving it beginning, comes we to two could in right are quickly that things. years, the

Operator

the line of [Operator from Instructions] Capital. question next of Macquarie Your Paul comes Golding

Paul Golding

of I to a ask technology couple just questions. wanted

of on out of you follow-on, revised across this, I perspective F&B transaction we some penetration footprint? the how next an mobile cap or call I And contributed then you're can to that mobile much the should dining the from app mentioned wondering the across options expect rolling the year, believe. attribute growth was footprint per noted as as or You there. you consumer-facing whether to spring to a the count continue ordering a updated additional app uplift that

Richard Zimmerman

still the Right testing working of really now, mobile. and Food is it it's we transactions formats. of well, every variety small percentage a we're at and mobile we're testing a ordering but do, park,

what So to facility. depending best see trying we're on works really

Brian lot mobile the got I this The make week, we In out, app a into great lot drive be last a everything And that we're engagement just of roll and integration plank it our And with that progress. of making much transaction do mobile terms key and ease easier the we We so will that can and think briefing consumer of writing, order. opportunity. count. it's food a a the next more we're and year. able we of thing as really mobile app to transactions think leverage to then there's

Paul Golding

to may around be the For any sell-through you seeing metrics we you maybe admission quantitative are overall, retarget could able that app or results that pilot ability share to share? any

Brian Witherow

Yes. will app the the At be this year. Paul, point, later no, pilot this of

we're off place. that's been mobile getting what now out right is the in of So existing platform of

still made, -- probably the So the seeing not I our Richard cashless transaction what options, lift you're mobile. in attributable the expand of areas to there at enhance, of the More sped a we've up small much going the lift made dining throughput engines, think It's that to seeing is business. we're like Richard, to counts this has we're higher investments point, higher the transactions. piece comment certainly F&B, just

doesn't so narrow, checkout And more the and it then have a the offerings, different right, around just lot more stand -- simplification locations and consumer to pretty keeping and offerings a experience. efficiency, streamlining simplified it's the but of process different at of make It's decisions. efficient offerings,

going area in forward, going where so here significant to is an noted, in 'XX. than opportunity, mobile And see anything we're as play I just but that to we think going there's think, be out Richard and do 'XX more beyond

Operator

the Your next question Barton of comes Rosenblatt. line Crockett from of

Barton Crockett

there the any One roller the attendance from coaster. the impact the questions. publicity of around is, was on couple issue A with

Did impact I lot the play. got press of think that the quarter? an Carowind Fury Coaster a in have and

Richard Zimmerman

And months our rain, weekends. rain, on significant a of of ill-time more Richard. significant impact the weather Barton, [SER-XXX]. the portion from it's Close look, your a referencing has Carowinds six on had last far lot

the been So really that's significant factor.

Barton Crockett

weak then stronger I season historical where situation know sales maybe topic year I is can demand you pass next And weather, talked Okay. of about in this be the mean, the then one on year. and

people consumers will leaving and any season kind of But and the media persistent headwind you a I'm truth. from dependent your everything. and about sticky, if is. park? if negative perceive to your we're of accurate certainly As the just for debate a kind catch-up curious of money like pre-spending on issues perspective, that might the And extent seeing something to aside be climate Certainly, experiences wondering, weather that that change, their that as put have discussion how of seeing as that pass kind I'm the you're more passes weather theme desire their love

Richard Zimmerman

to first, out. itself weather say, would that let me I go average question. great Barton, back over time, belief will our firm

have of been So more fueled I period of which over you do the disruptive in half is there's back, a last revert that I take to improved a couple if for things means. think year impact. December. of one the broadly, In understand the I or step we're where significantly so. But of us, of back September the the decade through the the weather course months a

July you around back-to-school you've the August, and once -- appeal all Brian what then of got the the appeal urgency the of into referenced our events So you you before Halloween got appeal, got got the you've the event get holiday. and of

weather we've is back year the benefited actually of where from half the the demand. So the driving

seen, a opportunity. shift of we've or which sort the two is that's over last where So the decade that

the springtime challenging a So opportunities, been it has the when in more weather disruptive. has more little created little

But attendance back reasons generate half and well, we the and to year, is of combined the in the slightly do half year. impact. much that appeal year of the in evaluating one we the EBITDA continue with back we're events of weather so our revenue both So of the of back the half but I the better of think the have

Operator

And of line Chris of final Bank. Deutsche question our the Rowenka comes from

Unidentified Analyst

of you landscape for for in any maturities think Richard, you of got longer M&A things. might owners whether up interest because can rate We've I the some happens view maybe be some environment. a higher you. that other just a guess, terms of coming question going or or got opportunities one with we've that bit the private be give us debt for M&A a to overall industry Just there's little

as So just the view your landscape. to curious of

Richard Zimmerman

these that's you was posted calls length a pre-pandemic, we'll that's built company to healthy. has at look I everybody available been M&A. this there. record do year We've if Listen, We anything talked that out through companies, on think back we've as as in go as The the others. much all structures. both private strength the to most has private operators the public have of benefited our the capital companies, I recovery, the from public. think, XXXX at improved recovery we talk helped The but

So I industry healthy. think is the

significant think healthy happens, everybody they're But more opportunity than weakness. if is and probably linked to doing well. it is M&A, So I

the good actually that's for So industry.

where The recovery, continue that think healthy us. industry not the saw appeal in like to line the that all of second the see all disruption, strong the of for we're and to rapidness good is we being 'XX of And continuing to starting although, now again, where the half we'd improvement want see so with you'd to year. I in strength it, to despite the be see and

seeing. So I others is think seeing what most what the we're of are

Operator

There Richard are no for further back questions at this to Zimmerman time. I will closing now turn the remarks. call

Richard Zimmerman

in for interest for Fair. Cedar and everybody, your continued joining thanks Thanks, us,

be historically for the our year. will October, return events days parks biggest and attendance As the down produced to in kids popular summer Halloween school, winds we transforming of which have the our always

Fair's our to Please initiatives. announcement program, major rides, investments capital Cedar of our you keeping and on landmarks. in planned other slides apprised these and regarding attractions for progress forward irreplaceable entertainment of Michael? our season look highlighting new upcoming XXXX at next We at look portfolio our

Michael Russell

our today. (XXX) call XXXX Jean-Louis, will call concludes be our results. Please our everybody. Thank the in you Third our November feel Investor free release much. again, after next XXX-XXXX Thanks quarter at department to that call very Relations of

Operator

You disconnect. now may all

Six Flags Entertainment (FUN) 3 Aug 232023 Q2 Earnings call transcript