Cedar Fair Reports 2021 Fourth-Quarter and Full-Year Results

Rhea-AI Summary

Cedar Fair Entertainment Company (NYSE: FUN) reported its 2021 financial results, highlighting a net revenue of $1.34 billion despite a 70% attendance rate compared to 2019 levels. In-park spending reached a record $62.03 per guest, marking a 28% increase from 2019. The company faced a net loss of $49 million and Adjusted EBITDA of $325 million, a significant recovery from the previous year's losses. Management expressed confidence in reinstating a quarterly cash distribution by Q3 2022, driven by strong season pass sales and strategic initiatives aimed at enhancing guest experiences.

Positive

• Record in-park per capita spending of $62.03, a 28% increase from 2019.
• Sales of 2022 season passes are pacing ahead of record levels set in 2020.
• Management expects to reinstate unitholder distributions by Q3 2022.

Negative

• Net loss of $49 million in 2021 compared to net income of $172 million in 2019.
• Net revenue down to $1.34 billion from $1.47 billion in 2019, reflecting COVID-19 impacts.
• Operated only 1,765 days in 2021 compared to 2,224 days in 2019.

• Delivers outstanding 2021 results with record in-park spending
• Well positioned to reinstate a quarterly cash distribution by the third quarter of 2022
• 2022 outlook reflects management's confidence in Cedar Fair's strong momentum and resilient business model

SANDUSKY, Ohio--(BUSINESS WIRE)-- Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and immersive entertainment, today announced its 2021 fourth-quarter and full-year results, ended Dec. 31, 2021.

Highlights

(Note: To offer more informative comparisons, highlights for 2021 below are compared to 2019. During 2021, the Company’s parks had 1,765 operating days compared to 2,224 operating days in 2019.)

• Net revenues for 2021 totaled $1.34 billion compared with $1.47 billion for 2019, driven by:
  • Attendance that approximated 70% of 2019 levels (85% on a comparable operating day basis) ⁽¹⁾;
  • Record in-park per capita spending of $62.03, representing a 28% increase over 2019 in-park per capita spending of $48.32, with double-digit increases across all key revenue categories; and
  • Out-of-park revenues of $168 million, which was comparable to 2019 levels.
• Net loss and Adjusted EBITDA⁽²⁾ for 2021 totaled $49 million and $325 million, respectively, compared with net income of $172 million and Adjusted EBITDA of $505 million for 2019.
• Through early February, sales of 2022 season passes and all-season products are pacing ahead of the then-record pace set for the sale of 2020 season pass products.

  (1)	For additional information regarding statistics on a comparable same-day basis, including how the Company defines and uses these measures, see the attached Key Operational Measures table and related footnotes.
  (2)	For additional information regarding Adjusted EBITDA, including how the Company defines and uses Adjusted EBITDA, see the attached reconciliation table and related footnotes.

“We are extremely pleased with our 2021 results, particularly given the level of uncertainty with which we entered the year and the ongoing headwinds of the pandemic,” said Cedar Fair President and CEO Richard A. Zimmerman. “Our key strategic initiatives focused on broadening and enhancing the guest experience are clearly resonating with consumers. As a result, we produced revenues over the second half of 2021 that outpaced the record revenues of the comparable six-month period in 2019 by 14%, an increase of more than $130 million. Our outstanding performance is a testament to the agility and insight of our talented team as they overcame unprecedented challenges of 2021.”

“Our strong 2021 performance gives us the financial flexibility to continue rapidly deleveraging our balance sheet while investing in high-return organic initiatives,” continued Zimmerman. “In fact, with a strengthened balance sheet, we’re increasingly confident that Cedar Fair will be able to reinitiate a unitholder distribution by the third quarter of 2022, if not sooner. The Cedar Fair Board and management team are focused on extending our track-record of enhancing value for unitholders, and we are confident we are taking the right steps to achieve that objective.”

Results of Full-Year 2021 Compared to Full-Year 2020

The coronavirus pandemic had a material impact on park operations in both 2021 and 2020. All but one of Cedar Fair’s parks opened for the 2021 season on various dates in May. Canada’s Wonderland, which remained closed through the entire first half of the year due to local COVID-19 restrictions, reopened for the first time on July 5, 2021, under capacity limitations. In 2020, full-park operations of Knott’s Berry Farm, as well as abbreviated operations of the two Schlitterbahn water parks, had begun prior to the suspension of all park operations on March 14, 2020. The Company was able to resume partial operations at eight of its 13 properties beginning in mid-June 2020, while two additional parks reopened on weekends in November and December of 2020. Given the effects of the coronavirus pandemic and disruption of park operations during 2020, results for 2021 and 2020 are not directly comparable.

By direct comparison, operating days in 2021 totaled 1,765 compared to 487 operating days in 2020.

For the year ended Dec. 31, 2021, net revenues totaled $1.34 billion versus $182 million for 2020. The increase in net revenues was attributable to a 1,278 operating day increase in 2021, resulting in a 16.9 million-visit increase in attendance and a $101 million increase in out-of-park revenues, including our resort properties. In-park per capita spending in 2021 totaled a record $62.03, driven by increases in guest spending across all key revenue categories, particularly admissions, food and beverage, and extra-charge attractions.

Operating costs and expenses in 2021 totaled $1.03 billion, compared with $484 million for 2020. The $547 million increase was due primarily to an increase of operating days during 2021 versus 2020, and the related increase in variable operating costs. Depreciation and amortization expense, which is spread over planned operating days, was $149 million in 2021, down $9 million from last year due primarily to the run-out of depreciation expense on 15-year useful lived property and equipment from the Company’s 2006 acquisition of Paramount Parks. A loss on impairment of goodwill and intangibles of $104 million was recorded during 2020, which was triggered by the anticipated impacts of the COVID-19 pandemic. Including the items noted above, the Company’s operating income for 2021 totaled $148 million, compared with an operating loss of $572 million for 2020.

Interest expense for 2021 totaled $184 million, up $33 million from last year due to incremental interest incurred on the Company’s 2025 senior notes issued in April 2020 and the Company’s 2028 senior unsecured notes issued in October 2020. The net effect of the Company’s swaps resulted in a $19 million benefit to earnings during 2021, compared with a $16 million charge to earnings in 2020. The difference reflects the change in fair market value movement in the Company’s swap portfolio. The Company recognized a loss on early debt extinguishment of $6 million in 2021 related to the full redemption of its 2024 senior notes, and it recognized a $2 million loss on early debt extinguishment in 2020 related to its 2020 refinancing events. During 2021, the Company also recognized a $6 million net charge to earnings for foreign currency gains and losses related to its U.S. dollar-denominated Canadian notes, compared with a $12 million net benefit to earnings for 2020.

For 2021, a $20 million provision for taxes was recorded to account for publicly traded partnership taxes and federal, state, local and foreign income taxes, compared to a benefit for taxes totaling $138 million for 2020. The difference in provision for taxes in 2021 was primarily attributable to the Company’s taxable subsidiaries’ pretax income in 2021 compared to a pretax loss in 2020. During 2022, the Company expects to receive a nearly $90 million refund of taxes related to the carryback to prior years of its pretax loss reported in 2020.

Accounting for the items above, the Company reported a net loss for 2021 totaling $49 million, or $0.86 per diluted L.P. unit, which compares with a net loss of $590 million, or $10.45 per LP diluted unit, in 2020.

Adjusted EBITDA, which management believes is a meaningful measure of the Company’s park-level operating results, totaled $325 million for 2021, compared to an Adjusted EBITDA loss of $302 million for 2020. The $627 million increase in Adjusted EBITDA reflects the impact of COVID-19-related park closures in 2020, and the related increases in attendance, in-park per capita spending, and out-of-park revenues from the reopening of parks in 2021.

Results of Full-Year 2021 Compared to Full-Year 2019

As previously noted, given the effects of the coronavirus pandemic and disruption of park operations in 2020, results for 2021 and 2020 are not directly comparable.

To provide more informative comparisons, the following information compares results for 2021 versus 2019. The parks had 1,765 total operating days in 2021 compared with 2,224 total operating days in 2019.

Net revenues for 2021 totaled $1.34 billion compared with $1.47 billion for 2019. The decrease in net revenues from 2019 levels was due to COVID-19-related park closures, operating calendar changes and capacity limitations at select parks, resulting in an 8.4-million-visit decrease in attendance for the year. The attendance shortfall was significantly offset by a 28%, or $13.71, increase in 2021 in-park per capita spending, driven by a meaningful lift across all key revenue channels. Out-of-park revenues for the year were comparable to 2019 levels, reflecting the impact of the delayed opening of the Company’s parks in 2021 until May 2021, as well as the temporary closure of two resort properties for renovations during 2021. For 2021, attendance totaled 19.5 million guests, or approximately 70% of reported 2019 levels, driven by season passholder and general admission attendance, offset in part by an expected slower recovery in group sales attendance, fewer operating days, and capacity limitations at certain parks, including Canada’s Wonderland.

Operating costs and expenses in 2021 increased to $1.03 billion, up $40 million from 2019. The increase was the result of a $56 million increase in operating expenses, offset by a $14 million decrease in costs of goods sold and a $3 million decrease in SG&A expense. The $56 million increase in operating expenses was largely attributable to higher seasonal labor costs resulting from rising wage rates, offset in part by a reduction in seasonal labor hours compared with 2019, as well as higher full-time wages due primarily to an increase in headcount. The decrease in cost of goods sold was attributable to fewer operating days in 2021. Cost of goods sold as a percentage of food, merchandise, and games revenue in 2021 was comparable to 2019. The decrease in SG&A expense was primarily due to lower advertising expense, the result of a more efficient marketing program and fewer operating days, offset by an increase in full-time wages, including higher incentive plan expense. Depreciation and amortization expense in 2021 decreased $22 million from 2019 due primarily to the run-out of depreciation expense on 15-year useful lived property and equipment from the Company’s 2006 acquisition of Paramount Parks, as well as the change in estimated useful life of certain park assets in 2019. Including the items noted above, the Company’s operating income for 2021 totaled $148 million, compared with operating income of $309 million for 2019.

Interest expense for 2021 increased $84 million from 2019, due to incremental interest incurred on the Company’s 2025 and 2028 senior notes issued in 2020. The net effect of the Company’s swaps resulted in a $19 million benefit to earnings during 2021, compared with a $17 million charge to earnings in 2019. The difference reflects the change in fair market value movement in the Company’s swap portfolio. The Company recognized a loss on early debt extinguishment of $6 million in 2021 related to the full redemption of its 2024 senior notes. During 2021, the Company also recognized a $6 million net charge to earnings for foreign currency gains and losses related to its U.S. dollar-denominated Canadian notes, compared with a $21 million net benefit to earnings in 2019.

For 2021, a $20 million provision for taxes was recorded to account for publicly traded partnership taxes and federal, state, local and foreign income taxes, compared to a provision for taxes of $43 million in 2019. The difference in provision for taxes in the current year was attributable to a decrease in pretax income from the Company’s taxable subsidiaries during 2021.

Accounting for the items above, net loss for 2021 totaled $49 million, or $0.86 per diluted L.P. unit, compared with net income of $172 million, or $3.03 per diluted LP unit, for 2019.

Adjusted EBITDA for 2021 totaled $325 million compared with $505 million for 2019. The $180 million decrease was the result of an 8.4-million-visit decrease in attendance due to the postponed opening of the Company’s parks for the 2021 operating season, other COVID-19-related operating calendar changes, mandated capacity restrictions at Canada’s Wonderland in the second half of the year, and significantly higher labor costs in 2021.

Balance Sheet and Liquidity Update

Deferred revenues as of Dec. 31, 2021, including non-current deferred revenue, totaled $198 million, representing an increase of $37 million, or 23%, when compared to deferred revenues at Dec. 31, 2019. As of Dec. 31, 2021, the Company had cash on hand of $61 million and $359 million available under its revolving credit facility, net of $16 million of letters of credit, for total liquidity of $420 million. This compares to $442 million of total liquidity at the end of 2019. Net debt at as of Dec. 31, 2021, calculated as total debt of $2.564 billion less cash and cash equivalents of $61 million, was $2.503 billion. This total factors in the early redemption of the Company’s outstanding 5.375% notes due in June 2024, which had an aggregate principal amount of $450 million.

Outlook

“After successfully maneuvering through the most unpredictable environment in the Company’s history, I have never been more confident in the team’s ability to continue to successfully execute regardless of the challenges we face,” said Zimmerman. “While we anticipate the labor market will remain challenging for the foreseeable future, the intelligent pricing and labor rate management strategies we activated position us to mitigate these headwinds and continue delivering unforgettable experiences for our guests.”

Zimmerman added, “We are focused on continuing to advance our strategic initiatives in 2022, including investing more than $200 million in new attractions and entertainment offerings, as well as the completion of several resort renovation projects that were delayed over the last two years. With a strong balance sheet, we also maintain the flexibility to continue to expand our park offerings and develop new revenue centers, and technology enhancements, such as cashless parks, touch-free transactions, and labor management tools, all aimed at improving the guest experience and creating a more nimble, efficient, and cost-effective operating model. We are confident that we have a strong foundation for the future and are well positioned to deliver exceptional performance for our team, guests and unitholders in 2022.”

Conference Call

As previously announced, the Company will host a conference call with analysts starting at 10 a.m. ET today, Feb. 16, 2022, to further discuss its recent financial performance. Participants on the call will include Cedar Fair President and CEO Richard Zimmerman, Executive Vice President and CFO Brian Witherow and Corporate Director of Investor Relations Michael Russell.

Investors and all other interested parties can access a live, listen-only audio webcast of the call on the Cedar Fair Investors website at https://ir.cedarfair.com under the tabs Investor Information / Events & Presentations / Upcoming Events. Those unable to listen to the live webcast can access a recorded version of the call on the Cedar Fair Investors website at https://ir.cedarfair.com under Investor Information / Events and Presentations / Past Events, shortly after the live call’s conclusion.

A replay of the call is also available by phone starting at approximately 1 p.m. ET on Wednesday, Feb. 16, 2021, until 11:59 p.m. ET, Wednesday, Feb. 23, 2021. To access the phone replay, please dial (800) 770-2030 or (647) 362-9199, followed by the Conference ID: 3720518.

About Cedar Fair

Cedar Fair Entertainment Company (NYSE: FUN), one of the largest regional amusement-resort operators in the world, is a publicly traded partnership headquartered in Sandusky, Ohio. Focused on its mission to make people happy by providing fun, immersive, and memorable experiences, the Company owns and operates 13 properties, consisting of 11 amusement parks, four separately gated outdoor water parks, and resort accommodations totaling more than 2,300 rooms and more than 600 luxury RV sites. Cedar Fair’s parks are located in Ohio, California, North Carolina, South Carolina, Virginia, Pennsylvania, Minnesota, Missouri, Michigan, Texas and Toronto, Ontario.

Forward-Looking Statements

Some of the statements contained in this news release that are not historical in nature constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements as to the Company's expectations, beliefs, goals, and strategies regarding the future. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond our control and could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct, including the timing of any debt paydown or payment of partnership distributions, or that the Company's growth strategies will achieve the targeted results. Important factors, including the impacts of the COVID-19 pandemic, general economic conditions, adverse weather conditions, competition for consumer leisure time and spending, unanticipated construction delays, changes in the Company’s capital investment plans and projects and other factors discussed from time to time by the Company in its reports filed with the Securities and Exchange Commission (the “SEC”) could affect attendance at the Company’s parks, as well as the timing of any debt paydown or payment of partnership distributions, and the Company's growth strategies, and cause actual results to differ materially from the Company's expectations or otherwise to fluctuate or decrease. Additional information on risk factors that may affect the business and financial results of the Company can be found in the Company's Annual Report on Form 10-K and in the filings of the Company made from time to time with the SEC. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether a result of new information, future events, information, circumstances or otherwise that arise after the publication of this document.

This news release and prior releases are available under the News tab at http://ir.cedarfair.com

(financial tables follow) 

CEDAR FAIR, L.P.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
		Three months ended								Twelve months ended
		December 31, 2021				December 31, 2020				December 31, 2021				December 31, 2020
Net revenues:
Admissions		$	193,950			$	7,124			$	674,799			$	67,852
Food, merchandise and games			105,703				19,652				432,513				76,921
Accommodations, extra-charge products and other			51,283				7,101				230,907				36,782
			350,936				33,877				1,338,219				181,555
Costs and expenses:
Cost of food, merchandise and games revenues			27,028				7,963				112,466				27,991
Operating expenses			202,717				73,613				698,242				347,782
Selling, general and administrative			51,479				31,437				219,758				108,118
Depreciation and amortization			35,897				30,102				148,803				157,549
Loss on impairment / retirement of fixed assets, net			4,613				(395	)			10,486				8,135
Loss on impairment of goodwill and other intangibles			—				—				—				103,999
Loss (gain) on other assets			131				—				129				(11	)
			321,865				142,720				1,189,884				753,563
Operating income (loss)			29,071				(108,843	)			148,335				(572,008	)
Interest expense			47,661				46,328				184,032				150,669
Net effect of swaps			(8,418	)			(3,931	)			(19,000	)			15,849
Loss on early debt extinguishment			5,905				249				5,909				2,262
Loss (gain) on foreign currency			7,918				(24,167	)			6,177				(12,183	)
Other expense (income)			48				(110	)			(300	)			(447	)
Loss before taxes			(24,043	)			(127,212	)			(28,483	)			(728,158	)
Provision (benefit) for taxes			3,176				(21,759	)			20,035				(137,915	)
Net loss			(27,219	)			(105,453	)			(48,518	)			(590,243	)
Net loss allocated to general partner			—				(1	)			—				(6	)
Net loss allocated to limited partners		$	(27,219	)		$	(105,452	)		$	(48,518	)		$	(590,237	)

 

CEDAR FAIR, L.P.
UNAUDITED BALANCE SHEET DATA
(In thousands)
		December 31, 2021				December 31, 2020
Cash and cash equivalents		$	61,119			$	376,736
Total assets		$	2,313,020			$	2,693,412
Long-term debt, including current maturities:
Term debt		$	258,391			$	255,025
Notes			2,260,545				2,699,219
		$	2,518,936			$	2,954,244
Total partners' deficit		$	(698,488	)		$	(666,437	)

 

CEDAR FAIR, L.P.
RECONCILIATION OF ADJUSTED EBITDA
(In thousands)
		Three months ended												Twelve months ended
		December 31, 2021				December 31, 2020				December 31, 2019				December 31, 2021				December 31, 2020				December 31, 2019
Net (loss) income		$	(27,219	)		$	(105,453	)		$	2,785			$	(48,518	)		$	(590,243	)		$	172,365
Interest expense			47,661				46,328				28,550				184,032				150,669				100,364
Interest income			(28	)			(11	)			(912	)			(94	)			(460	)			(2,033	)
Provision (benefit) for taxes			3,176				(21,759	)			(717	)			20,035				(137,915	)			42,789
Depreciation and amortization			35,897				30,102				32,628				148,803				157,549				170,456
EBITDA			59,487				(50,793	)			62,334				304,258				(420,400	)			483,941
Loss on early debt extinguishment			5,905				249				—				5,909				2,262				—
Net effect of swaps			(8,418	)			(3,931	)			(4,536	)			(19,000	)			15,849				16,532
Non-cash foreign currency loss (gain)			7,920				(24,138	)			(8,533	)			6,255				(12,011	)			(21,061	)
Non-cash equity compensation expense			3,521				1,633				3,674				15,431				(209	)			12,434
Loss on impairment/retirement of fixed assets, net			4,613				(395	)			1,150				10,486				8,135				4,931
Loss on impairment of goodwill and other intangibles			—				—				—				—				103,999				—
Loss (gain) on other assets			131				—				—				129				(11	)			(617	)
Acquisition-related costs			—				—				(76	)			—				16				7,162
Other (1)			16				176				569				1,173				359				1,351
Adjusted EBITDA (2)		$	73,175			$	(77,199	)		$	54,582			$	324,641			$	(302,011	)		$	504,673

(1)	Consists of certain costs as defined in the Company's Fifth Amended 2017 Credit Agreement and prior credit agreements. These items are excluded from the calculation of Adjusted EBITDA and have included certain legal expenses and severance expenses. This balance also includes unrealized gains and losses on short-term investments.
(2)	Adjusted EBITDA represents earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in the Fifth Amended 2017 Credit Agreement and prior credit agreements. The Company believes Adjusted EBITDA is a meaningful measure as it is widely used by analysts, investors and comparable companies in our industry to evaluate our operating performance on a consistent basis, as well as more easily compare our results with those of other companies in our industry. Further, management believes Adjusted EBITDA is a meaningful measure of park-level operating profitability and we use it for measuring returns on capital investments, evaluating potential acquisitions, determining awards under incentive compensation plans, and calculating compliance with certain loan covenants. Adjusted EBITDA is provided as a supplemental measure of our operating results and is not intended to be a substitute for operating income, net income or cash flows from operating activities as defined under generally accepted accounting principles. In addition, Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

 

CEDAR FAIR, L.P.
KEY OPERATIONAL MEASURES
(In thousands, except per capita amounts)
		Three months ended									Twelve months ended
		December 31, 2021			December 31, 2020			December 31, 2019			December 31, 2021			December 31, 2020			December 31, 2019
Attendance (2)			5,320			315			5,074			19,498			2,595			27,938
In-park per capita spending (1)		$	61.42		$	45.59		$	46.44		$	62.03		$	46.38		$	48.32
Out-of-park revenues (1)		$	33,924		$	20,670		$	28,256		$	167,978		$	67,375		$	168,708
Operating days			384			44			362			1,765			487			2,224

(1)

In-park per capita spending is calculated as revenues generated within our amusement parks and separately gated outdoor water parks along with related tolls and parking revenues (in-park revenues), divided by total attendance. Out-of-park revenues are defined as revenues from resort, marina, sponsorship, online transaction fees charged to customers and all other out-of-park operations. A reconciliation of out-of-park revenues to net revenues for the periods presented is as follows:

		Three months ended												Twelve months ended
(In thousands)		December 31, 2021				December 31, 2020				December 31, 2019				December 31, 2021				December 31, 020				December 31, 2019
In-park revenues		$	326,826			$	14,362			$	235,663			$	1,209,505			$	120,370			$	1,349,903
Out-of-park revenues			33,924				20,670				28,256				167,978				67,375				168,708
Concessionaire remittance			(9,814	)			(1,155	)			(6,673	)			(39,264	)			(6,190	)			(43,686	)
Net revenues		$	350,936			$	33,877			$	257,246			$	1,338,219			$	181,555			$	1,474,925

(2)

On a comparable same-day basis, we excluded 0.3 million visits for the year ended December 31, 2021 to exclude the results of the Schlitterbahn parks which were acquired on July 1, 2019. We also excluded 5.3 million visits for the year ended December 31, 2019 to exclude the results of 2019 operating days without equivalent 2021 operating days. This supplemental comparison was used by management for operational decisions during 2021. We believe this supplemental key operational measure provides a more meaningful measure of demand on an annual basis due to the material variances in operating days between years.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220215006112/en/

Investor Contact: Michael Russell, 419.627.2233

Media Contact: Gary Rhodes, 704.249.6119

https://ir.cedarfair.com

Source: Cedar Fair Entertainment Company

FAQ

What were Cedar Fair's 2021 financial results?

Cedar Fair reported net revenues of $1.34 billion and a net loss of $49 million for 2021.

How does Cedar Fair's 2021 attendance compare to 2019?

Attendance in 2021 was approximately 70% of 2019 levels, with a record in-park spending increase.

What is Cedar Fair's plan for unitholder distributions in 2022?

Management aims to reinstate a quarterly cash distribution by the third quarter of 2022.

How did Cedar Fair's operating days in 2021 compare to previous years?

Cedar Fair operated 1,765 days in 2021, down from 2,224 days in 2019.

What was Cedar Fair's Adjusted EBITDA for 2021?

Cedar Fair's Adjusted EBITDA for 2021 totaled $325 million.