Six Flags Entertainment Corporation Common Stock New

Good morning. My name is Rob and I will be your conference operator today. At this time, I'd like to welcome everyone to the Cedar Fair Entertainment Company fourth quarter 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. I will now turn the call over to Cedar Fair.

Thank you, Rob, and good morning to everyone. My name is Michael Russell, Corporate Director of Investor Relations for Cedar Fair. Welcome to today's earnings call to review our 2022 fourth quarter and full year results, ended December 31st. Earlier this morning, we distributed via wire service our earnings press release, a copy of which is available under the news tab of our investors' website, at ir.cedarfair.com. On the call with me this morning are Richard Zimmerman, Cedar Fair President and CEO, and Brian Witherow, our Executive Vice President and CFO. Before we begin, I need to remind you that comments made during this call will include forward-looking statements within the meaning of the federal securities laws. These statements may involve risks and uncertainties that could cause actual results to differ from those described in such statements. For a more detailed discussion of these risks, you may refer to the company's filings with the SEC. In compliance with the SEC's regulation FTE, this webcast is being made available to the media and general public, as well as analysts and investors. Because the webcast is open to all constituents and prior notification has been widely and unselectively disseminated, all content on this call will be considered fully disclosed. With that, I'd like to introduce our CEO, Richard Zimmerman.

Thanks, Michael. Good morning and thanks to everybody for joining us. Earlier this morning, we announced record performance for fiscal 2022, which reflects the significant progress we are making on our strategic initiatives and the incredible work of our team to continue to deliver exceptional experiences for our guests. These record operating results allowed us to return approximately 220 million of capital to unit holders through the reinstatement of our quarterly cash distributions and the implementation of a new unit buyback program. These results also demonstrate that the strong performance trends that we provided updates on during our quarterly and interim reports throughout the 2022 season came to fruition in the second half of the year. The result was the second highest attendance year in the company's history, near historical highs for in-part per capita spending, and record out-of-park revenues driven in large part by the outstanding performance of our resort properties. We produced record revenues and adjusted EBITDA for the year despite continued headwinds including labor availability, the impact of inflation, and a group business channel that was still recovering. We also delivered 30% plus margins, a marked improvement over last year with achievable upside as we worked back to pre-pandemic demand levels. Much of the credit goes to our park GMs and their team's disciplined cost management practices, including efficiently managing seasonal labor to align with demand, while also actively managing down other variable operating costs to offset general inflationary pressure. The improvements they are making will ensure the long-term vitality of our parks and the growth of our business for years to come. Before I ask Brian to review our financial results in more detail, I want to take just a couple of minutes to walk through some key elements of our strategy and business that led to our success in 2022 and the strong momentum we have heading into 2023. First, reinvesting in our properties is essential to driving long-term growth. At the heart of attracting millions of guests to our parks and resort properties each year has been the company's commitment to consistently reinvest in the business to improve the guest experiences. While M&A activity has certainly played a major role in our historical growth, the limited number of opportunities to acquire strategic, high-quality properties emphasizes the central importance of investing in our own assets to produce steady organic growth. Second, prioritizing top-line growth was the right recovery strategy. Our strong revenue growth in 2022 was a direct result of our ability to attract more guests to our parks, provide guests with more exciting and engaging options to drive in-park spending, and keep guests coming back time and again. Given the uncertainty of the macro environment at the start of the year, we believe strongly that focusing on the guest experience and top-line revenue growth would be the most effective way to create the operating leverage necessary to propel our business over the long term and through whatever economic challenges were ahead. I believe our strong 2022 results show this was the right strategy. Third, our business is underpinned by reliable, recurring, and growing revenue streams. More than two-thirds of our annual attendance comes through ticketing channels with pre-purchase commitments that are well in advance of the guest visit, including season passes, group bookings, and tickets associated with overnight stays at our resort properties. These long lead recurring revenue streams also produce predictable levels of cash flow that allow us to fine tune our capital allocation priorities and make informed decisions about our future direction. We view the consistent growth of recurring revenues to be a valuable cornerstone of our business model and believe it remains the most unrecognized and underappreciated strength of our company. Fourth, we are a second half company. generating two-thirds of our attendance and revenues and 80% of our adjusted EBITDA over the third and fourth quarters. As with most seasonally weighted businesses, we enjoy peak demand in very narrow windows of the calendar, in our case from July through October, when we fully leverage our cost structure and maximize flow-through on incremental revenues. Finally, our balance sheet is strong and getting stronger. To date, we have reduced total net leverage back to pre-pandemic levels while progressing with purpose towards our net debt target of $2 billion. Our rapid recovery and strong results have positioned us well to move quickly towards achieving our goals while pursuing opportunities to add flexibility and capacity to our capital structure for the longer term. I'll pause here so that Brian can review our results in more detail before I provide some more color on our outlook going forward. Brian?