Six Flags Entertainment Corporation Common Stock New

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Thank you, John and Lee, and good morning, everyone. My name is Michael Russell, Corporate Director of Investor Relations for Cedar Fair. Welcome to today's earnings call to review our 2023 second quarter results for the period ended June 25th. 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 FD, this webcast is being made available to the media and the 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. Richard?

Thanks, Michael. Good morning, everyone, and thanks for joining us today. On this morning's call, we will provide context for our second quarter results, update revenue trends through this past weekend, and provide some perspective on our expectations for the balance of the year, along with some early thoughts on the 2024 season as well. Let me begin by saying that our latest trends, while not fully back to where we would like them, are improving. Demand at parks that were impacted by disruptive weather in the second quarter has strengthened as weather conditions have improved and operating conditions normalized. Preliminary July results reflect net revenues down 2% versus the unprecedented performance of July last year, but July's revenues remained up 11% compared to 2019 pre-pandemic levels. Our underlying business fundamentals are improving as we head into the second half of the year when we historically generate two-thirds of our annual attendance and revenues and more than 80% of our adjusted EBITDA. In just a moment, Brian will provide additional details on second quarter results and the more recent trends we've seen through last weekend. With that said, the first half of 2023 has been a challenge on several levels, with exogenous factors constraining demand and negatively impacting operating performance. First, poor weather conditions, including unprecedented rainfall and extreme temperatures, plagued our East Coast parks during the second quarter, as well as our California parks earlier in the season. The persistent rainfall meaningfully disrupted demand over the first half of the year, as well as sales of 2023 passes, which will continue to be a headwind on attendance over the balance of the year. Second, cooler-than-normal temperatures in the second quarter had a major impact on attendance at our four standalone water parks, including Cedar Point Shores, Knott's Soak City, and our two Schlitterbahn water parks in Texas, where springtime temperatures were unseasonably cool prior to the recent stretch of more typical 100-degree days. Finally, and most unexpectedly, On attendance in the quarter, Canada's Wonderland and several of our U.S. parks was negatively impacted by public health concerns over poor air quality caused by the ongoing Canadian wildfires. While demand challenges have been persistent in certain key markets, most notably in California, our solid performance at parks operating under normal conditions underscores the resilience of our business model, the continued strength of consumer demand for experiences, and the benefit of our strategic initiatives over the last two years. For instance, we are pleased by the solid performances at our six Midwest parks, where combined attendance was up 7% over the first six months of the year compared to last year. Coincidentally, these six parks were least affected to date by poor weather, demonstrating the extent to which difficult operating conditions can have on park performance, especially when weather occurs on days of peak demand. Meanwhile, we are pleased to report improvements in other key areas of performance, including guest spending levels and booking trends within the group channel and at our resort properties. Through the first half of the year, in-park per capita spending is trending up 4% year-over-year, led by improved spending on food and beverage, admissions, and merchandise. The consistent growth of per caps indicate our guests' willingness to spend to enhance their experience and their willingness to buy up for higher quality items. We are confident we can continue to build on this momentum through further investments in our park facilities and guest amenities, including a new consumer-friendly mobile app that is currently under development. The new app is being designed to simplify and streamline the guest experience, expedite and expand payment options, and minimize wait times beyond the improvements we have already achieved. This is just the latest example of our ongoing investments in technology to improve the guest experience, build loyalty, and drive higher attendance and in-park spending. We will begin rolling out the new mobile app in our parks later this year with full rollout planned for spring of 24. Finally, our group sales channel continues to show strong signs of recovery. Through the first two quarters, group attendance is up 11% over last year and in line with our expectations. led by strong early season performance of school and youth events. I'm quite proud of our group sales team's excellent work to drive improved sales, including their proactive prospecting process that has expanded our pipeline of leads and increased the pace of bookings going into the second half of the year. This is a key period for the group channel as group events shift from school and youth to corporate groups with a deeper share of wallet and higher per cap potential. Before Brian reviews our second quarter results in more detail, let me put in perspective where we stand with five months remaining this season. While our results demonstrate that our business fundamentals remain strong, we are not satisfied with our financial performance year to date. Therefore, with a heightened sense of urgency, we have taken deliberate and decisive action to increase demand, generate incremental guest spend, and drive revenues higher. With some of the biggest days of the season still ahead of us, We've accelerated our marketing efforts at our largest parks and activated mid-season marketing promotions through our season pass and single-day ticketing channels to generate incremental attendance. We believe any short-term impact these actions may have on admissions per cap will be more than offset by increased attendance and higher levels of in-park guest spending on food and beverage, merchandise, and extra charge attractions. Meanwhile, Our park teams are tightly managing variable costs to better align with attendance levels, most notably around seasonal labor. These efforts have already contributed to a 2% reduction in second quarter operating costs and expenses on a per operating day basis. While recent results show progress has been made, there is more work to be done. We are committed to rolling up our sleeves and continuing to advance our strategic initiatives to drive improved performance for the remainder of 2023 and prepare for 2024, with margin expansion being a top priority. To wrap up my opening remarks, I want to emphasize our belief that consumer demand for experiential entertainment remains incredibly strong. The consumer is healthy, and guest spending levels remain elevated compared to 2019 and even to post-pandemic levels. I also want to reiterate that we are in the midst of our most profitable six-month period when we generate more than 80% of our adjusted EBITDA. We believe the actions we are taking better position us to maximize returns over the remainder of 2023. After Brian's comments, I'll come back with some thoughts on our strategic approach for 2024 and beyond. Brian?