Six Flags Entertainment Corporation Common Stock New

Ladies and gentlemen, thank you for standing by. Today's conference will begin momentarily. Until that time, your lines will again be placed on music hold. Thank you for your patience. Thank you for standing by. My name is Danica and I'll be your conference operator today. At this time, I would like to welcome everyone to the Cedar Fair Entertainment Company 2023 fourth quarter earnings 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, press star one again. Thank you. I would now like to turn the call over to Michael Russell. Please go ahead.

Thanks, Danica. Good morning to everyone. Welcome to today's earnings call to review our 2023 fourth quarter full year results for the period 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 Cedar Fair's CEO, Richard Zimmerman, and Brian Witherow, our Chief Financial Officer. 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 those 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. Before I begin, I want to reiterate that the purpose of today's call is to discuss 2023 fourth quarter and full year results and answer related questions. During Q&A today, management will not be taking questions about the proposed merger with Six Flags. With that, I'd like to introduce our CEO, Richard Zimmerman. Richard?

Thank you, Michael. Good morning, and thanks to everyone for joining us today. We're excited to be here today to discuss another very solid performance by Cedar Fair in 2023, including a record performance over the second half of the year. But before we review our results, Let me briefly bring everyone up to speed regarding where we stand in terms of the proposed merger with Six Flags. I am pleased to say that we passed a key milestone at the end of January when the S-4 was declared effective and the related definitive documents were subsequently filed, including the Six Flags proxy statement and prospectus. Meanwhile, we continued to work through the antitrust approval process after receiving a second request from the Department of Justice on January 22nd. This was an anticipated part of the process that our respective teams had prepared for, and we continue to expect the transaction to close within the first half of the year as originally contemplated. Since announcing the proposed merger in early November, we have engaged in many conversations with Cedar Fair's unit holders as well as the broader investment community, and we are encouraged by the strong support we've heard from many investors. We look forward to closing the transaction in the coming months and unlocking the compelling value creation opportunities ahead for our combined company, which we are confident are greater than either company could have achieved independently. Naturally, as this process moves forward, we will keep the market apprised of other material events. Now, let's move on to 2023 results and our outlook for the year ahead. I am pleased to report that Cedar Fair capped off an outstanding second half of the year with a record fourth quarter performance. including new fourth quarter highs in attendance, net revenues, and adjusted EBITDA. As we have seen before, the 2023 operating season was a tale of two halves. By mid-season, the effects created by anomalous macro factors, namely unprecedented rainfall in California and uncontrolled wildfires in Canada, resulted in shortfalls in early season attendance and spring season pass sales. which posed a challenge to our potential full-year results. Consequently, we modestly adjusted ticket pricing at several key parts while also investing more in our advertising and promotional campaigns. Along with a return to more normal weather conditions, these mid-season adjustments were successful in generating incremental demand and led to a 3% increase in attendance over the balance of the season, recouping a meaningful portion of our early season deficit. In an effort to drive greater flow through from the revenues we generated, we also remain laser focused on identifying new cost efficiencies. While there is still more work to be done in this area, we were pleased that we achieved our goal of reducing second half operating costs and expenses from 2022 levels and improving adjusted EBITDA margins over the last six months of the year. As we have previously stated, Our best opportunity to streamline cost and drive margin expansion resides in each year's second half, when operating costs are the most variable and attendance and revenues are at their peak. Before I ask Brian to review our financial results in more detail, I want to take just a few minutes to elaborate on the value of several intangibles of our business model that are often overlooked yet extremely important to our ongoing success. First, is resiliency. Our historical track record of quickly recovering from macro disruptions is a testament to the resiliency of our business model. Cedar Fair's resiliency is grounded in our ability to dynamically manage resources, market our unique brand of entertainment, and deliver a diversity of engaging experiences that drive demand through market cycles. This has allowed us to navigate downturns in our industry as evidenced by our recoveries from the Great Recession and the recent pandemic. This past season is just the most recent example of how our resiliency played a key role in driving record second half performance after macro factors weighed on first half results and our plans to produce another record year. Second is our ability to sustain performance. For more than a century and a half, Cedar Fair and its iconic collection of parks have delivered sustained performance. This resides in the irresistible consumer appeal created by our unique outdoor attractions that draw millions of guests to our parks each year, as they have for decades. We leverage our expertise and the economic value produced by the resilient demand for our parks to generate exceptional amounts of free cash flow much of which is invested back into our properties to drive future growth. Executed well, this time-tested approach is at the heart of Cedar Fair's sustained durability. The appeal of our parks and all they have to offer has withstood the test of time. Since the founding of our flagship park, Cedar Point, in 1870, our company is built upon a rich history of delivering happiness and excitement to multiple generations of families. Our parks are woven into the fabric of their local communities, providing tens of thousands of good paying jobs, as well as economic prosperity for neighboring businesses and local governments. Therefore, we take seriously our role as custodians of a unique collection of historic parks and our obligation to preserve their integrity for the generations to come. And third is stability. Our culture is rooted in stability. supported by the most experienced senior leadership team among the regional amusement park players. Industry experience also runs deep among our regional VPs and general managers, responsible for overseeing and managing the day-to-day operations at our park. Fundamentally, we also have a healthy, stable business. Our balance sheet is solid. We can fund the company's capital needs, and if we see attractive opportunities, We have the capacity and financial flexibility to pursue them. Helping to drive that economic stability is the growth of our recurring predictable revenue streams, the existence of which instills confidence in our long-term strategic plans and capital allocation strategies. With that, I'll turn the call over to Brian, after which I'll return with a few closing thoughts around our outlook for the business. Brian?