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5/9/2024
Good day and welcome to the Cedar Fair Entertainment Company 2024 first 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, please press star one again. For operator assistance throughout the call, please press star zero. And finally, I would like to advise all participants that this call is being recorded. Thank you. I'd now like to hand over to Cedar Fair.
Thank you, Gavin, 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 2024 first quarter results for the period ended March 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 Chief Executive Officer, Richard Zimmerman, and our Chief Financial Officer, Brian Witherow. 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 resolve 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. Before we begin, I want to reiterate that the purpose of today's call is to discuss the 2024 first quarter results and answer related questions. During Q&A, 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. Before we discuss our results, let me provide a quick update on where we stand in terms of the proposed merger with Six Flags. Back in March, Six Flags shareholders overwhelmingly approved the merger of equals transaction, which we continue to believe will be completed before the end of the second quarter. At this time, we have substantially complied fully with the Department of Justice second request, and both companies continue to work constructively with the DOJ in its ongoing review of the merger. At the same time, our teams have been working diligently to complete the initial phases of a joint integration plan, that upon closing of the transaction will allow us to bring our two strong companies together efficiently and effectively and realize the full potential of the strategic combination. Naturally, as this process moves forward, we will keep the market apprised of other material events. Now, let's move on to our operating results and our outlook for the year ahead. Earlier this morning, We reported first quarter results that maintained the positive momentum we established during last year's record second half. Our first quarter results were solidly in line with our expectations coming into the year. Although our first quarter historically represents only about 5% of our full year attendance and revenues, getting off to a strong start and building solid demand in our long lead channels is critical. Our first quarter performance positions us well for the peak summer season ahead and validates the strength of our portfolio and strategy, as well as our belief that consumers continue to place a high priority on experiential entertainment. In a few minutes, Brian will review our operating results in more detail. First, however, let me highlight a few specific factors that underpin our confidence in Cedar Fair's long-term business model and the season ahead. First, We are coming off a record 2023 second half, and the key drivers and strategy behind those results remain in place. Second, our long lead indicators led by season pass sales are trending very well. Third, our initiatives to operate more efficiently without sacrificing guest service are working, and we are confident this will drive long-term margin expansion. And lastly, in 2024, We have our most complete and compelling capital program since the disruption of the pandemic, and we are already seeing increased anticipation and excitement in our markets for all of the new rides and attractions. For the upcoming season, we've strategically allocated capital dollars across our portfolio and are introducing marquee caliber attractions at six of our parks, including our four largest parks. as well as investing in numerous enhancements to the food and beverage, retail, and premium experience offerings across our portfolio. Headliners in this year's collection of two marquee attractions include Top Thrill 2 at Cedar Point, the world's tallest and fastest triple launch strata coaster, and a record-breaking thrill ride unlike any other anywhere. The ride debuted to the public this past weekend. and the response from our guests was incredible. Iron Menace at Dorney Park, the Northeast's first dive coaster, the world's first kids' water coaster at our Schlitterbahn Park in New Braunfels, Texas, and finally, the addition of new family coasters to the Camp Snoopy areas at both Kings Island and Knott's Berry Farm. We are confident these new rides and attractions will drive urgency and strong demand with our guests, I'm equally excited about the work our team is doing behind the scenes on the digital technology front. Based on our consumer roadmap strategy, we are making investments in scalable technologies that enhance the guest experience, drive revenue growth, and improve operational efficiencies for our associates. An integral part of our long-term strategic planning process is a holistic analysis of the guest journey. We take a deep dive into every step our guests take in the process associated with a park visit, from researching and buying tickets to leaving the parking lot for the ride home. The objective for this exercise is known as making fun easy, which is consistent with our goal to continually evolve and enhance the guest experience. Fast forward to what this means to our guests and our associates in 2024. In April, Carowinds, our park in Charlotte, became the first outdoor entertainment complex in the country to offer next-gen 6E-enabled Wi-Fi coverage. And by the end of this year, this same technology will drive the wireless network at our six largest parks. Deploying a robust wireless network with improved coverage and capacity is consistent with our goal to seamlessly integrate and support the best possible digital experience for our guests and our associates. For the 2024 season, we're also introducing our NextGen mobile app that features a broader range of capabilities and experiential enhancements, including fast lane wait times and improved mapping of our parks. Our new park app has been introduced at all parks except for the Schlitterbahn water parks, where the app is targeted for rollout later in the year. Throughout the season, our team will be activating additional user-friendly features park by park. including real-time ticketing upgrade capabilities, incremental guest access to dining menus with mobile ordering functionality, and other unique guest engagement options. We are also rolling out single-use fast lane passes at seven of our parks, including our five largest parks. This enhancement to our front-of-the-line program has the potential to make the premium offering of fast lane more attractive to a wider segment of our guest base. providing us with another opportunity for meaningful growth in guest spending. Looking ahead, we are developing other scalable technologies to enhance a wide range of systems and processes, including a more guest-friendly design on online ticketing, a next-gen e-commerce system that operates seamlessly across all consumer devices, addition of more robust data capturing platforms to enhance the capabilities of our business intelligence group, a cloud-based hotel management system to accelerate innovations at our resort properties, and finally, AI partnerships that target value creation and risk mitigation across our enterprise. For decades, our parks were a convenient and enjoyable getaway to unplug from the outside world. For most of us today, staying plugged in is a way of life no matter where we go. The expectation to always be connected now drives our consumer roadmap. Strategically, it's the same rationale we leaned into over the last decade when we invested tens of millions of dollars to build or enhance high-volume culinary engines that offer higher-quality food and beverage options. It's simply listening to and responding to what our guests demand. With that, I'll turn it over to Brian.
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