Top Thrill Dragster Posted March 9, 2009 Share Posted March 9, 2009 SANDUSKY, OHIO, March 9, 2009 -- Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement resorts, water parks and active entertainment, today announced it will decrease its annual distribution rate to $1.00 per limited partner unit. On a quarterly basis, the Company’s distribution rate will be $0.25 per unit and will begin with the distribution that is expected to be declared in the second quarter of 2009. “Although Cedar Fair has continued to report solid earnings and cash flows with some of the best operating margins among regional amusement parks, the Board of Directors is taking this action in order to retain additional cash flow to delever the Company over the next several years,” said Dick Kinzel, Cedar Fair’s chairman, president and chief executive officer. “The current macro environment requires us to balance the distribution of excess cash flow to our unitholders with the Company’s strategic objective of strengthening our balance sheet.” The Company currently pays approximately $105 million in distributions to its investors on an annual basis. A $0.92 reduction in the per-unit rate, along with scheduled debt repayments and interest savings on the lower debt balance, will allow the Company to reduce its debt by approximately $200 million over the next three fiscal years. This distribution reduction is a first step in Cedar Fair’s strategy to reduce debt and strengthen its balance sheet. In addition, the Company continues to pursue the sale of excess land in the Toronto and Cleveland markets and continues to discuss the potential sale of California’s Great America, in Santa Clara, California, with the San Francisco 49ers. It has also completed a strategic review of its assets and has decided to explore the potential sale of Worlds of Fun, in Kansas City, Missouri and Valleyfair, in Shakopee, Minnesota. The Company said it would be premature to speculate on either the price or timing of any potential transaction. “In light of current economic and market conditions, reducing our debt and strengthening our balance sheet must continue to be a priority,” added Kinzel. “These actions are designed to reiterate our commitment to create long-term value for our unitholders. We feel confident that we are proactively taking steps to reduce our leverage and strengthen our financial position over the long term.” Cedar Fair is a publicly traded partnership headquartered in Sandusky, Ohio, and one of the largest regional amusement-resort operators in the world. The Partnership owns and operates 11 amusement parks, six outdoor water parks, one indoor water park and five hotels. Amusement parks in the company’s northern region include two in Ohio: Cedar Point, consistently voted “Best Amusement Park in the World” in Amusement Today polls and Kings Island; as well as Canada’s Wonderland, near Toronto; Dorney Park, PA; Valleyfair, MN; and Michigan’s Adventure, MI. In the southern region are Kings Dominion, VA; Carowinds, NC; and Worlds of Fun, MO. Western parks in California include: Knott’s Berry Farm; Great America; and Gilroy Gardens, which is managed under contract. http://www.cedarfair.com/ir/press_releases/index.cfm?current_root=15&mode=story&story_id=190 Link to comment Share on other sites More sharing options...
ChrisZer0 Posted March 9, 2009 Share Posted March 9, 2009 Like everyone else in this economy, they're hurting for money and the banks are holding on to their money likes meisers. Like SF, I see them selling off their side properties and focusing on their main money makers (Cedar Point, KBF) and sheding the other parks that are draining resources... Link to comment Share on other sites More sharing options...
larrygator Posted March 9, 2009 Share Posted March 9, 2009 Not surprising, nor is it surprising how 3 different sources can report 3 varying headlines from the same PR release. Cedar Fair Entertainment puts Worlds of Fun up for sale (bizjournals.com) Cedar Fair exploring sale of parks in Mo., Minn. (AP) Cedar Fair to sell excess lands (Reuters) From what I have been able to gather, this is not a fire sale, but if the properties can fetch a good price the posiibility of a sale will be considered. However, market conditions could cause a fire sale in the future. Link to comment Share on other sites More sharing options...
Hercules Posted March 9, 2009 Share Posted March 9, 2009 I'm wondering if they are kicking themselves now over the purchase of the Paramount properties. Link to comment Share on other sites More sharing options...
Zero One Posted March 9, 2009 Share Posted March 9, 2009 Not likely. It was a great buy then and it still is a solid investment today. Notice that none of the Paramount Parks are at risk of being sold. Link to comment Share on other sites More sharing options...
larrygator Posted March 9, 2009 Share Posted March 9, 2009 Well this shareholder is kicking himself. ^The Paramount Parks are better money makers because they are in larger markets and/or have longer operating seasons. Cedar Fair certainly overpaid for the Paramount properties. I'm just surpirsed Michigan's Adventure is not included with Valleyfair and Worlds of Fun. Link to comment Share on other sites More sharing options...
Hercules Posted March 9, 2009 Share Posted March 9, 2009 I doesn't matter that the Paramount parks aren't listed as potential sales. They took on a considerable amount of debt and added expenses with those parks. Cedar Fair was a very solid and stable company before they made that purchase. Link to comment Share on other sites More sharing options...
ginzo Posted March 9, 2009 Share Posted March 9, 2009 Not likely. It was a great buy then and it still is a solid investment today. Notice that none of the Paramount Parks are at risk of being sold. Wasn't Great America a Paramount Park? Link to comment Share on other sites More sharing options...
robbalvey Posted March 9, 2009 Share Posted March 9, 2009 Cedar Fair 2009 = Six Flags 2005/2006 Link to comment Share on other sites More sharing options...
Homer Posted March 9, 2009 Share Posted March 9, 2009 Notice that none of the Paramount Parks are at risk of being sold. ...continues to discuss the potential sale of California’s Great America, in Santa Clara, California, with the San Francisco 49ers. On the topic of Paramount parks though, I still see them as a solid addition to the CF chain. It gives them foothold in the South with Carowinds, Canada with their largest theme park, and monopolizing Ohio. This bit of news doesn't surprise me too much though. But I don't really see the land flying off the shelf because of the real estate market. Here's hoping to see some good come out of this story. Link to comment Share on other sites More sharing options...
Hercules Posted March 9, 2009 Share Posted March 9, 2009 Not likely. It was a great buy then and it still is a solid investment today. Notice that none of the Paramount Parks are at risk of being sold. I give him a pass on this statement because Great America was put on the market by Cedar Fair before the transaction was final. They wanted to sell that place from the beginning. Link to comment Share on other sites More sharing options...
Zero One Posted March 9, 2009 Share Posted March 9, 2009 Yes. Sorry that wasn't quite clear. GA is on the block because they have a VERY interested buyer. As for Michigan's Adventure, remember that it is the park with the company's largest attendance growth rate year to year. EDIT: Full disclosure, I own 50 shares of FUN Link to comment Share on other sites More sharing options...
thrillerman1 Posted March 9, 2009 Share Posted March 9, 2009 I guess I'll just never understand why corporations make these type of huge investments and add new coasters (one of which hasn't even opened yet), only to turn around and go oh...we need to sell this park. Baffles me. Wasn't that thought of before they started talking to coaster designers, contractors, etc.? Personally, it's exciting to me if these parks can find buyers that can give them more of a personal touch and remove the big corporate feel. Link to comment Share on other sites More sharing options...
Jew Posted March 9, 2009 Share Posted March 9, 2009 Cedar Fair 2009 = Six Flags 2005/2006 Bingo. Right now the only difference is the dividend. But I'm guessing that will have to be cut the next time more debt/interest payments become due. Link to comment Share on other sites More sharing options...
Jive Posted March 9, 2009 Share Posted March 9, 2009 Neither Valleyfair or WoF are in prime development spots anyway. They would almost have to be sold as parks. Link to comment Share on other sites More sharing options...
Hercules Posted March 9, 2009 Share Posted March 9, 2009 ^ Plus it would be stupid to sell to a developer considering the profit margin on the sale wouldn't be optimal. Link to comment Share on other sites More sharing options...
CreditCrazy Posted March 9, 2009 Share Posted March 9, 2009 This is pretty sudden, you build Prowler, then try to sell the park it's at, and other parks. Just like Six Flags. And poor CGA. I was hoping Cedar Fair would help it, just like they did/are doing with the other Paramount Parks. CGA hasn't gotten much, and now it looks like it may not get anything again Link to comment Share on other sites More sharing options...
spaceace12 Posted March 9, 2009 Share Posted March 9, 2009 ...................... Link to comment Share on other sites More sharing options...
raptor2011 Posted March 9, 2009 Share Posted March 9, 2009 At least Cedar Fair tried to help California's Great America, they tried to add a coaster but the neighbors of the park objected. I actually think Cedar Fair is doing a pretty good job, they evenly distribute their capital into each park every couple of years. Like every major Cedar Fair park except a failed California's Great America received a new coaster since 2007. Unlike Six Flags who can just let a property sit their unattended like Six Flags Kentucky Kingdom and America. Link to comment Share on other sites More sharing options...
ebl Posted March 9, 2009 Share Posted March 9, 2009 I haven't been to CGA in nearly ten years, and nothing really is driving me to hurry and get up there anytime soon. Had they built the new GCII woodie, then, sure I'd go. But as much as I despise football and everything that goes along with it, Cedar Fair may as well just dump CGA and let the 49ers have it. There's no room for park expansion anyway. Even back in 1978 when I took my first trip up there, I wondered why they built a theme park in the middle of an industrial complex. Eric Link to comment Share on other sites More sharing options...
robbalvey Posted March 9, 2009 Share Posted March 9, 2009 Neither Valleyfair or WoF are in prime development spots anyway. They would almost have to be sold as parks. Don't ever underestimate the willingness of a park owner to sell the park to a land developer if the price was right. Just because you and I love the parks and the coasters doesn't mean that Cedar Fair wouldn't jump at the chance for the park to be paved into a parking garage or a football stadium if it made sense to the bottom line. --Robb Link to comment Share on other sites More sharing options...
Hercules Posted March 9, 2009 Share Posted March 9, 2009 That is very true. They aren't very sentimental when it comes to keeping it as a park. It is all about the money. Though, you they will probably be able to get a better price as a park. However, if they are in a pinch and the price is right, they would just sell it off to anyone. It just depends on the situation and the price they are looking for. Link to comment Share on other sites More sharing options...
FlyingScooter Posted March 9, 2009 Share Posted March 9, 2009 Neither Valleyfair or WoF are in prime development spots anyway. They would almost have to be sold as parks. Don't ever underestimate the willingness of a park owner to sell the park to a land developer if the price was right. Just because you and I love the parks and the coasters doesn't mean that Cedar Fair wouldn't jump at the chance for the park to be paved into a parking garage or a football stadium if it made sense to the bottom line. --Robb Robb's got a point. Look at Geauga Lake. Problem there was the economy tanked and no one wants to buy the land. Link to comment Share on other sites More sharing options...
spaceace12 Posted March 9, 2009 Share Posted March 9, 2009 I know of oen land developer wanting the land that CGA is built on. The city of Santa Clara (or the owner of the 49er's ) wants to build a football stadium near there for the 49'ers. The owner of the San Francisco 49ers said Wednesday that plans to build a new football stadium at Candlestick Point are dead and that the team will be leaving San Francisco, according to several sources. This article is from 2006, but I believe they are still up for a move. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/11/09/BAGNJM99FK1.DTL Link to comment Share on other sites More sharing options...
Zero One Posted March 9, 2009 Share Posted March 9, 2009 Yes, I think they would sell to developers if someone was willing to buy, but since Geauga Lake hasn't found any buyers, I think they would be more likely to find a person who wants to run a park. No one is building right now, any deal for a amusement park is going to come from another park company. Link to comment Share on other sites More sharing options...
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