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FUN Long Term Strategy, Financial Goals Conference Call


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Companies do not normally have conference calls to discuss long term strategies unless that strategy is changing. Or there are strong demands to change strategy, the company doesn't want to and is defensive.

Something IS up. And you may not hear even a word about it on that Tuesday, but I bet we get at least a glimpse.

As for that place that numbers its flags, the wisdom, or lack thereof, of the many, many changes there (only some of which are public as of now) remains to be seen. Ultimately, it is the customers, potential customers and the company employees who allow a company to be successful...or not. At least one of these two companies has seemed to have forgotten that, largely taking its customers and employees for granted...in recent years. (Build the customers a coaster and titillate their senses, pay the associates a nickel or two more while attempting to waltz off with millions and millions and work the lower level people beyond frustration levels...while laying off plenty of others)

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You can't cut out 2 levels of management and expect things to run as well.

While not speaking directly to the Six Flags scenario, I actually beleive that cutting out layers of management can be a good thing. What is critical to do, however, is make sure that this pushes both the Responsibility AND Accountability down to the right level and get real clear about who owns what. If done correctly, it can be empowering for the employee, can simplify things (like decision making), and be a positive for company and customer.

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You can't cut out 2 levels of management and expect things to run as well.

While not speaking directly to the Six Flags scenario, I actually beleive that cutting out layers of management can be a good thing. What is critical to do, however, is make sure that this pushes both the Responsibility AND Accountability down to the right level and get real clear about who owns what. If done correctly, it can be empowering for the employee, can simplify things (like decision making), and be a positive for company and customer.

Oh I agree as well, but it seems they might be cutting a little to much and relying on less experienced people to run the park. I Hope I am wrong!

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  • 2 weeks later...

What makes this even odder, is that it is about a month before they normally have a quarterly conference call. Could this relate to the upcoming quarter`s performance? Only time will tell, and hopefully some Qs are answered. It shall be interested to see what, if anything, they release tomorrow.

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One hopes...

Well, actually I am sure that certain ones hope not, but that's another story.

Terp, who might consider being a stock analyst in a future career, but that's another story (and who'd probably be about as welcome in Sandusky, Ohio as Mark Shapiro or Al Weber would be...but even less so! For now. :))

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In an interesting change, even to listen to the webcast live requires registration (and the giving of personal information) "for internal use only" this time around...

Very interesting...

Access is by http://www.cedarfair.com then pick Investor Relations, then Calendar of Events, then find today and click on the link...then fill in the required information.

I have not progressed beyond that as I may or may not be able to listen live this morning, depending on other developments in my "real" life...

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-- Declares $0.25 per limited-partner unit distribution for 2010 - 24th consecutive year of distributions to unitholders

-- Proven business strategy and financial flexibility in place to drive growth

-- Reaffirms fiscal 2010 revenues and Adjusted EBITDA guidance

SANDUSKY, Ohio, Oct. 5 -- Cedar Fair Entertainment Company FUN, a leader in regional amusement parks, water parks and active entertainment, today announced the declaration of a cash distribution of $0.25 per limited-partner unit. The Company also announced that it has established the following long-term financial goals upon the completion of its strategic planning process with management and its board of directors:

  • Grow revenues by 10% to 14% by 2015 (~2.3% CAGR)
  • Grow Adjusted EBITDA by 10% to 14% by 2015 (~2.3% CAGR)
  • Achieve free cash flows of $120 million to $140 million on an annual basis during 2012 to 2015
  • Reduce its Consolidated Leverage Ratio to 4.0x in 2013
  • Provide for a sustainable and growing distribution to unitholders – between $1.25 to $1.75 per limited partner unit by 2015

As part of this planning process, the Company also reaffirmed its previous 2010 outlook of revenues between $940 million and $965 million and Adjusted EBITDA, excluding one-time costs, between $320 million and $340 million. In 2010, the Company also expects cash interest of approximately $130 million, cash taxes between $20 million and $23 million, and capital expenditures of $85 million.

"Building on the positive value-creating momentum we have cultivated through the successful refinancing of our debt, coupled with our strong performance through the summer operating season, we have developed a comprehensive five-year plan to position us for consistent, steadily increasing growth going forward while returning an attractive income stream to our investors through a sustainable distribution policy," said Dick Kinzel, chairman, president and chief executive officer.

The Company plans to achieve these goals by steadily growing its attendance and revenues through continued investment in trend-setting new rides and attractions along with new targeted marketing programs. The Company will also continue to maintain strict controls over operating costs while maintaining its "best-in-class" visitor experience. Finally, further opportunistic reduction of debt through the prudent use of free cash flows will position Cedar Fair with the balance sheet flexibility it needs to take advantage of future growth opportunities.

"Cedar Fair is a recognized leader in the regional amusement park industry with a business model that has generated healthy revenues and strong cash flows in all economic climates over many years," added Kinzel. "I am confident that the expertise and proven success of our management team will keep us focused on executing our strategy, and delivering maximum long-term value creation for our unitholders."

The $0.25 per limited partner unit distribution will be paid on December 15, 2010 to holders of record December 3, 2010. This is the 24th consecutive year in which Cedar Fair has paid a distribution to its unitholders.

Conference Call

The Company will host a conference call with analysts today, October 5, 2010, at 10:00 a.m. Eastern Time, which will be web cast live in "listen only" mode via the Cedar Fair web-site (www.cedarfair.com). A slide presentation will also be available via the webcast and a copy of the presentation will be filed with the SEC immediately following the call. The conference call will be available for replay starting at approximately 1:00 p.m. ET, Tuesday, October 5, 2010, until 11:59 p.m. ET, Tuesday, October 19, 2010. In order to access the replay of the earnings call, please dial 1-877-870-5176, followed by the access code 4369543.

About Cedar Fair

Cedar Fair is a publicly traded partnership headquartered in Sandusky, Ohio, and one of the largest regional amusement-resort operators in the world. The Company 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; California's Great America; and Gilroy Gardens, which is managed under contract.

Forward-Looking Statements

Some of the statements contained in this news release may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including statements as to Cedar Fair's expectations, beliefs and strategies regarding the future. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond the Company's control and could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors could adversely affect the Company's future financial performance and cause actual results to differ materially from the Company's expectations, including general economic conditions, competition for consumer leisure time and spending, adverse weather conditions, unanticipated construction delays and the risk factors discussed from time to time by the Company in reports filed with the Securities and Exchange Commission (the "SEC"). Additional information on risk factors that may affect the business and financial results of the Company can be found in the Company's Annual Report on Form 10-K and in the filings of the Company made from time to time with the SEC. The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Cedar Fair Entertainment Company

http://www.cedarfair...eases/index.cfm
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Intent appears to do annual distributions in December each year....

They have purchased breathing room through paying relatively very high money rent (also known as interest) for the short term. Focus for now must be in paying down revolver debt, which had been used to pay long term debt. As I have said before, they essentially borrowed high cost short term money to get out of the restrictive covenants applying to the then long term debt. Now that they have successfully refinanced (though at very high rates), they now must get this debt repaid, down to a reasonable level or refinance yet again.

No sales or acquisitions are currently expected in the six to nine month term...

Main focus in the near term for spending, etc. is debt reduction.

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A question was asked about smaller rides vs. larger rides and a more clear succession plan for management. Apparently they think they put in major attractions in two parks per year with several smaller rides. "We have a deep and experienced management team." "Succession is always on the mind of the board and they are working on this at this time." Shot back by the questioner: "It's always on the minds of investors, too."

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The southern former Paramount Parks may well get resorts, etc. (they mentioned Richmond and Charlotte)...(How odd that once upon a time, until Mr. Lindner, Kings Island HAD a hotel/conference center, then Paramount/CBS invested in one, but Cedar Fair was not interested in acquiring its interest).

Q4 call in about a month...

And that concludes the call, and back off to real life the Terpy does go...

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Note from the press release:

The conference call will be available for replay starting at approximately 1:00 p.m. ET, Tuesday, October 5, 2010, until 11:59 p.m. ET, Tuesday, October 19, 2010. In order to access the replay of the earnings call, please dial 1-877-870-5176, followed by the access code 4369543.

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