-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jxbte2uiuu3L7mlPScr6Xg2xzUHgVH8VYpLX10FFFWlHVQEq/MzJH6E6gnIrP6Gn yKbjGqSJ9XkBx9VB2f0obw== 0000811532-00-000006.txt : 20000511 0000811532-00-000006.hdr.sgml : 20000511 ACCESSION NUMBER: 0000811532-00-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000326 FILED AS OF DATE: 20000510 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CEDAR FAIR L P CENTRAL INDEX KEY: 0000811532 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 341560655 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09444 FILM NUMBER: 623879 BUSINESS ADDRESS: STREET 1: P O BOX 5006 CITY: SANDUSKY STATE: OH ZIP: 44871 BUSINESS PHONE: 4196260830 10-Q 1 FORM 10 - Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 26, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________. Commission file number 1-9444 CEDAR FAIR, L.P. (Exact name of Registrant as specified in its charter) DELAWARE 34-1560655 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Cedar Point Drive, Sandusky, Ohio 44870-5529 (Address of principal executive offices) (zip code) (419) 626-0830 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . Title of Class Units Outstanding As Of Depositary Units May 8, 2000 (Representing Limited Partner 51,572,525 Interests) CEDAR FAIR, L.P. INDEX FORM 10 - Q Part I - Financial Information Item 1. Financial Statements 3-8 Item 2. Management's Discussion and 9 Analysis of Financial Condition and Results of Operations Part II - Other Information Item 6. Exhibits and Reports on Form 10 8-K Signatures 11 Index to 12 Exhibits PART I - FINANCIAL INFORMATION Item 1. - Financial Statements CEDAR FAIR, L.P. CONSOLIDATED BALANCE SHEETS (In thousands)
3/26/00 12/31/99 ASSETS Current Assets: Cash $2,550 $ 638 Receivables 2,446 7,457 Inventories 17,541 11,951 Prepaids 5,650 4,138 28,187 24,184 Land, Buildings, Rides and Equipment: Land 134,896 134,884 Land improvements 96,610 95,240 Buildings 214,231 207,973 Rides and equipment 399,219 391,312 Construction in progress 56,277 44,484 901,233 873,893 Less accumulated depreciation (201,459) (199,253) 699,774 674,640 Intangibles, net of amortization 10,056 10,137 $ 738,017 $ 708,961 LIABILITIES AND PARTNERS' EQUITY Current Liabilities: Accounts payable $28,770 $21,563 Distribution payable to partners 19,437 18,860 Accrued interest 1,099 2,789 Accrued taxes 21,486 20,176 Accrued salaries, wages and benefits 9,463 10,831 Self-insurance reserves 8,775 9,371 Other accrued liabilities 3,728 2,969 92,758 86,559 Other Liabilities 11,017 11,216 Long-Term Debt: Revolving credit loans 234,350 161,200 Term debt 100,000 100,000 334,350 261,200 Partners' Equity: Special L.P. interests 5,290 5,290 General partner 320 549 Limited partners, 51,573 and 51,798 units outstanding at March 26, 2000 and December 31, 294,282 344,147 1999, respectively 299,892 349,986 $ 738,017 $ 708,961 The accompanying Notes to Consolidated Financial Statements are an integral part of these balance sheets. CEDAR FAIR, L.P. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands except per unit data) Three months ended Twelve months ended 3/26/00 3/28/99 3/26/00 3/28/99 Net revenues: Admissions $8,524 $9,855 $216,168 $216,517 Food, merchandise and 10,225 11,507 182,908 180,962 games Accommodations and other 1,799 1,835 36,276 27,207 20,548 23,197 435,352 424,686 Costs and expenses: Cost of products sold 3,090 3,637 48,857 48,653 Operating expenses 29,308 26,595 188,620 178,169 Selling, general and 6,585 7,134 50,304 50,669 administrative Depreciation and 3,249 3,289 35,042 32,860 amortization 42,232 40,655 322,823 310,351 Operating income (loss) (21,684) (17,458) 112,529 114,335 Interest expense 4,100 3,533 15,938 14,552 Income (loss) before (25,784) (20,991) 96,591 99,783 taxes Provision for taxes 768 840 15,508 14,686 Net income (loss) (26,552) (21,831) 81,083 85,097 Net income (loss) (133) (109) 405 425 allocated to general partner Net income (loss) $(26,419) $(21,722) $80,678 $84,672 allocated to limited partners Earnings per limited partner unit: Weighted average limited partner units 51,658 51,940 51,861 51,335 outstanding - basic Net income per limited $ (.51) $ (.42) $ 1.56 $ 1.65 partner unit - basic Weighted average limited partner units 52,162 52,384 52,340 52,389 outstanding - diluted Net income per limited $ (.51) $ (.41) $ 1.54 $ 1.62 partner unit - diluted The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. CEDAR FAIR, L.P. CONSOLIDATED STATEMENTS OF PARTNERS' EQUITY (In thousands) Special General Limited Total L.P. Partner's Partners' Partners' Interests Equity Equity Equity Balance at $ 5,290 $ 549 $ 344,147 $ 349,986 December 31, 1999 Units - - (4,105) (4,105) Repurchased Allocation of net - (133) (26,419) (26,552) loss Distribution - (96) (19,341) (19,437) declared ($.375 per limited partner unit) Balance at March $ 5,290 $ 320 $ 294,282 $ 299,892 26, 2000 The accompanying Notes to Consolidated Financial Statements are an integral part of these statements. CEDAR FAIR, L.P. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Three months ended Twelve months ended 3/26/00 3/28/99 3/26/00 3/28/99 CASH FLOWS FROM (FOR) OPERATING ACTIVITIES Net income (loss) $(26,552) $(21,831) $81,083 $85,097 Adjustments to reconcile net income (loss) to net cash from (for) operating activities Depreciation and 3,249 3,289 35,042 32,860 amortization Change in assets and liabilities, net of effects from acquisitions: (Increase) in inventories (5,590) (5,928) (1,323) (793) Decrease in current and 3,499 1,677 33 2,265 other assets Increase in accounts 7,207 10,190 1,401 2,461 payable Increase in accrued taxes 1,310 1,219 1,311 14,272 Increase (decrease) in (596) 161 440 5 self-insurance reserves Increase (decrease) in (2,299) (3,475) 1,460 (4,528) other current liabilities Increase (decrease) in (199) 17 (753) 856 other liabilities Net cash from (for) (19,971) (14,681) 118,694 132,495 operating activities CASH FLOWS FROM (FOR) INVESTING ACTIVITIES Capital expenditures (28,302) (17,060) (91,642) (65,624) Acquisition of White Water Canyon: Land, buildings, rides and - - (11,796) - equipment acquired Negative working capital - - 227 - assumed Acquisition of the Buena Park Hotel: Land, buildings, and - (17,230) - (17,230) equipment acquired Working capital acquired - (206) - (206) Net cash (for) investing (28,302) (34,496) (103,211) (83,060) activities CASH FLOWS FROM (FOR) FINANCING ACTIVITIES Net borrowings on 73,150 49,914 55,081 5,864 revolving credit loans Distributions paid to (18,860) (16,979) (74,366) (67,611) partners Repurchase of limited (4,105) - (7,548) - partnership units Acquisition of White Water Canyon: Borrowings on revolving - - 11,569 - credit loans Acquisition of the Buena Park Hotel: Borrowings on revolving - 17,436 - 17,436 credit loans Acquisition of Knott's Berry Farm: Redemption of limited - - - (3,964) partnership units Net cash from (for) 50,185 50,371 (15,264) (48,275) financing activities CASH Net increase for the 1,912 1,194 219 1,160 period Balance, beginning of 638 1,137 2,331 1,171 period Balance, end of period $ 2,550 $ 2,331 $ 2,550 $ 2,331 SUPPLEMENTAL INFORMATION Cash payments for interest $ 5,790 $ 5,379 $ 16,147 $ expense 15,267 Interest capitalized 880 - 1,280 - Cash payments for income 126 - 14,634 - taxes Reduction of final - - - purchase price of Knott's 3,506 Berry Farm The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.
CEDAR FAIR, L.P. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE QUARTERS ENDED MARCH 26, 2000 AND MARCH 28, 1999 The accompanying consolidated financial statements have been prepared from the financial records of Cedar Fair, L.P. (the Partnership) without audit and reflect all adjustments which are, in the opinion of management, necessary to fairly present the results of the interim periods covered in this report. Due to the highly seasonal nature of the Partnership's amusement park operations, the results for any interim period are not indicative of the results to be expected for the full fiscal year. Accordingly, the Partnership has elected to present financial information regarding operations and cash flows for the preceding twelve month periods ended March 26, 2000 and March 28, 1999 to accompany the quarterly results. Because amounts for the 12 months ended March 26, 2000 include actual 1999 peak season operating results, they are not indicative of 2000 full calendar year operations. (1) Significant Accounting and Reporting Policies: The Partnership's consolidated financial statements for the quarters ended March 26, 2000 and March 28, 1999 included in this Form 10-Q report have been prepared in accordance with the accounting policies described in the Notes to Consolidated Financial Statements for the year ended December 31, 1999, which were included in the Form 10-K filed on March 30, 2000. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Form 10-K referred to above. (2) Interim Reporting: The Partnership owns and operates five amusement parks: Cedar Point in Sandusky, Ohio; Knott's Berry Farm near Los Angeles in Buena Park, California; Dorney Park & Wildwater Kingdom near Allentown, Pennsylvania; Valleyfair in Shakopee, Minnesota; and Worlds of Fun / Oceans of Fun in Kansas City, Missouri. The Partnership also operates Knott's Camp Snoopy at the Mall of America in Bloomington, Minnesota under a management contract. Virtually all of the Partnership's revenues from its four seasonal parks are realized during a 130-day operating period beginning in early May, with the major portion concentrated in the third quarter during the peak vacation months of July and August. Knott's Berry Farm is open year-round but operates at its lowest level of attendance during the first quarter of the year. To assure that these highly seasonal operations will not result in misleading comparisons of current and subsequent interim periods, the Partnership has adopted the following reporting procedures for its four seasonal parks: (a) depreciation, advertising and certain seasonal operating costs are expensed ratably during the operating season, including certain costs incurred prior to the season which are amortized over the season and (b) all other costs are expensed as incurred or ratably over the entire year. (3) Acquisitions: As discussed in Note (7) in the 1999 Annual Report to unitholders, on December 7, 1999, the Partnership acquired White Water Canyon, a water park located near San Diego in Chula Vista, California for a cash purchase price of $11.6 million. The purchase price has been allocated to assets and liabilities acquired based on their relative fair values at the date of acquisition. White Water Canyon's assets, liabilities and non-operating period expenses since December 7, 1999 are included in the accompanying consolidated financial statements. On February 19, 1999, the Partnership acquired the 320-room Buena Park Hotel, which is located adjacent to Knott's Berry Farm in Buena Park, California. The purchase price of $17.4 million has been allocated to the assets and liabilities acquired based on their relative fair values at the date of acquisition. The hotel has undergone a significant renovation throughout the past six months, and its assets, liabilities and results of operations since February 19, 1999 are included in the accompanying consolidated financial statements. (4) Provision for Taxes: Beginning in 1998, the Partnership is subject to a new federal tax of 3.5% of its gross income (net revenues less cost of products sold) plus an additional 1% state tax on California-source gross income. (5) Earnings per Unit: Net income per limited partner unit is calculated based on the following unit amounts:
Three months Twelve months ended ended 3/26/00 3/28/99 3/26/00 3/28/99 (in thousands except per unit data) Basic weighted 51,658 51,940 51,861 51,335 average units outstanding Effect of dilutive units: Deferred units 504 404 449 370 Contingent units - - 40 30 684 Knott's acquisition Diluted weighted 52,162 52,384 52,340 52,389 average units outstanding Net income per unit - $(.51) $(.42) $ 1.56 $ 1.65 basic Net income per unit - $(.51) $(.41) $ 1.54 $ 1.62 diluted
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations: Net revenues for the first quarter of 2000 decreased to $20.5 million from $23.2 million in 1999, principally due to decreased early-season attendance at Knott's Berry Farm compared to last year's first quarter, which benefited significantly from the very successful debut of the GhostRider roller coaster and an earlier Easter season. However, April attendance at Knott's Berry Farm improved significantly and the park is now nearly on pace with 1999's record level. The Partnership's four seasonal parks were not in operation during the quarter. Operating results for the first quarter include normal off-season operating, maintenance and administrative expenses at the Partnership's four seasonal parks and daily operations at Knott's Berry Farm, which is open year-round. Operating expenses increased in the first quarter of 2000 due in part to the renovation of the Knott's Radisson Resort Hotel and the acquisition of the White Water Canyon water park late in 1999. The operating loss for the quarter was $21.7 million compared with $17.5 million in 1999, and net loss for the quarter was $26.6 million, or $.51 per limited partner unit, compared with a net loss of $21.8 million, or $.41 per unit, in 1999. Included in costs and expenses are approximately $1,711,000 of incentive fees payable to the general partner relating to the 2000 first quarter distribution, which exceeds the minimum distribution as defined in the partnership agreement by 18.25 cents per unit, or $9,459,000 in the aggregate. This compares to $1,536,000 of incentive fees in the 1999 first quarter. Financial Condition: The Partnership has available through April 2002 a $200 million revolving credit facility and an additional $90 million revolving credit facility available through November 2000. Borrowings under these credit facilities were $234.35 million as of March 26, 2000. Current assets and liabilities are at normal seasonal levels at March 26, 2000, and the negative working capital ratio of 3.3 is the result of the Partnership's highly seasonal business and careful management of cash flow. Seasonal cash flow and available credit facilities are expected to be adequate to fund seasonal working capital needs, planned capital expenditures and regular quarterly distributions to partners through the end of 2000. The Partnership expects to arrange appropriate revolving credit facilities sufficient to fund its cash requirements beyond the current year. Year 2000 Compliance: The Partnership implemented all changes it believed to be needed for its computer-dependent rides and equipment and its internal information systems, and did not experience any significant malfunctions or errors in its operating or business systems when the year changed from 1999 to 2000. Based on operations since January 1, 2000, the Partnership does not expect any significant impact to its ongoing business as a result of the Year 2000 issue. However, as daily operations at the Partnership's seasonal parks have just begun in April and May of 2000, it is still possible that the full impact of the date change has not been fully recognized. The Partnership believes that any future problems, not yet recognized, are likely to be minor and correctable. In addition, the Partnership's parks could be negatively impacted if its major utility or financial service providers are adversely affected by the Year 2000 issue. The Partnership currently is not aware of any significant Year 2000 problems that have arisen for its principal suppliers of essential utilities or financial services. The Partnership expended less than $1 million in Year 2000 readiness efforts from 1997 to 1999. These efforts included replacing some outdated, noncompliant hardware and reprogramming or replacing some noncompliant software. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K Exhibits: (a) Exhibit (20) - 2000 First Quarter Press Release (b) Reports on Form 8-K: None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CEDAR FAIR, L.P. (Registrant) By Cedar Fair Management Company General Partner Date: May 10, 2000 Bruce A. Jackson Bruce A. Jackson Corporate Vice President - Finance (Chief Financial Officer) Charles M. Paul Charles M. Paul Corporate Controller (Chief Accounting Officer) INDEX TO EXHIBITS Page Number Exhibit (20) 2000 First Quarter Press Release. 13 EX-27 2
5 3-MOS DEC-31-2000 MAR-26-2000 2550 0 2446 0 17541 28187 901233 201459 738017 92758 0 0 0 294602 5290 738017 20548 20548 3090 42232 0 0 4100 (25784) 768 (26552) 0 0 0 (26552) (.51) (.51)
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