Matt Ouimet, Cedar Fair’s chief executive officer said, “This past year was the most successful year in our history. The talented teams at all of our parks, the popularity of our innovative attractions and the ongoing success of our marketing programs combined to produce our seventh successive year of record results. Based on our 2016 performance and our expectations for the coming year, we are on track to achieve our long-term Adjusted EBITDA target of $500 million by the end of 2017, a full year earlier than our original forecast.
“I am particularly happy we, once again, achieved solid growth across our three core revenue metrics of attendance, in-park guest per capita spending and out-of-park revenues, counting our resort accommodations,” added Ouimet. “We credit this achievement to our unique regional brands and the positive responses we have received for our special events programming and immersive entertainment offerings. These individual park brands allow us to provide our guests an experience unmatched by other generic amusement parks. This in turn has resulted in strong guest loyalty within the regions we operate and decades of record growth across all revenue channels.
“I am proud of what our leadership team and employees were able to accomplish this year – producing strong results in the near term while still focusing on growing the business and creating value for our unitholders over the long term,” continued Ouimet. “The success of our operations, combined with many long-term programs coming on line, gives us great confidence in our ability to continue our record-setting trends for years to come.”
2016 Full-Year Results
For the full year ended December 31, 2016, Cedar Fair generated record net revenues of $1.29 billion and net income of $178 million, or $3.14 per diluted LP unit, contrast with net revenues of $1.24 billion and net income of $112 million, or $1.99 per diluted LP unit, in 2015.
Driving the $53 million, or 4%, increase in net revenues were a 3%, or 656,000-visit, increase in attendance to a record 25.1 million visits; a 2%, or $0.70, increase in average in-park guest per capita spending to a record $46.90; and a 6%, or $8 million, increase in out-of-park revenues to a record $146 million.
Operating costs and expenses for 2016 totaled $827 million, up $33 million, or 4% from the prior year. The increase reflects higher costs to support the raised attendance and guest spending, combined with higher labor costs because of market/minimum wage rate increases and normal merit increases. As a percentage of sales, operating costs and expenses were comparable with the prior year.
Adjusted EBITDA, which administration believes is a meaningful measure of the Company’s park-level operating results, raised 5%, or $22 million, to $481 million in 2016, contrast with $459 million last year. Adjusted EBITDA margin raised by 10 basis points to 37.3%, as a result of the record attendance and guest spending levels, offset somewhat by the higher labor costs mentioned above. See the attached table for a reconciliation of net income to Adjusted EBITDA.
Cash Flow and Liquidity Remain Strong
Brian Witherow, Cedar Fair’s executive vice president and chief financial officer, said, “Our liquidity, cash flow and capital structure remain strong, and we continue to have great financial flexibility heading into 2017, which positions us well to capitalize on our opportunities to drive additional long-term value for our unitholders. In addition, 2016 represented our 30th successive year of paying a distribution to unitholders. During this time, we have paid to unitholders about $2.3 billion in distribution payments, contributing to an annual total return to shareholders of 17%.”
As of December 31, 2016, Cedar Fair had $597 million of variable-rate debt (before giving consideration to fixed-rate interest rate swaps), $940 million of fixed-rate debt, no outstanding borrowings under its revolving credit facilities and cash on hand of $123 million. The Company’s cash flows from operations and credit facilities are expected to be sufficient to meet working capital needs, debt service, planned capital expenditures and distributions for the foreseeable future.