FORM 10 - Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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.)
P.O. Box 5006, Sandusky, Ohio 44871-5006
(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 August 1, 1996
(Representing Limited Partner 22,960,208
Interests)
<PAGE>
CEDAR FAIR, L.P.
INDEX
FORM 10 - Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
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
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
CEDAR FAIR, L.P.
CONSOLIDATED BALANCE SHEETS
(In thousands)
<CAPTION> 6/30/96 12/31/95
<S> <C> <C>
ASSETS
Current Assets:
Cash $ 5,186 $ 111
Receivables 10,241 2,468
Inventories 11,747 4,387
Prepaids 4,219 2,839
31,393 9,805
Land, Buildings and Equipment:
Land 28,055 27,999
Land improvements 39,055 36,617
Buildings 91,588 88,910
Rides and equipment 230,112 205,364
Construction in progress 248 8,047
389,058 366,937
Less accumulated depreciation (120,632) (113,097)
268,426 253,840
Intangibles, net of amortization 10,891 11,072
$310,710 $274,717
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable $ 17,335 $ 6,409
Distribution payable to partners 13,335 13,335
Accrued interest 1,673 1,685
Accrued taxes 2,826 2,889
Accrued salaries, wages and benefits 7,579 4,601
Self-insurance reserves 6,440 6,402
Other accrued liabilities 7,008 2,327
56,196 37,648
Other Liabilities 4,847 5,593
Long-Term Debt:
Revolving credit loans 71,200 30,000
Term debt 50,000 50,000
121,200 80,000
Partners' Equity:
Special L.P. interests 5,290 5,290
General partners 302 531
Limited partners, 22,960,208 units 122,875 145,655
outstanding
128,467 151,476
$ 310,710 $274,717
The accompanying Notes to Consolidated Financial Statements are
an integral part of these balance sheets.
<PAGE>
CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per unit data)
<CAPTION> Three months ended Twelve months
ended
6/30/96 6/25/95 6/30/96 6/25/95
<S> <C> <C> <C> <C>
Net revenues $79,779 $54,919 $243,023 $197,955
Costs and expenses:
Cost of products sold 8,373 6,058 25,159 20,953
Operating expenses 32,520 22,671 92,958 74,313
Selling, general and 9,539 7,026 28,093 21,608
administrative
Depreciation and amortization 7,617 5,404 18,958 14,796
58,049 41,159 165,168 131,670
Operating income 21,730 13,760 77,855 66,285
Interest expense, net 2,351 2,220 7,250 7,469
Insurance claim settlement -- -- -- 502
Net income 19,379 11,540 70,605 59,318
Net income allocated to 194 116 706 593
general partners
Net income allocated to $19,185 $11,424 $69,899 $58,725
limited partners
Weighted average limited 23,050 22,293 22,973 22,282
partner units outstanding
Net income per limited partner $ .83 $ .51 $ 3.04 $ 2.64
unit
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)
<CAPTION> Special General Limited Total
L.P. Partners' Partners' Partners'
Interests Equity Equity Equity
Balance at December $ 5,290 $ 531 $145,655 $ 151,476
31, 1995
Allocation of net -- (157) (15,561) (15,718)
loss
Distribution declared -- (133) (13,202) (13,335)
($.575 per limited
partner unit)
Balance at March 31, 5,290 241 116,892 122,423
1996
Allocation of net -- 194 19,185 19,379
income
Distribution declared -- (133) (13,202) (13,335)
($.575 per limited
partner unit)
Balance at June 30, $5,290 $ 302 $122,875 $128,467
1996
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)
<CAPTION> Three months ended Twelve months ended
<S> <C> <C> <C> <C>
6/30/96 6/25/95 6/30/96 6/25/95
CASH FLOWS FROM (FOR) OPERATING
ACTIVITIES
Net income $19,379 $11,540 $70,605 $59,318
Adjustments to reconcile net income
to net cash from operating
activities
Depreciation and amortization 7,617 5,404 18,958 14,796
Change in assets and liabilities,
net of effects from acquisition of
Worlds of Fun / Oceans of Fun:
(Increase) in inventories (2,917) (2,165) (895) (351)
(Increase) decrease in current and (9,011) (6,579) (3,419) 558
other assets
Increase (decrease) in accounts 3,805 5,934 (3,294) 201
payable
Increase (decrease) in self- (101) (60) 591 1,915
insurance reserves
Increase in other current 9,118 6,959 3,192 1,128
liabilities
Increase in other liabilities 42 47 1,417 1,100
Net cash from operating activities 27,932 21,080 87,155 78,665
CASH FLOWS FROM (FOR) INVESTING
ACTIVITIES
Capital expenditures (11,016) (12,105) (31,440) (25,329)
Acquisition of Worlds of Fun /
Oceans of Fun:
Land, buildings, rides and - - (37,350) -
equipment acquired
Negative working capital assumed, - - 1,481 -
net of cash acquired
Net cash (for) investing activities (11,016) (12,105) (67,309) (25,329)
CASH FLOWS FROM (FOR) FINANCING
ACTIVITIES
Net borrowings (payments) on 1,500 6,700 (1,903) (4,800)
revolving credit loans
Distributions paid to partners (13,335) (12,636) (52,643) (49,142)
Acquisition of Worlds of Fun /
Oceans of Fun:
Borrowings on revolving credit
loans for refinancing of - - 13,903 -
assumed long-term debt
Issuance of limited partnership - - 22,230 -
units
Net cash (for) financing activities (11,835) (5,936) (18,413) (53,942)
Cash:
Net increase (decrease) for the 5,081 3,039 1,433 (606)
period
Balance, beginning of period 105 714 3,753 4,359
Balance, end of period $ 5,186 $ 3,753 $ 5,186 $ 3,753
SUPPLEMENTAL INFORMATION
Cash payments for interest expense $ 1,573 $ 1,239 $ 7,157 $ 7,124
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
</TABLE>
<PAGE>
CEDAR FAIR, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE QUARTERS ENDED
JUNE 30, 1996 AND JUNE 25, 1995
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 for the preceding
twelve month periods ended June 30, 1996 and June 25, 1995 to
accompany the quarterly results. Because amounts for the 12
months ended June 30, 1996 include actual 1995 third and fourth
quarter operations, they are not necessarily indicative of 1996
full calendar year operations.
(1) Significant Accounting and Reporting Policies
The Partnership's consolidated financial statements for the
quarters ended June 30, 1996 and June 25, 1995 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, 1995, which
were included in the Form 10-K filed on March 29, 1996. 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 operates four amusement parks (Cedar Point in
Sandusky, Ohio; Valleyfair in Shakopee, Minnesota; Dorney Park
and Wildwater Kingdom near Allentown, Pennsylvania; and Worlds of
Fun / Oceans of Fun in Kansas City, Missouri), which generate
virtually all of the Partnership's annual revenue during a season
which starts in April or May and ends in early October, with the
major portion concentrated in the third quarter during the peak
vacation months of July and August.
<PAGE>
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: (a) depreciation, advertising and certain seasonal
operating costs are expensed ratably during the operating season,
including certain costs incurred prior to the season and
amortized over the season and (b) all other costs are expensed as
incurred or ratably over the entire year.
(3) Acquisition
As discussed in Note (7) in the 1995 Annual Report to
unitholders, on July 28, 1995, the Partnership acquired
substantially all of the assets of Worlds of Fun and Oceans of
Fun.
The table below summarizes the unaudited consolidated pro forma
results of operations assuming the acquisition had occurred at
the beginning of each of the periods presented, with adjustments
primarily attributable to interest expense relating to the
refinancing of long-term debt and depreciation expense relating
to the fair value of assets acquired.
<TABLE>
<CAPTION> Three Months Ended Twelve Months Ended
<S> <C> <C> <C> <C>
6/30/96 6/25/95 6/30/96 6/25/95
(In thousands except per unit data)
Net revenues $79,779 $65,645 $250,469 $229,311
Net income 19,379 12,430 72,650 62,344
Net income per $ .83 $ .53 $ 3.12 $ 2.68
limited partner unit
</TABLE>
These pro forma results have been prepared for comparative
purposes only and do not purport to be indicative of what would
have occurred had the acquisition been made at the beginning of
the periods presented, or of results which may occur in the
future.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Net revenues for the quarter, which included one more week of
operations than the prior year, increased to $79.8 million for
the quarter ended June 30, 1996, from $54.9 million for the
quarter ended June 25, 1995. Net income for the period increased
to $19.4 million, or $.83 per limited partner unit, from $11.5
million, or $.51 per unit, in 1995.
Operating results for the current period were significantly
impacted by seven additional days of operations compared to the
same period last year, and by the contribution of Worlds of Fun's
operations for the 1996 period. Excluding Worlds of Fun, which
was acquired in July 1995, and on a comparable number of
operating days, net revenues and net income for the period
increased 3% and 2%, respectively, on a 3% decrease in combined
attendance offset by a 5% increase in in-park guest per capita
spending.
The disappointing early-season attendance was the result of a
cold and rainy spring and, except for Valleyfair, attendance
levels have remained below expectations as the season has
progressed.
Financial Condition
Current assets and liabilities are at normal seasonal levels at
June 30, 1996. In our highly seasonal business with investment
heavily concentrated in property and equipment, the negative
working capital ratio of 1.8 at June 30, 1996 is financially
advantageous.
The Partnership has available through April 1999, a $95 million
revolving credit facility, of which $71.2 million was borrowed
and in use as of June 30, 1996. Seasonal cash flow and this
credit facility are expected to be adequate to meet current
working capital needs, planned capital expenditures and scheduled
distributions to partners.
<PAGE>
Partnership Tax Status:
Under current law the Partnership's tax status as a publicly
traded partnership is scheduled to end on December 31, 1997,
unless legislation is enacted to extend its grandfathered status.
The Partnership is in the process of thoroughly reviewing a
number of alternatives in preparation for the loss of the
partnership tax status next year.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibits:
(a) Exhibit (10) - First Amendment adopted April 19, 1996 to
Credit Agreement dated October 6, 1994
(b) Exhibit (20) - 1996 Second Quarter Report and Cash
Distribution Notice
(c) Reports on Form 8-K: None.
<PAGE>
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
Managing General Partner
Date: August 12, 1996 Bruce A. Jackson
Bruce A. Jackson
Vice President
(Chief Financial Officer)
Charles M. Paul
Charles M. Paul
Controller
(Chief Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit Page
10 First Amendment adopted April 19, 1996 13
to Credit Agreement dated October 6, 1994.
27 Financial Data Schedule 15
AMENDMENT TO LOAN AGREEMENT ("Amendment")
WHEREAS, CEDAR FAIR, L.P. ("Borrower"), SOCIETY NATIONAL
BANK, NBD BANK, N.A. and NATIONAL CITY BANK (collectively, the
"Banks"), and SOCIETY NATIONAL BANK, as agent for the Bank
("Agent") are parties to a certain Credit Agreement dated October
6, 1994 (the "Loan Agreement"); and
WHEREAS, Borrower, Banks and Agent have agreed to amend the
Loan Agreement.
NOW, THEREFORE, for valuable consideration received to their
satisfaction, Borrower and Bank mutually agree as follows:
1. Sections 11.14 and 11.17 of the Loan Agreement are
hereby amended by deleting them in their entirety and
substituting the following in place thereof:
"11.14. NET WORTH. Borrower will not suffer or
permit the Consolidated Net Worth of Borrower and its
Subsidiaries to fall below $75,000,000 at any time.
11.17. FUNDED INDEBTEDNESS TO TANGIBLE NET WORTH
RATIO. At June 30 and December 31 of each year,
Borrower will not suffer or permit the ratio of its
average (for that date and the last day of each of the
11 previous fiscal months) consolidated Funded
Indebtedness to average (for that date and the last day
of each of the 11 previous fiscal months) Consolidated
Net Worth to exceed 1.15 to 1.00."
2. Section 17 of the Loan Agreement is hereby amended by
deleting the definition of "Commitment Period" in its entirety
and substituting the following in place thereof:
"'Commitment Period' shall mean the period from
the date hereof through April 30, 1999, as such date
may be extended pursuant to Subsection 3.4 hereof:"
3. The provisions of this Amendment shall be effective on
April 30, 1996.
4. Except as amended hereby, all provisions of the Loan
Agreement are ratified and confirmed and shall remain in full
force and effect.
<PAGE>
5. Borrower hereby represents and warrants to Banks and
Agent that (a) Borrower has the legal power and authority to
execute and deliver this Amendment; (b) the officials executing
this Amendment have been duly authorized to execute and deliver
the same and bind Borrower with respect to the provisions hereof;
(c) the execution and delivery hereof by Borrower and the
performance and observance by Borrower of the provisions hereof
do not violate or conflict with the organizational agreements of
Borrower or any law applicable to Borrower or result in a breach
of any provisions of or constitute a default under any other
agreement, instrument or document binding upon or enforceable
against Borrower; and (d) this Amendment constitutes a valid and
binding obligation upon Borrower in every respect.
6. In consideration of this Amendment, Borrower hereby
releases and discharges the Banks and Agent and their
shareholders, directors, officers, employees, attorneys,
affiliates and subsidiaries from any and all claims, demands,
liability, and causes of action whatsoever, now known or unknown,
arising out of or in any way related to the extension or
administration of the Loan, the Loan Agreement or any mortgage or
security interest related thereto.
7. This Amendment shall be construed in accordance with the
laws of the State of Ohio, without regard to principles of
conflict of laws.
IN WITNESS WHEREOF, Borrower, Banks and Agent have caused
this Amendment to be executed by their duly authorized officers
on April 19, 1996.
CEDAR FAIR, L.P
By: Cedar Fair Management Company, NBD BANK, N.A.
Managing General Partner
By: Thomas W. Salamone By: Paul DeMelo
Title: Treasurer Title: Vice President
SOCIETY NATIONAL BANK, individually NATIONAL CITY BANK
and as Agent
By: Richard A. Pohle By: Terri Cable
Title: Vice President Title: Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-END> JUN-30-1996 JUN-30-1996
<CASH> 5,186 5,186
<SECURITIES> 0 0
<RECEIVABLES> 10,241 10,241
<ALLOWANCES> 0 0
<INVENTORY> 11,747 11,747
<CURRENT-ASSETS> 31,393 31,393
<PP&E> 389,058 389,058
<DEPRECIATION> 120,632 120,632
<TOTAL-ASSETS> 310,710 310,710
<CURRENT-LIABILITIES> 56,196 56,196
<BONDS> 0 0
<COMMON> 122,875 122,875
0 0
0 0
<OTHER-SE> 5,592 5,592
<TOTAL-LIABILITY-AND-EQUITY> 310,710 310,710
<SALES> 79,779 243,023
<TOTAL-REVENUES> 79,779 243,023
<CGS> 8,373 25,159
<TOTAL-COSTS> 50,432 146,210
<OTHER-EXPENSES> 7,617 18,958
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 2,351 7,250
<INCOME-PRETAX> 19,379 70,605
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 19,379 70,605
<EPS-PRIMARY> .83 3.04
<EPS-DILUTED> 0 0
</TABLE>
