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 30, 1997
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 May 12, 1997
(Representing Limited Partner 22,960,208
Interests)
<PAGE>
CEDAR FAIR, L.P.
INDEX
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 8-K 10
Signatures 11
Index to Exhibits 12
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<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements
CEDAR FAIR, L.P.
CONSOLIDATED BALANCE SHEETS
(In thousands)
<CAPTION>
<S> 3/30/97 12/31/96
ASSETS <C> <C>
Current Assets:
Cash $ 610 $1,279
Receivables 1,266 2,984
Inventories 9,247 4,446
Prepaids 4,288 3,021
15,411 11,730
Land, Buildings and Equipment:
Land 29,056 29,056
Land improvements 39,882 39,711
Buildings 104,981 105,545
Rides and equipment 230,855 231,457
Construction in progress 16,404 6,454
421,178 412,223
Less accumulated depreciation (129,641) (130,585)
291,537 281,638
Intangibles, net of amortization 10,642 10,736
$317,590 $304,104
LIABILITIES AND PARTNERS' EQUITY
Current Liabilities:
Accounts payable $15,470 $5,251
Distribution payable to partners 14,495 14,495
Accrued interest 848 1,555
Accrued taxes 3,578 3,604
Accrued salaries, wages and benefits 2,696 5,539
Self-insurance reserves 6,596 6,635
Other accrued liabilities 2,447 2,162
46,130 39,241
Other Liabilities 7,519 7,269
Long-Term Debt:
Revolving credit loans 70,900 33,100
Term debt 54,500 54,500
125,400 87,600
Partners' Equity:
Special L.P. interests 5,290 5,290
General partners 402 717
Limited partners, 22,960,208 units 132,849 163,987
outstanding
138,541 169,994
$317,590 $304,104
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
3/30/97 3/31/96 3/30/97 3/31/96
<S> <C> <C> <C> <C>
Net revenues $ 1,418 $ 348 $251,593 $218,163
Costs and expenses:
Cost of products sold 280 106 25,196 22,844
Operating expenses 13,046 11,190 98,184 83,109
Selling, general and 2,885 2,803 29,062 25,580
administrative
Depreciation and amortization 263 99 19,236 16,745
16,474 14,198 171,678 148,278
Operating income (loss) (15,056) (13,850) 79,915 69,885
Interest expense, net 1,902 1,868 6,976 7,119
Net income (loss) (16,958) (15,718) 72,939 62,766
Net income (loss) allocated (170) (157) 729 628
to general partners
Net income (loss) allocated $(16,788) $(15,561) $ 72,210 $ 62,138
to limited partners
Weighted average limited
partner units and equivalents 23,099 23,049 23,070 22,787
outstanding
Net income (loss) per limited $ (.73) $ (.68) $ 3.13 $ 2.73
partner unit
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
<PAGE>
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
<S> <C> <C> <C> <C>
Balance at December $ 5,290 $ 717 $163,987 $169,994
31, 1996
Allocation of net -- (170) (16,788) (16,958)
loss
Distribution declared -- (145) (14,350) (14,495)
($.625 per limited
partner unit)
Balance at March 30, $ 5,290 $ 402 $132,849 $138,541
1997
The accompanying Notes to Consolidated Financial Statements are
an integral part of these statements.
<PAGE>
CEDAR FAIR, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
Three months ended Twelve months ended
3/30/97 3/31/96 3/30/97 3/31/96
CASH FLOWS FROM (FOR) OPERATING
ACTIVITIES
Net income (loss) $(16,958) $(15,718) $ 72,939 $ 62,766
Adjustments to reconcile net
income to net cash from (for)
operating activities
Depreciation and amortization 263 99 19,236 16,745
Change in assets and liabilities,
net of effects from acquisitions:
(Increase) in inventories (4,801) (4,443) (336) (143)
Decrease (increase) in current 451 (142) 171 (987)
and other assets
Increase (decrease) in accounts 10,219 7,121 1,557 (1,165)
payable
Increase (decrease) in self- (39) 139 55 632
insurance reserves
Increase (decrease) in other (3,291) (1,534) (815) 1,033
current liabilities
Increase (decrease) in other 250 (788) 2,714 1,422
liabilities
Net cash from (for) operating (13,906) (15,266) 95,521 80,303
activities
CASH FLOWS (FOR) INVESTING
ACTIVITIES
Capital expenditures (10,068) (11,105) (29,202) (32,529)
Acquisition of JHW Limited
Partnership:
Land, buildings and equipment - - (16,295) -
acquired
Negative working capital assumed, - - 442 -
net of cash acquired
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 (10,068) (11,105) (45,055) (68,398)
activities
CASH FLOWS FROM (FOR) FINANCING
ACTIVITIES
Net borrowings (payments) on 37,800 39,700 (10,275) 3,297
revolving credit loans
Distributions paid to partners (14,495) (13,335) (55,661) (51,944)
Acquisition of JHW Limited
Partnership:
Borrowings on revolving credit - - 11,475 -
loans
Long-term debt of JHW Limited - - 4,500 -
Partnership
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 from (for) financing 23,305 26,365 (49,961) (12,514)
activities
Cash:
Net increase (decrease) for the (669) (6) 505 (609)
period
Balance, beginning of period 1,279 111 105 714
Balance, end of period $ 610 $ 105 $ 610 $ 105
SUPPLEMENTAL INFORMATION
Cash payments for interest $ 2,609 $ 2,658 $ 5,233 $ 6,823
expense
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
MARCH 30, 1997 AND MARCH 31, 1996
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 the interim periods are not
indicative of the results to be expected for the full year.
Accordingly, the Partnership has elected to present financial
information regarding operations for the preceding twelve month
periods ended March 30, 1997 and March 31, 1996 to accompany the
quarterly results. Because amounts for the 12 months ended March
30, 1997 include actual 1996 season operating results, they are
not necessarily indicative of 1997 full calendar year operations.
(1) Significant Accounting and Reporting Policies:
The Partnership's consolidated financial statements for the
quarters ended March 30, 1997 and March 31, 1996 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, 1996, which
were included in the Form 10-K filed on March 27, 1997. 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 &
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 130-
day operating season, with the major portion concentrated in the
third quarter during the peak vacation months of July and August.
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,
<PAGE>
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) Acquisitions:
As discussed in Note (7) in the 1996 Annual Report to
unitholders, on December 31, 1996 the Partnership acquired
substantially all of the equity of JHW Limited Partnership, which
owns a 237-room Radisson hotel and a TGI Friday's restaurant near
Cedar Point in Sandusky, Ohio. In addition, the Partnership
acquired substantially all of the assets of Worlds of Fun and
Oceans of Fun on July 28, 1995.
The table below summarizes the unaudited consolidated pro forma
results of operations assuming the acquisition of Worlds of Fun
and Oceans of Fun had occurred at the beginning of the twelve-
month period ended March 31, 1996.
Net revenues $ 236,335,000
Net income 65,701,000
Net income per
limited partner unit $ 2.82
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 period presented, or of results which may occur in the
future.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations:
The Partnership's amusement parks are open to the public starting
in April or May of each year and ending in October. Therefore,
net revenues for the first quarter are historically minimal and
are primarily from restaurant operations and marina rentals. Net
revenues for the quarter ended March 30, 1997 increased to
$1,418,000 from $348,000 for the quarter ended March 31, 1996,
principally due to the acquisition of a Radisson hotel and TGI
Friday's restaurant near Cedar Point at the end of 1996.
Operating results for the first quarter include normal off-season
operating, maintenance and administrative expenses for the four
parks and the operating costs of the Radisson / TGI Friday's
business in 1997. Net loss for the quarter was $17.0 million or
$.73 per limited partner unit, compared with a loss of $15.7
million, or $.68 per unit, in 1996.
Included in costs and expenses are approximately $1,137,000 of
incentive fees payable to the managing general partner relating
to the 1997 first quarter distribution, which exceeded the
minimum distribution as defined in the partnership agreement by
27.25 cents per unit, or $6,320,000 in the aggregate. This
compares to $970,000 of incentive fees in the 1996 first quarter.
Financial Condition:
The Partnership has available through April, 1999 a $95 million
revolving credit facility, of which $70.9 million was borrowed
and in use as of March 30, 1997. The negative working capital
ratio of 3.0 at March 30, 1997 is the result of the Partnership's
highly seasonal business and careful management of cash flow.
Current assets are at normal seasonal levels and credit
facilities are in place to fund current liabilities as required.
Partnership Tax Status:
Under current law, the Partnership's tax status is scheduled to
expire on December 31, 1997. The Partnership is currently
finalizing plans for a new entity structure which will preserve
<PAGE>
many of the benefits of the current partnership status, and plans
to provide unitholders with full details in the third quarter of
this year.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Exhibits:
(a) Exhibit (20) - 1997 First Quarter Report and Cash
Distribution Notice
(b) 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: May 12, 1997 By Bruce A. Jackson
Bruce A. Jackson
Vice President
(Chief Financial Officer)
By Charles M. Paul
Charles M. Paul
Corporate Controller
(Chief Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
Page Number
Exhibit (20) Report to Unitholders, May 12, 1997 13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-30-1997
<CASH> 610
<SECURITIES> 0
<RECEIVABLES> 1,266
<ALLOWANCES> 0
<INVENTORY> 9,247
<CURRENT-ASSETS> 15,411
<PP&E> 421,178
<DEPRECIATION> 129,641
<TOTAL-ASSETS> 317,590
<CURRENT-LIABILITIES> 46,130
<BONDS> 0
<COMMON> 132,849
0
0
<OTHER-SE> 5,692
<TOTAL-LIABILITY-AND-EQUITY> 317,590
<SALES> 1,418
<TOTAL-REVENUES> 1,418
<CGS> 280
<TOTAL-COSTS> 16,474
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,902
<INCOME-PRETAX> (16,958)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (16,958)
<EPS-PRIMARY> (.73)
<EPS-DILUTED> 0
</TABLE>
