Cedar Fair L.P. (NYSE: FUN) reported Q1 EPS of ($3.83), $2.14 worse than the analyst estimate of ($1.69). Revenue for the quarter came in at $53.64 million versus the consensus estimate of $55.98 million.

First-Quarter Results

• For the first quarter ended March 29, 2020, Cedar Fair’s net revenues totaled $54 million compared with $67 million for last year’s first quarter ended March 31, 2019. The decrease in net revenues for the period was the direct result of a 239,000-visit decrease in attendance and a $3 million decrease in out-of-park revenues, both shortfalls due to COVID-19-related park closures beginning March 14, 2020, through the end of the quarter.
• Prior to the mid-March disruption of operations, attendance was up 149,000 visits, or 19%, and revenues were up more than $8 million, both increases primarily driven by a record start to the 2020 season at Knott’s Berry Farm, the Company’s only year-round park. During the last two weeks of the quarter, with no parks in operation as a result of COVID-19, the Company estimates it lost 388,000 visits and more than $20 million in revenues when compared with the same two-week period a year ago.
• Early cost-savings measures implemented after park operations were suspended helped offset a portion of the decrease in revenues. For the first quarter, operating costs and expenses totaled $138 million, which was comparable to the first quarter of 2019. Depreciation and amortization expense in the quarter decreased $9 million compared to the first quarter of 2019 due to less depreciation expense being recognized in the current period due to the COVID-19 park closures, as well as a change in the estimated useful life of a long-lived park asset in the prior period.
• The loss on impairment / retirement of fixed assets in the quarter was $7 million, compared with $1 million in the first quarter last year. The increase between years included a $3 million impairment charge with respect to the newly acquired Schlitterbahn parks’ long-lived assets, triggered by the anticipated impacts of COVID-19, as well as the impairment of two specific assets during the current-year period. Similarly, the loss on impairment of goodwill and other intangibles of $88 million during the first quarter of 2020 was also triggered by the anticipated impacts of COVID-19.
• After the items noted above, the operating loss for the first quarter totaled $184 million, compared with an operating loss of $85 million in the first quarter last year.
• Interest expense for the first quarter was $27 million, up from $21 million in the first quarter of 2019 due to incremental interest incurred on the Company’s 2029 senior notes issued in June 2019. The net effect of the Company’s swaps resulted in a $20 million charge to earnings during the first quarter of 2020, compared with a $6 million charge to earnings in the same period last year. The difference reflects the change in fair market value movements in the Company’s swap portfolio. During the first quarter of 2020, the Company also recognized a $34 million net charge to earnings for foreign currency gains and losses related to the U.S.-dollar denominated Canadian notes, compared with a $9 million net benefit to earnings for the first quarter of 2019.
• During the first three months of 2020, a benefit for taxes of $49 million was recorded to account for publicly traded partnership taxes and federal, state, local and foreign income taxes compared to a tax benefit of $20 million recorded in the first quarter of 2019.
• After the items above, net loss for the 2020 first quarter totaled $216 million, or $3.83 per diluted LP unit, versus a net loss of $84 million, or $1.49 per diluted LP unit, reported in the first quarter of 2019.
• In spite of the disruption caused by COVID-19, the Company’s season pass sales remained up more than 30% as of the end of the first quarter, compared to the prior-year period. The year-over-year increase reflects the record pace in season pass sales coming out of 2019 and the continuation of that strong momentum in the current year prior to COVID-19. As of March 29, 2020, deferred revenues totaled $195 million, representing an increase of $33 million, or more than 20%, from this same time last year.

“The near-term financial impact of the COVID-19 pandemic is rapidly evolving and difficult to measure and quantify. First-quarter attendance and revenues were trending ahead of the first quarter last year and were consistent with our expectations through the middle of March, when we were forced to indefinitely close our parks or delay park openings,” said Richard Zimmerman, president and CEO of Cedar Fair.

“In response to the COVID-19 pandemic, we have taken timely, proactive steps to adapt the Company to the current environment, and to further strengthen our financial position,” continued Zimmerman. “The ability to quickly adjust our flexible business model enables us to manage through these uncertain times while remaining prepared to reopen our properties as soon as reasonably possible.”

Zimmerman added, “Although the COVID-19 pandemic created conditions which led to the closure of our operations in mid-March, we are nevertheless pleased that the record pace we established in 2019 carried well into the first quarter of 2020. Strong season passes sales, coupled with Knott’s Berry Farm’s very strong start this year and an anticipated pent-up demand for outdoor entertainment, give us confidence our parks are well positioned to provide our guests with an outstanding choice for family outdoor entertainment.”

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