Finance of Cedar Fair Entertainment Company Free Essay Example

Cedar Fair recorded revenues at $542 million on December 31, 2004 (Annual Report, 15) a 6% increase from 2003 ($510 million) and a 7% increase from 2002 ($502 million). Sales from Admission went up $17 million from 2003. Food, merchandise, and games went up $10 million and accommodations and other services went up by $4 million. Advertising Expenses totaled $34. 5 million in 2004, $30. 8 million in 2003, and $29. 9 million in 2002. (Annual Report, 20) And though expenses were high the sales proved to be even higher due to the major advertising campaigns.

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Net Income

Cedar Fairs net income from 2004 was $78. 3 million, a slight decrease from 2003’s figure of .

9. It was however a $7 million increase from 2002. Because of steeper expenses that totaled $424 million in 2004, Cedar Fair took a 2% loss from 2003. This loss was due to the acquisition of Geauga Lake (Financial Highlights, 5). Expenses this period were highest in 2004 out of the three years. (Annual Report, 15)

Stock analysis

Cedar Fair stock trades under the ticker symbol (FUN). The current price per share as of March 28, 2006 is 28.71, which was a . 05/17% increase from the previous days close.

(www. morningstar. com) There are currently 54. 4 million units of this stock issued and 83,900 people trading it on the stock market. Dividends are currently at 1. 88 a 6. 60% yield. Looking at the longer range of things, over the past five years, there has been more of a steady sort of increase. Compared to early January 2002, January 2006 proves to be in better standing with the stock market. Cedar Fair Stock Over its Lifetime.

Over the life time of the stock we see that it has increased in share price over the years which give reason to why the company has so many shareholders.

When first publicly traded the stock price per share was 0. 20. It is now traded at 28. 71 a share. (www. yahoo. com) Products Cedar Fairs dedication to providing the best in family entertainment and guest service has kept guest coming back year after year. (www. cedarfair. com) Though it doesn’t directly sell many products, it sells entertainment.

From amusement park and water park rides, games, shows, and animal attractions to food, souvenirs, and accommodations, Cedar Fair sells its services to more than 12. 7 million people a year. (www. cedarfair. com) Analyst Opinions According to the finance reports we ran, the current 2 out of 10 analysts said Cedar Fair out performed, 2 considered it a strong buy, 3 said hold it, and 4 said buy it. On a scale of 1 to 5, 1 being a strong buy and 5 being a strong sell, Cedar Fair ranked at a 2. 6 which is a mediocre level to be. There is not a strong pull for either a buy or a sell.

Current News

Company Financials Cedar Fair hiked its quarterly distributions up by a penny to $0. 47 a unit this year. This is the thirteenth time the company has made a hike over the past ten years, inching its payout higher for the past nineteen straight years. (www. fool. com; Motley Fool Income Investor) On the other side of the coin there is good news for the shareholders at cedar fair, just as analysts were expecting to lose $0. 12 a share, Cedar Fair posted a profit of $0.04 a share for the period. (www. fool. com)

Also, despite some weaknesses in the economy and stock market, the company has been positively affected by higher top line results form its seven amusement parks on a increase in average in-park guest spending. (Mergents, 162) Other good news affecting the public, Cedar Point has been in talks about lowering its admission prices for the 2006 season by $5. 00 and continues to offer reduced ticket prices to senior citizens and juniors. (www. toledoblade. com).

This change followed Geauga Lakes lowering of their general admission tickets by $10. 00 to $24. 95. (Annual report, 7) Bad News/Lawsuits Two weeks ago a woman was awarded $3. 6 million in a lawsuit after she was hit in the head by an object while riding The Villain at Six Flags Ohio back in 2000. Other bad news regarding Geauga Lake (formerly Six Flags); this year will be the last for Halloween events at this amusement park. New capital spending is going towards the renovations and new events at Cedar Point, the more profitable of the two parks.

As well, Mr. Hyde’s Nasty Fall, one of Geauga Lakes famous thrill rides, is being taken down and transferred to Cedar point where the company believes it will become more popular with the public. Last year, Cedar Fair encompassed some problems with weather which affected attendance at some of the parks dropping their attendance by 4%. Top Thrill Dragster, a forty million dollar thrill coaster was broke down six days last year and, on top of all that, Geauga Lake still isn’t living up to the expectations of the public, even with the new $13 Wild Water Park. (www. screamscape. com)

Future Forecasts

Looking ahead to the 2006-2008 season, Cedar Fair will be investing $58 million in capital improvements at its 12 properties some that include new world class roller coasters at Worlds of Fun and new thrill rides at Cedar Point. (Mergents, 162) Other news involving changes at Cedar Fair; this season the company is stretching its calendar to fit more events through October and possibly into November to boost revenues yet again. (www. screamscape. com)

The most exciting news however is the world-record-breaking thrill ride, Skyhawk at Cedar Point, in their ever famous Frontier Town. The ride will stand 103 ft. above the ground and will be the tallest ride of its kind. “Skyhawk will be the world’s largest swing ride. It’s a simple concept, but it will be an amazing ride experience,” said John Hildebrandt, vice president and general manager of Cedar Point. (www. invisionfree. com) “All of us have ridden swings as kids. Imagine riding a swing that is higher than a 12-story building and goes faster than many roller coasters. “(www. invisionfree. com)