Cedar Fair's Seasonal Makeover

As an investor in Cedar Fair (NYSE:FUN) for a few years now, I usually find myself dozing through the company's fourth-quarter report. It's not that I don't think every financial report should matter when you own a company. It's just that Cedar Fair is a regional -- and seasonal -- amusement park operator. Until its meager June quarter and substantially meatier September quarter are up, I'm usually tapping the six-month snooze button.

Of the company's collection of amusement parks, only Knott's Berry Farm in California is open year-round. This is a quiet time of the year at Knott's, anyway, with limited operating hours finding the theme park closing well before dark, save for the busier Saturday nights.

However, Cedar Fair has been pretty adept at stretching the calendar lately. Halloween events have given the company a little more punch in what was typically a moribund fourth quarter. Cedar Fair now also has a year-round resort open -- adjacent to its flagship Cedar Point park -- to sprinkle in some December-quarter loving.

Castaway Bay opened in mid-November of 2004 and helped guide Cedar Fair to a 12% spike in quarterly revenues in 2004's final quarter. Analysts expect Cedar Fair to post a $0.12 per-share loss tomorrow for the final quarter of 2005, but it would be the narrowest loss in years for the company during that once-sleepy quarter.

Slimmer deficits in seasonally forgettable periods are almost as important as improving operations over the summer, because Cedar Fair has grown its shareowner distributions a dozen times over the past 10 years. It needs to keep growing if it wants to continue that enviable streak.

Castaway Bay is able to win guests over to the chilly Lake Erie coastline because of its large indoor water park. It's a perk for overnight guests, though daily admission is available to walk-in patrons during slower weekdays.

Six Flags (NYSE:PKS) and CBS's (NYSE:CBS) Paramount Parks are following Cedar Fair's lead by opening park-adjacent resort hotels with indoor water parks this year. Disney (NYSE:DIS) and General Electric's (NYSE:GE) Universal have yet to break ground on similar ventures, though that's probably due to the warm year-round weather in their Florida and California theme parks. Then again, those afternoon thunderstorms can get brutally pesky in Central Florida. I wouldn't be surprised to see one or the other ape Cedar Fair in a few years.

So, yes, Cedar Fair is set to report its fourth-quarter financials tomorrow, and I promise that I won't sleep through it. The days of just waiting until the spring for my Cedar Fair coupons to arrive -- and, yes, owners of at least 100 units in Cedar Fair receive generous coupons for discounted park admissions and overnight stays -- are over. Every quarter matters for Cedar Fair now. And that's a good thing.

Cedar Fair was an Income Investor stock pick last year. If you are a recent unitholder, look for the coupons to arrive in April or May.

Longtime Fool contributor Rick Munarriz enjoys taking his family on coaster treks over the summer. Yes, he plans to visit a Cedar Fair park or two come June. He owns shares in Disney and units in Cedar Fair. T he Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.