Six Flags Entertainment Corporation/NEW Q2 FY2023 Earnings Call

Hello, and welcome to the Cedar Fair Entertainment Company 2023 Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. I will now turn the conference over to Cedar Fair. Please go ahead.

Thank you, John Loi, and good morning, everyone. My name is Michael Russell, Corporate Director of Investor Relations for Cedar Fair. Welcome to today's earnings call to review our 2023 second quarter results for the period end June 25. Earlier this morning, we distributed via wire service our earnings press release, a copy of which is available under the News tab of our Investors website at ir.cedarfair.com. On the call with me this morning are Richard Zimmerman, Cedar Fair President and CEO; and Brian Witherow, our Executive Vice President and CFO. Before we begin, I need to remind you that comments made during this call will include forward-looking statements within the meaning of the federal securities laws. These statements may involve risks and uncertainties that could cause actual results to differ from those described in such statements. For a more detailed discussion of these risks, you may refer to the Company's filings with the SEC. In compliance with the SEC's Regulation FD, this webcast is being made available to the media and the general public as well as analysts and investors. Because the webcast is open to all constituents and prior notification has been widely disseminated, all content on this call will be considered fully disclosed. With that, I'd like to introduce our CEO, Richard Zimmerman. Richard?

Thanks, Michael. Good morning, everyone, and thanks for joining us today. On this morning's call, we will provide context for our second quarter results, update revenue trends through this past weekend and provide some perspective on our expectations for the balance of the year, along with some early thoughts on the 2024 season as well. Let me begin by saying that our latest trends, while not fully back to where we would like them, are improving. Demand at parks that were impacted by disruptive weather in the second quarter has strengthened as weather conditions have improved and operating conditions normalized. Preliminary July results reflect net revenues down 2% versus the unprecedented performance of July last year, but July's revenues remained up 11% compared to 2019 pre-pandemic levels. Our underlying business fundamentals are improving as we head into the second half of the year when we historically generate two-thirds of our annual attendance and revenues and more than 80% of our adjusted EBITDA. In just a moment, Brian will provide additional details on second quarter results and the more recent trends we've seen through last weekend. With that said, the first half of 2023 has been a challenge on several levels with exogenous factors constraining demand and negatively impacting operating performance. First, poor weather conditions, including unprecedented rainfall and extreme temperatures plagued our East Coast parks during the second quarter as well as our California parks earlier in the season. The persistent rainfall meaningfully disrupted demand over the first half of the year as well as sales of 2023 passes, which will continue to be a headwind on attendance over the balance of the year. Second, cooler-than-normal temperatures in the second quarter had a major impact on attendance at our four stand-alone water parks, including Cedar Point Shores, Not Soak City and our two Schlitterbhan Waterparks in Texas where springtime temperatures were unseasonably cool prior to the recent stretch of more typical 100-degree days. Finally, and most unexpectedly, attendance in the quarter at Canada's Wonderland and several of our U.S. parks was negatively impacted by public health concerns over poor air quality caused by the ongoing Canadian wildfires. While demand challenges have been persistent in certain key markets, most notably in California, our solid performance at parks operating under normal conditions underscores the resilience of our business model, the continued strength of consumer demand for experiences and the benefit of our strategic initiatives over the last two years. For instance, we are pleased by the solid performances at our six Midwest parks, where combined attendance was up 7% over the first six months of the year compared to last year. Coincidentally, these six parks were least affected to date by poor weather, demonstrating the extent to which difficult operating conditions can affect park performance, especially when weather occurs on days of peak demand. Meanwhile, we are pleased to report improvements in other key areas of performance, including guest spending levels and booking trends within the group channel and at our resort properties. Through the first half of the year, in-park per capita spending is trending up 4% year-over-year, led by improved spending on food and beverage, admissions and merchandise. The consistent growth of per caps indicates our guest's willingness to spend to enhance their experience and their willingness to buy up for higher-quality items. We are confident we can continue to build on this momentum through further investments in our park facilities and guest amenities, including a new consumer-friendly mobile app that is currently under development. The new app is being designed to simplify and streamline the guest experience, expedite and expand payment options and minimize wait time beyond the improvements we have already achieved. This is just the latest example of our ongoing investments in technology to improve the guest experience, build loyalty and drive higher attendance and in-park spending. We will begin rolling out the new mobile app in our parks later this year, with full rollout planned for spring of 2024. Finally, our group sales channel continues to show strong signs of recovery. Through the first two quarters, group attendance is up 11% over last year and in line with our expectations, led by strong early season performance of school and youth events. I'm quite proud of our group sales team's excellent work to drive improved sales, including their proactive prospecting process that has expanded our pipeline of leads and increased the pace of bookings going into the second half of the year. This is a key period for the group channel as group events shift from school and youth to corporate groups with a deeper share of wallet and higher per cap potential. Before Brian reviews our second quarter results in more detail, let me put in perspective where we stand with five months remaining this season. While our results demonstrate that our business fundamentals remain strong, we are not satisfied with our financial performance year-to-date. Therefore, with a heightened sense of urgency, we have taken deliberate and decisive action to increase demand, generate incremental guest spend and drive revenues higher. One of the biggest days of the season still ahead of us, we have accelerated our marketing efforts at our largest parks and activated mid-season marketing promotions through our season pass and single-day ticketing channels to generate incremental attendance. We believe any short-term impact these actions may have on admissions per cap will be more than offset by increased attendance and higher levels of in-park guest spending on food and beverage, merchandise and extra-charge attractions. Meanwhile, our park teams are tightly managing variable costs to better align with attendance levels, most notably around seasonal labor. These efforts have already contributed to a 2% reduction in second quarter operating costs and expenses on a per operating day basis. While recent results show progress, there is more work to be done. We are committed to rolling up our sleeves and continuing to advance our strategic initiatives to drive improved performance for the remainder of 2023 and prepared for 2024, with margin expansion being a top priority. To wrap up my opening remarks, I want to emphasize our belief that consumer demand for experiential entertainment remains incredibly strong. The consumer is healthy and guest spending levels remain elevated compared to 2019 and even to post-pandemic levels. I also want to reiterate that we are in the midst of our most profitable six-month period when we generate more than 80% of our adjusted EBITDA. We believe the actions we are taking better position us to maximize returns over the remainder of 2023. After Brian's comments, I'll come back with some thoughts on our strategic approach for 2024 and beyond.

Thanks, Richard, and good morning. I'll start off by reviewing our second quarter operating results before discussing preliminary results for the five-week period ended July 30, then wrap up with an update on our balance sheet and capital allocation priorities. During the second quarter, we had 736 operating days compared with 708 days in the second quarter of 2022. The increase primarily reflects operating days added back in the quarter at our mid-tier parks to accommodate the return of school and youth groups this season. During the quarter, we entertained 7.4 million guests and generated net revenues of $501 million compared with 7.8 million guests and net revenues of $509 million in the second quarter of 2022. The decreases in attendance and net revenues are primarily attributable to the disruptive weather patterns that continued from the first quarter along with wildfires in Canada, which impacted demand in our park in Toronto as well as several of our U.S.-based parks during the period. The decline in attendance also reflected a decline in season pass visitation, the result of fewer season passes sold, and the impact of carryover pass privileges on second quarter results last year. Overall, we estimate that weather and smoke from the wildfires accounted for the loss of approximately 300,000 visits during the quarter based on average historical attendance on the days and at the parks impacted. Meanwhile, we estimate that carryover pass visits at Knott's Berry Farm and Canada's Wonderland accounted for the loss of another 200,000 visits during the period. Excluding the impact of these factors, we estimate that attendance in the second quarter would have been up roughly 100,000 visits over the prior year, due in large part to the incremental operating days in the period. As Richard noted, helping offset some of the pressure on attendance in the quarter was continued strength in other key performance areas, including guest spending levels and booking trends at our resort properties and on group outings. Capital spending for the quarter totaled $61.46 million, up almost $2 or 3% compared to the second quarter of 2022. Guest spending levels on admissions and merchandise increased 1% and 3%, respectively, but the biggest lift came from within the F&B channel, where per capita was up 9% over last year. While pricing accounted for some of the increase in F&B spending, most of the year-over-year lift is attributable to the growth in both transaction counts per guest and average transaction value. The investments we've made over the last few years to improve and expand dining options are yielding outstanding returns. Meanwhile, the strong performance of our resort properties helped contribute to an increase in out-of-park revenues of $3 million or 5% when compared to the second quarter of 2022. On the cost front, operating costs and expenses in the second quarter increased to $352 million, up 1% or $5 million compared to last year. The year-over-year increase reflects higher variable operating costs associated with the 28 incremental operating days in the period, anticipated higher land lease and property tax expenses related to the sale leaseback at California's Great America, and planned higher advertising costs to support this year's capital programs. Despite inflationary cost pressures, the cost of goods sold as a percentage of food and merchandise revenues decreased 70 basis points compared with last year's second quarter. As Richard mentioned, we remain laser-focused on reducing operating costs and improving margins, including taking variable costs out of the system when attendance levels are below expectations. During the quarter, these efforts resulted in a 3% decrease in total seasonal labor hours and a 6% decrease in seasonal labor hours per operating day. The reduction in seasonal labor hours, combined with a 1% decrease in our average seasonal labor rate contributed to a 2% reduction in operating costs and expenses for the operating day. Today, we are more nimble than ever, and consistent with our focus on margin expansion, we will continue to actively manage the business to optimize operating expenses relative to attendance and revenue trends. Adjusted EBITDA for the quarter, which we believe is a meaningful measure of the Company's park-level operating results, totaled $151 million compared with $171 million for the second quarter last year. The year-over-year decline is the direct result of the attendance revenue shortfalls in the quarter, combined with the anticipated increases in operating costs and expenses. Turning our attention to preliminary results through this past Sunday, July 30. For the five-week month of July, we delivered net revenues of $414 million, a 2% or $7 million decline from net revenues for the same five-week period a year ago. Our July revenue performance was driven by a 2% increase in per capita spending, flat out-of-park revenues, and a 4% or 219,000 visit decrease in attendance. Despite attendance remaining below pre-pandemic levels, preliminary revenues for the month were up $40 million or 11% compared to July of 2019, driven by significantly higher levels of guest spending. Based on our preliminary results for July through the first seven months of 2023, we have now entertained 14.4 million guests and generated preliminary net revenues of $1 billion. This compares to net revenues of $1.03 billion and attendance of 15.4 million guests for the comparable seven-month period last year. As we've mentioned, over the balance of the season, we will continue to adjust our variable operating costs, including seasonal labor to best align with attendance trends. Additionally, I've highlighted that we will continue to adjust park operating calendars, both adding and reducing days when appropriate. As our park calendars currently stand, we project this year's second half will have 15 additional days compared to the same period in 2022, with three of those added days falling in the third quarter and the balance in the fourth quarter. Now turning to the balance sheet. As of the end of the second quarter, Cedar Fair's balance sheet was in solid financial condition, with ample liquidity to fund future cash obligations and no near-term debt maturities. As of June 25, we had net debt of $2.4 billion and total liquidity of $172 million, including $49 million of cash on hand and $123 million of available borrowings under our revolving credit facility. Our deferred revenue balance at the end of the second quarter totaled $283 million. This compares to $307 million at the end of the second quarter last year, which included approximately $9 million of COVID-related product extensions at Canada's Wonderland into 2022. The variance in deferred revenues, in large part reflects the impact that weather had on early season sales of 2023 season passes, particularly at our California parks which endured monsoon-like conditions in the first quarter. This resulted in an approximate 9% shortfall in total passes sold through the second quarter of 2023 compared to the record 3.2 million units sold in 2022. Regarding capital expenditures, during the quarter, we spent $70 million on CapEx, bringing our total investment through the first half of 2023 to $124 million. We expect our full year capital spend will be $200 million to $225 million. Lastly, in May, our Board authorized a new $250 million equity buyback program. Through July, we have repurchased approximately 280,000 limited partnership units at a total cost of approximately $11 million under the new buyback program. Combined with our original buyback program, which was authorized last August and fully exhausted in the second quarter this year, we've now repurchased approximately 6.3 million units or more than 10% of Cedar Fair's outstanding equity. With that, I'd like to turn the call back to Richard to provide some additional commentary on our business outlook.

Thanks, Brian. While today's call primarily addresses the current operating season, we are also aggressively working on the strategic initiatives that will lay the foundation for a strong 2024 season, including our capital program and, most importantly, our season pass program. As we gear up for the imminent launch of our 2024 Season Pass sales program, much work has gone into analyzing last season's marketing and pricing strategies. As we previously noted, our 2023 season pass program, which effectively wrapped up at the end of July, fell short of our goal of matching the record 3.2 million units sold for the 2022 season, although this year's program did represent the second largest ever in terms of season pass units sold. For the 2024 season, our sales strategy will focus on starting out with more attractive pricing in key markets to build demand earlier in the cycle. We then plan to take price after specific volume thresholds have been reached, continuing to evolve our dynamic pricing model for season passes. Most of our parks will be announcing the start of the 2024 season pass sales program in the next couple of weeks with compelling early purchase pricing that we are confident will drive strong demand. Over the next few weeks, many of our parks will also be announcing new rides and attractions for the 2024 season. Cedar Point kicked things off earlier this week announcing next season's planned launch of Top Thrill 2, the world's tallest and fastest triple launch coaster. The reimagined version of this iconic world-class roller coaster, the first ever to go above 400 feet, may be the most anticipated new attraction we have ever introduced, and we can't wait to see our guest reaction to this one-of-a-kind experience. Those of you who invest in our company or visit our properties know the importance we place on keeping our parks safe, fresh and inviting while offering the finest thrill rides in family entertainment the industry has to offer. We have a few additional surprises in store for next season that should once again delight families and thrill-seekers alike. So please stay tuned. With the investments we have made over the past several years and those we have planned for 2024, we are confident our parks offer a combination of family and thrill entertainment unmatched in our industry. Given the strength of our underlying business model and the initiatives we have underway, we are confident we can further expand the appeal of our parks, adding more unique experiences that drive repeat visits and enhance the appeal to a broader audience. I've challenged our team to develop programs to drive incremental demand and revenues through more premium and customized experiences in addition to the traditional amusement and water park offerings. We believe meaningful upside potential awaits in these areas. We are also committed to driving greater flow-through from the incremental revenue we generate. We have successfully flattened the growth curve around most of our operating costs, a stark contrast to the significant inflationary pressures we have faced over the past two to three years. Most importantly, this has been largely achieved through seasonal labor, our largest single expense where we have been effectively reducing the average hourly rate. We are now focused on further streamlining our park staffing models for both rate and hours while also reducing the size of our overhead cost structure. We believe successful execution of these cost reduction efforts, combined with a return to the pre-pandemic attendance levels of 27 million to 28 million guests, while maintaining current guest spending levels, would produce EBITDA margins that are near our most recent pre-pandemic levels. Improving operating margin is a top priority for us and a key metric for tracking our continued progress. Growing free cash flow while improving margins will allow us to fuel our capital allocation priority of returning capital to investors through a combination of cash distributions and equity buybacks. I'm extremely pleased to say we've returned more than $310 million to investors since the implementation of our first equity buyback program last August and the reinstatement of our quarterly cash distribution payments last September. The Cedar Fair management team and our Board of Directors believe that Cedar Fair's units are significantly undervalued and that repurchasing units is an extremely compelling high-return investment opportunity. We will, however, remain disciplined and opportunistic in deploying unitholders' capital. Looking ahead, we plan to review details of our new long-term strategic plan, including new targets for key performance metrics during our third quarter earnings call in November. With that, we'll open the call for questions.

Your first question comes from the line of Steve Wieczynski of Stifel.

So Richard, you noted that obviously, you've been disappointed in attendance this year. And a lot of that was weather, which has been well documented. But it sounds like for the last couple of months of the season, it sounds like you guys want to get more aggressive on the marketing and maybe even the discounting side of things in order to drive demand. So I guess my question is, if you start to discount single-day tickets to stimulate demand for the near term, does that eventually hurt your ability to take price over time? Or am I just totally misunderstanding your kind of philosophy there?

On the marketing end, we have looked at our digital-heavy approach. And through the latter half of June and through the month of July, we broadened our reach. So we wanted to ensure that we expanded our ability to connect with our customers. We've seen traction in that as we've gotten a little broader in our region, in our key markets. On the pricing front, we're committed to dynamic pricing. Dynamic pricing means you're testing different price points all the time. I don't think I would take our approach and say that we are leaning into deep discounting. I think what we're trying to do is assess where dynamic pricing can take us, particularly as we're in peak periods. I'm really pleased with the per capita spending we're able to drive when the weather was good, seeing some of our strongest days of the year. July was a choppy month weather-wise as well. But on the good weather days, we are pleased with the demand we saw and how we translated that demand into higher per cap spending.

So to be crystal clear here, on a normal absolutely normal weather day, attendance is exactly where you guys would think it should be and spend levels are as good, if not better than what you guys would expect them to be?

As I look at particularly the month of July, there were very few Saturdays where I'd say we had really good weather across the system, but we put up some of our strongest days. So yes, we were trending in the zone of where we would expect to be on a bright sunny day in the middle of the summer without rain covering half of the East Coast.

Your next question comes from the line of James Hardiman of Citi.

I want to clarify that it seems like you're feeling more optimistic about July, especially with the trends you've mentioned. If I consider that 2Q revenues were down, it appears July revenues were also down, but attendance might have improved per capita despite being somewhat lower year over year. Can you explain what improved in July? Perhaps it relates to operating days, since Q2 had a benefit in that area, which may have diminished in July. Could you elaborate on these points?

Yes. Brian, do you want to take that?

Yes, sure, James. So yes, I think you hit on it there towards the end, right, a bit, which is that while the July trends overall, the revenue trends are comparable on a percent basis, some of the Q2 lift, as we said on the call, was the benefit of the incremental days in the period. As Richard noted, July hasn't been perfect, and tying it back a little bit to Steve's question, I think we're pleased when you sort through, and you break the demand apart, we have certainly seen better demand on single-day tickets, the general demand channel in July as operations began to normalize. There's still a little bit of a drag. And the answer is always a bit different, maybe park by park. But a bit of a drag at certain parks that are well down in their season pass sales. That channel for not in Great America, the two California parks that were most disrupted in terms of season pass sales this year, that will be a drag for them for the balance of the year, as we said on the call. So not everything quite perfect, but certainly seeing improvement in July on a relative basis.

As we look at our operating calendar, July, August, and October are our three most significant months. During these months, we see the highest attendance revenues and generate our best EBITDA, which provides a substantial opportunity to increase margins. We experienced this trend last October. In July, we face stronger comparisons from previous years, not only because the number of operating days remains the same but also due to the fact that these are our peak months, making the comparison more meaningful.

Got it. That's helpful. And then maybe, Brian, if you could bridge the margin versus where we were in 2019, I think the comment that you think if we can get back to 2019 levels of attendance that we can effectively get back to 2019 levels of margin, pretty big gap to bridge at this point. I know the acquisitions that you guys made, I think were somewhat dilutive to the margin, I can remember if that was the case in Q2. But maybe help us figure out the pieces and ultimately, how you're going to get back there?

Yes. So I think you're right, James, in terms of some of the acquisitions we did make in 2019 were dilutive. So on a pro forma basis, that 34.2% margin from 2019 might have been somewhere in the mid- to high 33s on a pro forma basis. That said, we do believe and we did believe at the time that there was margin growth opportunity at the Schlitterbhan Parks as an example, as we integrated them into the system. So not going to rest on that being dilutive longer term. As we think about it going forward, and we've said this before, and Richard's comments hit on it. It's a combination. We know we have to get more efficient on the cost front, and we're very pleased with what we were able to do in Q2, taking our operating costs and expenses, all in, down 2% per operating day, even with the added lease and property tax expense related to the Great America Park, which wouldn't have been in last year's numbers. But it's also about getting attendance back, getting back to those 27-plus million visits because while the gap does seem pretty big, there's a lot of leverage that's in the system, right? And Richard hit on it just a minute ago, July, August, October, those are our busiest months and the attendance recovery in those months when you're putting those incremental visits on top of a pretty fixed cost structure can move the needle pretty quickly. When we think about the balance of this year, while we haven't gotten as much out of the cost in the first half as maybe some would have expected, part of the challenge we have there for our particularly our seasonal parks, much of the cost structure for the first four or five months of the year is very fixed. It's off-season fixed cost associated with maintaining or preparing the parks to open. So we run pretty skinny on the cost structure of those properties during the downtime or the prep time before those parks open in the spring. There's a lot more opportunity over the second half of the year. And we would fully expect that our operating costs and expenses, including SG&A and cost of goods over the second half of 2023 are going to be inside of the roughly $760 million that we incurred last year in the second half of 2022. We have a lot more leverage to take costs out of the system. We've activated, as Richard noted, a lot of initiatives and efforts to already begin taking costs out. We're not done. There's more to go. But I think the ultimate answer to your question is it's both reducing the cost structure and driving volume.

Your next question comes from the line of Thomas Yeh of Morgan Stanley.

Just following up on Chris' question on running the discounts for admissions. It seems like there is strong spending when someone's in the park, but admissions pricing has potentially been a bit more of a barrier. Just curious what you think the drivers of that are from a consumer health perspective, what's limiting that initial point of sale.

Yes. Thomas, this is Brian. I think at the top of that list is certainly those macro factors, right? What we've seen over the years and this isn't new to 2023, it's been a developing change in consumer behavior is just a shortening of the booking cycle. It's one of the reasons why we try and push as many people to the multi-day ticket products like season pass, getting them to commit a lot earlier. But when weather is so unpredictable and people are buying much later, I think that's what disrupts that purchase, that initial purchase, certainly what we saw play out this year. Attendance isn't just driven by the weather in the moment, but the weather during the point in time you were going to make a purchase. So what we saw play out this year was the impact of weather on sales in the first quarter and the early part of the second quarter, particularly around season passes, is a headwind for us for the balance of the year. Our efforts, as Richard noted, to increase some of our marketing in some of our key markets to be a little strategic with some very limited duration promotions is about trying to stimulate that urgency and get it in front of a few more folks to get them to activate. It always plays out that it gets a little bit easier as you get deeper into the year because there's a natural sense of urgency that summer is winding down, kids are going back to school. That has always worked well for us. We would anticipate that working well for us again this year.

Okay. Great. That's helpful. And it was super helpful on sizing the weather impact for 2Q. And it sounds like July included some weather-related headwinds maybe now on the East Coast versus the West. Is that right? I guess the interpretation I was getting from just the comment you made on catching up from season pass sales picking back up again heading into August for 2024 passes. Is the expectation there that August, September looks better than July?

Yes, weather certainly played a role. We are currently experiencing extreme heat across the country, which has positively impacted South Texas, particularly at the Schlitterbahn Water parks, where 100-degree days are beneficial. However, the rain and heat have adversely affected the Southeast, where Carowinds, Kings Dominion, and Dorney Park are facing significantly more rainfall compared to other regions. This shift is different from earlier in the year when the focus was on the West Coast. The challenges we encountered in July, especially at the West Coast parks, can be attributed to lower season pass sales. Historically, a tough year tends to lead to increased demand the following year. For example, some of our usual season pass purchasers at Knott's Berry Farm and California's Great America opted out of buying a pass for 2023, but we have seen that these customers often return as early buyers for the 2024 pass. This trend was evident in 2018 and 2019, where despite poor weather in 2018, we achieved record season pass sales for 2019. We anticipate strong demand for season pass sales at several of our parks, especially on the West Coast, as we start selling those passes in early August.

Your next question comes from the line of Michael Swartz of Truist Securities.

I have a question following up on James' earlier inquiry about how we can return to pre-pandemic margin levels, around 33% to 34%. A significant factor in this is the attendance returning to about 27 million. Can you explain what kind of cost reductions would be necessary to achieve a 33% to 34% EBITDA margin if we reach that attendance level?

We have a specific target in mind. The answer to your question depends on several interconnected factors. It's not just about attendance; it also involves our current position, our ability to drive guest spending both inside the park and at additional locations. Additionally, reducing overhead costs and streamlining operations, as Richard mentioned, along with managing variable operating costs and park structures, are essential for a quicker recovery. I would say that the time it takes to return to the 33% to 34% margin can be significantly shortened by accelerating cost reductions; the more we achieve in that area, the faster we can reach those margin levels.

Your next question comes from the line of Paul Golding of Macquarie Capital.

I just wanted to ask a couple of technology questions. You noted an F&B perspective that additional dining options contributed to the per cap growth there. I was wondering how much of the transaction count you can attribute to the mobile ordering or mobile app penetration across the footprint? And then as a follow-on, whether we should continue to expect some uplift from this, as you mentioned on the call that you're rolling out a revised or updated consumer-facing app across the footprint spring of next year, I believe.

Right now, mobile food mobile ordering is still a small percentage of the transactions we do, but we're testing it at every park, and it's working really well, and we're testing a variety of formats. So we're really trying to see what works best depending on facility. In terms of the mobile app that we're writing, and Brian and I just got a briefing last week, we're making great progress. The ease and the integration of everything into the mobile app will make it so much easier as we roll this thing out, to really be able to leverage mobile food ordering. And we think there's a lot of opportunity. We think we can do a lot more transactions and drive that transaction count. And it's a key plank of that engagement with our consumer next year.

For the app overall, are we seeing any pilot results that you may be able to share around maybe admission sell-through or the ability to retarget any quantitative metrics that you could share?

Yes, the pilot for the app will be launched later this year. Currently, the mobile performance is based on the existing platform we have. The improvements we see in areas like food and beverage with higher transaction counts are not largely due to mobile, as it still represents a small part of our business. Most of the growth comes from our investments in enhancing and expanding dining options, increasing transaction speeds through cashless methods, and improving the efficiency and simplicity of the checkout process. We've streamlined our offerings to make it easier for consumers to choose, which creates a more efficient experience. Looking ahead, as mentioned, we believe mobile presents significant opportunities, but we expect to see more results from it in 2024 and beyond rather than in 2023.

Your next question comes from the line of Barton Crockett of Rosenblatt.

A couple of questions. One is, was there any impact on the attendance from the publicity around the issue with the roller coaster? I think the Fury Coaster at Carowinds got a lot of press play. Did that have an impact in the quarter?

Barton, it's Richard. As you mentioned, the weather has had a much more significant effect on Carowinds, particularly due to the heavy rain we experienced on many weekends over the last six months. This has really been the main factor affecting attendance.

Okay. And then on the topic of weather, I mean, I know you talked about this historical situation where season pass sales can be weak one year and then maybe demand is stronger in the next year. But I'm just wondering, to the extent that we're seeing more kind of media discussion about the weather issues as climate change, something that will be sticky, persistent leaving aside the debate of how accurate that is. Certainly, I'm curious from your perspective, if you're seeing your consumers perceive that as truth. And if that might have any negative headwind on their desire to put their money into weather-dependent kind of pre-spending experiences like season passes for a theme park?

Barton, that's a great question. First, I want to reinforce our belief that, over time, weather patterns tend to balance out. I recognize that we are currently experiencing some disruptive effects. However, if I take a broader view, I believe a few factors have contributed to our performance in the second half of the year. One of those is that weather has significantly improved over the past decade during the months from September to December. We also have the appeal of events like back-to-school preparations in July and August, Halloween festivities, and our holiday events. Consequently, the second half of the year is where we've seen increased demand driven by weather improvements. This shift over the last decade or so has created opportunities, though springtime has been more challenging due to disruptive weather. We are assessing that impact, but I think the combination of appealing events in the latter part of the year and slightly better weather is a key reason why we continue to perform well and generate a significant portion of our attendance, revenue, and EBITDA during this time.

And our final question comes from the line of Chris Rowenka of Deutsche Bank.

Just one question for you. I guess, Richard, maybe you can give us a little bit of a view of the landscape overall for the industry in terms of whether you think there's going to be any M&A opportunities or just M&A that happens because we've got a higher for longer interest rate environment. We've got some private owners that might be coming up with some debt maturities or other things. So just curious as to your view of the landscape.

Listen, this company has been built through M&A. We've talked at length on these calls that we'll look at anything that's available that's out there. I do think if you go back to pre-pandemic, everybody was healthy. We posted a record year in 2019 as most others. The strength of the recovery, I think, has helped both the public companies, but the private companies, and we've all improved our capital structures. The private operators we talk to have benefited from the recovery as much as the public. So I think the industry is healthy. So I think M&A, if it happens, probably is more linked to opportunity than significant weakness. But everybody is healthy and they're doing well. So that's actually good for the industry. The industry being healthy is good for all of us. And I think that to continue to appeal to the strength and rapidness of the recovery, where we all saw 2022 be so strong and now continuing, although, again, not in line with where we'd like to see it, despite the disruption, we're starting to see that improvement you'd want to see in the second half of the year.

There are no further questions at this time. I will now turn the call back to Richard Zimmerman for closing remarks.

Thanks, everybody, for joining us, and thanks for your continued interest in Cedar Fair. As the summer winds down and kids return to school, we will be transforming our parks for the always popular Halloween events in October, which historically have produced our biggest attendance days of the year. Please look at our upcoming announcement regarding Cedar Fair's 2024 capital program, highlighting our planned investments in new rides, slides, and major attractions for next season at our portfolio of irreplaceable entertainment landmarks. We look forward to keeping you apprised of our progress on these and other initiatives. Michael?

Thanks again, everybody. Please feel free to call our Investor Relations department at (419) 627-2233. Our next call will be in November after the release of our 2023 Third Quarter results. Jean-Louis, that concludes our call today. Thank you very much.

You may all now disconnect.