Good day, and welcome to the Cedar Fair Entertainment Company 2024 First Quarter Earnings Call. Thank you.

Thank you, Gavin, 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 2024 first quarter results for the period ended March 31. 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 Cedar Fair's Chief Executive Officer, Richard Zimmerman; and our Chief Financial Officer, Brian Witherow. 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 and unselectively disseminated, all content on this call will be considered fully disclosed. Before we begin, I want to reiterate that the purpose of today's call is to discuss the 2024 first quarter results and answer related questions. During Q&A, management will not be taking questions about the proposed merger with Six Flags. With that, I'd like to introduce our CEO, Richard Zimmerman. Richard?

Thank you, Michael. Good morning, and thanks to everyone for joining us today. Before we discuss our results, let me provide a quick update on where we stand in terms of the proposed merger with Six Flags. Back in March, Six Flags shareholders overwhelmingly approved the merger of equals transaction, which we continue to believe will be completed before the end of the second quarter. At this time, we have substantially complied fully with the Department of Justice's second request, and both companies continue to work constructively with the DOJ in its ongoing review of the merger. At the same time, our team has been working diligently to complete the initial phases of a joint integration plan that, upon closing of the transaction, will allow us to bring our two strong companies together efficiently and effectively and realize the full potential of the strategic combination. Naturally, as this process moves forward, we will keep the market apprised of other material events. Now let's move on to our operating results and our outlook for the year ahead. Earlier this morning, we reported first quarter results that maintain the positive momentum we established during last year's record second half. Our first quarter results were solidly in line with our expectations coming into the year. Although our first quarter historically represents only about 5% of our full year attendance and revenues, getting off to a strong start and building solid demand in our long lead channels is critical. Our first quarter performance positions us well for the peak summer season ahead and validates the strength of our portfolio and strategy as well as our belief that consumers continue to place a high priority on experiential entertainment. In a few minutes, Brian will review our operating results in more detail. First, however, let me highlight a few specific factors that underpin our confidence in Cedar Fair's long-term business model and the season ahead. First, we are coming off a record 2023 second half, and the key drivers of the strategy behind those results remain in place. Second, our long lead indicators, led by season pass sales, are trending very well. Third, our initiatives to operate more efficiently without sacrificing guest service are working, and we are confident this will drive long-term margin expansion. And lastly, in 2024, we have our most complete and compelling capital program since the disruption of the pandemic, and we are already seeing increased anticipation and excitement in our markets for all of the new rides and attractions. For the upcoming season, we strategically allocated capital dollars across our portfolio and are introducing marquee caliber attractions at six of our parks, including our four largest parks, as well as investing in numerous enhancements to the food and beverage, retail, and premium experience offerings across our portfolio. Headline in this year's developments: two marquee attractions include Top Thrill 2 at Cedar Point, the world's tallest and fastest triple launch strata coaster and a record-breaking thrill ride unlike any other anywhere. The ride opened to the public this past weekend, and the response from our guests was incredible. Iron Menace at Dorney Park, the Northeast’s first dive coaster. The world's first kids' water coaster at our Schlitterbahn Park in New Braunfels, Texas; and finally, the addition of new family coasters to the Camp Snoopy areas at both Kings Island and Knott's Berry Farm. We are confident these new rides and attractions will drive urgency and strong demand with our guests. I'm equally excited about the work our team is doing behind the scenes on the digital technology front. Based on our consumer roadmap strategy, we are making investments in scalable technologies that enhance the guest experience, drive revenue growth, and improve operational efficiencies for our associates. An integral part of our long-term strategic planning process is a holistic analysis of the guest journey. We take a deep dive into every step our guests take in the process associated with the park visit. From researching and buying tickets to leaving the parking lot for the ride home, the objective for this exercise is known as Making Fun Easy, which is consistent with our goal to continually evolve and enhance the guest experience. Fast forward to what this means to our guests and our associates in 2024. In April, Carowinds, our park in Charlotte, became the first outdoor entertainment complex in the country to offer next-gen, 6G-enabled WiFi coverage. And by the end of this year, this same technology will drive the wireless network at our six largest parks. Deploying a robust wireless network with improved coverage and capacity is consistent with our goal to seamlessly integrate and support the best possible experience for our guests and our associates. For the 2024 season, we are also introducing our next-gen mobile app that features a broader range of capabilities and experiential enhancements, including fast lane wait times and improved mapping of our parks. Our new park app has been introduced at all parks except for the Schlitterbahn Waterpark, where the app is targeted for rollout later in the year. Throughout the season, our team will be activating additional user-friendly features park by park, including real-time ticketing upgrade capabilities, incremental guest access to dining menus with mobile ordering functionality, and other unique guest engagement options. We are also rolling out single-use Fast Lane passes at seven of our parks, including our five largest parks. This enhancement to our front-of-the-line program has the potential to make the premium offering of Fast Lane more attractive to a lighter segment of our guest base, providing us with another opportunity for meaningful growth and guest spending. Looking ahead, we are developing other scalable technologies to enhance a wide range of systems and processes, including a more guest-friendly design on online ticketing, a next-gen e-commerce system that operates seamlessly across all consumer devices. The addition of more robust data capturing platforms to enhance the capabilities of our business intelligence group, a cloud-based hotel management system to accelerate innovations at our resort properties. And finally, AI partnerships that target our value creation and risk mitigation across our enterprise. For decades, our parks were convenient and enjoyable getaways to unplug from the outside world. For most of us today, staying plugged in is a way of life no matter where we go. The expectation to always be connected now drives our consumer roadmap. Strategically, it's the same rationale we leaned into over the last decade when we invested tens of millions of dollars to build or enhance high-volume culinary engines that offer higher quality food and beverage options. It's simply listening to and responding to what our guests demand. With that, I'll turn it over to Brian.

Thanks, Richard, and good morning. I'll start by discussing our first quarter results before wrapping up my remarks with updates on our balance sheet and the current state of our long lead indicators. As Richard mentioned, due to the highly seasonal nature of our business, first quarter results represent only 5% of full year attendance and net revenues, as most of our parks are closed during the period. As such, the company typically operates at a loss during the first quarter. It's also important to note that due to the fiscal calendar shift in the current year, the first quarter of 2024 includes 13 weeks of results compared to only 12 weeks in the first quarter last year. Because of the impact of the fiscal calendar shift, I'll start my comments with a recap of our financial results as reported before reviewing first quarter performance trends on a comparable week basis. Including the planned extra week in the period, operating days in the quarter totaled 117 compared with 161 operating days in the first quarter of 2023. The net decrease of 44 operating days was primarily the result of a strategic decision to eliminate lower-value, higher-risk operating days early in the year at several parks. These strategic calendar changes were primarily concentrated at three of our seasonal parks: Carowinds, Kings Dominion, and California's Great America. For the quarter, we generated a record $102 million in net revenues on attendance of 1.3 million guests. This compares with revenues of $85 million and attendance of 1.1 million guests during the first quarter of 2023. In addition to the 290,000 visit increase in attendance, the higher net revenues during the period reflect a $4 million increase in out-of-park revenues to a record $23 million. The increases in first quarter attendance and out-of-park revenues were partially offset by a 6% or $3.94 decrease in in-park per capita spending. The increase in attendance during the quarter was the direct result of higher season pass sales and improved weather at Knott's Berry Farm as well as the inclusion of the extra calendar week in the current period. Meanwhile, the increase in out-of-park revenues reflects the impact of the extra week as well as the improved performance of the Knott's Hotel, which was under renovation at this time last year. The decline in per capita spending is due to a planned decrease in season pass pricing and a higher mix of season pass visitation at Knott's Berry Farm during the period. The softer per caps at Knott's were partially offset by improved in-park per capita spending at the four other parks with limited first quarter operations. Moving to the cost front. Operating costs and expenses in the first quarter totaled $215 million, up $25 million compared with the first quarter last year. The period-over-period increase reflects a $15 million increase in SG&A expense, a $9 million increase in operating expenses, and a $1 million increase in cost of goods sold. The increase in SG&A expense was largely attributable to costs related to the proposed merger with Six Flags. Excluding the merger-related costs, SG&A expense for the quarter increased $5 million, the result of the additional calendar week in the current period and higher spend on technology initiatives. The increase in first quarter operating expenses was entirely due to the additional calendar week, offset in part by a reduction in full-time wages and related benefits. Meanwhile, cost of goods sold as a percentage of food, merchandise, and games revenue decreased 250 basis points compared with last year's first quarter, the result of planned initiatives to reduce food and beverage costs. Shifting our focus for a moment to comparable period operating results on a same-week basis or comparing the three months ended March 31, 2024, with the three months ended April 2, 2023, net revenues increased 3% or $3 million and attendance was up 10% or 125,000 visits. Meanwhile, out-of-park revenues were up 8% or $2 million and in-park per capita spending was down 8% or $5.39. We're very pleased with the increase in attendance as it was generated over 62 fewer operating days than the same period last year. On a same-week basis, first quarter attendance per operating day was up more than 4,500 visits, in part due to eliminating the smaller attendance days in January and February at our seasonal parks. On a same-week basis, first quarter operating costs and expenses were up $10 million, with the increase entirely due to the merger-related costs. Excluding these costs, operating costs and expenses were essentially flat between years despite our parks entertaining 125,000 more guests during the period. As we discussed in our last earnings call, we remain laser-focused on improving margins by increasing demand and driving operating efficiencies across our portfolio, particularly around variable operating costs such as seasonal labor. During the quarter, we reduced our seasonal labor hours by 3% on a comparable week basis, while at the same time pushing our average seasonal labor rate down approximately 1%. As more of our parks come online, we will continue to aggressively manage seasonal labor hours and other variable costs as well as look for opportunities to reduce general and administrative overhead costs. As evidence of this, our leading park with substantial first quarter operations, Knott's Berry Farm, was able to improve EBITDA margins on a comparable week basis by more than 200 basis points during the quarter by driving demand levels higher and tightly managing variable costs. Something we are confident can be replicated across the full portfolio going forward. Now turning to the balance sheet. At the end of the first quarter, Cedar Fair's balance sheet remains strong with ample liquidity to fund future cash obligations. Last week, we fully redeemed our 2025 notes using proceeds raised through a new $1 billion term loan while also securing a new $300 million revolving credit facility, which replaced our former revolver. The transaction execution was excellent, and demand for the loan was significantly oversubscribed, underscoring the market's confidence in Cedar Fair and our management team. Following the financing and subsequent bond redemption, we have no near-term debt maturities. This refinancing was part of a series of financing transactions undertaken by Cedar Fair and Six Flags in anticipation of the merger closing. The steps taken improve Cedar Fair's capital structure flexibility and position the future combined company with sufficient liquidity to address any near-term debt maturities and anticipated fees and obligations associated with closing the merger. At the end of the quarter, Cedar Fair's net debt totaled $2.4 billion, and we had total liquidity of approximately $157 million, including $35 million of cash on hand and $122 million of available borrowings under our revolver. Regarding the use of cash, during the quarter, we spent $57 million on capital investments, which was in line with expectations and consistent with our plans to invest between $210 million and $220 million for the full year. During the period, we also used $14 million of cash for interest payments, $3 million on payments for income taxes, and $15 million on cash distributions to our unitholders. Taking a closer look at our long lead business indicators for a moment, as Richard mentioned, we are very encouraged by the strong start and the solid trends we are seeing within our long lead indicators. This includes positive booking trends within our group sales channel and at our resort properties, as well as a record pace for unit sales of season passes and other all-season products. Through the end of the first quarter, sales of season passes on a comparable week basis were up 8% or approximately $15 million, driven by a 17% increase in units sold or an increase of more than 270,000 units. The lift in units sold was partially offset by an 8% decrease in the average season pass price, which was primarily the result of the strategic decision to adjust season pass pricing in a few markets to drive demand, most notably at Knott's Berry Farm, which has our largest season pass base. Meanwhile, total sales of other all-season products through the end of the first quarter were up $13 million or 27% on a comparable week basis, reflecting an increase in units sold and higher average pricing. Driven in large part by the outstanding start to our season pass sales program, our deferred revenue balance at the end of the first quarter totaled $233 million, up approximately 10% compared to the same time last year. Excluding carryover pass benefits during the years disrupted by the pandemic, this level of deferred revenues would represent a record for the first quarter. Consistent with our strategy of dynamically pricing when demand trends permit, we've adjusted season pass pricing up since initially launching the program last fall. Most recently, average season pass pricing has trended up mid-single digits, while unit sales have also paced up mid-single digits. Heading into our peak season pass sales cycle, we are optimistic these positive trends, combined with tailwinds in other demand channels such as group bookings and reservations at our resort properties position us well to deliver another outstanding season in 2024. With that, I'd like to turn the call back over to Richard.

Thanks, Brian. Before we open the call to questions, I'd like to share a couple of additional thoughts. First, as Brian mentioned, our team remains laser-focused on improving margins by driving higher attendance and activating cost-saving measures across the portfolio. These cost-saving efforts are multifaceted; however, there's a concentrated effort around labor, given it represents more than half of our overall cost structure. And while we are focused on driving the efficiencies, we are also committed to maintaining appropriate staffing levels and delivering the high-quality experience our guests have come to expect, particularly as attendance levels continue to improve. The importance of labor availability and the recruiting process is an area of our business that is often overlooked. It was a hot button issue coming out of the pandemic when labor supply was limited, and we saw a structural shift in labor rates. At the time, we made the strategic decision to increase our rates to market leading to ensure our parks are adequately staffed so that all our rides are operating and all our revenue centers were open. As attendance has recovered and labor markets have stabilized, we have successfully optimized both seasonal labor rates and seasonal staffing levels, largely due to the decisions we made back in 2020 and '21. And as a result, heading into the 2024 summer season, we are enjoying some of our healthiest staffing levels in years, and we continue to realize seasonal rate efficiencies. Some of those gains are the result of automating our recruiting process, including the addition of an AI chat feature on our career site, which has measurably increased applicant flow and expedited the overall hiring process. Our recruiting and hiring process remains active throughout the season, but we remain cautiously optimistic about the labor outlook given our applicant flow and hiring to date. And as I hope you can tell from our prepared remarks, I'm as excited as I've ever been about the future growth potential of our business and this industry. Based on our record performance over the second half of 2023 and the momentum we've carried into the start of 2024, we remain optimistic about the health of the consumer and the general strength of our core markets overall. Because operating days are relatively few during the first few months, this period best serves as an early gauge for the season ahead. It is also the one time of year we can clearly see the tangible results of our long-term vision at play. The years of decisions that now fill our parks reinforce how we got here, respect for a culture that remains steadfast in dreaming big, planning smart, and executing with precision. For decades, this time-tested and successful approach to building our business has delivered results, and we are confident that we remain on the right path to drive long-term profitable growth regardless of market conditions. We have built a strong team of professionals who continue to excel and deliver against any challenge thrown their way. We are fortunate to have a high-quality business model we can rely on; one that produces free cash flow year after year to reinvest in the breadth and quality of our entertainment product that consumers have come to love and appreciate. We know this because season after season, our loyal guests continue to purchase their day tickets and their season passes and frequently return to our parks, demonstrating a recognition of the strong value we offer in family entertainment. As a reminder, we have no further updates on the merger beyond what I shared at the beginning of the call today. We ask that you keep your questions focused on our first quarter performance and our results. Gavin, that's the end of our prepared remarks. We'll open the call for questions.

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

So Brian, can we think about costs for a second? If we look at your combined operating expenses, SG&A in the quarter, you take out the merger cost, they came in around, I think it was $193 million. So I don't think if we want to compare those to last year given the weather that you guys encountered. But if we went back and looked at, let's say, 2022, I think those expenses were maybe around $160 million. So that's up almost 20% over a 2-year period. And look, I fully get the inflationary environment, I understand the labor environment. But I guess what I'm trying to understand is maybe how we should think about cost growth? Or is there anything one-off that I'm kind of missing that is driving those costs a little bit higher than what we would have thought outside of labor and inflation?

Yes, Steve. So I think when you look at costs year-over-year, there are always differences. Some of the timing, others of them, as you noted, related to inflationary pressure. As we think about cost for 2024, our inflationary outlook is certainly better than it's been the last several years. While there's still some individual channels where the broader market is seeing pressure, things like insurance, property taxes, those are smaller dollar items in our overall cost structure. I think what we're most focused on are those are tightly managing those variable costs, as we noted on the call, most directly seasonal labor and very pleased with what we've accomplished so far in the early going this year. But also I have to look back to last year when we were very effective in taking both hours out of the system but keeping rates flat. So as we look at the year ahead, we continue to see opportunities to mine more costs out of the system on the variable side. We will always look for ways to find more efficiencies in the overhead and general administrative costs, but feel very good about where things are pacing at this point.

Okay. For my second question, you mentioned that your season pass sales have been impressive this year. However, you've decided to lower pricing at Knott's. I'm trying to understand the reasoning behind targeting that market. Is the Southern California market particularly sensitive to price increases right now, or are there other entertainment options that could be attracting customers away from you and other parks? I'm just trying to grasp why you chose to focus on that market specifically.

Thanks, Richard, for the question. When we consider any specific market, our goal is to initiate strong momentum. We are in the out-of-home entertainment sector, competing for consumers' discretionary time and spending, particularly evident in Southern California where there are numerous options available. Last year, we noted some challenges in the first half, not only due to economic conditions or weather but also because California wasn't performing at its best during that time. However, we started to see improvements as we approached fall. As we’ve mentioned previously, dynamic pricing can fluctuate. Our objective was to start strong and adjust prices as demand increased. Recently, we've experienced mid-single-digit growth in unit sales and pricing across our portfolio. The deferred revenue balance is healthier than ever, which is encouraging. As we open our parks, we see strong interest in season passes, even at elevated prices compared to last year. Approximately half of our season pass sales occur in the spring season, which should yield significant revenue and, more importantly, boost attendance that drives margin. Knott's saw a 200 basis points increase in margin in the first quarter, and as Brian mentioned, we can link this to higher attendance across our portfolio, which supports margin growth both now and in the future.

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

So a couple of points of clarification here. You gave us the numbers on a, sort of, a comparable calendar basis, maybe solving for the extra week that you had. But there's really no discussion of the Easter shift and the fact that that fell in 1Q this year as opposed to 2Q last year. Your peers called out that as a pretty meaningful 1Q benefit. It doesn't sound like you think that was a big deal for your business. Really just trying to understand maybe more than anything, how to think about second quarter headwinds. I guess, conversely, what can you tell us about the month of April or sort of the year-to-date trend in terms of attendance.

Yes, James, it's Brian. Regarding Easter, the different park openings have influenced its impact. Since we weren't open daily and only had one park functioning significantly, the timing of Easter didn't greatly affect us. In the first quarter, Knott's accounted for nearly three-quarters of our operating days. Therefore, the Easter timing wasn't particularly impactful for us. Instead, Knott's Boysenberry Festival, which aligns more closely with last year’s timing, will continue to show strength in the second quarter, just like it did last year. So, Easter hasn’t had a material impact worth mentioning.

Got it. And similarly, as I think about the second quarter, then you don't see it being a meaningful impact.

No, we haven't provided specific numbers, but I can share the general trends at a high level. As Richard mentioned, there is ongoing strength in advanced purchase products like season passes and other all-season offerings, which continue to perform well in April. Additionally, with some of our parks opening more recently, Richard noted that the energy has remained strong and the overall environment is positive. The trends we observed in the first quarter, which we highlighted in our prepared remarks, are holding steady into April.

James, I'll piggyback on what Brian said. Let me jump in here. We had parks in the month of April punching through 30,000, getting to healthy attendance levels on Saturdays that they opened up with good weather. We're seeing extremely strong demand. We always say this to you guys when the weather is good, that's our barometer. We've got parks doing over 30,000 on a Saturday in April. That usually shapes up to be a strong spring and a good year.

Got it. To rephrase Steve's question, when looking at operating expenses in the first quarter, there was a substantial decline in operating days. If we evaluate OpEx per operating day, it has increased by nearly 50%. Additionally, attendance per operating day has risen even more than that. Therefore, the operating day metrics might not be very meaningful for the first quarter. The response likely relates to the selection of parks that were opened compared to the ones that were reduced. Could you help us understand OpEx in this context? You mentioned eliminating the lower-value, higher-risk operating days in the quarter from Carowinds, Kings Dominion, and Great America. Why didn’t this have a more significant impact on costs, and how should we view this as we plan for the rest of the year?

Yes, James, those are excellent questions. Your observation is accurate that metrics like operating cost per day or revenue attendance per day can be quite deceptive and can fluctuate rapidly with smaller samples. This is just the nature of small numbers, making it challenging to analyze those figures effectively. To clarify, when comparing to last year, it's important to note that most of our parks are not operational during the first quarter, as mentioned in our prepared remarks. The parks that are operating, particularly during the off-season, have minimal maintenance and staffing levels to ensure they can be ready for the spring opening. Consequently, a lot of the costs we incur are related to this fixed off-season base, which is streamlined to facilitate the necessary seasonal maintenance and repairs on rides in preparation for our April and early May openings. There isn't much you can trim from parks like Cedar Point, Kings Island, and Canada's Wonderland while they remain closed. Regarding the parks that were operational, like Knott's Berry Farm, we managed to reduce many variable costs last year, albeit for unfortunate reasons. Attendance was affected by severe weather in Southern California; for instance, we were closed for 12 days last year in the first quarter compared to just five this year. So, there are various factors to consider. Overall, if you exclude merger-related expenses, operating costs and expenses remained relatively flat on a comparable week basis, despite accommodating 125,000 more visitors. There are certain variable costs associated with this increased visitation, especially as we strive to maintain the guest experience our customers expect. We are satisfied with our current position and anticipate further opportunities, particularly in the latter half of the second quarter and into the third quarter, to be more proactive in reducing costs, as that’s where most of the variable expenses are concentrated.

Your next question comes from the line of Ian Zaffino of Oppenheimer.

Great commentary on the group demand side. Can you maybe tell us what's driving that? And I guess Six Flags has kind of commented similarly to the strength in group, but they also kind of pointed to some of the internal changes they've done with staffing as a way to drive that; but I guess now you guys are saying something similar. So maybe if I could just tell us what you're seeing there, any comment that you could give us.

Yes, Ian, that's a great question. We've always observed that the group channel tends to face the biggest disruption during economic slowdowns, as we witnessed in 2008 and 2009 and again during the pandemic. It's also typically slower to recover, usually taking two to three years. When we look specifically at youth groups versus corporate groups, we notice that much of the youth group business spikes in the spring. We're performing exceptionally well and trending back toward 2019 levels, if not exceeding them in our youth channels. It's encouraging to see our parks busy on Thursdays and Fridays, particularly in locations like Charlotte. Our youth business, which was affected by the pandemic due to remote learning and schools hesitating to organize day trips, is now experiencing a significant rebound. On the corporate side, we see that companies are actively seeking ways to support their customers and employees. The recovery patterns we're observing closely resemble those from the 2008 to 2012 recovery period, with budgets being reinstated to care for employees. We believe there is a strong demand for our offerings, as companies look to bring their employees together, whether they work in the same location or remotely. We offer a unique experience that allows people to network and enjoy their time together. Both our youth and corporate channels are performing well. While we haven't made internal changes, we are enhancing our support through our CRM system and by building a stronger prospecting and lead sourcing system. We're investing in technology and other initiatives to improve our lead sourcing, which has been beneficial for us.

And your next question comes from Chris Woronka from Deutsche Bank.

With the strategy to reduce operating days and hours, what insights have you gained from that? Although it's challenging to know what you might have achieved if you had remained open, do you think you will make hourly or daily adjustments as we approach the fall and next spring, or are you satisfied with the current outcomes?

Chris, that's a good question. Looking back, last year was the first time we operated in January and February in some of our Southern markets. We wanted to evaluate the market's response, and after assessing the off-season, we decided to reduce those hours and days. We received feedback, including challenges like weather, which we were aware of, but we wanted to test the limits. Our approach has always been that if you're not testing, you're not learning. Based on that test, we adjusted our hours and days. We have a clearer picture of what our operating calendar should be for spring. We continually look to add days based on demand, so if we fill up a Thursday in youth groups, for example, we’ll open up a Wednesday to capture that demand. As we plan for this year, we’re also preparing for next year and applying what we’ve learned. By early summer, we'll review our spring calendar to finalize our operating plan for the following spring. I don’t anticipate major changes, as the current approach seems effective. We might add a weekend here or there, but overall, we're satisfied with our current strategy.

Okay. Appreciate that, Richard. And then next question is kind of open-ended, I guess. But you and some of your peers have talked about a lot of revenue generation opportunities through the app with push offers and things like that. Is there any way to kind of size that up, if not with a number, maybe a magnitude? I mean how much do you think you've done versus how much more there is to go on kind of that instant revenue gratification?

So I'll let Brian weigh in here in a second. But as we think about any of those types of programs. First, I would say we, like others, are firm believers in a loyalty program and making sure that we engage our customers within that digital footprint. So I think that when you think about your most valuable customers, the season pass holder, we spend the most time with them. So we want to push that out. But when you look at a program, and I'll take you back almost 10 years, I think we sold our first all-season dining in 2015 and followed others in the industry, like Six Flags as well. We've seen penetration levels on that increase year after year. So clearly, we're in the very early innings. But what's encouraging is once you build that customer behavior and they use the app and they start reacting to the push offers and all those types of things. That's a program that no matter where you start, we'll continue to grow year-over-year. Brian?

Yes. Chris, just adding to Richard's comments. I would echo we are still in the very early innings. Our view of the app as a component of our digital transformation efforts at the parks is about, as we said in our prepared remarks, about enhancing efficiencies, eliminating pain points for the guests, which ultimately will over time translate into incremental revenue generation. I think from our perspective, the goal is always to try and push those per caps up in that 3% to 4% range over the long term. If we can do that, that's a healthy business model. This is just another tool in our tool belt for getting there. As we look, for us, you've heard us talk about it. It's less about just going out and boldly taking pricing in the parks. We don't believe we have that kind of pricing power. It's more about efficiencies and driving more transactions per guest and driving higher transaction values. And we think that the app along with some of the other digital initiatives that we have in place can help achieve that.

Your next question comes from the line of Lizzie Dove of Goldman Sachs.

I know the decline in admissions per cap this quarter and last was mostly due to the California reset. And that's obviously, as you mentioned, the majority of 1Q. But as that becomes a less important piece in our other parks open, can you help us kind of think about how to think about the pacing of admissions per cap for the rest of the year?

Yes, Lizzie, it's Brian. So yes, I would reiterate, as you just noted that the first quarter numbers are so heavily skewed by Knott's. As I mentioned earlier, it represents close to 3/4 of our operating days and honestly, probably closer to 85% of the attendance. So it's having an outsized impact when you look at this truncated window. If I carve Knott's out for a second and just look at albeit a small sample size, so I'll caveat my comment that way. We're seeing what we want to see out of the other parks that have started to kick off; the per capita spending is solid. It's in that 3% to 4% range and in line with up 3% to 4%. And in line with our expectations in the early going. Will there be pressure on admissions per cap over the balance of the year? I think as long as we continue to see growth in some of those lower per cap channels like season passes and groups, there is going to be pressure on admissions per cap. The ultimate answer to your question, though, Lizzie, will depend on the mix, where does the mix of each of those channels ultimately play out as well as where does the mix of the park performance play out. But as we're seeing at Knott's even where the price adjustments we did make have had an impact on that parks per cap. It's had the intended result, as we noted, with the attendance lift and most importantly, the revenue lift. So in the early going through the first quarter, our revenues are up double digits which is really what's most important. Per cap is a key metric for us. But at the end of the day, it's about revenue. And so our focus is to drive volume, drive revenue growth, and the per cap is going to be a little bit of what washes out on the backside.

That's helpful. And then I guess on the other impact side of things, like the trends there kind of improved nicely this quarter. Any kind of read you can give on what you're seeing from the consumer or changes to food and beverage spend or merchandise, anything like that would be great just to kind of get a pulse check there.

Yes. Lizzie, if I think about the month of April and what we've been seeing continued healthy increases in food and beverage leading the way, increased extra charge premium offering revenue and per cap as well, part of that. And we're just getting to where we've opened now Cedar Point, which with Top Thrill 2, we think the premium offerings there, most notably Fast Lane and the holiday Fast Lane and the single-use Fast Lane will be a nice lift year-over-year. So we continue to see strength in the consumer spending once they get in the park, as Brian said, part of that is we've built a lot of engines that will drive transaction capacity, and we continue to listen to what the customers value and try and provide that. Premium offerings, sitting on top of a healthy attendance space seem to drive really strong revenue growth, and that's what we're focused on.

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

Richard, I wanted to follow up on your comments about the healthy staffing level and setting industry-leading wage rates. In light of some of the minimum wage increases that we've kind of seen in certain areas of your footprint, do you see the need to react to that? What does that kind of do to the broader wage market?

We always consider scheduled minimum wage increases in our planning. Last year, we successfully managed the seasonal wage rate, and this year, we have been able to both reduce hours and lower the rates. We believe we have various tools to continue managing this effectively. Our workforce management team has done an exceptional job collaborating with park operators, leading to improved efficiencies. We are focused on ensuring that while rides and revenue centers are operational, we are staffing parks effectively. We will continue to leverage the regional variations in labor markets, which differ significantly from one area to another. We are confident in our ability to slightly lower our labor costs while maintaining the staffing levels necessary to accommodate the increased attendance we are experiencing.

I see. That's helpful. And then just another one on the digital transformation opportunities. You laid out some pretty exciting initiatives. Is there maybe a way to think about within the $210 million to $220 million CapEx guidance how much is maintenance and how much is growth? And how should we think about kind of ROI on the growth piece and how that kind of shapes out over time?

Yes, Thomas, it's Brian. So within those capital programs, ideally, we would usually like to see somewhere approaching 60% to 70% of that spend beyond what we would consider either marketable or ROI driving projects, projects that either drive attendance and urgency to visit like Top Thrill 2 or Iron Menace at Dorney Park or guest spending through investments in things like new mobile app, expanded or improved food and beverage offerings, etc. So the balance of spend then is really on more of your infrastructure type of projects, the things that are really important that people don't often pay attention to until they're not working. So things like a WiFi platform, things like the roadways and the parking lots, restrooms, etc. In terms of returns, it will vary park by park, but it's fair to say that the big attractions, the marquee rides, the Top Thrills, the Iron Menace, things of that caliber have historically generated returns 1-year cash-on-cash returns that are well north of 20%. And now that's going to depend. There are a lot of macro factors that come into play, right, when you're looking at that, that's the weather for that season, are there broader economic headwinds or tailwinds, etc. But we've seen great success with those types of marquee attractions over the years, which is why we're so excited about this year's program. As we noted, that it's the first capital program that's what we would consider sort of the normal and complete capital program that wasn't disrupted by the pandemic because those programs got disrupted for several years based on the cadence of getting those rides purchased and built. And so we're really excited about what we have in place for '24.

There are no further questions at this time. So I'll hand back to Richard Zimmerman for closing comments.

I want to thank everybody for joining us and for your continued interest in Cedar Fair. We're looking forward to an exciting year ahead, and we hope to see you with us every step of the way. We sincerely hope you can find some time to visit our parks so you can see firsthand what makes our brand of entertainment so special and timeless. Michael?

Thanks again, everybody. Please feel free to contact Investor Relations at (419) 627-2233, and our next scheduled call will be in early August after we release our second quarter results. Gavin, that concludes today's call. Thank you.

That concludes today's call. Thank you for participating. You may now all disconnect.