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Two analyst, one expert and top management from six sector firms examine the leisure products & theme parks sector in this special 38-page Leisure Products & Theme Parks issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info523.htm.

TWST: Cedar Fair (NYSE:FUN) and Six Flags (NYSE:PKS) are not really destinations, are they?

Mr. Gianoukos: They’re not. One of the benefits that Six Flags and Cedar Fair have is that a large percentage of the people who go to the parks drive. Two-thirds of the population of the US live within 150 miles of a Six Flags-owned park. Cedar Fair doesn’t have quite as many parks, but they essentially attract a drive-in audience as well. As a result, both companies offer a compelling value in a slow economy and also, for many potential customers, eliminate the need to fly. This, coupled with their operating schedules, helped eliminate at least some of the effects of 9/11.

TWST: What’s your outlook for Cedar Fair and Six Flags as we move through 2002 and into 2003?

Mr. Gianoukos: Over the long run, we expect about 4% revenue growth and 8% EBITDA growth. We expect the revenue growth to be driven by a combination of 2% attendance growth and 2% per capita spending growth. About 65% of this revenue growth should fall to EBITDA.

TWST: Are these stocks that investors should be putting new money into at this time?

Mr. Gianoukos: I think Cedar Fair is a stock that you can put away and hold forever, as it offers an attractive yield. It’s a master limited partnership, which makes it difficult for some institutions to invest in, but it has a 7% yield and a very conservative management team. Because we don’t see any danger to the distribution being cut, at least not anytime soon, it’s attractive for conservative investors or for someone looking for an income or a yield play.

TWST: A few years ago I recall hearing that only 10% of the public had ever taken a cruise. Does this suggest some strong growth opportunities?

Mr. Gianoukos: That is true. However, we would caution that 10% includes every man, woman and child in the US, and that’s not necessarily a realistic target market. So we think the penetration rate may be quite a bit higher than that. However, cruising does represent only 4% to 5% of the entire vacation market, so there appears to be plenty of room to grow. Our concern is, and has always been, the speed at which the lines are adding capacity. We don’t think the market is saturated, but we do get nervous that they’re adding ships too quickly. Historically, they’ve grown supply about 8%, but over the next couple of years we’re likely to see rates higher than that.

TWST: How much competition do traditional toys get from electronic toys and computer games?

Mr. Gianoukos: Some, mainly because kids are maturing quicker and as a result leaving traditional toys behind at an earlier age. As an example, girls used to play with Barbie until they were age 12 and now it’s around eight to 10. Additionally, the growth of PCs, the Internet and video games is also having an impact. As a result of kids growing up faster and the fact that the toy companies’ target demographic is shrinking, we think the industry may be in a tough spot, especially once the turnarounds are complete. That’s why we don’t expect a lot of top-line growth and are only willing to apply p/e multiples of 17-19 times for Mattel and Hasbro. We think it’s hard to put a growth multiple on a toy stock, and at this point they’re not really value stocks either.

TWST: Overall, Dean, what would your message be to investors who are wondering whether leisure products and leisure time stocks are a place to put money this year?

Mr. Gianoukos: We would say you need to watch the stocks closely. They tend to be very volatile and, to a large degree, are trading stocks. So we try to pick the right entry points by sticking with historical valuations. There is a lot of money to be made in this sector because the stocks tend to move around so much, but at the same time, if you come in at the high end, there’s money to be lost as well.

This special issue includes:

1) Leisure Activity & Recreational Products - In an in-depth (2,900 words) Analyst Interview, Timothy A. Conder, Vice President at.G. Edwards & Sons, examines the outlook for the sector including and shares specific stock recommendations.

2) Leisure Activity & Recreational Products - In an in-depth (3,700 words) Analyst Interview, Dean Gianoukos, Analyst that follows the leisure industry at J.P.Morgan Chase, examines the outlook for the sector including and shares specific stock recommendations.

3) Outlook for Them Parks - In an in-depth (4,500 words) Expert Interview, Dennis L. Speigel, President of International Theme Park Services, Inc., examines the outlook for the sector including and shares specific stock recommendations.

4) CEO interviews (average 2,500 words). Top management of six sector firms examine the outlook for their firm and the sector.