CBS 11 Header TXA 21 Header MeTV Header KRLD Header The Fan Header
CBS DFW WEATHER APP: iPhone App Store | Android App Coming Soon | More Information

Six Flags Announces Strong Second Quarter 2010 Results

Six Flags Entertainment Corporation announced today its consolidated operating results for the second quarter and six months ended June 30, 2010(2).

“Our strong revenue and profitability in the quarter and year to date are a reflection of Six Flags’ strong brand equity and the operational excellence of this superb team,” said Jim Reid-Anderson, Chairman, President and Chief Executive Officer.  “We are well positioned to leverage our base business momentum for long term success.”

“I am honored to be a part of this great company, and I am pleased with the strong results we delivered in the second quarter,” said Alexander Weber, Jr., Chief Operating Officer.  “Six Flags has a renewed focus on its core theme park business.  We remain committed to delivering a clean, safe and fun guest experience with new and exciting attractions for customers of all ages.”

Three Month Results

Total revenue of $321.3 million for the second quarter increased 8% from the prior-year quarter’s total of $296.8 million, reflecting $3.4 million of revenues from the Six Flags Great Escape Lodge and Indoor Waterpark (the “Lodge”), the results of which were consolidated beginning with the first quarter of 2010 as a result of adopting new consolidation accounting rules.(3)  Excluding the consolidation of the Lodge, total revenues for the quarter increased $21.1 million, or 7%, compared to the prior-year quarter, primarily reflecting increased attendance and sponsorship revenue.

Attendance for the quarter was 8.2 million, a 7% increase over the prior-year quarter’s attendance of 7.7 million, reflecting strong season pass visitation and higher group sales.

Per capita guest spending, which excludes sponsorship, licensing, Lodge accommodations and other fees, decreased 1% to $36.86 in the second quarter from $37.15 in the prior-year quarter, reflecting planned decreases in season pass pricing, partially offset by improved yield on single-day tickets, and the favorable exchange rate impact at our Mexico City and Montreal parks, which accounted for an $0.18 increase in per capita guest spending for the second quarter of 2010 compared to the prior-year quarter.

Cash operating expenses(4) of $213.3 million for the second quarter decreased $11.9 million, or 5%, compared to the second quarter of 2009.  Excluding the Lodge, cash operating expenses totaled $210.8 million, a decrease of $14.4 million, or 6%, from the prior-year quarter, reflecting decreased marketing costs, insurance expense, and payroll and benefits expenses, partially offset by the currency impacts at our Montreal and Mexico City parks.

Non-cash operating expenses comprised of depreciation, amortization, stock-based compensation and loss on disposal of assets increased $2.3 million in the second quarter of 2010 to $40.6 million, compared with $38.3 million in the second quarter of 2009, reflecting increased depreciation and amortization primarily as a result of increased amortizable assets due to the application of fresh start accounting and the impact of the consolidation of the Lodge, partially offset by decreased loss on disposal of assets and lower stock-based compensation expense.

Other expense decreased from $16.3 million in the second quarter of 2009 to $1.0 million in the second quarter of 2010, reflecting the prior-year loss from interest-rate swaps.  The Company also incurred $16.5 million in restructuring costs in the second quarter of 2010, which reflect severance and related costs from the change in senior management and the implementation of the Company’s new cost reduction strategy.

The Company’s income from continuing operations in the second quarter of 2010 totaled $749.2 million compared to a loss of $96.5 million in the prior-year quarter.  Reorganization items resulted in a gain of $786.9 million in the second quarter of 2010 compared to a net expense of $78.7 million in the second quarter of 2009, primarily reflecting gains from the extinguishment of debt in connection with the consummation of the Plan(5) in the second quarter of 2010.  Income from continuing operations before reorganization items and income taxes for the second quarter of 2010 totaled $22.5 million, an improvement of $40.5 million over the prior year quarter’s loss of $18.0 million, primarily reflecting the impact of increased revenues, reduced operating expenses, lower interest expense resulting from the cancellation of debt in connection with the confirmation of the Plan and reduced other expense, partially offset by the current-year restructuring costs.

Income tax expense was $60.2 million for the second quarter of 2010 compared to a $0.2 million benefit for the second quarter of 2009, primarily reflecting the deferred income taxes that were recorded as a result of fresh start accounting.

Adjusted EBITDA(6) for the second quarter of 2010 was $94.7 million compared to $56.4 million for the prior-year quarter, reflecting the impact of increased revenues and reduced cash operating expenses.

Six Month Results

For the six months ended June 30, 2010, total revenue increased $30.6 million, or 9%, to $378.5 million compared to $347.9 million in the six months ended June 30, 2009, reflecting $7.7 million of revenues from the Lodge in the six months ended June 30, 2010.  Excluding the consolidation of the Lodge, total revenues increased $22.9 million, or 7%, for the first half of 2010 compared to the first half of 2009, reflecting increased attendance, per capita in-park spending and sponsorship revenues.

Attendance for the first six months of 2010 was 9.5 million, a 6% increase over the prior-year period’s attendance of 9.0 million, reflecting strong season pass visitation and higher group sales.

Per capita guest spending, which excludes sponsorship, licensing, Lodge accommodations and other fees, remained relatively flat at $36.67 in the first half of 2010 compared to $36.76 in the same period of the prior year, reflecting planned decreases in season pass pricing, partially offset by improved yield on single day tickets, and a favorable exchange rate impact attributable to our Montreal and Mexico City parks, which accounted for a $0.29 increase in per capita guest spending for the first half 2010 compared to the same prior-year period.

Cash operating expenses of $332.0 million for the first six months of 2010 decreased $5.8 million, or 2%, compared to the same period of 2009.  Excluding the Lodge, cash operating expenses totaled $326.7 million, a decrease of $11.2 million, or 3%, from the prior-year period, reflecting decreased marketing costs, insurance expense, and payroll and benefits expenses, partially offset by the currency exchange rate impacts at our Montreal and Mexico City parks.

Non-cash operating expenses comprised of depreciation, amortization, stock-based compensation and loss on disposal of assets increased $2.3 million in the first six months of 2010 to $78.5 million, compared with $76.3 million in the same period of 2009, reflecting increased depreciation and amortization primarily as a result of increased amortizable assets due to the application of fresh start accounting and the impact of the consolidation of the Lodge, partially offset by decreased loss on disposal of assets and lower stock-based compensation expense.

– Revenues increased by 7% for Q2 and the first six months of 2010(1) driven by increases in attendance and sponsorship

– Q2 Adjusted EBITDA increased 68% to $94.7 million driven by top line growth and effective cost management

– Strong liquidity position, including cash balance of $210 million as of August 1st with no revolver drawn, enables $25 million pay down of first lien term loan

– Six Flags emerges from bankruptcy with approximately one-third of the annual financing cost burden (approximately $75 million) and over $1 billion in federal NOLs

– New management team in place focused on theme park excellence and shareholder value creation