- Full Year 2008 Adjusted EBITDA(1) Increases 45% to a Record $275.3
Million on 5% Revenue Growth and Reduced Costs and Expenses
- Full Year 2008 Operating Income More than Triples to $144.0 Million
- Positive Free Cash Flow(1) Achieved for Full Year 2008 for the First
Time in the Company's History
- Fourth Quarter Adjusted EBITDA Reaches $5.2 Million and, Excluding
Certain Non-Cash Items(2), Loss From Continuing Operations Per Share Improves
to $0.83
NEW YORK, March 10 /PRNewswire-FirstCall/ -- Six Flags, Inc. (NYSE: SIX)
announced today its operating results for the year and quarter ended December
31, 2008.(3)
Commenting on the Company's performance, Mark Shapiro, President and Chief
Executive Officer of Six Flags, Inc., said: "The three-year turnaround for Six
Flags required a great deal of patience. I am proud and grateful that the
efforts and commitment of our workforce -- some 30,000 strong -- resulted in
our best year ever, putting our operations back on solid footing. The
remaining challenge is the inherited balance sheet and we are in comprehensive
dialogue with our lenders to remedy that issue."
For the year ended December 31, 2008, total revenues increased $50.5
million, or 5%, to $1.02 billion from $970.8 million in the prior year.
Attendance for the year was 25.3 million, an increase of 0.4 million, or 2%,
compared to 24.9 million in the prior year. The attendance increase was
driven by increased paid admissions, partially offset by planned reductions of
approximately 0.5 million in complimentary and free promotional attendance.
Total revenue per capita for the year increased $1.31, or 3%, to $40.30
from $38.99 in the prior year, reflecting increased per capita guest spending
as well as growth in sponsorship, licensing and other fees. Increased per
capita guest spending of $0.53, or 1%, to $37.97 from $37.44 in the prior year
was driven by increased rentals, food and beverages, parking, admissions and
retail revenues. Sponsorship, licensing and other fees increased $20.4
million, or 53%, to $59.0 million.
Operating costs and expenses, including cost of sales, depreciation,
amortization, stock-based compensation and loss on disposal of assets,
decreased $55.4 million, or 6%, to $877.3 million for 2008, compared to $932.7
million in 2007. Key planned reductions were achieved in marketing, loss on
disposal of assets, third party services, repairs and maintenance,
travel-related expenses, supplies and seasonal labor.
Income from continuing operations before income taxes was $19.4 million,
an improvement of $252.4 million over the prior year pre-tax loss of $233.0
million. The improved results reflect a net gain on debt extinguishment of
$107.7 million compared to a $13.2 million loss on debt extinguishment for
2007, increased revenues of $50.5 million, reduced operating costs and
expenses of $55.4 million, a $5.5 million reduction in net other expense, and
reduced net interest expense of $21.5 million. The lower net other expense
reflects the 2008 loss related to an interest rate hedge that no longer
qualified for hedge accounting treatment, compared to the prior year's cost of
settling a class-action labor lawsuit in California and costs associated with
implementation of an early retirement plan. The reduced net interest expense
resulted from lower long-term debt and interest rates in 2008.
Adjusted EBITDA for 2008 was $275.3 million, an $85.7 million improvement
over the prior-year's Adjusted EBITDA of $189.6 million, reflecting increased
revenues and reduced cash operating costs and expenses.
Three Month Results
For the fourth quarter of 2008, total revenues of $118.1 million increased
5% over the prior-year quarter's $112.3 million, while total attendance grew
9%, or 0.3 million. The attendance increase over the prior-year quarter was
primarily due to strong Halloween and Christmas Holiday seasons, driven by an
increased mix of season pass attendance.
Revenue growth for the fourth quarter also reflected growth in
sponsorship, licensing and other fees, which increased $4.1 million over the
prior-year period to $13.8 million. Total revenue per capita decreased 4% to
$38.04 in the fourth quarter of 2008 from $39.45 in the prior-year quarter,
reflecting reduced guest spending due in part to the increased mix of season
pass attendees who tend to spend less in-park.
Mr. Shapiro added: "While the economic environment continued to tighten
in the fourth quarter, our business remained resilient. Six Flags has
effectively positioned itself as an affordable close-to-home entertainment
destination for the entire family. With paid attendance, length of stay and
in-park spending increases in 2008, it is clear that consumer confidence in
our brand and the guest experience has returned."
Excluding the non-cash items resulting from the change in the Company's
income tax valuation allowance and the mark-to-market charge related to an
interest rate hedge that ceased to be an "effective hedge" for accounting
purposes, the Company's loss from continuing operations in the fourth quarter
of 2008 was $75.4 million, an improvement of $51.2 million over the prior-year
quarter's loss of $126.6 million. Including the non-cash items, the Company
recorded a loss of $201.2 million from continuing operations in the fourth
quarter of 2008.
The improved operating results, excluding the non-cash charges, reflect
revenue growth of $5.7 million and a reduction of $27.1 million in operating
costs and expenses, which decreased from $183.0 million in the prior-year
fourth quarter to $155.9 million for the fourth quarter of 2008, reflecting
primarily a reduction in the loss on disposal of assets. Also included in the
change in net income from continuing operations for the fourth quarter was a
$7.3 million reduction in net interest expense, reflecting less long-term debt
and lower interest rates compared to the fourth quarter of 2007.
Adjusted EBITDA for the fourth quarter of 2008 improved by $3.3 million,
or 165%, to $5.2 million compared to $1.9 million for the prior-year quarter,
driven primarily by the Company's revenue growth.
Cash and Liquidity
As of December 31, 2008, the Company had $210.3 million in unrestricted
cash and $1.5 million available (after reduction for outstanding letters of
credit of approximately $29.4 million) on its $275 million revolving credit
facility.
The Company's Preferred Income Redeemable Shares ("PIERS") are required to
be redeemed for cash on August 15, 2009 for $287.5 million plus accrued and
unpaid dividends, which totaled $15.6 million at December 31, 2008. The
Company does not expect to have sufficient cash to redeem the PIERS at their
redemption date. The PIERS redemption is just one component of the
comprehensive restructuring of the balance sheet that the Company is pursuing.
Accordingly, the Company's 2008 Annual Report on Form 10-K will include the
disclosure of risk factors associated with the Company's liquidity, pending
PIERS maturity and the restructuring effort.
Conference Call
The Company will host a teleconference for analysts and investors on
Monday, March 16, 2009 at 9:00 AM Eastern. Participants in the call will
include President and Chief Executive Officer, Mark Shapiro, and Executive
Vice President and Chief Financial Officer, Jeffrey R. Speed.
The teleconference will be broadcast live to all interested persons as a
listen-only Web cast on http://investors.sixflags.com/. The Web cast will be
archived for one year.
About Six Flags
Six Flags, Inc. is the world's largest regional theme park company with 20
parks across the United States, Mexico and Canada, and soon will be expanding
beyond North America with destinations in Dubai and Qatar. Since 1961,
hundreds of millions of families have trusted Six Flags to combine
friendly-clean-fast-safe service with affordable, value-packed thrills,
record-shattering roller coasters and special events like the Summer Concert
Series, Fright Fest and Holiday in the Park. Six Flags' wide array of
entertainment options reaches all demographics -- families, teens, tweens and
thrill seekers alike -- featuring themed attractions based on skateboarding
legend Tony Hawk, the ultimate daredevil Evel Knievel, movie franchises The
Dark Knight and The Mummy; as well as world-renowned, kid-friendly brands
including Looney Tunes, the Justice League of America, The Wiggles and Thomas
the Tank Engine.
Six Flags continues to develop new avenues for growth, acquiring ownership
and management of Dick Clark Productions, producer of such perennial
television hits as the American Music Awards, the Golden Globe Awards, the
Academy of Country Music Awards, Dick Clark's New Year's Rockin' Eve and So
You Think You Can Dance. Six Flags, Inc. is a publicly-traded corporation
(NYSE: SIX) headquartered in New York City.
Forward Looking Statements:
The information contained in this news release, other than historical
information, consists of forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act. These statements may involve risks and uncertainties that could cause
actual results to differ materially from those described in such statements.
These risks and uncertainties include, among others, Six Flags' success in
implementing its new business strategy. Although Six Flags believes that the
expectations reflected in such forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to have been correct.
Important factors, including factors impacting attendance, such as local
conditions, events, disturbances and terrorist activities, risk of accidents
occurring at Six Flags' parks, adverse weather conditions, general economic
conditions (including consumer spending patterns), competition, pending,
threatened or future legal proceedings and other factors could cause actual
results to differ materially from Six Flags' expectations. Reference is made
to a more complete discussion of forward-looking statements and applicable
risks contained under the captions "Cautionary Note Regarding Forward-Looking
Statements" and "Risk Factors" in Six Flags' Annual Report on Form 10-K for
the year ended December 31, 2007, and the Quarterly Reports on Form 10-Q for
the first three quarters of 2008, which are available free of charge on Six
Flags' website http://www.sixflags.com.
(1) See the following tables and Notes 4 and 6 to the tables for a
discussion of Adjusted EBITDA and Free Cash Flow and their reconciliation to
net income (loss).
(2) The certain non-cash items were an income tax charge of $110.8 million
due to an increase in the Company's valuation allowance for deferred tax
assets that are derived from the Company's carry-forward of income tax net
operating losses and a mark-to-market charge of $15.0 million related to an
interest rate hedge that ceased to be an "effective hedge" for accounting
purposes. See Note 2 to the tables for a discussion of the use of this
measure.
(3) Reported results from continuing operations for all periods presented
exclude park operations in Buffalo, New York; Columbus, Ohio; Concord,
California; Denver, Colorado; Houston, Texas; Oklahoma City, Oklahoma;
Sacramento, California; and Seattle, Washington. These parks have been
classified as discontinued operations. As of April 6, 2007, the sales of all
of the above-named parks were completed. Also excluded from continuing
operations for all periods are results from our park in New Orleans,
Louisiana, which has been closed since August 2005 due to damage caused by
Hurricane Katrina. During the 2008 second quarter, the Company decided that
it will not resume operations in New Orleans and has classified the park as a
discontinued operation.
Six Flags, Inc.
Three and Twelve Months Ended December 31, 2008 and 2007
(In Thousands, Except Per Share Amounts)
Statements of Operations Data(1)
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Revenue $ 118,051 $112,329 $1,021,298 $970,825
Costs and
Expenses
(excluding
depreciation,
amortization,
stock-based
compensation
and loss on
disposal of
assets) 117,708 113,606 713,845 743,007
Depreciation 34,801 34,886 138,406 136,657
Amortization 223 274 1,203 1,249
Stock-based
compensation (99) 6,296 6,202 12,525
Loss on
disposal of
assets 3,311 27,899 17,692 39,243
Income from
operations (37,893) (70,632) 143,950 38,144
Interest
expense (net) 41,157 48,504 176,174 197,643
Minority
interest in
earnings (596) (1,421) 40,728 39,684
Equity in
operations of
partnerships (562) (66) 806 502
Net (gain) loss on
debt extinguishment - 27 (107,743) 13,210
Other expense 13,780 6,816 14,627 20,122
Income (loss) from
Continuing
operations
before
income
taxes (91,672) (124,492) 19,358 (233,017)
Income tax
expense (109,521) (2,087) (116,630) (6,203)
Loss from
Continuing
operations (201,193) (126,579) (97,272) (239,220)
Discontinued
operations 74 (309) (15,691) (13,939)
Net loss $(201,119) $(126,888) $(112,963) $(253,159)
Net loss
Applicable
to common
stock $(206,612) $(132,381) $(134,933) $(275,129)
Per share -
basic and
diluted:
Loss from
Continuing
operations $ (2.12) $ (1.39) $ (1.23) $ (2.76)
Discontinued
operations $ - $ - $ (0.16) $ (0.14)
Net loss $ (2.12) $ (1.39) $ (1.39) $ (2.90)
SUPPLEMENTAL
INFORMATION:
Income (loss)
From continuing
operations
excluding certain
non-cash items (2) (75,379) 28,542
Per share - basic
and diluted
Income (loss)
from continuing
operations
excluding certain
non-cash items(2) $(0.83) $0.07
Balance Sheet Data
(In Thousands)
Balance Sheet Data December 31, 2008 December 31, 2007
Cash and cash equivalents
(excluding restricted cash) $ 210,332 $28,388
Total assets 3,030,845 2,945,319
Current portion of long-term debt 253,970 18,715
Long-term debt
(excluding current portion) 2,112,272 2,239,073
Redeemable minority interests 414,394 415,350
Mandatory redeemable preferred
stock 302,382 285,623
Total stockholders' deficit (443,825) (252,620)
Leverage Ratio (3) 5.39 N/A
Restricted Subsidiary
Leverage Ratio (3) 3.81 N/A
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Other Data:
Adjusted EBITDA(4) $ 5,153 $ 1,947 $275,254 $189,632
Weighted average
Shares outstanding
- basic and diluted 97,433 94,977 96,950 94,747
Net cash provided by
(used in) operating
activities $(57,672) $(55,696) $66,929 $(36,157)
The following table sets forth a reconciliation of net income loss to
Adjusted EBITDA and Free Cash Flow for the periods shown (in thousands):
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Net loss $(201,119) $(126,888) $(112,963) $(253,159)
Discontinued
operations (74) 309 15,691 13,939
Income tax
expense 109,521 2,087 116,630 6,203
Other expense 13,780 6,816 14,627 20,122
Net (gain) loss
on debt
extinguishment - 27 (107,743) 13,210
Equity in
operations of
partnerships (562) (66) 806 502
Minority
interest in
earnings (596) (1,421) 40,728 39,684
Interest
expense(net) 41,157 48,504 176,174 197,643
Loss on
disposal
of assets 3,311 27,899 17,692 39,243
Amortization 223 274 1,203 1,249
Depreciation 34,801 34,886 138,406 136,657
Stock-based
compensation (99) 6,296 6,202 12,525
Third party
interest in
EBITDA
of certain
operations (5) 4,810 3,224 (32,199) (38,186)
Adjusted EBITDA $5,153 $1,947 $275,254 $189,632
Cash paid
for interest
(net) and
debt Issuance
costs (39,282) (63,891) (167,166) (215,573)
Capital
expenditures
(net of property
insurance
recoveries) (6,409) (23,014) (90,251) (114,132)
Cash dividends
and taxes (604) (7,864) (12,230) (25,891)
Free Cash
Flow (6) $(41,142) $(92,822) $5,607 $(165,964)
NOTES
(1) Revenues and expenses of international operations are converted into
U.S. dollars on a current basis as provided by U.S. generally accepted
accounting principles ("GAAP").
(2) The certain non-cash items were an income tax charge of $110.8
million due to an increase in the Company's valuation allowance for deferred
tax assets that are derived from the Company's carry forward of income tax net
operating losses and a mark to market charge of $15.0 million related to an
interest rate hedge that ceased to be an "effective hedge" for accounting
purposes. The Company believes that the earnings per share information
excluding these items is useful to its investors and analysts who could use
the information to reconcile between expectations for the period and actual
results.
(3) Under the terms of the $400,000,000 12 1/4% Senior Notes of Six Flags
Operations, Inc. ("New Notes"), we must disclose on a quarterly basis the
Leverage Ratio and Restricted Subsidiary Leverage Ratio, both as defined in
the terms of the New Notes.
(4) Adjusted EBITDA, a non-GAAP measure, is defined as income (loss) from
continuing operations before discontinued operations, income tax expense
(benefit), other (income) expense, net (gain) loss on debt extinguishment,
equity in operations of partnerships, minority interest in earnings (losses),
interest expense (net), amortization, depreciation stock-based compensation,
(gain) loss on disposal of assets minus interests of third parties in EBITDA
of the four parks (see Note 5 below), plus our interest in the Adjusted EBITDA
of one hotel and Dick Clark Productions, which are less than wholly owned.
The Company believes that Adjusted EBITDA provides useful information to
investors regarding the Company's operating performance and its capacity to
incur and service debt and fund capital expenditures. The Company believes
that Adjusted EBITDA is used by many investors, equity analysts and rating
agencies as a measure of performance. In addition, Adjusted EBITDA is
approximately equal to "Consolidated Cash Flow" as defined in the indentures
relating to the Company's senior notes. Adjusted EBITDA is not defined by GAAP
and should not be considered in isolation or as an alternative to net income
(loss), income (loss) from continuing operations, net cash provided by (used
in) operating, investing and financing activities or other financial data
prepared in accordance with GAAP or as an indicator of the Company's operating
performance. Adjusted EBITDA as defined in this release may differ from
similarly titled measures presented by other companies.
(5) Represents interest of third parties in the Adjusted EBITDA of Six
Flags Over Georgia, Six Flags Over Texas, Six Flags White Water Atlanta, and
Six Flags Discovery Kingdom (formerly Six Flags Marine World, the minority
interest in which we purchased in July 2007), plus our interest in the
Adjusted EBITDA of one hotel and Dick Clark Productions, which are less than
wholly owned.
(6) Free Cash Flow, a non-GAAP measure, is defined as Adjusted EBITDA
less (i) cash paid for interest expense, net of interest income receipts, and
debt issuance costs (ii) capital expenditures net of property insurance
recoveries and (iii) cash dividends and taxes. The Company believes that Free
Cash Flow is used by many investors, equity analysts and rating agencies as a
measure of performance. Free Cash Flow is not defined by GAAP and should not
be considered in isolation or as an alternative to net income (loss), income
(loss) from continuing operations, net cash provided by (used in) operating,
investing and financing activities or other financial data prepared in
accordance with GAAP or as an indicator of the Company's operating
performance. Free Cash Flow as defined in this release may differ from
similarly titled measures presented by other companies.
SOURCE Six Flags, Inc.
CONTACT:
Sandra Daniels
1-212-652-9360
or Investor Relations
William Schmitt
1-203-682-8200
Web Site: http://investors.sixflags.com
