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Financial Release

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Fourteenth Consecutive Record Quarter at Six Flags
Year-to-Date Adjusted EBITDA(1) up $27 Million or 8 Percent on Comparable Basis(2)

GRAND PRAIRIE, Texas, Oct. 23, 2013 /PRNewswire/ -- Six Flags Entertainment Corporation (NYSE: SIX), the world's largest regional theme park company, today announced record revenue for the third quarter of 2013 of $505 million, representing a $19 million or 4 percent increase over the same period in 2012. Adjusted EBITDA1 of $268 million for the same period represented an $11 million or 4 percent improvement over prior year and included a $3 million accrual for estimated litigation costs relating to the July 19 accident at Six Flags Over Texas. Third quarter attendance, revenue and profit were somewhat suppressed due to lower attendance at Six Flags Over Texas following the accident.

"I am very proud of our team for delivering yet another record with the best quarter in our company's history on a comparable park basis," said Jim Reid-Anderson, Chairman, President and CEO. "We are firing on all cylinders with innovative attractions at every park and all-time high guest-satisfaction ratings. We remain solidly on track to achieve our aspirational target of $500 million of Modified EBITDA or nearly $3 of cash earnings per share by 2015."

Total guest spending per capita grew $0.71 or 2 percent in the third quarter to $41.27, with admissions revenue per capita increasing $0.45 or 2 percent to $23.96 and in-park revenue per capita increasing $0.26 or 2 percent to $17.31. Attendance for the third quarter grew 2 percent to 11.8 million guests.

Through the first nine months of 2013, the company reported revenue of $956 million, representing a $32 million or 3 percent increase over prior year after adjusting 2012 for the $3 million of insurance proceeds related to Hurricane Irene. Adjusted EBITDA for the same nine-month period totaled $369 million representing a $16 million or 5 percent increase as reported, and a $27 million or 8 percent increase on a comparable basis2.

In the first nine months of the year, total guest spending per capita grew $0.54 or 1 percent to $40.54, with admissions revenue per capita increasing $0.50 or 2 percent to $23.32 and in-park revenue per capita increasing $0.04 to $17.22. Attendance for the first nine months of 2013 increased 2 percent to 22.4 million guests.

For the twelve-month period ended September 30, 2013, Adjusted EBITDA was $399 million with Modified EBITDA3 margin at an industry high 39.9 percent.

The company continued to successfully upsell guests to season passes and membership plans, and as a result, deferred revenue grew to $76 million as of September 30, 2013, an increase of $17 million or 28 percent compared to September 30, 2012. 

Cash earnings per share4 for the twelve-month period ending September 30, 2013 was $2.21, an increase of $0.14 per share or 7 percent compared to the prior twelve-month period ending September 30, 2012.

During the first nine months of 2013 the company invested $89 million in new capital. It also paid dividends of $131 million, or $0.45 per common share per quarter and repurchased $504 million or 15 million shares of its common stock, both after adjusting for the June 26, 2013 two-for-one stock split. In the third quarter, the company repurchased 2.8 million shares for $100 million.

Net Debt5 as of September 30, 2013 was $1.2 billion, a 3.0 times net leverage ratio.

Conference Call
At 8:00 a.m. Central Time today, the company will host a conference call to discuss its third quarter 2013 financial results. The call is accessible either through the Six Flags Investor Relations website at www.sixflags.com/investors or by dialing 1-855-889-1976 in the United States or +1-937-641-0558 from outside the United States and requesting the Six Flags earnings call. A replay of the call will be available by dialing 1-855-859-2056 or +1-404-537-3406 through October 30, 2013.

About Six Flags Entertainment Corporation
Six Flags Entertainment Corporation is the world's largest regional theme park company with $1.1 billion in revenue and 18 parks across the United States, Mexico and Canada. For more than 50 years, Six Flags has entertained millions of families with world-class coasters, themed rides, thrilling water parks and unique attractions including up-close animal encounters, Fright Fest® and Holiday in the Park®. For more information, visit www.sixflags.com.

Forward Looking Statements
The information contained in this 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, (i) the adequacy of cash flows from operations, available cash and available amounts under our credit facilities to meet our future liquidity needs, (ii) our ability to improve operating results by implementing strategic cost reductions, and organizational and personnel changes without adversely affecting our business, (iii) our operations and results of operations, and (iv) the risk factors or uncertainties listed from time to time in the company's filings with the Securities and Exchange Commission ("SEC"). In addition, important factors, including factors impacting attendance, local conditions, contagious diseases, events, disturbances and terrorist activities, recall of food, toys and other retail products which we sell, risk of accidents occurring at the company's parks or other parks in the industry, inability to achieve desired improvements and financial performance targets set forth in our aspirational goals, adverse weather conditions such as excess heat or cold, rain and storms, general financial and credit market conditions, economic conditions (including customer spending patterns), changes in public and consumer tastes, construction delays in capital improvements or ride downtime, competition with other theme parks and other entertainment alternatives, dependence on a seasonal workforce, pending, threatened or future legal proceedings and the significant expenses associated with litigation and other factors could cause actual results to differ materially from the company's expectations. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will be realized and actual results could vary materially. 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 the company's Annual and Quarterly Reports on Forms 10-K and 10-Q, and its other filings and submissions with the SEC, each of which are available free of charge on the company's investor relations website at  www.sixflags.com/investors and on the SEC's website at www.sec.gov.

Footnotes

(1)

See the following summary financial statements and Note 3 to those financial statements for a discussion of Adjusted EBITDA and its reconciliation to net income (loss).

(2)

The comparison adjusts for i) the first quarter 2012 one-time benefit of $3 million of insurance proceeds related to Hurricane Irene that occurred in 2011; ii) the 2012 Adjusted EBITDA from the company's minority interest in dick clark productions ("dcp"); and iii) the third quarter 2013 $3 million litigation accrual related to the accident at Six Flags Over Texas. The company's minority interest in dcp was divested on September 28, 2012 and generated $5.4 million, $1.9 million, $3.3 million and $0.3 million of Adjusted EBITDA for the company in Q4 2011, Q1 2012, Q2 2012 and Q3 2012, respectively.

(3)

See Note 3 to the following summary financial statements for a discussion of Modified EBITDA and its reconciliation to net income (loss).

(4)

Cash Earnings Per Share (or Cash EPS), which is defined as Free Cash Flow divided by the weighted average basic shares outstanding, is not a U.S. GAAP defined measure. The company believes this measure provides meaningful profitability metrics, given current accumulated tax loss carryforwards and the net depreciation/amortization impacts relating to the revaluation of assets in connection with the company's emergence from Chapter 11 in April 2010.

(5)

Net Debt represents total long-term debt, including current portion, less cash and cash equivalents.

 

Six Flags Entertainment Corporation

(In Thousands, Except Per Share Amounts)















Statements of Operations Data (1)



Three Months Ended




September 30,




2013



2012








Theme park admissions



$    282,095



$    271,119

Theme park food, merchandise and other



203,846



196,626

Sponsorship, licensing and other fees



13,589



12,409

Accommodations revenue



4,990



4,989

Total revenue



504,520



485,143








Operating expenses (excluding depreciation and







 amortization shown separately below)



134,395



132,737

Selling, general and administrative expense (excluding







 depreciation, amortization and stock-based







 compensation shown separately below)



45,571



41,364

Costs of products sold



36,616



34,483

Depreciation



27,300



31,686

Amortization



3,598



3,626

Stock-based compensation



7,077



12,751

Loss on disposal of assets



4,325



5,192

Gain on sale of investee



-



(67,041)

Interest expense, net



18,603



11,419

Equity in loss of investee



-



1,652

Other expense, net



1,013



832








Income from continuing operations before







 reorganization items, income taxes and 







 discontinued operations



226,022



276,442








Reorganization items, net



-



659








Income from continuing operations







 before income taxes and discontinued operations



226,022



275,783

Income tax expense



86,405



11,014








Income from continuing operations before







 discontinued operations



139,617



264,769








Income from discontinued operations



-



7,209








Net income



$    139,617



$    271,978








Less: Net income attributable to







  noncontrolling interests



(19,214)



(18,953)








Net income attributable to







  Six Flags Entertainment Corporation



$    120,403



$    253,025








Per share - basic:







     Income from continuing operations







       attributable to Six Flags Entertainment







       Corporation common stockholders



$          1.27



$         2.30

     Income from discontinued operations







       attributable to Six Flags Entertainment







       Corporation common stockholders



$             -



$         0.07








Net income attributable to Six Flags Entertainment







   Corporation common stockholders



$          1.27



$         2.37








Per share - diluted:







     Income from continuing operations







       attributable to Six Flags Entertainment







       Corporation common stockholders



$          1.22



$         2.17

     Income from discontinued operations







       attributable to Six Flags Entertainment







       Corporation common stockholders



$             -



$         0.06








Net income attributable to Six Flags Entertainment







   Corporation common stockholders



$          1.22



$         2.23








Weighted average shares outstanding - basic



95,105



106,974








Weighted average shares outstanding - diluted



98,472



113,586

 

Six Flags Entertainment Corporation

(In Thousands, Except Per Share Amounts)















Statements of Operations Data (1)



Nine Months Ended




September 30,




2013



2012








Theme park admissions



$    523,293



$    503,690

Theme park food, merchandise and other



386,347



379,160

Sponsorship, licensing and other fees



32,064



30,076

Accommodations revenue



14,038



13,487

Total revenue



955,742



926,413








Operating expenses (excluding depreciation and







 amortization shown separately below)



340,926



339,452

Selling, general and administrative expense (excluding






 depreciation, amortization and stock-based







 compensation shown separately below)



131,091



131,158

Costs of products sold



75,541



70,144

Depreciation



86,411



100,677

Amortization



10,796



12,045

Stock-based compensation



21,496



44,884

Loss on disposal of assets



6,959



7,647

Gain on sale of investee



-



(67,041)

Interest expense, net



55,580



34,234

Equity in loss of investee



-



2,222

Other expense, net



1,197



295

Restructure recovery



-



(47)








Income from continuing operations before







 reorganization items, income taxes and 







 discontinued operations



225,745



250,743








Reorganization items, net



(180)



1,708








Income from continuing operations







 before income taxes and discontinued operations



225,925



249,035

Income tax expense



82,361



8,452








Income from continuing operations before







 discontinued operations



143,564



240,583








Income from discontinued operations



-



7,157








Net income



$    143,564



$    247,740








Less: Net income attributable to







  noncontrolling interests



(38,327)



(37,559)








Net income attributable to







  Six Flags Entertainment Corporation



$    105,237



$    210,181








Per share - basic:







     Income from continuing operations







       attributable to Six Flags Entertainment







       Corporation common stockholders



$         1.08



$         1.88

     Income from discontinued operations







       attributable to Six Flags Entertainment







       Corporation common stockholders



$             -



$         0.07








Net income attributable to Six Flags Entertainment







   Corporation common stockholders



$         1.08



$         1.95








Per share - diluted:







     Income from continuing operations







       attributable to Six Flags Entertainment







       Corporation common stockholders



$         1.04



$         1.79

     Income from discontinued operations







       attributable to Six Flags Entertainment







       Corporation common stockholders



$             -



$         0.06








Net income attributable to Six Flags Entertainment







   Corporation common stockholders



$         1.04



$         1.85








Weighted average shares outstanding - basic



97,569



107,916








Weighted average shares outstanding - diluted



100,819



113,784

 

The following table sets forth a reconciliation of net income to Adjusted EBITDA and Free Cash Flow for the 

periods shown (in thousands):





















Three Months Ended





September 30,





2013




2012











Net income



$  139,617




$   271,978


Income from discontinued operations



-




(7,209)


Income tax expense



86,405




11,014


Reorganization items, net



-




659


Other expense, net



1,013




832


Equity in loss of investee



-




1,652


Interest expense, net



18,603




11,419


Loss on disposal of assets



4,325




5,192


Gain on sale of investee



-




(67,041)


Amortization



3,598




3,626


Depreciation



27,300




31,686


Stock-based compensation



7,077




12,751


Impact of Fresh Start valuation adjustments (2)



150




250











Modified EBITDA (3)



288,088




276,809


Third party interest in EBITDA









  of certain operations (4)



(19,785)




(19,231)











Adjusted EBITDA (3)



$  268,303




$   257,578


Cash paid for interest, net



(31,483)




(9,563)


Capital expenditures



(16,843)




(14,816)


Cash taxes (5)



(3,428)




(1,765)











Free Cash Flow (6)



$  216,549




$   231,434











Weighted average shares outstanding - basic



95,105




106,974











Cash Earnings Per Share



$       2.28




$        2.16




















The following table sets forth a reconciliation of net income to Adjusted EBITDA and Free Cash Flow for the 

periods shown (in thousands):




















Nine Months Ended



September 30,




2013




2012










Net income



$  143,564




$   247,740


Income from discontinued operations



-




(7,157)


Income tax expense



82,361




8,452


Restructure recovery



-




(47)


Reorganization items, net



(180)




1,708


Other expense, net



1,197




295


Equity in loss of investee



-




2,222


Interest expense, net



55,580




34,234


Loss on disposal of assets



6,959




7,647


Gain on sale of investee



-




(67,041)


Amortization



10,796




12,045


Depreciation



86,411




100,677


Stock-based compensation



21,496




44,884


Impact of Fresh Start valuation adjustments (2)



442




738











Modified EBITDA (3)



408,626




386,397


Third party interest in EBITDA









  of certain operations (4)



(40,080)




(33,726)











Adjusted EBITDA (3)



$  368,546




$   352,671


Cash paid for interest, net



(44,730)




(30,264)


Capital expenditures (net of property insurance recoveries in 2012)



(89,182)




(79,121)


Cash taxes (5)



(11,447)




(8,192)











Free Cash Flow (6)



$  223,187




$   235,094











Weighted average shares outstanding - basic



97,569




107,916











Cash Earnings Per Share



$       2.29




$        2.18


 

The following table sets forth a reconciliation of net income to Adjusted EBITDA and Free Cash

Flow for the periods shown (in thousands):


















Last Twelve Months Ended



September 30,




2013




2012

















Net income



$  286,937




$  145,264

Income from discontinued operations



(116)




(8,471)

Income tax (benefit) expense



(98,319)




14,452

Restructure recoveries



-




(107)

Reorganization items, net



280




2,720

Other expense, net



1,514




561

Loss on debt extinguishment



587




46,520

Equity in loss of investee



-




2,320

Interest expense, net



67,970




50,173

Loss on disposal of assets



7,417




9,157

Gain on sale of investee



(278)




(67,041)

Amortization



14,399




16,552

Depreciation



118,131




137,808

Stock-based compensation



39,487




64,829

Impact of Fresh Start valuation adjustments (2)



697




1,131









Modified EBITDA (3)



438,706




415,868

Third party interest in EBITDA








  of certain operations (4)



(40,202)




(28,414)









Adjusted EBITDA (3)



$  398,504




$  387,454

Cash paid for interest, net



(56,179)




(53,126)

Capital expenditures (net of property insurance recoveries in 2012)



(108,556)




(101,012)

Cash taxes (5)



(12,690)




(9,248)









Free Cash Flow (6)



$  221,079




$  224,068









Weighted average shares outstanding - basic



99,946




108,438









Cash Earnings Per Share



$        2.21




$       2.07

 

Balance Sheet Data

(In Thousands)

























Balance Sheet Data


September 30, 2013


December 31, 2012
















Cash and cash equivalents












  (excluding restricted cash)


$            200,962




$    629,208





Total assets



2,746,331




3,056,391

















Deferred income



76,280




52,703





Current portion of long-term debt



6,256




6,240





Long-term debt (excluding current












  portion)



1,395,175




1,398,966

















Redeemable noncontrolling interests 



456,296




437,941

















Total equity



404,526




896,153

















Shares outstanding



95,027




107,638





























(1)  Revenues and expenses of international operations are converted into U.S. dollars on an average basis as provided by GAAP.













(2)  Amounts recorded as valuation adjustments and included in reorganization items for the month of April 2010 that would have been included in Modified EBITDA and Adjusted EBITDA, had fresh start accounting not been applied. Balance consists primarily of discounted insurance reserves that will be accreted through the statement of operations each quarter through 2018.


(3)   "Modified EBITDA", a non-GAAP measure, is defined as the Company's consolidated income (loss) from continuing operations: (i) excluding the cumulative effect of changes in accounting principles, discontinued operations gains or losses, income tax expense or benefit, restructure costs or recoveries, reorganization items (net), other income or expense, gain or loss on early extinguishment of debt, equity in income or loss of investees, interest expense (net), gain or loss on disposal of  assets, gain or loss on the sale of investees, amortization, depreciation, stock-based compensation, and fresh start accounting valuation adjustments. The Company believes that Modified EBITDA is useful to investors, equity analysts and rating agencies as a measure of the Company's performance. The Company believes that Modified EBITDA is a measure that can be readily compared to other companies, and the Company uses Modified EBITDA in its internal evaluation of operating effectiveness and decisions regarding the allocation of resources. Modified 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. Modified EBITDA as defined herein may differ from similarly titled measures presented by other companies.


"Adjusted EBITDA", a non-GAAP measure, is defined as Modified EBITDA minus the interests of third parties in the Adjusted EBITDA of properties that are less than wholly owned (consisting of Six Flags Over Georgia, Six Flags White Water Atlanta, Six Flags Over Texas, and Six Flags Great Escape Lodge & Indoor Waterpark (the "Lodge")) plus the Company's interest in the Adjusted EBITDA of dick clark productions, inc., which was sold in September 2012. 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. Adjusted EBITDA is approximately equal to "Parent Consolidated Adjusted EBITDA" as defined in the Company's secured credit agreement, except that Parent Consolidated Adjusted EBITDA excludes Adjusted EBITDA from equity investees that is not distributed to the Company in cash on a net basis and has limitations on the amounts of certain expenses that are excluded from the calculation. 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 herein may differ from similarly titled measures presented by other companies.


(4) Represents interests of third parties in the Adjusted EBITDA of Six Flags Over Georgia, Six Flags Over Texas, Six Flags White Water Atlanta and the Lodge, plus the Company's interest in the Adjusted EBITDA of dick clark productions, inc., which are less than wholly owned. The Company sold its interest in dick clark productions, inc. in September 2012.


(5) Based on our current federal net operating loss carryforwards, we believe we will continue to pay minimal amounts for cash taxes for the next four to five years. Cash taxes paid represents statutory taxes paid, primarily in Mexico.


(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, (ii) capital expenditures net of property insurance recoveries, and (iii) cash taxes. The Company has excluded from the definition of Free Cash Flow deferred financing costs related to the Company's senior unsecured note offering that occurred in the fourth quarter of 2012 and the Company's debt refinancing that occurred in the fourth quarter of 2011 due to the unusual nature of these items. The Company believes that Free Cash Flow is useful to investors, equity analysts and rating agencies as a performance measure. The Company uses Free Cash Flow in its internal evaluation of operating effectiveness and decisions regarding the allocation of resources. 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 herein may differ from similarly titled measures presented by other companies.

 

SOURCE Six Flags Entertainment Corporation

Nancy Krejsa, Senior Vice President, Investor Relations and Corporate Communications, +1-972-595-5083, nkrejsa@sftp.com