NEW YORK, Jun 22, 2006 (BUSINESS WIRE) -- Following a comprehensive review of the Company's
assets, Six Flags, Inc. (NYSE: SIX) today announced its decision to
explore potential strategic options with respect to six of its
properties. The properties are: Six Flags Darien Lake (outside
Buffalo, New York); Six Flags Waterworld (Concord, California); Six
Flags Elitch Gardens (Denver, Colorado); Wild Waves and Enchanted
Village (outside Seattle, Washington); Six Flags Splashtown (Houston,
Texas); and Six Flags Magic Mountain and Hurricane Harbor (near Los
Angeles, California).
Although the Company cannot predict when, or if, any specific
transaction will occur with respect to these properties, potential
options include a sale of the parks as going concerns in a single
transaction or a series of transactions, dismantling and re-utilizing
certain rides and attractions and selling the underlying land for real
estate development purposes, as well as other potential alternatives.
In March, the Company's new management indicated that a key
strategic initiative was to evaluate the disposition of non-core
assets in order to reduce leverage and focus management resources on
the Company's parks that have the highest strategic value.
Since March, the Company:
-- Sold the land where Six Flags Astroworld was located for an
aggregate purchase price of $77 million;
-- Agreed to sell the assets of the Columbus, Ohio, water park to
the Company's lessor, the Columbus Zoo, for $2 million at the
end of the lease term (October 31, 2006);
-- Exercised the right to terminate the lease of the Sacramento
water park following the 2006 season and is currently in
discussions with third parties to sell the rides and
attractions at that park;
-- Announced that it would be selling its two Oklahoma City
parks, and has received multiple bids that the Company is
currently evaluating; and
-- Is actively marketing certain parcels of excess land at its
parks in Gurnee, Illinois, and Eureka, Missouri.
"We're making progress with our strategy to focus on the growth of
our strongest assets, reduce the Company's debt, and generate
increased value for our shareholders," said Mark Shapiro, who was
named President and Chief Executive Officer of Six Flags in December
2005.
Update on Operations(1)
As previously scheduled, today the Company also provided an update
on its business performance through the end of May and through June
18th, which includes the first three weeks in which all of its parks
have been in full-time operation.
For the period through May 31, total revenues were up
approximately 1%, or $2.6 million, compared to the same period last
year, driven by a strong increase in guest spending and offset by a
decline in attendance. Per capita guest spending, which excludes
sponsorship and other revenues not related to guest spending, was up
approximately 15%, an increase of $4.47 per capita, due to increased
spending on tickets, food, parking, merchandise, and games. Attendance
declined by approximately 760,000, or 11%.
For the period through June 18, which captures the most recent
weekend in June, total revenues were down approximately 1%, or $3.2
million, compared to the prior year period. Per capita guest spending
was up approximately 14%, an increase of $4.12 per capita, and
attendance was down approximately 1.3 million, or 13%, driven
primarily by reduced season pass attendance.
"Increased guest spending is continuing at a strong pace - a clear
indication that our strategy is working. The drop-off in attendance
was driven primarily by an anticipated decline in our season pass
sales, which we are no longer deeply discounting in an effort to
restore price and brand integrity, and to wean ourselves from those
teens who don't spend money in the park," said Shapiro.
"What has been unexpected thus far is that the families we are
targeting to replace those teens have been harder to attract than
anticipated. Make no mistake about it, families are coming back - as
evidenced by our solid increase in per capita guest spending - but not
as quickly as we had hoped. We have to work even harder to regain
their trust and bring them back to sample today's Six Flags."
Shapiro noted that attendance was also negatively impacted by the
season-long closure of the New Orleans park due to damage it sustained
from Hurricane Katrina, reduced visits to the Six Flags park in Mexico
City by school groups, reduced and delayed marketing expenditures,
rides that came on-line late, and weather on the West Coast in the
first quarter and on the East Coast in May.
To accelerate the Company's turnaround with its target audience,
Mr. Shapiro also said the Company plans to further increase its cash
operating expenses by $15 million above prior guidance (to
approximately $60 million) over the course of the year. These
increased expenditures are primarily for additional staffing in the
parks to further improve the guest experience.
Given the Company's performance to date, recent attendance trends,
and the additional $15 million of cash operating expenses, reaching
the prior adjusted EBITDA guidance will be extremely difficult. And
although the second quarter is not complete, the Company is at risk of
not complying with certain financial covenants in its bank credit
agreement. The Company is in discussions with the agent bank and
intends to seek amendments to those covenants.
Mr. Shapiro said, "We're investing more in our operations because
the health of our business depends on bringing back families. Our
first priority is to fix the operation and that is not going to happen
overnight. We see this as a long-term investment."
About Six Flags
Six Flags, Inc. is the world's largest regional theme park
company. Founded in 1961, Six Flags is celebrating its 45th
Anniversary in 2006. It 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 caption "Cautionary Note Regarding Forward-Looking
Statements" and "Risk Factors" in Six Flags' Annual Report on Form
10-K for the year ended December 31, 2005, which is available free of
charge on Six Flags' website http://www.sixflags.com.
(1)The information for the periods ended May 31 and June 18
include the operations of our parks in Oklahoma City, Oklahoma;
Columbus, Ohio; and Sacramento, California. These parks are classified
as Discontinued Operations in our financial statements.
SOURCE: Six Flags, Inc.
For Six Flags, Inc.:
Wendy Goldberg, 212-652-9393
