Six Flags to Report Fourth Quarter and Full Year 2007

[29yrswithaGApass]

Six Flags, Inc. to Report Fourth Quarter and Full Year 2007 Results on Monday, March 10, 2008

Monday February 25, 9:00 am ET

 

 

NEW YORK, Feb. 25 /PRNewswire-FirstCall/ -- Six Flags, Inc. (NYSE: SIX - News) announced today that it will report Fourth Quarter 2007 results before the market opens on Monday, March 10, 2008.

 

The Company will hold a teleconference at 8:00 AM Eastern Time that day for interested investors, analysts and portfolio managers. Participants in the call will include President and CEO Mark Shapiro and Executive Vice President and CFO Jeff Speed.

 

The teleconference will be broadcast live to all interested persons as a listen-only Web cast on http://investors.sixflags.com/. The Webcast will be archived for one year.

 

 

[GAcoaster]

From the Press Release:

 

Six Flags Reports 2007 Fourth Quarter and Full Year Results

Monday March 10, 7:45 am ET

- Fourth Quarter Revenue Up 7% on Attendance and Guest Spending Growth

- Twelve Month Revenue Up 3% on Increased Total Revenue Per Capita and Stable Attendance, Despite Fewer Park Operating Days

 

NEW YORK, March 10 /PRNewswire-FirstCall/ -- Six Flags, Inc. (NYSE: SIX - News) announced today operating results for its fourth quarter and twelve months ended December 31, 2007. (1)

 

Commenting on the Company's progress, Six Flags President and CEO, Mark Shapiro, stated: "Our turnaround plan is on pace. Guest spending and guest satisfaction are at record levels and our corporate sponsorship business has shown impressive growth. The recent announcement of our strategic expansion into Dubai validates the growing strength and momentum of our brand."

 

Total revenue for the quarter increased 7% to $112.1 million from $104.3 million in the prior-year quarter. Attendance increased 0.1 million, or 4%, to 2.8 million from 2.7 million in the prior-year quarter. The attendance increase reflects an improved December performance compared to the prior-year quarter.

 

Total revenue per capita for the quarter increased by $1.43 (4%) to $39.38, reflecting a 4% increase in guest spending for admissions and increased in-park spending for food and beverages and rentals, as well as increased sponsorship revenue. Total per capita guest spending increased $1.17 (4%) during the quarter to $34.49.

 

The Company's net loss from continuing operations for the quarter was $130.8 million, compared to a loss of $100.5 million in the fourth quarter of 2006, reflecting increased non-cash charges for losses on fixed assets from the decision to remove certain inefficient rides and attractions, and higher stock-based compensation costs, partially offset by increased revenue. Other expense also increased, reflecting severance and benefits costs related to a reduction in our full-time workforce primarily through an early retirement program, as well as accruals for certain contingencies.

 

Net loss applicable to common stock in the fourth quarter 2007 was $132.4 million, or $1.39 per share -- basic and diluted, compared to net loss applicable to common stock of $195.2 million, or $2.07 per common share -- basic and diluted, in the prior-year period, which included $89.2 million (or $0.95 per common share -- basic and diluted) of loss from discontinued operations.

 

Shapiro continued, "We are well-positioned for the 2008 season with a much anticipated new ride and attraction package, a compelling value proposition and an economic climate that should play into our favor as families seek entertainment alternatives that are affordable and close to home."

 

Adjusted EBITDA(2) for the quarter was $1.8 million, compared to a loss of $6.3 million in the fourth quarter of 2006, reflecting increased revenue and stable costs and expenses.

 

Twelve Month Results

 

For the year ended December 31, 2007, total revenue increased $27.1 million, or 3%, to $972.8 million from $945.7 million in the prior year.

 

Total revenue per capita for the year compared to the prior year increased $0.99, or 3%, to $39.06 reflecting increased per capita guest spending and sponsorship revenue. Increased per capita guest spending for the year of $0.52, or 1%, over the prior year to $36.64 was driven by increased food and beverages, parking, rentals and games revenue. Attendance for 2007 was 24.9 million, up 0.1 million compared to 2006 despite 40 (1.4%) fewer park operating days.

 

Total costs and expenses, including cost of sales, depreciation, amortization, stock-based compensation and loss on fixed assets, increased $43.9 million to $939.5 million for 2007 compared to 2006. The key drivers of the change were increased advertising expense ($25.6 million), non-cash loss on fixed assets ($16.0 million) and park-wide labor ($15.3 million), partially offset by prior-year management change costs ($13.9 million).

 

Net loss applicable to common stock for 2007 was $275.1 million, or $2.90 per share -- basic and diluted, compared to a net loss applicable to common stock of $327.6 million, or $3.48 per common share -- basic and diluted, in the prior year. The decreased net loss of $52.5 million reflects a reduced loss from discontinued operations ($88.5 million) and an increased loss from continuing operations ($37.1 million) driven by higher costs and expenses.

 

Adjusted EBITDA for 2007 improved by $8.7 million over 2006 to $189.5 million, reflecting the prior-year management change costs, the Company's share of EBITDA in Dick Clark Productions, as well as the acquisition in July of the minority interest of Six Flags Discovery Kingdom.

 

Cash and Liquidity

 

As of December 31, 2007, the Company had $5.0 million outstanding on its $275 million revolving credit facility (excluding letters of credit in the amount of $27.3 million) and had $28.4 million in unrestricted cash.

 

Outlook for 2008 Press Release:

 

Six Flags Provides Outlook for 2008

Monday March 10, 8:42 am ET

 

NEW YORK, March 10 /PRNewswire-FirstCall/ -- Following this morning's release of results for the quarter and year ended December 31, 2007, Mark Shapiro, President and CEO of Six Flags, Inc. (NYSE: SIX - News) and Jeffrey R. Speed, Executive Vice President and CFO, hosted a webcast conference call to discuss the Company's results and provide an updated operational outlook for 2008.

 

"The Six Flags product and brand are re-emerging," Mr. Shapiro stated. "The season is underway and despite a tightening economy, we remain cautiously optimistic -- first quarter attendance has good momentum; season pass sales are up strong double digits; our corporate sponsorship business continues to gain traction; and our strategic expansion into Dubai provides for yet another promising revenue stream."

 

Mr. Shapiro expanded on the Company's initiatives for 2008:

 

-- The Company is coming off a year of record per capita guest spending

and guest satisfaction, driven by the implementation of the Company's

new in-park strategy, which began in 2006, focusing on improving and

diversifying the in-park entertainment experience.

 

-- The new attraction program for 2008 continues the strategy of

diversifying and improving the product offering with eight coasters in

eight parks and continued expansion of the Wiggles World and Thomas the

Tank Engine franchises.

 

-- Additional guest spending growth is targeted for 2008; driven by

upgrades of the in-park product offering and the continued roll-out of

additional units of Papa John's (Nasdaq: PZZA - News), Johnny Rockets, and

Cold Stone Creamery, as well as growth related to the Company's

photography business operated by Kodak (NYSE: EK - News).

 

-- The Company's corporate sponsorship business combined with new

international licensing opportunities is expected to provide excellent

growth, with approximately $51 million of revenue targeted for 2008.

 

-- To facilitate sponsorship growth, the Company has been rapidly

expanding its in-park signage, television and radio broadcasting to

provide sponsors with a wide range of alternatives to reach potential

customers.

 

-- International expansion will be driven by annual fees, beginning this

year, from third-party developers for brand exclusivity, design and

development services, and, upon park opening, licensing royalties.

 

-- The Company will continue to leverage its dynamic new venues for

growth. In 2007, the Company acquired 40% of Dick Clark Productions,

Inc., ("DCP"), the producer of television event programming such as the

Golden Globe Awards, the American Music Awards and the Academy of

Country Music Awards. Recently, Six Flags announced it would assume

management oversight of DCP, exploiting logical synergies within its

stable of parks to create a fully integrated entertainment and

sponsorship platform. The Company expects that DCP will experience

strong earnings growth over the next several years, while paying Six

Flags an annual management fee.

 

-- Cash operating expenses are expected to decline by $55 million,

reflecting reduced marketing and full-time labor costs, seasonal labor

efficiencies from an automated labor scheduling system that the Company

will expand throughout its parks, and the removal of inefficient rides

and attractions.

 

-- Marketing efforts for 2008 will be more targeted and efficient through

the use of increased online channels and less radio advertising, while

concentrating media on the front end of the season. Additionally, the

Company intends to capitalize on its ever-increasing database of

customers, established in 2006.

 

-- The risk to the Company from an economic slowdown is difficult to

determine, but certain factors give rise to cautious optimism. First,

historically the Company's business has been relatively stable during

recessionary periods. Second, as a result of the increased appeal of

its parks, the Company is poised to benefit from families who will

likely stay closer to home and seek affordable entertainment options.

Finally, the income tax rebates due to arrive in May should provide an

economic stimulus that directly benefits the Company's business.

 

 

In his discussion, Mr. Speed spoke to the prospects for the Company to achieve positive free cash flow.(1) For 2008, with attendance flat at 24.9 million, the Company would generate Adjusted EBITDA of approximately $270 million and be within $25 million of achieving positive free cash flow, assuming the following:

 

-- Increased per capita guest spending of $10 million;

-- Sponsorship and international licensing growth of $13 million;

-- Full-year benefit of DCP and Discovery Kingdom investments of $7

million;

-- Cash operating expense savings of $50 million;

-- Reduced capital expenses to $100 million; and

-- Cash interest, dividends and taxes of $195 million

 

 

With regard to the Company's ability to achieve positive free cash flow in 2008, Mr. Speed stated: "Through increased guest spending and new high margin revenue streams, combined with meaningful cost and capital expense efficiencies, we have positioned the Company to generate positive free cash flow for the first time in its history."

[JetsDevs4Lyf]

I think this will be a very telling year as with the economy slowing the way it has and other factors piling on top of that, if they are abel to continue to build momemntum through the year they will be in very good shape. One thing I personally see as needing to be cautiously optimistic about has to be the rise in season passes sinply because of the fact that it could just mean same volume, with less gate intake for the company as more and more people find spending less on a one time pass the way to go. We shall see though and while I'm no business major or anything of the sort, I do find these rteports intriguing.