Six Flags Second Quarter Results Are In

[Thunderbolt]

The second quarter profit is largely attributed to a hefty gain on debt restructuring. A smaller contribution to the profit margin was achieved through staff reduction (the answer Medusa opens at noon), ad revenue, and in park price gouging. The "free cash flow positive" comments still baffle me. He states this year will be SIX's first year as "free cash flow positive", but then mentions the company was in 2005 ("$260 million is what they did, yet they burned $115 million in terms of free cash flow."). I quickly scanned a full transcript of the conference call (available here: http://tinyurl.com/6frlvm), so I'll reexamine that previous point. I know for a fact Six Flags was a profitable venture for Time Warner.

 

Six Flags has stated attendance for the quarter declined to 8.6 million; while year to date attendance was "flat" at 10.1 million. Shapiro stated this was due to fewer operating days this year with the Easter Holiday falling in the first quarter. Cedar Fair reported a gain in attendance today for the second-quarter. Earnings for Q2 more than doubled, helped by the additional operating days. The former Paramount Parks were largely responsible for FUN's gains. More importantly, despite gate discounts, admission revenue rose to $163.6 million from $150.2 million. FUN also stated, "Attendance revenue improved across all of the company's properties toward the end of June and through the peak vacation month of July." Comparing SIX's results to FUN's paints the former in a much darker place despite the latter reporting a lower profit number. FUN managed to grow despite a tougher economic climate without short term accounting gimmicks. SIX's profitable quarter was a nice surprise. The overall picture is less rosy due to attendance. All the increased costs, fees, and advertising won't help them sustain profitability if the people stop coming.

 

The Wall Street Jorunal has an article regarding Six Flags (sub required):

 

http://tinyurl.com/5j8b3c

 

Based on Mark's comments in the preview; I don't see Dive Machines coming any time soon. I hope I'm wrong.

 

 

Seeking Alpha has posted a Q2 2008 Transcript:

 

http://tinyurl.com/6frlvm)

Edited August 6, 2008 by Thunderbolt