Six Flags Entertainment Corporation Reports 2024 Third Quarter Results; Announces New Long-Range Strategic Objectives
- Outstanding October performance underscores strong momentum heading into 2025
-
Targeting at least
$800 million of annual unlevered pre-tax free cash flow(1) by 2027
On
Third Quarter 2024 Highlights
- Total operating days were 2,585, of which 1,591 were contributed by the legacy Six Flags operations added in the Merger.
-
Net revenues totaled
$1.35 billion ,$558 million of which relates to the legacy Six Flags operations added in the Merger. -
Net income attributable to the Combined Company totaled
$111 million ,$3 million of which relates to the legacy Six Flags operations added in the Merger. -
Adjusted EBITDA(2) totaled
$558 million ,$206 million of which relates to the legacy Six Flags operations added in the Merger. - Attendance totaled 21.0 million guests, 9.2 million of whom attended legacy Six Flags parks added in the Merger.
-
In-park per capita spending(3) was
$61.27 . -
Out-of-park revenues(3) totaled
$102 million ,$21 million of which relates to legacy Six Flags operations added in the Merger.
CEO Commentary
“We delivered solid results in our first quarter as a combined company and are encouraged by the continued momentum we see in the business,” said Six Flags President and CEO
“Since completing the Merger, we have been finding ways to operate more efficiently and reducing unnecessary costs while still delivering a high level of guest service,” continued Zimmerman. “By the end of 2024, we expect to have delivered
Zimmerman added, “Four months ago we launched Project Accelerate, a transformational initiative to harmonize our operations and unlock the full potential of the new Six Flags. We have only scratched the surface of what we can accomplish, and we are moving with a sense of urgency to optimize performance and execute our new long-term initiatives. I’m highly confident that focusing on our core strategic objectives will deliver superior and sustainable value creation over the next several years, enabling us to reach our new target of at least
Third Quarter 2024 Results
Operating days in the third quarter of 2024 totaled 2,585 days compared with 1,091 operating days for the third quarter last year. Of the 1,494 operating-day increase, 1,591 of the additional operating days resulted from the Merger and reflected operating days during the third quarter of 2024 at the legacy Six Flags parks. That increase was offset in part by 71 fewer operating days at the legacy
Net revenues for the third quarter ended
The
Of the
Operating costs and expenses in the third quarter of 2024 totaled
Depreciation and amortization expense in the third quarter of 2024 totaled
After the items above, operating income for the three months ended
Net interest expense for the quarter totaled
During the three months ended
After the items above and income attributable to non-controlling interests, net income attributable to the Combined Company for the quarter totaled
Adjusted EBITDA, which management believes is a meaningful measure of park-level operating results, increased
Balance Sheet and Liquidity Highlights
Deferred revenues on
Liquidity as of
Net debt
(4) on
October Update
Based on preliminary operating results, attendance for the Combined Company over the five-week period ended
Based on the strength of October performance, management now believes the Combined Company is on pace to achieve fourth quarter Adjusted EBITDA of
Long-Range Plan – Project Accelerate
Six Flags today also announced the core objectives of its new long-range plan designed to deliver on the full growth potential of the Combined Company. In many cases, the new objectives represent the natural extension and evolution of strategic initiatives that contributed to the success of legacy
- Enhance the guest experience to deliver a stronger price-value proposition and drive demand.
- Identify incremental operating efficiencies that generate cost synergies and help drive margin expansion.
- Maintain a disciplined approach to the prioritization and activation of capital investments to realize the full market potential of each park, while maximizing free cash flow efficiency.
- Integrate technology stacks with a focus on harmonizing systems, eliminating redundancies, and enhancing the guest-facing digital experience.
- Review the park portfolio over time, to optimize the asset base, narrow management’s focus, and help reduce net leverage.
Six Flags also noted that as part of Project Accelerate, it has established a new annual unlevered pre-tax free cash flow target of at least
The company has posted additional information regarding its long-range strategic plan and objectives on its investor relations website at https://investors.sixflags.com under the tabs Investor Information and Events & Presentations.
Footnotes:
(1) |
Unlevered pre-tax free cash flow is defined as Adjusted EBITDA less capital expenditures. Unlevered pre-tax free cash flow is not computed in accordance with generally accepted accounting principles (GAAP) and may not be comparable to similarly titled measures of other companies. Management believes unlevered pre-tax free cash flow is a meaningful measure because it is used by analysts and investors in the industry to evaluate operating performance on a consistent basis, as well as more easily compare the Combined Company’s results with those of other companies in the industry. Management also uses unlevered pre-tax free cash flows for incentive compensation plans. |
|
(2) |
Adjusted EBITDA, Modified EBITDA and Modified EBITDA margin are not measurements computed in accordance with GAAP. Management believes Adjusted EBITDA and Modified EBITDA are meaningful measures of park-level operating profitability and uses them for measuring returns on capital investments, evaluating potential acquisitions, determining awards under incentive compensation plans, and calculating compliance with certain loan covenants. For additional information regarding Adjusted EBITDA, Modified EBITDA and Modified EBITDA margin, including how the Company defines and uses these measures, see the attached reconciliation table and related footnotes. |
|
(3) |
In-park per capita spending and out-of-park revenues are non-GAAP financial measures. See the attached reconciliation table and related footnote for the calculations of in-park per capita spending and out-of-park revenues. These metrics are used by management as major factors in significant operational decisions as they are primary drivers of financial and operational performance, measuring demand, pricing, and consumer behavior. |
|
(4) |
Net debt is a non-GAAP financial measure. See the attached reconciliation table and related footnote for the calculation of net debt. Net debt is a meaningful measure used by the Company and investors to monitor leverage, and management believes it is meaningful for this purpose. |
|
(5) |
Net Total Leverage is a non-GAAP financial measure calculated as Consolidated Debt (as defined in the Combined Company’s credit agreement) less cash and cash equivalents divided by Adjusted EBITDA. Net Total Leverage is not computed in accordance with GAAP and may not be comparable to similarly titled measures of other companies. Net Total Leverage is defined in the Combined Company’s credit agreement and is used to determine the amount of restricted payments allowable under the credit agreement. Management believes Net Total Leverage is a meaningful measure because of its importance in the credit agreement, its use by analysts and investors in the industry to evaluate financial condition on a consistent basis, and that it more easily compares the Combined Company’s results with those of other companies in the industry. |
Conference Call
As previously announced, Six Flags Entertainment Corporation will host a conference call with analysts starting at
Investors and all other interested parties can access a live, listen-only audio webcast of the call on the
A digital recording of the conference call will be available for replay by phone starting at approximately
About Six Flags Entertainment Corporation
Six Flags Entertainment Corporation (NYSE: FUN) is North America’s largest regional amusement-resort operator with 27 amusement parks, 15 water parks and nine resort properties across 17 states in the
Forward-Looking Statements
Some of the statements contained in this report (including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section) that are not historical in nature are forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements as to our expectations, beliefs, goals and strategies regarding the future. Words such as “anticipate,” “believe,” “create,” “expect,” “future,” “guidance,” “intend,” “plan,” “potential,” “seek,” “synergies,” “target,” “will,” “would,” similar expressions, and variations or negatives of these words identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. Forward-looking statements by their nature address matters that are, to different degrees, uncertain. These forward-looking statements may involve current plans, estimates, expectations and ambitions that are subject to risks, uncertainties and assumptions that are difficult to predict, may be beyond our control and could cause actual results to differ materially from those described in such statements. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct, that our growth and operational strategies will achieve the target results. Important risks and uncertainties that may cause such a difference and could adversely affect attendance at our parks, our future financial performance, and/or our growth strategies, and could cause actual results to differ materially from our expectations or otherwise to fluctuate or decrease, include, but are not limited to: general economic, political and market conditions; the impacts of pandemics or other public health crises, including the effects of government responses on people and economies; adverse weather conditions; competition for consumer leisure time and spending; unanticipated construction delays; changes in our capital investment plans and projects; anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the Combined Company’s operations; failure to realize the anticipated benefits of the merger, including difficulty in integrating the businesses of legacy Six Flags and legacy
This news release and prior releases are available under the News tab at https://investors.sixflags.com
(financial tables follow)
SIX FLAGS ENTERTAINMENT CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands) |
|||||||||||||||
|
Three months ended |
|
Nine months ended |
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|
|
|
|
|
|
|
||||||||
Net revenues: |
|
|
|
|
|
|
|
||||||||
Admissions |
$ |
716,684 |
|
|
$ |
430,952 |
|
|
$ |
1,043,375 |
|
|
$ |
725,367 |
|
Food, merchandise and games |
|
436,781 |
|
|
|
281,546 |
|
|
|
685,663 |
|
|
|
493,274 |
|
Accommodations, extra-charge products and other |
|
194,920 |
|
|
|
129,511 |
|
|
|
292,578 |
|
|
|
208,904 |
|
|
|
1,348,385 |
|
|
|
842,009 |
|
|
|
2,021,616 |
|
|
|
1,427,545 |
|
Costs and expenses: |
|
|
|
|
|
|
|
||||||||
Cost of food, merchandise, and games revenues |
|
109,890 |
|
|
|
70,072 |
|
|
|
174,759 |
|
|
|
129,085 |
|
Operating expenses |
|
575,032 |
|
|
|
332,559 |
|
|
|
999,159 |
|
|
|
739,216 |
|
Selling, general and administrative |
|
209,260 |
|
|
|
64,799 |
|
|
|
322,518 |
|
|
|
141,405 |
|
Depreciation and amortization |
|
144,560 |
|
|
|
65,936 |
|
|
|
211,887 |
|
|
|
127,711 |
|
Loss on retirement of fixed assets, net |
|
4,671 |
|
|
|
2,018 |
|
|
|
11,406 |
|
|
|
12,779 |
|
Loss on impairment of goodwill |
|
42,462 |
|
|
|
— |
|
|
|
42,462 |
|
|
|
— |
|
|
|
1,085,875 |
|
|
|
535,384 |
|
|
|
1,762,191 |
|
|
|
1,150,196 |
|
Operating income |
|
262,510 |
|
|
|
306,625 |
|
|
|
259,425 |
|
|
|
277,349 |
|
Interest expense, net |
|
81,742 |
|
|
|
35,296 |
|
|
|
155,903 |
|
|
|
104,099 |
|
Loss on early debt extinguishment |
|
2,063 |
|
|
|
— |
|
|
|
7,974 |
|
|
|
— |
|
Other (income) expense, net |
|
(101 |
) |
|
|
5,162 |
|
|
|
6,862 |
|
|
|
(1,508 |
) |
Income before taxes |
|
178,806 |
|
|
|
266,167 |
|
|
|
88,686 |
|
|
|
174,758 |
|
Provision for taxes |
|
43,341 |
|
|
|
50,673 |
|
|
|
31,135 |
|
|
|
40,246 |
|
Net income |
|
135,465 |
|
|
|
215,494 |
|
|
|
57,551 |
|
|
|
134,512 |
|
Net income attributable to non-controlling interests |
|
24,499 |
|
|
|
— |
|
|
|
24,499 |
|
|
|
— |
|
Net income attributable to Six Flags Entertainment Corporation |
$ |
110,966 |
|
|
$ |
215,494 |
|
|
$ |
33,052 |
|
|
$ |
134,512 |
|
Net income margin(1) |
|
10.0 |
% |
|
|
25.6 |
% |
|
|
2.8 |
% |
|
|
9.4 |
% |
(1) Net income margin is calculated as net income divided by net revenues. |
SIX FLAGS ENTERTAINMENT CORPORATION UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET DATA (In thousands) |
||||||
|
|
|
|
|||
Cash and cash equivalents |
$ |
89,705 |
|
$ |
134,394 |
|
Total assets |
$ |
9,369,226 |
|
$ |
2,318,603 |
|
Long-term debt, including current maturities: |
||||||
Revolving credit loans |
$ |
139,080 |
|
$ |
— |
|
Term debt |
|
986,622 |
|
|
— |
|
Notes |
|
3,658,805 |
|
|
2,272,961 |
|
|
$ |
4,784,507 |
|
$ |
2,272,961 |
|
Equity (deficit) |
$ |
2,341,578 |
|
$ |
(565,769 |
) |
SIX FLAGS ENTERTAINMENT CORPORATION RECONCILIATION OF MODIFIED EBITDA, ADJUSTED EBITDA AND MODIFIED EBITDA MARGIN (In thousands) |
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Three months ended |
Nine months ended |
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|
|
|
|
|
|
|
|
||||||||
Net income |
$ |
135,465 |
|
|
$ |
215,494 |
|
|
$ |
57,551 |
|
|
$ |
134,512 |
|
Interest expense, net |
|
81,742 |
|
|
|
35,296 |
|
|
|
155,903 |
|
|
|
104,099 |
|
Provision for taxes |
|
43,341 |
|
|
|
50,673 |
|
|
|
31,135 |
|
|
|
40,246 |
|
Depreciation and amortization |
|
144,560 |
|
|
|
65,936 |
|
|
|
211,887 |
|
|
|
127,711 |
|
EBITDA |
|
405,108 |
|
|
|
367,399 |
|
|
|
456,476 |
|
|
|
406,568 |
|
Loss on early debt extinguishment |
|
2,063 |
|
|
|
— |
|
|
|
7,974 |
|
|
|
— |
|
Non-cash foreign currency (gain) loss |
|
(1,122 |
) |
|
|
5,460 |
|
|
|
5,880 |
|
|
|
(1,674 |
) |
Non-cash equity compensation expense |
|
39,131 |
|
|
|
8,221 |
|
|
|
53,550 |
|
|
|
15,841 |
|
Loss on retirement of fixed assets, net |
|
4,671 |
|
|
|
2,018 |
|
|
|
11,406 |
|
|
|
12,779 |
|
Loss on impairment of goodwill |
|
42,462 |
|
|
|
— |
|
|
|
42,462 |
|
|
|
— |
|
Costs related to the Mergers (1) |
|
73,335 |
|
|
|
5,012 |
|
|
|
94,610 |
|
|
|
5,012 |
|
Self-insurance adjustment (2) |
|
14,865 |
|
|
|
— |
|
|
|
14,865 |
|
|
|
— |
|
Other (3) |
|
2,019 |
|
|
|
385 |
|
|
|
3,593 |
|
|
|
284 |
|
Modified EBITDA (4) |
|
582,532 |
|
|
|
388,495 |
|
|
|
690,816 |
|
|
|
438,810 |
|
Modified EBITDA attributable to non-controlling interests |
|
24,499 |
|
|
|
— |
|
|
|
24,499 |
|
|
|
— |
|
Adjusted EBITDA (4) |
$ |
558,033 |
|
|
$ |
388,495 |
|
|
$ |
666,317 |
|
|
$ |
438,810 |
|
|
|
|
|
|
|
|
|
||||||||
Modified EBITDA margin (5) |
|
43.2 |
% |
|
|
46.1 |
% |
|
|
34.2 |
% |
|
|
30.7 |
% |
(1) |
Consists of third-party legal and consulting transaction costs, as well as integration costs related to the Mergers. Integration costs include third-party consulting costs, travel costs and contract termination costs. These costs are added back to net income to calculate Modified EBITDA and Adjusted EBITDA as defined in the Combined Company's credit agreement. |
|
|
|
|
(2) |
During the third quarter of 2024, an actuarial analysis of legacy |
|
|
|
|
(3) |
Consists of certain costs as defined in the Combined Company's credit agreement. These costs are added back to net income to calculate Modified EBITDA and Adjusted EBITDA and have included certain legal expenses, severance and related benefits and contract termination costs. This balance also includes unrealized gains and losses on short-term investments. |
|
|
|
|
(4) |
Modified EBITDA represents earnings before interest, taxes, depreciation, amortization, other non-cash items, and adjustments as defined in the Combined Company's credit agreement. Adjusted EBITDA represents Modified EBITDA minus net income attributable to non-controlling interests. Management included both measures to disclose the effect of non-controlling interests. Prior to the Merger, legacy |
|
|
|
|
(5) |
Modified EBITDA margin (Modified EBITDA divided by net revenues) is not a measurement computed in accordance with GAAP and may not be comparable to similarly titled measures of other companies. Modified EBITDA margin is provided because the measure provides a meaningful metric of operating profitability. Modified EBITDA margin has been disclosed as opposed to Adjusted EBITDA margin because management believes Modified EBITDA margin more accurately reflects the park-level operations of the Combined Company as it does not give effect to distributions to non-controlling interests. |
SIX FLAGS ENTERTAINMENT CORPORATION CALCULATION OF NET DEBT (In thousands) |
|||||
|
|||||
|
|
||||
Long-term debt, including current maturities |
$ |
4,784,507 |
|
||
Plus: Debt issuance costs and original issue discount |
|
44,494 |
|
||
Less: Acquisition fair value layers |
|
(23,001 |
) |
||
Less: Cash and cash equivalents |
|
(89,705 |
) |
||
Net Debt (1) |
$ |
4,716,295 |
|
||
(1) |
Net Debt is a non-GAAP financial measure used by investors to monitor leverage. The measure may not be comparable to similarly titled measures of other companies. |
SIX FLAGS ENTERTAINMENT CORPORATION KEY OPERATIONAL MEASURES (In thousands, except per capita and operating day amounts) |
|||||||||||
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Three months ended |
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Nine months ended |
||||||||
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|
|
|
|
|
|
|
||||
Attendance |
|
20,971 |
|
|
12,433 |
|
|
30,955 |
|
|
20,889 |
In-park per capita spending (1) |
$ |
61.27 |
|
$ |
62.70 |
|
$ |
61.21 |
|
$ |
62.94 |
Out-of-park revenues (1) |
$ |
102,265 |
|
$ |
85,995 |
|
$ |
184,623 |
|
$ |
155,366 |
Operating days |
|
2,585 |
|
|
1,091 |
|
|
3,491 |
|
|
1,988 |
(1) |
In-park per capita spending is calculated as revenues generated within the Combined Company's amusement parks and separately gated outdoor water parks along with related parking revenues and online transaction fees charged to customers (in-park revenues), divided by total attendance. Out-of-park revenues are defined as revenues from resorts, out-of-park food and retail locations, sponsorships, international agreements and all other out-of-park operations. In-park revenues, in-park per capita spending and out-of-park revenues are non-GAAP measures. These metrics are used by management as major factors in significant operational decisions as they are primary drivers of financial and operational performance, measuring demand, pricing, and consumer behavior. A reconciliation of in-park revenues and out-of-park revenues to net revenues for the periods presented in the table below. Certain prior period amounts totaling |
|
Three months ended |
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Nine months ended |
||||||||||||
(In thousands) |
|
|
|
|
|
|
|
||||||||
In-park revenues |
$ |
1,284,875 |
|
|
$ |
779,532 |
|
|
$ |
1,894,766 |
|
|
$ |
1,314,723 |
|
Out-of-park revenues |
|
102,265 |
|
|
|
85,995 |
|
|
|
184,623 |
|
|
|
155,366 |
|
Concessionaire remittance |
|
(38,755 |
) |
|
|
(23,518 |
) |
|
|
(57,773 |
) |
|
|
(42,544 |
) |
Net revenues |
$ |
1,348,385 |
|
|
$ |
842,009 |
|
|
$ |
2,021,616 |
|
|
$ |
1,427,545 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106933285/en/
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Source: Six Flags Entertainment Corporation