Six Flags Announces 2nd Quarter Results

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GRAND PRAIRIE, Texas–(BUSINESS WIRE)–Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company, today announced another period of strong financial performance with revenue for the first six months of 2016 growing $51 million or 11 percent to $522 million, driven primarily by a 7 percent increase in attendance, a 3 percent increase in guest spending per capita and a 104 percent increase in international licensing revenue. On a constant currency1 basis, revenue for the first six months of 2016 grew $57 million or 12 percent. Net Income for the same time period increased $19 million and Adjusted EBITDA2 grew $21 million or 19 percent to $132 million. Diluted earnings per share for the first six months of the year was $0.15 as compared to a loss of $0.05 for the same period in 2015.

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Riddler Revenge at Six Flags Over Texas, New for 2016

“Our 2016 season is off to an excellent start,” said John Duffey, President and CEO. “Our innovative new attractions have received very positive reviews along with the first-ever integration of virtual reality technology into our roller coasters. Our pricing and multi-visit pass initiatives are working well and we are highly encouraged by the positive trends in our business including the 11 percent increase in our Active Pass Base. Combined with our ticket price gains and international expansion opportunities, we are well-positioned for 2016 and we remain laser-focused on our aspirational target of $600 million of Modified EBITDA3 by 2017.”

Fireball at Six Flags New England, New for 2016

Fireball at Six Flags New England, New for 2016

Attendance for the first six months of 2016 grew 7 percent to 11.2 million guests and guest spending per capita increased 3 percent, with admissions per capita increasing 3 percent and in-park spending per capita increasing 2 percent. On a constant currency basis, year-to-date guest spending per capita increased $1.65 or 4 percent.

Superman Krypton Virutal Reality Coaster at Six Flags Fiesta Texas

Superman Krypton Virutal Reality Coaster at Six Flags Fiesta Texas

For the quarter ended June 30, 2016, revenue increased $21 million or 5 percent to $407 million driven primarily by a 2 percent increase in attendance, a 2 percent increase in guest spending per capita and a 132 percent increase in international licensing revenue. Net income decreased $5 million or 7 percent and diluted earnings per share decreased 4 percent to $0.64 for the quarter—both declines were due primarily to a one-time tax benefit in the second quarter of 2015. Adjusted EBITDA in the second quarter increased $6 million or 4 percent to $155 million.

The New Revolution at Six Flags Magic Mountain

The New Revolution at Six Flags Magic Mountain

Attendance in the second quarter grew 2 percent to 9 million guests. Adjusting for the approximately 200,000 in attendance that shifted from the second quarter to the first quarter due to the timing of Easter and our related operating calendar, second quarter 2016 attendance grew 4 percent. Total guest spending per capita for the second quarter was $42.54, which was an increase of $0.99 or 2 percent compared to the second quarter of 2015. Admissions per capita increased 2 percent to $23.90 and in-park spending per capita increased 2 percent to $18.64. On a constant currency basis, second quarter guest spending per capita increased $1.37 or 3 percent.

The company’s continued success in upselling guests to multi-visit passes resulted in an 11 percent year-over-year increase in its Active Pass Base, which represents the total number of guests who have purchased a season pass or who are enrolled in the company’s membership program. Season pass holders and members are the company’s most valuable guests, generating higher revenue and cash flow than a single day guest and providing an excellent full-year hedge against inclement weather.

Deferred revenue of $175 million increased by $26 million or 17 percent over June 30, 2015 primarily due to incremental sales of season passes, memberships and all-season dining passes.

In the first half of 2016 the company invested $81 million in new capital projects, paid $107 million in dividends, or $0.58 per common share per quarter, and repurchased $44 million of its common stock. Net Debt4 as of June 30, 2016, calculated as total reported debt of $1,652 less cash and cash equivalents of $164 million, was $1,488 million, which translates to a 3.0 times net leverage ratio.

Previous Announcements

On June 16, 2016 the company announced it had completed the private sale of $300 million of senior notes and that it had used $150 million of the proceeds to voluntarily pay down a portion of its Term Loan B credit facility and eliminate any required amortization payments until its maturity in 2022. The company intends to use the balance of the proceeds, after paying refinancing fees, for general corporate purposes over time including share repurchases and other strategic initiatives.

During the quarter, the company also announced that its board of directors had approved a stock repurchase plan that allows the company to repurchase an incremental $500 million of its common stock. Combined with the remaining balance from the prior authorization, the total authorized repurchase amount as of June 30, 2016 was $510 million.

On July 20, 2016, the company also announced it had signed a letter agreement with Riverside Investment Group Co. Ltd., a leading real estate developer in China and existing partner of Six Flags, to potentially develop a second Six Flags-branded theme park, together with a water park, in China. These parks will be located in Bishan, a district of Chongqing, with a surrounding population of approximately 120 million people.

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