Six Flags Entertainment Corporation (NYSE: SIX), the world’s
largest regional theme park company and the largest operator of
waterparks in North America, today reported attendance of 8.5
million and revenue of $460 million for second quarter 2021.
Results for second quarter 2021 are not directly comparable to the
same prior-year period due to the COVID-19-related suspension of
operations and operating restrictions that began in mid-March 2020.
Therefore, the company believes it is most relevant to compare its
results in the second quarter of 2021 to the second quarter of
2019.
As expected, due to the continuing effects of the pandemic, the
company reported lower attendance for second quarter 2021 compared
to the same period in 2019. As of May 29, the company had opened
all its parks, and, as of June 15, none of the parks were subject
to mandated capacity constraints, with the exception of the theme
park in Montreal and the two parks in Mexico.
Year-to-date through July 25, which includes the July 4th
holiday period in both 2021 and 2019, average attendance at the
company’s parks during the periods they were open in 2021 was
approximately 82% compared to the same periods in 2019.1 Attendance
through this time of year historically includes a significant
contribution from pre-booked groups, inclusive of school groups who
typically book in advance. Pre-booked group attendance has been
significantly diminished due to the pandemic. Excluding pre-booked
groups, attendance at the company’s open parks year-to-date through
July 25 was approximately 89% compared to the same period in 2019
at those same parks.1 Pre-booked groups historically comprise a
smaller proportion of attendance during the remainder of the
year.
“Our results this quarter are due to the dedication of our team
members, who really pulled together to safely reopen our parks,”
said Mike Spanos, President and CEO. “While the operating
environment continues to be challenging, we are encouraged by the
initial progress on our transformation plan, which contributed to
our improving revenue and guest spending per capita trends. Our
goal is to delight both our guests and our shareholders by
providing classic Six Flags thrills, enhanced with modern
technology, while keeping a careful eye on costs.”
Second Quarter 2021
Highlights
- Attendance was 8.5 million guests, a decrease of 2.0 million
compared to second quarter 2019.
- Total Revenue was $460 million, a decrease of $17 million
compared to second quarter 2019.
- Net Income was $71 million, a decrease of $9 million compared
to second quarter 2019.
- Adjusted EBITDA2 was $170 million, a decrease of $9 million
compared to second quarter 2019.
- Net cash flow for second quarter 2021 was $190 million.
First Half 2021
Highlights
- Attendance was 9.9 million guests, a decrease of 2.8 million
compared to first half 2019.
- Total Revenue was $542 million, a decrease of $64 million
compared to first half 2019.
- Net loss was $25 million, a decrease of $36 million compared to
first half 2019.
- Adjusted EBITDA was $125 million, a decrease of $23 million
compared to first half 2019.
- Net cash flow for first half 2021 was $95 million.
Second Quarter 2021
Results
(In millions, except per share and per
capita amounts)
Three Months Ended
July 4,
2021
June 30,
2020
June 30,
2019
% Change
vs. 2020
% Change
vs. 2019
Total revenues
$
460
$
19
$
477
N/M
(4)
%
Net income (loss) attributable to Six
Flags Entertainment Corporation
$
71
$
(137)
$
80
N/M
(10)
%
Net income (loss) per share, diluted
$
0.81
$
(1.62)
$
0.94
N/M
(13)
%
Adjusted EBITDA
$
170
$
(96)
$
180
N/M
(5)
%
Attendance
8.5
0.4
10.5
N/M
(19)
%
Total guest spending per capita
$
51.94
$
35.77
$
42.27
45
%
23
%
Admissions spending per capita
$
28.68
$
25.32
$
24.03
13
%
19
%
In-park spending per capita
$
23.26
$
10.45
$
18.24
123
%
28
%
Pro-forma allocation of Admissions
Spending to In-park Spending
Total guest spending per capita
$
51.94
$
35.77
$
42.27
45
%
23
%
Admissions spending per capita
$
28.68
$
24.54
$
23.17
17
%
24
%
In-park spending per capita
$
23.26
$
11.23
$
19.10
107
%
22
%
In second quarter 2021, the company generated $460 million of
revenue with attendance of 8.5 million guests, net income of $71
million, and Adjusted EBITDA of $170 million. As previously
announced, the company elected to change the method of determining
its fiscal quarters and fiscal years beginning in first quarter
2021. The change resulted in four additional calendar days in July
for second quarter 2021 versus both 2020 and 2019, including most
of the July 4th holiday weekend, offset by four fewer calendar days
in the month of April that were included in first quarter 2021
results. The net impact was a benefit of 614 thousand of attendance
and $32 million of revenue in second quarter 2021.
The Adjusted EBITDA calculation reflects an add-back adjustment
of approximately $1.3 million of non-recurring costs related to the
transformation plan, including $0.3 million of employee termination
costs, $1.0 million of technology costs, and $0.1 million of
consulting costs. During the quarter, the company received $11.3
million related to one of its terminated international development
agreements in China, which is included in Adjusted EBITDA. Of this
amount, $6.7 million was allocated to revenue from international
agreements and $4.6 million reduced expense for reimbursable costs
recorded in prior periods.
Certain of the company’s memberships include bundled products
and offerings. Since the beginning of the membership program, a
portion of the membership revenue has been allocated from Park
admissions revenue to Park food, merchandise and other revenue.
Beginning in October 2020, the company prospectively began
allocating an incremental portion of membership revenue from Park
admissions revenue to Park food, merchandise and other revenue.
This resulted in a reduction in reported Admissions spending per
capita and an increase in In-park spending per capita, but the
allocation of revenue between Park Admissions revenue and Park
food, merchandise and other revenue has no impact on Total revenues
or Total guest spending per capita.
Results of second quarter 2021 compared to second quarter
2019
The decrease in attendance was due to the temporary
pandemic-related limitations on park operations at several of the
company’s parks in second quarter 2021, partially offset by the
change to the company’s reporting calendar.
The $17 million decrease in revenue was driven by a $17 million
reduction in sponsorship, international agreements, and
accommodations revenue, primarily related to the termination of the
company’s contracts in China and Dubai in 2020 and 2019,
respectively, and a reduction in sponsorship revenue and
accommodations operations due to the pandemic. Excluding
sponsorship, international agreements, and accommodations revenue,
total revenue declined less than $1 million. The decrease was a
result of lower attendance, net of the attendance increase related
to the fiscal calendar change, mostly offset by higher guest
spending per capita.
The company partially offset the decrease in revenue with lower
operating costs. The reduction in operating costs reflected cost
savings measures implemented during the quarter driven by the
company’s transformation plan, lower advertising costs, and a
benefit from the proceeds received in connection with one of its
terminated international development agreements in China, partially
offset by higher wage rates and incentive costs to attract and
retain team members. During second quarter 2021, wage rate
increases and higher incentive costs were partially offset by fewer
total employee hours worked due to the tight labor market.
Total guest spending per capita in second quarter 2021 increased
23% compared to second quarter 2019. Applying the pro forma
allocation from Admissions spending to In-park spending in 2019,
Admissions spending per capita increased 24% and In-park spending
per capita increased 22%. The increase in admissions spending per
capita was driven by the company’s revenue management initiatives
and a shorter average season for 2021 season passes versus 2019.
Most 2021 season passes have been sold later in the season than in
2019, resulting in season pass revenue being recognized over a
shorter time frame and higher Admissions spending per capita. The
increase in In-park spending per capita was due to early progress
on several of the company’s transformation initiatives and strong
consumer spending trends.
First Half 2021 Results
(In millions, except per share and per
capita amounts)
Six Months Ended
July 4,
2021
June 30,
2020
June 30,
2019
% Change
vs. 2020
% Change
vs. 2019
Total revenues
$
542
$
122
$
605
N/M
(11)
%
Net income (loss) attributable to Six
Flags Entertainment Corporation
$
(25)
$
(221)
$
10
N/M
N/M
Net income (loss) per share, diluted
$
(0.30)
$
(2.62)
$
0.12
N/M
N/M
Adjusted EBITDA
$
125
$
(138)
$
148
N/M
(16)
%
Attendance
9.9
2.0
12.7
391
%
(22)
%
Total guest spending per capita
$
52.51
$
52.13
$
43.33
1
%
21
%
Admissions spending per capita
$
29.26
$
35.10
$
25.13
(17)
%
16
%
In-park spending per capita
$
23.25
$
17.03
$
18.20
37
%
28
%
Pro-forma allocation of Admissions
Spending to In-park Spending
Total guest spending per capita
$
52.51
$
52.13
$
43.33
1
%
21
%
Admissions spending per capita
$
29.26
$
31.83
$
24.00
(8)
%
22
%
In-park spending per capita
$
23.25
$
20.30
$
19.33
15
%
20
%
In first half 2021, the company generated $542 million of
revenue with attendance of 9.9 million guests, a net loss of $25
million, and Adjusted EBITDA of $125 million. As a result of the
change to the company’s reporting calendar, four additional days
were included in first half 2021 versus both 2020 and 2019,
including most of the July 4th holiday weekend, and 907 thousand in
attendance and $49 million in revenue shifted from third quarter to
first half of 2021.
The Adjusted EBITDA calculation reflects an add-back adjustment
of approximately $11.0 million of non-recurring costs related to
the transformation plan, including $1.1 million of employee
termination costs, $3.1 million of technology costs, and $6.9
million of consulting costs. During the first half, the company
received $11.3 million related to one of its terminated
international development agreements in China, which is included in
Adjusted EBITDA. Of this amount, $6.7 million was allocated to
revenue from international agreements and $4.6 million reduced
expense for reimbursable costs recorded in prior periods.
Results of first half 2021 compared to first half
2019
The decrease in attendance was due to the temporary
pandemic-related limitations on park operations at several of the
company’s parks in 2021, and capacity restrictions at some of the
parks that were open, partially offset by the change to the
company’s reporting calendar.
The $64 million decrease in revenue was driven by a $34 million
reduction in sponsorship, international agreements, and
accommodations revenue, primarily related to the termination of the
company’s contracts in China and Dubai in 2020 and 2019,
respectively; and a reduction in sponsorship revenue and
accommodations revenue due to the pandemic. Excluding sponsorship,
international agreements, and accommodations revenue, total revenue
declined by $30 million or 5%. The decrease was a result of lower
attendance, net of the attendance increase related to the fiscal
quarter reporting change, partially offset by higher guest spending
per capita.
The company partially offset the decrease in revenue with lower
operating costs. The reduction in operating costs reflected cost
savings measures during the first six months driven by the
company’s transformation plan, lower advertising costs, a benefit
from the proceeds received in connection with one of its terminated
international development agreements in China, and lower salaries,
wages and benefits due to the fact that several of the company’s
parks that were operating in first quarter 2019 were not operating
in first quarter 2021. In the second quarter, wage rate increases
and higher incentive costs to attract and retain team members were
partially offset by fewer total employee hours worked due to the
tight labor market.
Total guest spending per capita in first half 2021 increased 21%
compared to first half 2019. Applying the pro forma allocation from
Admissions spending to In-park spending in 2019, Admissions
spending per capita increased 22% and In-park spending per capita
increased 20%. The increase in Admissions spending per capita was
driven by the company’s revenue management initiatives and a
shorter average season for 2021 season passes versus 2019. Most
2021 season passes have been sold later in the season than in 2019,
resulting in season pass revenue being recognized over a shorter
time frame and higher Admissions spending per capita. The increase
in In-park spending per capita was due to early progress on several
of the company’s transformation initiatives and strong consumer
spending trends.
Active Pass Base
The company extended the use of all 2020 season passes through
the end of 2021 and offered members the option to pause payments on
their membership through the time their respective home park opened
in 2021. The company also offered higher-tiered benefits to members
that elected to maintain their payment schedule instead of pausing.
The company also began selling a significant number of season
passes and memberships as its parks reopened in 2021. As a result
of these retention and sales efforts, the Active Pass Base
increased 65% as of the end of second quarter 2021 compared to
second quarter 2020 and increased 2% compared to second quarter
2019. Due to the change in the reporting calendar, second quarter
2021 ended on July 4 instead on June 30, as it did in 2019 and
2020. As of June 30, 2021, the Active Pass Base was essentially
flat compared to June 30, 2019. The Active Pass Base of 6.3 million
included 2.1 million members as of the end of second quarter 2021,
compared to approximately 2.1 million at the end of second quarter
2020 and 2.7 million members at end of second quarter 2019, with
almost no members continuing to pause their payments. The Active
Pass Base also included 4.2 million traditional season pass holders
at the end of the second quarter 2021 compared to 1.7 million
season pass holders at the end of second quarter 2020 and 3.5
million season pass holders at the end of second quarter 2019.
Deferred revenue was $310 million as of July 4, 2021, an
increase of $75 million, or 32%, from June 30, 2019. The increase
in deferred revenue was primarily due to increased sales of season
passes and memberships in second quarter 2021 compared to the same
period in 2019, and the deferral of revenue from members and season
pass holders whose benefits were extended through 2021.
Balance Sheet and
Liquidity
As of July 4, 2021, the company had cash on hand of $253 million
and $461 million available under its revolving credit facility, net
of $20 million of letters of credit, or total liquidity of $714
million. This compares to $524 million of liquidity as of April 4,
2021. The company’s net cash flow was $190 million for second
quarter 2021.
For first half 2021, the company invested $42 million in new
capital projects. Net debt as of July 4, 2021, calculated as total
reported debt of $2,626 million less cash and cash equivalents of
$253 million, was $2,373 million.
On August 26, 2020, the company amended its credit facility to,
among other benefits, suspend testing of its senior secured
leverage ratio financial maintenance covenant through December 31,
2021. The company’s lenders also approved modified testing of its
senior secured leverage ratio financial maintenance covenant
through December 31, 2022. Through the duration of the amendment
period ending December 31, 2022, the company agreed to suspend
paying dividends and repurchasing its common stock, and to maintain
minimum liquidity of $150 million.
Transformation Plan
Update
The company commenced a transformation plan in March 2020 to
reinvigorate long-term profit growth, which includes both revenue
and cost initiatives. The company is focused on modernizing the
guest experience through technology, continuously improving
operational efficiency, and driving financial excellence.
As previously announced, executing the transformation will
require one-time charges of approximately $70 million, of which $60
million will be cash and $10 million will be non-cash write-offs of
ride assets. Approximately $46 million has been incurred through
second quarter 2021, including all of the non-cash write-offs of
ride assets. The company expects the remaining charges to be
incurred in 2021 and 2022. The majority of the remaining
investments will be made on the company’s information technology
infrastructure, mainly directed towards modernizing the guest
experience, beginning with the implementation of a Customer
Relations Management system.
(Amounts in thousands)
Twelve Months Ended
Six Months Ended
Life to Date
December 31,
2020
July 4,
2021
July 4,
2021
Amounts included in “Other expense,
net”
Consultant costs
$
20,460
$
6,854
$
27,314
Technology modernization costs
—
3,070
3,070
Employee termination costs
4,362
1,108
5,470
Amounts included in “Loss on disposal
of assets”
Ride / asset write-offs
9,754
—
9,754
Total transformation costs
$
34,576
$
11,032
$
45,608
The company expects its transformation plan to generate an
incremental $80 to $110 million in annual run-rate Adjusted EBITDA.
The company expects to realize $30 to $35 million of fixed cost
benefits in 2021, independent of attendance levels, and has already
realized more than $16 million through the first half of the year.
The company expects to achieve the remaining benefits through
incremental revenue opportunities and lower costs once the plan is
fully implemented and attendance returns to 2019 levels. The
revenue initiatives are expected to yield $30 to $40 million and
the company’s cost initiatives are expected to deliver $50 to $70
million.
Relative to the mid-point of the company’s pre-pandemic guidance
range of $450 million, this implies an Adjusted EBITDA baseline
range of $530 to $560 million once the plan is fully implemented
and attendance returns to 2019 levels.3
Change in Reporting
Calendar
As previously announced, the company elected to change the
method of determining its fiscal quarters and fiscal years, such
that each fiscal quarter (beginning with the fiscal quarter
commencing January 1, 2021) shall consist of thirteen consecutive
weeks ending on a Sunday4 and each fiscal year (beginning with the
fiscal year commencing January 1, 2021) shall consist of 52 weeks
or 53 weeks, as applicable, and shall end on the Sunday closest to
December 31. The company made the change to align the company’s
reporting calendar with how the company operates its business and
to improve comparability across periods. A summary of the
comparable reporting periods is set forth below.
Q1
Q2
Q3
Q4
2019
January 1- March 31
April 1 – June 30
July 1 – September 30
October 1 – December 31, 2019
2020
January 1- March 31
April 1 – June 30
July 1 – September 30
October 1 – December 31, 2020
2021
January 1 – April 4
April 5 – July 4
July 5 – October 3
October 4 – January 2, 2022
Conference Call
At 7:00 a.m. Central Time today, July 28, 2021, the company will
host a conference call to discuss its second quarter financial
performance. The call is accessible through either the Six Flags
Investor Relations website at investors.sixflag.com or by dialing
1-855-889-1976 in the United States or +1-937-641-0558 outside the
United States and requesting the Six Flags earnings call. A replay
of the call will be available through August 4, 2021 by dialing
1-855-859-2056 or +1-404-537-3406 and requesting conference ID
8240347.
About Six Flags Entertainment
Corporation
Six Flags Entertainment Corporation is the world’s largest
regional theme park company and the largest operator of waterparks
in North America, with 27 parks across the United States, Mexico
and Canada. For nearly 60 years, Six Flags has entertained hundreds
of millions of guests with world-class coasters, themed rides,
thrilling waterparks and unique attractions. Six Flags is committed
to creating an inclusive environment that fully embraces the
diversity of our team members and guests. For more information,
visit www.sixflags.com.
Forward Looking
Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
including statements regarding (i) the effect, impact, potential
duration or other implications of the COVID-19 pandemic or virus
variants, and any expectations we may have with respect thereto
including the continuing efficacy of the COVID-19 vaccines, (ii)
our ability to continue to safely and profitably operate our parks
in accordance with local health and government guidelines in light
of the ongoing pandemic, (iii) the adequacy of our cash flows from
operations, available cash and available amounts under our credit
facilities to meet our liquidity needs, including in the event of a
prolonged closure of one or more of our parks, (iv) expectations
regarding future actions and initiatives to increase profitability,
including expectations regarding the anticipated focus, timing,
costs, benefits and results of our transformation plan, as well as
our incremental annual run-rate Adjusted EBITDA and anticipated
earnings baseline resulting from the plan, (v) our ability to
significantly improve our financial performance and the guest
experience, (vi) expectations regarding consumer demand for
regional, outdoor, out-of-home entertainment, including for our
parks, and (vii) expectations regarding our annual income tax
liability and the availability and effect of net operating loss
carryforwards and other tax benefits. Forward-looking statements
include all statements that are not historical facts and often use
words such as "anticipates," "intends," "plans," "seeks,"
"believes," "estimates," "expects," "may," "should," "could" and
variations of such words or similar expressions. 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, factors impacting
attendance, such as local conditions, natural disasters, contagious
diseases, including COVID-19, or the perceived threat of contagious
diseases, events, disturbances and terrorist activities;
regulations and guidance of federal, state and local governments
and health officials regarding the response to COVID-19, including
with respect to business operations, safety protocols and public
gatherings; political or military events; recall of food, toys and
other retail products sold at our parks; accidents, incidents
involving the safety of guests and employees, or contagious disease
outbreaks occurring at our parks or other parks in the industry and
adverse publicity concerning our parks or other parks in the
industry; availability of commercially reasonable insurance
policies at reasonable rates; inability to achieve desired
improvements and our financial performance targets; adverse weather
conditions such as excess heat or cold, rain and storms; general
financial and credit market conditions, including our ability to
access credit or raise capital; economic conditions (including
customer spending patterns); changes in public and consumer tastes;
construction delays in capital improvements or ride downtime;
competition with other theme parks, waterparks and entertainment
alternatives; dependence on a seasonal workforce; unionization
activities and labor disputes; laws and regulations affecting labor
and employee benefit costs, including increases in state and
federally mandated minimum wages, and healthcare reform;
environmental laws and regulations; laws and regulations affecting
corporate taxation; pending, threatened or future legal proceedings
and the significant expenses associated with litigation;
cybersecurity risks; and other factors could cause actual results
to differ materially from the company’s expectations, including the
risk factors or uncertainties listed from time to time in the
company’s filings with the Securities and Exchange Commission (the
“SEC”). Although we believe that the expectations reflected in such
forward-looking statements are reasonable, we make no assurance
that such expectations will be realized and actual results could
vary materially. Reference is made to a more complete discussion of
forward-looking statements and applicable risks contained under the
captions "Cautionary Note Regarding Forward-Looking Statements" and
"Risk Factors" in our Annual and Quarterly Reports on Forms 10-K
and 10-Q, and our other filings and submissions with the SEC, each
of which are available free of charge on the company’s investor
relations website at investors.sixflags.com and on the SEC’s
website at www.sec.gov.
Footnotes
(1)
Comparable fiscal periods are January 4,
2021, through July 25, 2021, versus January 7, 2019 through July
28, 2019.
(2)
See the following financial statements and
Note 4 to those financial statements for a discussion of Adjusted
EBITDA (a non-GAAP financial measure) and its reconciliation to net
income (loss).
(3)
Information reconciling forward-looking
Adjusted EBITDA to net income (loss) is unavailable to the company
without unreasonable effort. The company is not able to provide
reconciliations of Adjusted EBITDA to net income (loss) because
certain items required for such reconciliations are outside of the
company’s control and/or cannot be reasonably predicted, such as
depreciation, amortization and the provision for income taxes.
Preparation of such reconciliations would require a forward-looking
balance sheet, statement of income and statement of cash flow,
prepared in accordance with GAAP, and such forward-looking
financial statements are unavailable to the company without
unreasonable effort. The company provides a range for its Adjusted
EBITDA outlook that it believes will be achieved; however, it
cannot accurately predict all the components of the Adjusted EBITDA
calculation.
(4)
When a fiscal year contains 53 weeks,
approximately every 5 to 6 years, the fourth quarter of that fiscal
year will contain 14 weeks.
Statement of Operations Data
(1)
Three Months Ended
Six Months Ended
(Amounts in thousands, except per share
data)
July 4, 2021
June 30, 2020
June 30, 2019
July 4, 2021
June 30, 2020
June 30, 2019
Park admissions
$
245,165
$
10,962
$
252,508
$
289,499
$
70,768
$
318,588
Park food, merchandise and other
198,897
4,523
191,655
230,121
34,329
230,633
Sponsorship, international agreements and
accommodations
15,725
3,658
33,047
22,191
16,549
56,182
Total revenues
459,787
19,143
477,210
541,811
121,646
605,403
Operating expenses (excluding depreciation
and amortization shown separately below)
183,768
62,681
178,348
276,411
168,545
292,870
Selling, general and administrative
expenses (excluding depreciation, amortization, and stock-based
compensation shown separately below)
47,204
30,800
56,170
76,693
62,710
92,389
Costs of products sold
39,194
2,214
43,513
46,409
9,974
53,788
Other net periodic pension benefit
(1,690
)
(994
)
(1,055
)
(3,333
)
(1,990
)
(2,110
)
Depreciation
28,047
29,032
28,674
56,874
59,095
57,144
Amortization
5
402
601
11
1,003
1,204
Stock-based compensation
3,001
6,020
3,553
9,638
10,300
7,444
Loss (gain) on disposal of assets
719
513
(690
)
1,239
393
446
Interest expense, net
38,048
51,047
29,572
76,468
78,204
57,920
Loss on debt extinguishment
—
5,087
6,231
—
6,106
6,231
Other expense (income), net
831
4,252
(1,278
)
8,450
5,812
(1,705
)
Income (loss) before income taxes
120,660
(171,911
)
133,571
(7,049
)
(278,506
)
39,782
Income tax expense (benefit)
29,257
(55,661
)
33,675
(2,613
)
(77,710
)
9,018
Net income (loss)
91,403
(116,250
)
99,896
(4,436
)
(200,796
)
30,764
Less: Net income attributable to
noncontrolling interests
(20,883
)
(20,644
)
(20,377
)
(20,883
)
(20,644
)
(20,377
)
Net income (loss) attributable to Six
Flags Entertainment Corporation
$
70,520
$
(136,894
)
$
79,519
$
(25,319
)
$
(221,440
)
$
10,387
Weighted-average common shares
outstanding:
Basic:
85,673
84,704
84,288
85,437
84,680
84,207
Diluted:
86,751
84,704
84,868
85,437
84,680
84,882
Net income (loss) per average common share
outstanding:
Basic:
$
0.82
$
(1.62
)
$
0.94
$
(0.30
)
$
(2.62
)
$
0.12
Diluted:
$
0.81
$
(1.62
)
$
0.94
$
(0.30
)
$
(2.62
)
$
0.12
Statement of Operations Data
(1)
Twelve Months Ended
(Amounts in thousands, except per share
data)
July 4, 2021
June 30, 2020
June 30, 2019
Park admissions
$
421,377
$
567,962
$
821,860
Park food, merchandise and other
322,098
378,136
565,859
Sponsorship, international agreements and
accommodations
33,265
57,728
107,007
Total revenues
776,740
1,003,826
1,494,726
Operating expenses (excluding depreciation
and amortization shown separately below)
497,592
483,466
601,130
Selling, general and administrative
expenses (excluding depreciation, amortization, and stock-based
compensation shown separately below)
141,748
156,241
182,106
Costs of products sold
70,554
86,490
125,608
Other net periodic pension benefit
(6,533
)
(4,066
)
(4,725
)
Depreciation
116,938
117,776
115,063
Amortization
22
2,204
2,428
Stock-based compensation
18,868
16,130
(59,829
)
Loss on disposal of assets
8,535
2,109
160
Interest expense, net
152,987
133,586
111,798
Loss on debt extinguishment
—
6,359
6,231
Other expense (income), net
27,631
10,059
(486
)
(Loss) income before income taxes
(251,602
)
(6,528
)
415,242
Income tax (benefit) expense
(65,870
)
5,214
100,635
Net (loss) income
(185,732
)
(11,742
)
314,607
Less: Net income attributable to
noncontrolling interests
(41,527
)
(41,020
)
(40,381
)
Net (loss) income attributable to Six
Flags Entertainment Corporation
$
(227,259
)
$
(52,762
)
$
274,226
Weighted-average common shares
outstanding:
Basic:
85,183
84,582
84,174
Diluted:
85,183
84,582
85,094
Net (loss) income per average common share
outstanding:
Basic:
$
(2.67
)
$
(0.62
)
$
3.25
Diluted:
$
(2.67
)
$
(0.62
)
$
3.21
Balance Sheet Data
As of
(Amounts in thousands)
July 4, 2021
December 31, 2020
June 30, 2020
Cash and cash equivalents
$
252,887
$
157,760
$
295,956
Total assets
2,928,399
2,772,691
2,968,934
Deferred revenue
310,441
205,125
182,386
Long-term debt
2,626,082
2,622,641
2,619,929
Redeemable noncontrolling interests
542,950
523,376
544,020
Total stockholders' deficit
(1,160,154
)
(1,158,547
)
(970,782
)
Shares outstanding
85,872
85,076
84,757
Definition and Reconciliation of Non-GAAP Financial
Measures
We prepare our financial statements in accordance with United
States generally accepted accounting principles ("GAAP"). In our
press release, we make reference to non-GAAP financial measures
including Modified EBITDA, Adjusted EBITDA and Adjusted Free Cash
Flow. The definition for each of these non-GAAP financial measures
is set forth below in the notes to the reconciliation tables. We
believe that these non-GAAP financial measures provide important
and useful information for investors to facilitate a comparison of
our operating performance on a consistent basis from period to
period and make it easier to compare our results with those of
other companies in our industry. We use these measures for internal
planning and forecasting purposes, to evaluate ongoing operations
and our performance generally, and in our annual and long-term
incentive plans. By providing these measures, we provide our
investors with the ability to review our performance in the same
manner as our management.
However, because these non-GAAP financial measures are not
determined in accordance with GAAP, they are susceptible to varying
calculations, and not all companies calculate these measures in the
same manner. As a result, these non-GAAP financial measures as
presented may not be directly comparable to a similarly titled
non-GAAP financial measure presented by another company. These
non-GAAP financial measures are presented as supplemental
information and not as alternatives to any GAAP financial measures.
When reviewing a non-GAAP financial measure, we encourage our
investors to fully review and consider the related reconciliation
as detailed below.
The following tables set forth a reconciliation of net income
(loss) to Adjusted EBITDA for the three month periods, six month
periods and twelve month periods ended July 4, 2021, June 30, 2020
and June 30, 2019:
Three Months Ended
Six Months Ended
(Amounts in thousands, except per share
data)
July 4, 2021
June 30, 2020
June 30, 2019
July 4, 2021
June 30, 2020
June 30, 2019
Net income (loss)
$
91,403
$
(116,250
)
$
99,896
$
(4,436
)
$
(200,796
)
$
30,764
Income tax expense (benefit)
29,257
(55,661
)
33,675
(2,613
)
(77,710
)
9,018
Other expense, net (2)
831
4,252
(1,278
)
8,450
5,812
(1,705
)
Loss on debt extinguishment
—
5,087
6,231
—
6,106
6,231
Interest expense, net
38,048
51,047
29,572
76,468
78,204
57,920
Loss (gain) on disposal of assets
719
513
(690
)
1,239
393
446
Amortization
5
402
601
11
1,003
1,204
Depreciation
28,047
29,032
28,674
56,874
59,095
57,144
Stock-based compensation
3,001
6,020
3,553
9,638
10,300
7,444
Modified EBITDA (4)
191,311
(75,558
)
200,234
145,631
(117,593
)
168,466
Third party interest in EBITDA of certain
operations (5)
(20,883
)
(20,644
)
(20,377
)
(20,883
)
(20,644
)
(20,377
)
Adjusted EBITDA (4)
$
170,428
$
(96,202
)
$
179,857
$
124,748
$
(138,237
)
$
148,089
Weighted-average common shares
outstanding
85,673
84,704
84,288
85,437
84,680
84,207
Twelve Months Ended
(Amounts in thousands, except per share
data)
July 4, 2021
June 30, 2020
June 30, 2019
Net (loss) income
$
(185,732
)
$
(11,742
)
$
314,607
Income tax (benefit) expense
(65,870
)
5,214
100,635
Other expense (income), net (2)
27,631
10,059
(486
)
Loss on debt extinguishment
—
6,359
6,231
Interest expense, net
152,987
133,586
111,798
Loss on disposal of assets
8,535
2,109
160
Amortization
22
2,204
2,428
Depreciation
116,938
117,776
115,063
Stock-based compensation
18,868
16,130
(59,829
)
Modified EBITDA (4)
73,379
281,695
590,618
Third party interest in EBITDA of certain
operations (5)
(41,527
)
(41,020
)
(40,381
)
Adjusted EBITDA (4)
$
31,852
$
240,675
$
550,237
Weighted-average common shares
outstanding
85,183
84,582
84,174
The following tables set forth a reconciliation of net cash
provided by (used in) operating activities to Adjusted Free Cash
Flow for the three month periods, six month periods and twelve
month periods ended July 4, 2021, June 30, 2020 and June 30,
2019:
Three Months Ended
Six Months Ended
(Amounts in thousands, except per share
data)
July 4, 2021
June 30, 2020
June 30, 2019
July 4, 2021
June 30, 2020
June 30, 2019
Net cash provided by (used in) operating
activities
$
209,731
$
(50,316
)
$
167,020
$
129,333
$
(110,703
)
$
126,197
Changes in working capital
(52,966
)
(81,719
)
(2,918
)
(63,595
)
(88,441
)
(20,069
)
Interest expense, net
38,048
51,047
29,572
76,468
78,204
57,920
Income tax expense (benefit)
29,257
(55,661
)
33,675
(2,613
)
(77,710
)
9,018
Amortization of debt issuance costs
(1,978
)
(1,611
)
(865
)
(3,956
)
(2,467
)
(1,872
)
Other expense (income), net (2)
1,064
5,284
(40
)
10,134
5,178
(384
)
Interest accretion on notes payable
(277
)
(285
)
(326
)
(554
)
(605
)
(664
)
Changes in deferred income taxes
(31,568
)
57,703
(25,884
)
414
78,951
(1,680
)
Third party interest in EBITDA of certain
operations (5)
(20,883
)
(20,644
)
(20,377
)
(20,883
)
(20,644
)
(20,377
)
Capital expenditures, net of property
insurance recovery
(19,117
)
(21,693
)
(47,666
)
(42,250
)
(73,109
)
(95,125
)
Cash paid for interest, net
(43,893
)
(20,274
)
(28,307
)
(107,790
)
(51,932
)
(59,733
)
Cash taxes (6)
(296
)
(367
)
(12,097
)
(564
)
(2,326
)
(17,407
)
Adjusted Free Cash Flow (7)
$
107,122
$
(138,536
)
$
91,787
$
(25,856
)
$
(265,604
)
$
(24,176
)
Weighted-average common shares outstanding
- basic:
85,673
84,704
84,288
85,437
84,680
84,207
Twelve Months Ended
(Amounts in thousands, except per share
data)
July 4, 2021
June 30, 2020
June 30, 2019
Net cash provided by operating
activities
$
49,156
$
173,673
$
404,638
Changes in working capital
(151,092
)
(39,633
)
55,645
Interest expense, net
152,987
133,586
111,798
Income tax (benefit) expense
(65,870
)
5,214
100,635
Amortization of debt issuance costs
(8,024
)
(4,158
)
(3,885
)
Other expense, net (2)
41,666
12,019
5,648
Interest accretion on notes payable
(1,106
)
(1,251
)
(1,338
)
Changes in deferred income taxes
55,662
2,245
(82,534
)
Third party interest in EBITDA of certain
operations (5)
(41,527
)
(41,020
)
(40,381
)
Capital expenditures, net of property
insurance recovery
(67,505
)
(118,160
)
(137,716
)
Cash paid for interest, net
(154,409
)
(105,196
)
(106,590
)
Cash taxes (6)
(4,155
)
(13,128
)
(32,584
)
Adjusted Free Cash Flow (7)
$
(194,217
)
$
4,191
$
273,347
Weighted-average common shares outstanding
- basic:
85,183
84,582
84,174
(1)
Revenues and expenses of international
operations are converted into U.S. dollars on an average basis as
provided by GAAP.
(2)
Amounts recorded as “Other (income)
expense, net” include amounts related to our transformation
initiative, including consulting costs of $0.1 million, $6.9
million and $27.3 million, for the three, six and twelve months
ended July 4, 2021, respectively; technology modernization costs of
$1.0 million and $3.1 million for the three and six months ended
July 4, 2021, respectively; and employee termination costs of $0.3
million, $1.1 million and $5.5 million for the three, six and
twelve months ended July 4, 2021, respectively. For the three and
six months ended June 30, 2020, amounts related to our
transformation initiative included in "Other (income) expense, net"
included $6.2 million of consulting costs. These amounts are
excluded from Modified EBITDA as they are non-routine,
non-recurring and unrelated to our ongoing operations and costs
necessary to operate our business.
(3)
Amounts recorded as valuation adjustments
and included in reorganization items for the month of April 2010
that would have been included in Modified EBITDA and Adjusted
EBITDA, had fresh start accounting not been applied. Balances
consisted primarily of discounted insurance reserves that were
accreted through the Statement of Operations each quarter through
2018.
(4)
“Modified EBITDA”, a non-GAAP measure, is
defined as our consolidated (loss) income from continuing
operations: excluding the cumulative effect of changes in
accounting principles, discontinued operations gains or losses,
income tax expense or benefit, restructure costs or recoveries,
reorganization items (net), other income or expense, gain or loss
on early extinguishment of debt, equity in income or loss of
investees, interest expense (net), gain or loss on disposal of
assets, gain or loss on the sale of investees, amortization,
depreciation, stock-based compensation, and fresh start accounting
valuation adjustments. Modified EBITDA as defined herein may differ
from similarly titled measures presented by other companies.
Management uses non-GAAP measures for budgeting purposes, measuring
actual results, allocating resources and in determining employee
incentive compensation. We believe that Modified EBITDA provides
relevant and useful information for investors because it assists in
comparing our operating performance on a consistent basis, makes it
easier to compare our results with those of other companies in our
industry as it most closely ties our performance to that of our
competitors from a park level perspective and allows investors to
review performance in the same manner as our management.
"Adjusted EBITDA", a non-GAAP measure, is
defined as Modified EBITDA minus the interests of third parties in
the Adjusted EBITDA of properties that are less than wholly owned
(consisting of Six Flags Over Georgia, Six Flags White Water
Atlanta and Six Flags Over Texas). Adjusted EBITDA is approximately
equal to “Parent Consolidated Adjusted EBITDA” as defined in our
secured credit agreement, except that Parent Consolidated Adjusted
EBITDA excludes Adjusted EBITDA from equity investees that is not
distributed to us in cash on a net basis and has limitations on the
amounts of certain expenses that are excluded from the calculation.
Adjusted EBITDA as defined herein may differ from similarly titled
measures presented by other companies. Our board of directors and
management use Adjusted EBITDA to measure our performance and our
current management incentive compensation plans are based largely
on Adjusted EBITDA. We believe that Adjusted EBITDA is frequently
used by all our sell-side analysts and most investors as their
primary measure of our performance in the evaluation of companies
in our industry. In addition, the instruments governing our
indebtedness use Adjusted EBITDA to measure our compliance with
certain covenants and, in certain circumstances, our ability to
make certain borrowings. Adjusted EBITDA, as computed by us, may
not be comparable to similar metrics used by other companies in our
industry.
(5)
Represents interests of non-controlling
interests in the Adjusted EBITDA of Six Flags Over Georgia, Six
Flags Over Texas and Six Flags White Water Atlanta.
(6)
Cash taxes represents statutory taxes
paid, primarily driven by Mexico and state level obligations. Based
on our current federal net operating loss carryforwards and reduced
operations due to the COVID-19 pandemic, we anticipate paying
minimal federal income taxes in 2021 and do not anticipate becoming
a full cash taxpayer until at least 2024. During the years 2021
through 2024, we have significant federal operating loss
carryforwards which will offset the majority of our taxable
income.
(7)
Management uses Adjusted Free Cash Flow, a
non-GAAP measure, in its financial and operational decision making
processes, for internal reporting, and as part of its forecasting
and budgeting processes as it provides additional transparency of
our operations. Management believes that Adjusted Free Cash Flow is
useful information to investors regarding the amount of cash that
we estimate that we will generate from operations over a certain
period. Management believes the presentation of this measure will
enhance the investors' ability to analyze trends in the business
and evaluate the Company's underlying performance relative to other
companies in the industry. A reconciliation from net cash provided
by (used in) operating activities to Adjusted Free Cash Flow is
presented in the table above. Adjusted Free Cash Flow as presented
herein may differ from similarly titled measures presented by other
companies.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210728005190/en/
Stephen Purtell Senior Vice President Investor Relations,
Treasury and Strategy +1-972-595-5180 investors@sftp.com
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