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 12
million guests and revenue of $638 million for third quarter 2021.
Results for third quarter 2021 are not directly comparable to the
same prior-year period due to the company’s COVID-19 related
suspension of operations and operating restrictions that began in
mid-March 2020. The company believes it is most relevant to compare
its results in the third quarter of 2021 to the third quarter of
2019.
In the third quarter (July 5, 2021, through October 3, 2021),
attendance at the company’s parks was approximately 92% compared to
the comparable fiscal period in 2019, which was July 8, 2019,
through October 6, 2019. Attendance by pre-booked groups, inclusive
of school groups who typically book in advance, has been
significantly diminished due to the pandemic. Excluding pre-booked
groups, attendance at the company’s parks in third quarter 2021 was
approximately 95% compared to the same period in 2019. As of
October 18, all capacity constraints were lifted on the company’s
two Mexico properties. Of the company’s 27 properties, only the
company’s theme park in Montreal continues to have capacity
constraints.
“We are encouraged by the strong demand we are seeing at all our
parks and by our early progress transforming our business, as shown
by accelerating attendance trends, higher per capita spending, and
a growing Active Pass Base,” said Mike Spanos, President and CEO.
“Through a difficult operating environment, we have remained
focused on our ultimate goal: to delight our guests with thrilling
experiences that only Six Flags can offer.”
Third Quarter 2021
Highlights
- Attendance was 12 million guests, inclusive of a negative
calendar shift of 437 thousand guests due to a change in the
company’s fiscal reporting calendar, a decrease of 2 million
compared to third quarter 2019.
- Total Revenue was $638 million, an increase of $17 million
compared to third quarter 2019.
- Net Income was $157 million, a decrease of $23 million compared
to third quarter 2019.
- Adjusted EBITDA1 was $279 million, including $11 million of
litigation reserve increases, a decrease of $28 million compared to
third quarter 2019.
- Net cash flow for third quarter 2021 was $137 million.
First Nine Months 2021
Highlights
- Attendance was 22 million guests, a decrease of 5 million
guests compared to the first nine months of 2019.
- Total Revenue was $1,180 million, a decrease of $46 million
compared to the first nine months of 2019.
- Net Income was $132 million, a decrease of $58 million compared
to the first nine months of 2019.
- Adjusted EBITDA was $404 million, a decrease of $52 million
compared to the first nine months of 2019.
- Net cash flow for the first nine months of 2021 was $232
million.
Third Quarter 2021
Results
(In millions, except per share and per
capita amounts)
Three Months Ended
October 3, 2021
September 30, 2020
September 30, 2019
% Change vs. 2020
% Change vs. 2019
Total revenues
$
638
$
126
$
621
N/M
3
%
Net income (loss) attributable to Six
Flags Entertainment Corporation
$
157
$
(116
)
$
180
N/M
(13
)%
Net income (loss) per share, diluted
$
1.80
$
(1.37
)
$
2.11
N/M
(15
)%
Adjusted EBITDA
$
279
$
(54
)
$
307
N/M
(9
)%
Attendance
12.0
2.6
14.0
N/M
(14
)%
Total guest spending per capita
$
52.02
$
46.82
$
42.44
11
%
23
%
Admissions spending per capita
$
28.70
$
27.92
$
25.17
3
%
14
%
In-park spending per capita
$
23.32
$
18.90
$
17.27
23
%
35
%
Pro-forma allocation of admissions
spending to in-park spending
Total guest spending per capita
$
52.02
$
46.82
$
42.44
11
%
23
%
Admissions spending per capita
$
28.70
$
25.89
$
23.95
11
%
20
%
In-park spending per capita
$
23.32
$
20.93
$
18.49
11
%
26
%
In third quarter 2021, the company generated $638 million of
revenue with attendance of 12 million guests, net income of $157
million, and Adjusted EBITDA of $279 million. The company changed
its fiscal reporting periods beginning in first quarter 2021. The
change resulted in four fewer calendar days in July for third
quarter 2021 than were included in the third quarter for both 2020
and 2019, including most of the July 4th holiday weekend. This was
offset by three additional days in the month of October that were
included in third quarter 2021 results. The net impact was a
reduction of 437 thousand of attendance and approximately $24
million of revenue in third quarter 2021.2
Net income and Adjusted EBITDA include an increase in litigation
reserves of approximately $11 million. The total amount recorded
primarily reflects management’s increased estimate of the probable
outcome of the settlement of a legacy class action lawsuit. The
Adjusted EBITDA calculation reflects an add-back adjustment of
approximately $1 million of non-recurring costs related to the
transformation plan, including a de minimis amount for employee
termination costs and less than $1 million of technology costs.
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 third quarter 2021 compared to third quarter
2019
The $17 million increase in revenue was driven by higher guest
spending per capita revenue, offset by lower attendance and a $14
million reduction in sponsorship, international agreements and
accommodations revenue, primarily related to the termination of the
company’s agreements in China and Dubai in 2020 and 2019,
respectively, and a reduction in sponsorship revenue and
accommodations operations due to the pandemic. The decrease in
attendance was due to the temporary pandemic-related limitations on
park operations, a reduction in pre-booked groups due to the
pandemic, and the change in the company’s fiscal reporting
calendar.
Total guest spending per capita in third quarter 2021 increased
23% compared to third quarter 2019. Applying the pro forma
allocation from admissions spending to in-park spending in 2019,
admissions spending per capita increased 20% and in-park spending
per capita increased 26%. The increase in admissions spending per
capita was driven by the company’s revenue management initiatives
and the impact of most 2021 season passes being sold later in the
season than in 2019, resulting in season pass revenue being
recognized over fewer visits, which increases 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.
The decrease in net income was driven by higher interest expense
and higher operating costs. The increase in operating costs was
driven by higher wage rates and incentive costs to attract and
retain team members, increased litigation reserves, increased
security in the company’s parks, the timing of repair and
maintenance costs due to the company’s cautious approach to
spending earlier in the year, and investments in the guest
experience. The cost increases were offset by cost savings measures
driven by the company’s transformation plan, lower advertising
costs, and the change in the company’s fiscal reporting
calendar.
First Nine Months 2021
Results
(In millions, except per share and per
capita amounts)
Nine Months Ended
October 3,
2021
September 30,
2020
September 30,
2019
% Change
vs. 2020
% Change
vs. 2019
Total revenues
$
1,180
$
248
$
1,227
N/M
(4
)%
Net income (loss) attributable to Six
Flags Entertainment Corporation
$
132
$
(338
)
$
190
N/M
(31
)%
Net income (loss) per share, diluted
$
1.51
$
(3.98
)
$
2.24
N/M
(32
)%
Adjusted EBITDA
$
404
$
(192
)
$
455
N/M
(11
)%
Attendance
21.9
4.6
26.7
N/M
(18
)%
Total guest spending per capita
$
52.24
$
49.13
$
42.86
6
%
22
%
Admissions spending per capita
$
28.95
$
31.05
$
25.15
(7
)%
15
%
In-park spending per capita
$
23.29
$
18.08
$
17.71
29
%
31
%
Pro-forma allocation of admissions
spending to in-park spending
Total guest spending per capita
$
52.24
$
49.13
$
42.86
6
%
22
%
Admissions spending per capita
$
28.95
$
28.48
$
23.97
2
%
21
%
In-park spending per capita
$
23.29
$
20.65
$
18.89
13
%
23
%
In the first nine months of 2021, the company generated $1,180
million of revenue with attendance of 22 million guests, net income
of $132 million, and Adjusted EBITDA of $404 million. The company
changed its fiscal reporting periods beginning in first quarter
2021. The change resulted in three additional calendar days in the
first nine months of 2021 versus both 2020 and 2019, and shifted
470 thousand in attendance and $25 million or revenue from the
fourth quarter to the first nine months of 2021.3
Net income and Adjusted EBITDA include an increase in litigation
reserves of approximately $11 million. The total amount recorded
primarily reflects management’s increased estimate of the probable
outcome of the settlement of a legacy class action lawsuit. The
Adjusted EBITDA calculation reflects an add-back adjustment of
approximately $12 million of non-recurring costs related to the
transformation plan, including $1 million of employee termination
costs, $4 million of technology costs, and $7 million of consulting
costs. In addition, the company received a settlement payment of
$11.3 million related to the termination of its agreements in
China, which was recorded in second quarter 2021. Of this amount,
$6.7 million was allocated to revenue from international agreements
and $4.6 million was a credit to expense.
Results of First Nine Months 2021 compared to First Nine
Months 2019
The $46 million decrease in revenue was due to a $48 million
reduction in sponsorship, international agreements and
accommodations revenue, primarily related to the termination of the
company’s agreements in China and Dubai in 2020 and 2019,
respectively; and a reduction in sponsorship revenue and
accommodations revenue due to the pandemic. This decrease was
offset by higher revenue from “Park admissions” and “Park food,
merchandise and other.” Lower attendance, net of the attendance
increase related to the fiscal reporting calendar change, was
offset by higher guest spending per capita. The decrease in
attendance was due to the temporary pandemic-related limitations
and capacity restrictions on park operations at several of the
company’s parks in 2021, and a reduction in pre-booked groups due
to the pandemic.
Total guest spending per capita in the first nine months of 2021
increased 22% compared to the first nine months of 2019. Applying
the pro forma allocation from admissions spending to in-park
spending in 2019, admissions spending per capita increased 21% and
in-park spending per capita increased 23%. The increase in
admissions spending per capita was driven by the company’s revenue
management initiatives and the impact of most 2021 season passes
being sold later in the season than in 2019, resulting in season
pass revenue being recognized over fewer visits, which increases
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.
The decrease in net income was driven by higher interest expense
and lower revenue. The company partially offset the decrease in
revenue with lower costs of sales as a percentage of revenue.
Operating costs in the first nine months of 2021 were flat compared
to the first nine months of 2019, excluding the increase in
litigation reserves of approximately $11 million. Reductions in
operating costs due to cost savings measures were driven by the
company’s transformation plan, lower advertising costs, the benefit
from the proceeds received in connection with one of its terminated
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. The
decreases were offset by higher wage rates and incentive costs to
attract and retain team members, increased security in the
company’s parks, investments to improve the guest experience, and
the change in the company’s fiscal reporting calendar.
Active Pass Base
As a result of the company’s retention and sales efforts, the
Active Pass Base as of the end of third quarter 2021 increased 102%
compared to third quarter 2020, and increased 3% compared to third
quarter 2019. The Active Pass Base of 7.6 million included 2.2
million members as of the end of third quarter 2021, compared to
approximately 1.9 million at the end of third quarter 2020 and 2.9
million members at end of third quarter 2019. The Active Pass Base
also included 5.4 million traditional season pass holders compared
to 1.9 million season pass holders at the end of third quarter 2020
and 4.5 million season pass holders at the end of third quarter
2019.
Deferred revenue was $224 million as of October 3, 2021, an
increase of $26 million, or 13%, from September 30, 2020, and an
increase of $26 million, or 13%, from September 30, 2019. The
increase in deferred revenue was primarily due to the deferral of
revenue from members whose benefits were extended.
Balance Sheet and
Liquidity
As of October 3, 2021, the company had cash on hand of $390
million and $461 million available under its revolving credit
facility, net of $20 million of letters of credit, or total
liquidity of $851 million. This compares to $714 million of
liquidity as of July 4, 2021. The company’s net cash flow was $137
million for third quarter 2021.
For first nine months of 2021, the company invested $62 million
in new capital projects. Net debt as of October 3, 2021, calculated
as total reported debt of $2,628 million less cash and cash
equivalents of $390 million, was $2,238 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.
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 third 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.
(Amounts in thousands)
Three Months Ended
Nine Months Ended
October 3, 2021
September 30, 2020
October 3, 2021
September 30, 2020
Amounts included in “Other expense,
net”
Consultant costs
$
—
$
12,145
$
6,854
$
18,300
Technology modernization costs
546
—
3,616
—
Employee termination costs
182
1,555
1,290
1,555
Amounts included in “Loss on disposal
of assets”
Ride / asset write-offs
—
9,351
—
9,351
Total transformation costs
$
728
$
23,051
$
11,760
$
29,206
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 $23 million through the first nine months of the
year. Based on year-to-date results, the company expects to achieve
the high end of the range through incremental revenue opportunities
and lower costs once the plan is fully implemented and attendance
returns to 2019 levels; however, it expects to achieve a higher
proportion of benefits from its revenue initiatives.
Relative to the mid-point of the company’s pre-pandemic guidance
range of $450 million, this expectation implies Adjusted EBITDA of
$560 million once the plan is fully implemented and attendance
returns to 2019 levels.4
Change in Reporting
Calendar
The company changed its fiscal reporting periods, such that each
fiscal quarter (beginning with the fiscal quarter commencing
January 1, 2021) consists of thirteen consecutive weeks ending on a
Sunday5 and each fiscal year (beginning with the fiscal year
commencing January 1, 2021) consists of 52 weeks or 53 weeks, as
applicable, and ends on the Sunday closest to December 31. The
company made the change to align the company’s fiscal 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, October 27, 2021, the company
will host a conference call to discuss its third quarter financial
performance. The call is accessible through either the Six Flags
Investor Relations website at investors.sixflags.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 November 3, 2021 by dialing
1-855-859-2056 or +1-404-537-3406 and requesting conference ID
7187724.
About Six Flags Entertainment
Corporation
Six Flags Entertainment Corporation is the world’s largest
regional theme park company with 27 parks across the United States,
Mexico and Canada. For 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 or 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)
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).
(2)
Assumes average total guest
spending per capita in third quarter 2021 for the period October 1
through October 3, 2021, and $49MM of revenue for the period July 1
through July 4, 2021.
(3)
Assumes average total guest
spending per capita in third quarter 2021 for the period October 1
through October 3, 2021.
(4)
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.
(5)
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
Nine Months Ended
(Amounts in thousands, except per share
data)
October 3, 2021
September 30, 2020
September 30, 2019
October 3, 2021
September 30, 2020
September 30, 2019
Park admissions
$
345,217
$
72,920
$
352,664
$
634,716
$
143,688
$
671,252
Park food, merchandise and other
280,499
49,342
242,059
510,620
83,671
472,692
Sponsorship, international agreements and
accommodations
12,568
4,065
26,457
34,759
20,614
82,639
Total revenues
638,284
126,327
621,180
1,180,095
247,973
1,226,583
Operating expenses (excluding depreciation
and amortization shown separately below)
228,119
113,833
189,820
504,530
282,378
482,690
Selling, general and administrative
expenses (excluding depreciation, amortization, and stock-based
compensation shown separately below)
56,480
33,661
51,241
133,173
96,371
143,630
Costs of products sold
54,100
12,980
53,508
100,509
22,954
107,296
Other net periodic pension benefit
(76
)
(995
)
(1,038
)
(3,409
)
(2,985
)
(3,148
)
Depreciation
28,047
28,780
30,084
84,921
87,875
87,228
Amortization
6
5
601
17
1,008
1,805
Stock-based compensation
7,876
7,907
3,903
17,514
18,207
11,347
Loss on disposal of assets
624
10,065
2,659
1,863
10,458
3,105
Interest expense, net
38,095
38,392
28,336
114,563
116,596
86,256
Loss on debt extinguishment
—
—
—
—
6,106
6,231
Other expense (income), net
346
13,470
231
8,796
19,282
(1,474
)
Income (loss) before income taxes
224,667
(131,771
)
261,835
217,618
(410,277
)
301,617
Income tax expense (benefit)
46,543
(36,243
)
61,626
43,930
(113,953
)
70,644
Net income (loss)
178,124
(95,528
)
200,209
173,688
(296,324
)
230,973
Less: Net income attributable to
noncontrolling interests
(20,883
)
(20,644
)
(20,376
)
(41,766
)
(41,288
)
(40,753
)
Net income (loss) attributable to Six
Flags Entertainment Corporation
$
157,241
$
(116,172
)
$
179,833
$
131,922
$
(337,612
)
$
190,220
Weighted-average common shares
outstanding:
Basic:
85,919
84,829
84,413
85,596
84,730
84,276
Diluted:
87,259
84,829
85,045
87,078
84,730
84,938
Net income (loss) per average common share
outstanding:
Basic:
$
1.83
$
(1.37
)
$
2.13
$
1.54
$
(3.98
)
$
2.26
Diluted:
$
1.80
$
(1.37
)
$
2.11
$
1.51
$
(3.98
)
$
2.24
Statement of Operations Data
(1)
Twelve Months Ended
(Amounts in thousands, except per share
data)
October 3, 2021
September 30, 2020
September 30, 2019
Park admissions
$
693,674
$
288,218
$
823,547
Park food, merchandise and other
553,255
185,419
574,966
Sponsorship, international agreements and
accommodations
41,768
35,336
97,573
Total revenues
1,288,697
508,973
1,496,086
Operating expenses (excluding depreciation
and amortization shown separately below)
611,878
407,479
602,246
Selling, general and administrative
expenses (excluding depreciation, amortization, and stock-based
compensation shown separately below)
164,567
138,661
177,747
Costs of products sold
111,674
45,962
129,035
Other net periodic pension benefit
(5,614
)
(4,023
)
(4,473
)
Depreciation
116,205
116,472
116,139
Amortization
23
1,608
2,417
Stock-based compensation
18,837
20,134
(66,109
)
(Gain) loss on disposal of assets
(906
)
9,515
2,433
Interest expense, net
152,690
143,642
113,149
Loss on debt extinguishment
—
6,359
6,231
Other expense (income), net
14,507
23,298
(125
)
Income (loss) before income taxes
104,836
(400,134
)
417,396
Income tax expense (benefit)
16,916
(92,655
)
107,001
Net income (loss)
87,920
(307,479
)
310,395
Less: Net income attributable to
noncontrolling interests
(41,766
)
(41,288
)
(40,753
)
Net income (loss) attributable to Six
Flags Entertainment Corporation
$
46,154
$
(348,767
)
$
269,642
Weighted-average common shares
outstanding:
Basic:
85,453
84,687
84,242
Diluted:
86,835
84,687
84,959
Net income (loss) per average common share
outstanding:
Basic:
$
0.54
$
(4.12
)
$
3.20
Diluted:
$
0.53
$
(4.12
)
$
3.17
Balance Sheet Data
As of
(Amounts in thousands)
October 3, 2021
December 31, 2020
September 30, 2020
Cash and cash equivalents
$
389,857
$
157,760
$
213,907
Total assets
3,054,934
2,772,691
2,864,972
Deferred revenue
224,083
205,125
198,563
Long-term debt
2,627,803
2,622,641
2,620,920
Redeemable noncontrolling interests
542,950
523,376
544,020
Total stockholders' deficit
(995,045
)
(1,158,547
)
(1,076,705
)
Shares outstanding
85,982
85,076
84,951
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, nine month
periods and twelve month periods ended October 3, 2021, September
30, 2020 and September 30, 2019:
Three Months Ended
Nine Months Ended
(Amounts in thousands, except per share
data)
October 3, 2021
September 30, 2020
September 30, 2019
October 3, 2021
September 30, 2020
September 30, 2019
Net income (loss)
$
178,124
$
(95,528
)
$
200,209
$
173,688
$
(296,324
)
$
230,973
Income tax expense (benefit)
46,543
(36,243
)
61,626
43,930
(113,953
)
70,644
Other expense, net (2)
346
13,470
231
8,796
19,282
(1,474
)
Loss on debt extinguishment
—
—
—
—
6,106
6,231
Interest expense, net
38,095
38,392
28,336
114,563
116,596
86,256
Loss on disposal of assets
624
10,065
2,659
1,863
10,458
3,105
Amortization
6
5
601
17
1,008
1,805
Depreciation
28,047
28,780
30,084
84,921
87,875
87,228
Stock-based compensation
7,876
7,907
3,903
17,514
18,207
11,347
Modified EBITDA (4)
299,661
(33,152
)
327,649
445,292
(150,745
)
496,115
Third party interest in EBITDA of certain
operations (5)
(20,883
)
(20,644
)
(20,376
)
(41,766
)
(41,288
)
(40,753
)
Adjusted EBITDA (4)
$
278,778
$
(53,796
)
$
307,273
$
403,526
$
(192,033
)
$
455,362
Weighted-average common shares
outstanding
85,919
84,829
84,413
85,596
84,730
84,276
Twelve Months Ended
(Amounts in thousands, except per share
data)
October 3, 2021
September 30, 2020
September 30, 2019
Net income (loss)
$
87,920
$
(307,479
)
$
310,395
Income tax expense (benefit)
16,916
(92,655
)
107,001
Other expense (income), net (2)
14,507
23,298
(125
)
Loss on debt extinguishment
—
6,359
6,231
Interest expense, net
152,690
143,642
113,149
(Gain) loss on disposal of assets
(906
)
9,515
2,433
Amortization
23
1,608
2,417
Depreciation
116,205
116,472
116,139
Stock-based compensation
18,837
20,134
(66,109
)
Impact of Fresh Start valuation
adjustments (3)
—
—
6
Modified EBITDA (4)
406,192
(79,106
)
591,537
Third party interest in EBITDA of certain
operations (5)
(41,766
)
(41,288
)
(40,753
)
Adjusted EBITDA (4)
$
364,426
$
(120,394
)
$
550,784
Weighted-average common shares
outstanding
85,453
84,687
84,242
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, nine month periods and twelve
month periods ended October 3, 2021, September 30, 2020 and
September 30, 2019:
Three Months Ended
Nine Months Ended
(Amounts in thousands, except per share
data)
October 3, 2021
September 30, 2020
September 30, 2019
October 3, 2021
September 30, 2020
September 30, 2019
Net cash provided by (used in) operating
activities
$
176,606
$
(43,261
)
$
214,668
$
305,939
$
(153,964
)
$
340,865
Changes in working capital
87,395
(38,955
)
74,481
23,800
(127,396
)
54,412
Interest expense, net
38,095
38,392
28,336
114,563
116,596
86,256
Income tax expense (benefit)
46,543
(36,243
)
61,626
43,930
(113,953
)
70,644
Amortization of debt issuance costs
(1,977
)
(2,091
)
(831
)
(5,933
)
(4,558
)
(2,703
)
Other expense (income), net (2)
1,135
14,254
(1,034
)
11,269
19,432
(1,418
)
Interest accretion on notes payable
(277
)
(276
)
(324
)
(831
)
(881
)
(988
)
Changes in deferred income taxes
(47,859
)
35,028
(49,273
)
(47,445
)
113,979
(50,953
)
Third party interest in EBITDA of certain
operations (5)
(20,883
)
(20,644
)
(20,376
)
(41,766
)
(41,288
)
(40,753
)
Capital expenditures, net of property
insurance recovery
(19,565
)
(17,337
)
(26,900
)
(61,815
)
(90,446
)
(122,025
)
Cash paid for interest, net
(26,897
)
(26,772
)
(32,711
)
(134,687
)
(78,704
)
(92,444
)
Cash taxes (6)
(219
)
(2,270
)
(7,546
)
(783
)
(4,596
)
(24,953
)
Adjusted Free Cash Flow (7)
$
232,097
$
(100,175
)
$
240,116
$
206,241
$
(365,779
)
$
215,940
Weighted-average common shares outstanding
- basic:
85,919
84,829
84,413
85,596
84,730
84,276
Twelve Months Ended
(Amounts in thousands, except per share
data)
October 3, 2021
September 30, 2020
September 30, 2019
Net cash provided by (used in) operating
activities
$
269,023
$
(84,256
)
$
411,986
Changes in working capital
(24,742
)
(153,069
)
50,182
Interest expense, net
152,690
143,642
113,149
Income tax expense (benefit)
16,916
(92,655
)
107,001
Amortization of debt issuance costs
(7,910
)
(5,418
)
(3,710
)
Other expense, net (2)
28,547
27,307
4,440
Interest accretion on notes payable
(1,107
)
(1,203
)
(1,325
)
Changes in deferred income taxes
(27,225
)
86,546
(90,192
)
Impact of Fresh Start valuation
adjustments (3)
—
—
6
Third party interest in EBITDA of certain
operations (5)
(41,766
)
(41,288
)
(40,753
)
Capital expenditures, net of property
insurance recovery
(69,733
)
(108,597
)
(142,907
)
Cash paid for interest, net
(154,534
)
(99,257
)
(108,564
)
Cash taxes (6)
(2,104
)
(7,852
)
(30,303
)
Adjusted Free Cash Flow (7)
$
138,055
$
(336,100
)
$
269,010
Weighted-average common shares outstanding
- basic:
85,453
84,687
84,242
(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, technology
modernization costs and employee termination costs. A detail of the
amounts recorded for the three and nine months ended October 3,
2021 and September 30, 2020 are included in the above release. See
section entitled “Transformation Plan Update” for further
reference. Amounts related to our transformation initiative for the
twelve months ended October 3, 2021 include consulting costs of 9.0
million, technology modernization costs of 3.6 million, employee
termination costs of 4.1 million and non-cash write-offs of ride
assets of 0.4 million. Amounts related to our transformation
initiative for the twelve months ended September 30, 2020 include
consulting costs of 18.3 million, employee termination costs of 1.6
million, and non-cash write-offs of ride assets of 9.4 million.
(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 income (loss) 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/20211027005266/en/
Stephen Purtell Senior Vice President Investor Relations,
Treasury and Strategy +1-972-595-5180 investors@sftp.com
Six Flags Entertainment (NYSE:SIX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Six Flags Entertainment (NYSE:SIX)
Historical Stock Chart
From Apr 2023 to Apr 2024