Industry > Six Flags News

Q2 SIX RESULTS

(1/5) > >>

GADVwow:
Say goodbye to the long term discounting at Six Flags:


--- Quote ---...Profits for the quarter ended June 30 were $743.5 million, up from a loss of $121.6 million a year ago. For the 2010 quarter, that worked out to profits of $7.47 a share for April and 40 cents a share for the two months that ended in June. That compares with a loss of $1.25 a share for the comparable three-month period a year ago. The gain was due in part to debt reduction stemming from the bankruptcy initiated by the predecessor company -- Six Flags Inc. –- on June 13, 2009....

But the company has put too much of its marketing muscle behind "Mr. Six" –- the company's balding pitch man -- and relied too much on long term discounting, said Alexander "Al" Weber Jr., who moved last week from interim chief executive to chief operating officer.

Future marketing messages will shift away from the diminutive Mr. Six to ads that "showcase the product," he said. ...

Weber said the company plans to move to a “more strategic discount plan.”

“We want to drive attendance the right way, without discounting on an ongoing basis,” Reid-Anderson said. “This is a great company that had a bad balance sheet. I think the company has a really good future.”


--- End quote ---
http://www.dallasnews.com/sharedcontent/dws/news/city/arlington/stories/081710dnbussixflags.5c9c9445.html

The Press Release:


--- Quote ---
Financial Release
<< Back
Six Flags Announces Strong Second Quarter 2010 Results
-- Revenues increased by 7% for Q2 and the first six months of 2010(1) driven by increases in attendance and sponsorship
-- Q2 Adjusted EBITDA increased 68% to $94.7 million driven by top line growth and effective cost management
-- Strong liquidity position, including cash balance of $210 million as of August 1st with no revolver drawn, enables $25 million pay down of first lien term loan
-- Six Flags emerges from bankruptcy with approximately one-third of the annual financing cost burden (approximately $75 million) and over $1 billion in federal NOLs
-- New management team in place focused on theme park excellence and shareholder value creation DALLAS, Aug 16, 2010 /PRNewswire via COMTEX/ -- Six Flags Entertainment Corporation (NYSE: SIX) announced today its consolidated operating results for the second quarter and six months ended June 30, 2010(2).

"Our strong revenue and profitability in the quarter and year to date are a reflection of Six Flags' strong brand equity and the operational excellence of this superb team," said Jim Reid-Anderson, Chairman, President and Chief Executive Officer. "We are well positioned to leverage our base business momentum for long term success."

"I am honored to be a part of this great company, and I am pleased with the strong results we delivered in the second quarter," said Alexander Weber, Jr., Chief Operating Officer. "Six Flags has a renewed focus on its core theme park business. We remain committed to delivering a clean, safe and fun guest experience with new and exciting attractions for customers of all ages."...


--- End quote ---

Complete press release(way too long to post here...) and financial tables available at:

http://investors.sixflags.com/phoenix.zhtml?c=61629&p=irol-newsArticle&ID=1460034&highlight=

GADVwow:
Conference call transcript here:

http://seekingalpha.com/article/220723-six-flags-ceo-discusses-q2-2010-results-earnings-call-transcript?source=yahoo

My impressions thereof to be posted later tonight.

GADVwow:
My notes from listening to the conference call:

The focus is to reduce costs, improve efficiency, listen to the guests and give them what they want and empower local park management to make local changes to improve the business.

Debt is down from $2.7 billion pre-bankruptcy to $830 million now...freeing up substantial cash for more debt reduction and capital improvements.

Al Weber is capable of cute sarcasm:  "I know a little bit about the theme park space."

The goal is best in class performance.  The focus for now is on marketing, pricing and capital effectiveness.

Mr. Six, though having high awareness, is not effective and does not make people want to visit the parks.  He will, therefore, slowly disappear.

They intend to target families and thrill seekers alike and "convey the message that Six Flags offers something for everyone."

It is of great importance that SIX is in 9 of the top 10 metro areas in this country...

SIX currently underprices its competitors by 20 percent.  It was implied, but not stated, that this will soon end.

They need to select product that truly appeals to the customers and closes the gaps in the product mix.  "We need to listen to our guests to better understand what they want."

Last year Kentucky Kingdom had 500,000 to 600,000 in attendance and lost a couple of million dollars in EBITDA.

Sponsorship/corporate alliance program has been very successful and they want to do more...it is "very, very high margin."  (Look for more shrink wrapped coasters...)

They see, even with increased pricing integrity, increased future attendance by more closely aligning the product choices and guest experience to what guests want and expect.

In park spending is actually up one percent, while the decline in the gate component of per cap (caused by too broad discounting) actually resulted in an overall per cap decline of one percent.

GADVwow:
More Riders, More Revenues and More Fun:  Six Flags:

http://www.fool.com/investing/general/2010/08/16/more-riders-more-revenue-and-more-fun-six-flags.aspx

jglonek:
Very nice writeup. I'm reading through the transcript now. I guess I'm not surprised that Mr. Six is on his way out (again). I do enjoy the commercials that showcase more of the coasters.. when it's the real coasters at the park.

I'm a little confused/concerned about their pricing comments. Sure the coke can promotions are a little over the top, but if they think people are going to spend more than $50 to go to Six Flags for a day I think they might be in for a wake-up call.

One thing that concerns me is this comment:

--- Quote ---And third, we can get a better bang for the buck by analyzing the value proposition of each capital investment. For example, our Glow In The Park parade over the five parks that present the parade, we spent approximately $7.5 million in capital. It's a magnificent event, but it is a night parade and must be schedule at night when guests have already left the park as well as requiring the park to stay open longer than tradition schedule suggests. We see this is as just one small example where we can improve the efficiency and effectiveness by deploying our capital differently.
--- End quote ---

I read that as: waste of money, get rid of it. I hope I'm wrong and we continue to see things like the Glow in the Park parade put into the parks.

Navigation

[0] Message Index

[#] Next page