Six Flags Says Roller Coaster Temporary Shutdown Should Have No Material Impact on Financial Performance
June 14 2005 - 8:40AM
Business Wire
Six Flags Inc. (NYSE:PKS) said today that the temporary shutdown of
its Kingda Ka roller coaster is not expected to materially affect
its financial performance and that the company remains comfortable
with its previous guidance of $300 million in Adjusted EBITDA(1)
for 2005. The company today posted a notice on its website that the
coaster would be closed for several weeks. The company said the
roller coaster, which opened in May at its Six Flags Great
Adventure Park in Jackson, N.J., was shut down on June 8, after a
malfunction during a routine test run. The ride had no passengers
at the time and no one was injured. Repairs to the ride, including
the fabrication of several custom parts, are underway. "Safety of
course is our number one priority and we are above all committed to
the safe operation of all of our attractions," said Kieran Burke,
chairman and CEO of Six Flags. "At the same time we are eager to
offer this spectacular roller coaster experience to our guests and
are working diligently to bring Kingda Ka back on line soon." The
company indicated that the shutdown could have a negative impact on
attendance at this particular park over the next several weeks.
However, it said the strong performance year-to- date across its
theme park portfolio with attendance up 4.4% through last Sunday
and season pass sales up 18%, the positive impact of several other
new attractions and Kingda Ka's likely return to operation with
much of the summer season left, led it to conclude the roller
coaster's temporary shutdown would not have a material effect on
its performance. "Although we are disappointed to have this
attraction off line, we can assure our guests that there is still
plenty to do and see at our Six Flags Great Adventure park, with
over 60 other rides, including 12 other roller coasters," said Mr.
Burke. Six Flags, Inc. is the world's largest regional theme park
company. The information contained in this news release, other than
historical information, consists of forward-looking statements
within the meaning of Section 27A of the Securities Act and Section
21E of the Securities Exchange Act. These statements may involve
risks and uncertainties that could cause actual results to differ
materially from those described in such statements. Although the
Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance
that such expectations will prove to have been correct. Important
factors, including factors impacting attendance, including local
conditions, events, disturbances and terrorist activities,
accidents occurring at the Company's parks, adverse weather
conditions, general economic conditions (including consumer
spending patterns), competition, pending, threatened or future
legal proceedings, the time involved in returning Kingda Ka to
service, including obtaining all necessary governmental
authorizations and other factors could cause actual results to
differ materially from the Company's expectations. 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 "Business - Risk Factors"
in the Company's Annual Report on Form 10-K for the year ended
December 31, 2004, which is available free of charge on the
Company's website (www.sixflags.com). This release and prior
releases are available on the Company's Worldwide Web site at
www.sixflags.com. You may register to receive Six Flags, Inc.
future press releases or to download a complete Digital Investor
Kit(TM) including press releases, regulatory filings and corporate
materials by clicking on the "Digital Investor Kit(TM)" icon at
www.kcsa.com. (1) EBITDA (Modified) is defined as net loss before
discontinued operations, income tax expense (benefit), other
expense, early repurchase of debt (formerly extraordinary loss),
minority interest in earnings (losses), interest expense (net),
non-cash compensation, amortization and depreciation. Adjusted
EBITDA is defined as EBITDA (Modified) minus the interest of third
parties in EBITDA of the four parks that are less than wholly
owned. The Company believes that EBITDA (Modified) and Adjusted
EBITDA (collectively, the "EBITDA-Based Measures") provide useful
information to investors regarding the Company's operating
performance and its capacity to incur and service debt and fund
capital expenditures. The Company believes that the EBITDA-Based
Measures are used by many investors, equity analysts and rating
agencies as a measure of performance. In addition, Adjusted EBITDA
is approximately equal to "Consolidated Cash Flow" as defined in
the indentures relating to the Company's senior notes. Neither of
the EBITDA-Based Measures is defined by accounting principles
generally accepted in the Unites States ("GAAP") and neither should
be considered in isolation or as an alternative to net income
(loss), income (loss) from continuing operations, net cash provided
by (used in) operating, investing and financing activities or other
financial data prepared in accordance with GAAP or as an indicator
of the Company's operating performance. The Company is not able as
of this date to provide a reliable estimate of its income tax
benefit and other income (expense) for the year ending December 31,
2005. Therefore, a reliable estimate of its net loss for that year
is not available. Accordingly, the following table sets forth a
reconciliation of expected income from operations for 2005 to
expected EBITDA (Modified) and expected Adjusted EBITDA for such
year. Since the EBITDA-Based Measures are calculated before income
taxes and other expense, the absence of estimates with respect to
these items would not affect the expected EBITDA-Based Measures
presented. For 2005, expected interest expense (net) is
approximately $185,000,000 and expected minority interest in
earnings is approximately $39,000,000. -0- *T Year Ending December
31, 2005 ---------- Income from operations $ 186,300 Non-cash
compensation 800 Amortization 900 Depreciation 156,000 ----------
EBITDA (Modified) 344,000 Third-party interest in EBITDA of certain
parks(a) 44,000 ---------- Adjusted EBITDA $ 300,000 ========== (a)
Represents interest of third parties in EBITDA of Six Flags Over
Georgia, Six Flags Over Texas, Six Flags White Water Atlanta and
Six Flags Marine World. *T (1) See Note 1 for a definition of
Adjusted EBITDA and the required reconciliation.
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