Six Flags, Inc. (NYSE: PKS) today announced the results of its
operations for the fourth quarter and full year ended December 31,
2005. For the full year 2005, as reported revenues were $1.09
billion, compared to $1.0 billion for 2004, an increase of $91.1
million or 9.1%. The Company's net loss for 2005 was $110.9
million, compared to a net loss of $464.8 million in 2004. The 2005
as reported Adjusted EBITDA totaled $286.8 million, compared to
$253.6 million in 2004.(1) The 2005 as reported Adjusted EBITDA
includes expenses totaling $12.6 million for severance and other
costs directly associated with the senior management and corporate
strategy changes. The 2005 as reported Adjusted EBITDA excludes
$7.8 million in Adjusted EBITDA related to Six Flags AstroWorld in
Houston which is classified as a discontinued operation. Including
the Six Flags AstroWorld results and excluding the expenses not
directly related to the Company's ongoing operations, Adjusted
EBITDA for 2005 would have totaled $307.2 million, exceeding the
Company's prior guidance. Strengthening the Brand and Improving the
Six Flags Guest Experience "Repositioning the brand, diversifying
our entertainment offerings and improving the guest experience are
our immediate company-wide priorities," said Mark Shapiro, who
joined the Company in December 2005 as President and Chief
Executive Officer. "However, these operating results illustrate the
already fundamental strength of the Six Flags experience and its
value to our guests. The Company finished 2005 on a strong note of
recovery and we are proceeding with several new initiatives
intended to place Six Flags on a path to deliver sustainable
growth, reduce debt and enhance shareholder value." "While most see
2006 as a transition year, by reaffirming previous management's
guidance we are underscoring confidence that our redefined
strategy, coupled with the celebration of our 45th Anniversary,
will broaden our customer base by attracting families as well as
teenagers, boosting our per capita revenue." Shapiro continued, "It
is our intention to drive increased attendance through enhanced
broad-based marketing strategies while capturing the full value of
admissions, parking and concessions by introducing more competitive
and standardized pricing in our parks. We also plan to realize
additional revenue streams through an array of new business
initiatives, including marketing alliances and sponsorships with
some of today's most popular consumer brands." He concluded, "Every
single day we will remain focused on bringing our guests an
entertainment package that they can't experience anywhere else
close to home: family rides, thrill rides, special events, concerts
and shows, daily parades, fireworks, shopping, dining and games, as
well as significantly increased interaction with, and appearances
by, Looney Tunes and Justice League characters." Financial Review
Full Year (As Reported) For the full year 2005, as reported
revenues were $1.09 billion, compared to $1.0 billion for 2004, an
increase of $91.1 million or 9.1%. Attendance for full year 2005
increased from 32.1 million to 33.7 million, a 4.9% gain from the
previous year, while total revenue per capita increased 4.0%, from
$31.12 in 2004 to $32.37. The Houston AstroWorld park, whose
operating results for 2005 are not included in the Company's
results from continuing operations, generated 2005 attendance and
revenue of 1.3 million and $41.3 million, respectively. This
compares to 2004 attendance and revenue for the park of 1.4 million
and $39.1 million, respectively. For the year, operating costs and
expenses, including depreciation, amortization and non-cash
compensation, were $906.3 million, compared to $845.8 million in
2004, an increase of 7.2%. Net loss applicable to common stock in
2005 was $132.9 million, or $1.43 per share, compared with a loss
of $486.8 million, or $5.23 per share in 2004. The 2005 loss
included a loss from discontinued operations of $22.0 million,
$0.24 per share. The 2004 loss included a loss from discontinued
operations of $291.0 million, $3.13 per share. As reported Adjusted
EBITDA for 2005 was $286.8 million in 2005, compared to $253.6
million in 2004, an increase of 13.1%. Fourth Quarter (As Reported)
For the fourth quarter, revenues were $111.8 million, compared to
$105.4 million for the fourth quarter 2004, an increase of $6.4
million or 6.1%. Attendance for the fourth quarter 2005 was 3.6
million, down 1.0% compared to the prior year, while total revenue
per capita increased 7.1%, from $29.26 in 2004 to $31.33 in 2005.
Operating costs and expenses were $170.9 million for the fourth
quarter of 2005, compared to $152.6 million for the fourth quarter
of 2004, an increase of 12.0%. This increase was primarily
attributable to $12.6 million of selling, general and
administrative and operating expenses, and $2.0 million of non-cash
compensation expense, both of which were directly associated with
the senior management and corporate strategy changes. Net loss
applicable to common stock in the fourth quarter 2005 was $144.5
million, or $1.55 per share, compared to a fourth quarter 2004 loss
of $115.0 million, or $1.24 per share. The 2005 loss included a
loss from discontinued operations of $22.4 million, $0.24 per
share. The 2004 loss included a loss from discontinued operations
of $3.5 million, $0.04 per share. As reported Adjusted EBITDA for
the fourth quarter of 2005 was a loss of $17.3 million, compared to
a loss of $6.0 million in 2004. Operating Highlights Since
mid-December, the Company has taken a number of major steps to
strengthen its management team, improve operating performance, and
enhance the guest experience at each of its parks: -- The corporate
management team was restructured, with the following appointments:
-0- *T -- Jeffrey Speed was named Executive Vice President and will
become Chief Financial Officer, effective April 1. -- Four new
divisions were created: -- Park Strategy and Management, headed by
Mark Quenzel. -- In-Park Services, headed by Andrew Schleimer. --
Marketing and Entertainment, headed by Mike Antinoro. -- Corporate
Alliances, headed by Lou Koskovolis. *T -- New general managers
have been named at five Six Flags parks - New Jersey, Chicago,
Washington DC, Denver and Louisville. -- Six new members of the
Board of Directors were named, including Mr. Shapiro; Daniel M.
Snyder, owner of the Washington Redskins; Harvey Weinstein,
Co-Chairman of the Weinstein Companies; and Dwight Schar, Chairman
and CEO of NVR, Inc., a home-building company. -- Several specific
initiatives were announced to improve the park experience,
including: -0- *T -- A broader range of family-oriented in-park
events and activities, including daily parades, fireworks, shows
and the creation of a Looney Tunes and Justice League character
program, featuring appearances, photo and dining opportunities with
guests. -- A universal employee training program to motivate and
educate employees to consistently deliver high quality customer
service. -- A new system-wide non-smoking policy. *T -- Six Flags
has signed marketing and sponsorship agreements with Sunkist and
with National CineMedia (a venture of three movie theatre chains -
AMC Entertainment, Cinemark USA and Regal Entertainment Group). The
Company also is in advanced discussions with Papa John's Pizza. --
Six Flags hired OgilvyOne Worldwide, the world's largest one-to-one
marketing agency, to help broaden and deepen the Company's
relationships with its guests through direct and interactive
marketing. -- Six Flags appointed MindShare, the global
full-service media company, as the media-buying agency for Six
Flags theme parks nationwide, enabling the Company - and its 29
theme parks - to implement an overall media strategy that
communicates at the local level the Company's focus on its
positioning as the country's leading local family entertainment
destination, its commitment to guest service, and the Company's
45th Anniversary celebration. Outlook Key financial priorities for
the Company are to drive free cash flow and reduce debt levels over
the next several years. For 2006, the Company is reaffirming
previous guidance of $340 million of Adjusted EBITDA (excluding
certain severance and other costs related to the management and
corporate strategy changes). This represents a 13.5% increase over
2005 comparable park performance. This growth is expected to be
generated by a combination of both attendance and per capita
spending growth as a result of enhanced in-park entertainment and
activities, new marketable attractions in 11 of our 19 theme parks,
as well as more focused and efficient marketing initiatives,
highlighted by the 45th Anniversary celebration of Six Flags. The
Company expects that operating costs for 2006 will reflect expenses
attributable to increased staffing and in-park initiatives. These
costs are an integral part of new management's strategy, which is
intended to drive enhanced guest satisfaction, particularly among
families, resulting in greater attendance and higher per capita
spending. In addition, the Company intends to reduce annual capital
expenditures to approximately $100 million in the future from the
expected 2006 season spend of approximately $140 million, as the
Company focuses its capital investments on more broad-based family
entertainment attractions. The Company also has previously
announced its intention to sell its Houston AstroWorld property as
well as its Oklahoma City parks and is in the process of assessing
other potential opportunities to dispose of non-core assets,
including underutilized real estate. Proceeds from these
dispositions are intended to be utilized to reduce debt levels and
provide the Company with enhanced operational and financial
flexibility. About Six Flags Six Flags, Inc. is the world's largest
regional theme park company. Founded in 1961, Six Flags is
celebrating its 45th Anniversary in 2006. It is a publicly-traded
corporation (NYSE: PKS) headquartered in New York City. Forward
Looking Statements: 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. These
risks and uncertainties include, among others, Six Flags' success
in implementing its new business strategy. Although Six Flags
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, such as local conditions,
events, disturbances and terrorist activities, risk of accidents
occurring at Six Flags' parks, adverse weather conditions, general
economic conditions (including consumer spending patterns),
competition, pending, threatened or future legal proceedings and
other factors could cause actual results to differ materially from
Six Flags' expectations. Reference is made to a more complete
discussion of forward-looking statements and applicable risks
contained under the caption "Cautionary Note Regarding
Forward-Looking Statements" and "Business-Risk Factors" in Six
Flags' Annual Report on Form 10-K for the year ended December 31st,
2004, which is available free of charge on Six Flags' website
http://www.sixflags.com. (1) See Note 2 to the following tables for
a discussion of EBITDA (Modified) and Adjusted EBITDA, and for a
reconciliation of these amounts to net income (loss). -0- *T Six
Flags, Inc. Statement of Operations Data Years and Quarters Ended
December 31, 2005 and 2004 (In Thousands, Except Per Share Amounts)
Statement of Operations Year Ended Three Months Ended Data(1)
December 31, December 31, -------------------- -------------------
2005 2004 2005 2004 ---------- --------- --------- ---------
Revenue $1,089,682 $ 998,590 $ 111,823 $ 105,429 Costs and expenses
(excluding depreciation, amortization and non-cash compensation)
758,168 701,996 132,094 114,179 Depreciation 144,484 141,967 36,446
38,042 Amortization 889 1,193 222 217 Non-cash compensation 2,794
643 2,174 161 ---------- --------- --------- --------- Income
(loss) from operations 183,347 152,791 (59,113) (47,170) ----------
--------- --------- --------- Interest expense (net) 183,489
191,581 48,838 45,763 Minority interest in earnings (losses) 39,794
37,686 (4,234) (4,010) Early repurchase of debt 19,303 37,731 --
5,869 Other expense 25,952 27,555 13,020 8,201 ---------- ---------
--------- --------- Loss from continuing operations before income
taxes (85,191) (141,762) (116,737) (102,993) Income tax (expense)
benefit (3,705) (32,003) 86 (3,087) ---------- --------- ---------
--------- Loss from continuing operations (88,896) (173,765)
(116,651) (106,080) Discontinued operations, net of net tax benefit
of $57,406 in the year ended 2004 (22,042) (291,044) (22,357)
(3,451) ---------- --------- --------- --------- Net loss $
(110,938)$(464,809)$(139,008)$(109,531) ========== =========
========= ========= Net loss applicable to common stock $
(132,908)$(486,777)$(144,500)$(115,021) ========== =========
========= ========= Per share - basic and diluted: Loss from
continuing operations $ (1.19)$ (2.10)$ (1.31)$ (1.20) Discontinued
operations (0.24) (3.13) (0.24) (0.04) ---------- ---------
--------- --------- Net loss $ (1.43)$ (5.23)$ (1.55)$ (1.24)
========== ========= ========= ========= Other Data: EBITDA
(Modified) (2) $ 331,514 $ 296,594 $ (20,271)$ (8,750) Adjusted
EBITDA(2) $ 286,840 $ 253,552 $ (17,257)$ (5,983) EBITDA (Modified)
(including Houston AstroWorld and excluding management change
items) (2) $ 351,920 $ 301,638 $ (7,118)$ (10,062) Adjusted EBITDA
(including Houston AstroWorld and excluding management change
items) (2) $ 307,246 $ 258,596 $ (4,104)$ (7,295) Average weighted
shares outstanding - basic and diluted 93,110 93,036 93,124 93,042
Net cash provided by (used in) operating activities $ 121,324 $
33,199 $ (90,038)$ (81,460) Balance Sheet Data (In Thousands) # # #
Balance Sheet Data December 31, 2005 December 31, 2004
----------------- ----------------- Cash and cash equivalents
(excluding restricted cash) $ 81,534 $ 68,807 Total assets
3,493,119 3,642,227 Current portion of long-term debt (excluding
debt called for repayment in 2004) 113,601 24,394 Long-term debt
(excluding current portion) 2,128,756 2,125,121 Mandatorily
redeemable preferred stock 283,371 282,245 Total stockholders'
equity 694,208 826,065 ----------------------------------- (1)
Revenues and expenses of international operations are converted
into dollars on a current basis as provided by accounting
principles generally accepted in the United States ("GAAP"). (2)
EBITDA (Modified), a non-GAAP measure, is defined as net loss
before discontinued operations, income tax expense (benefit), other
expense, early repurchase of debt (formerly an extraordinary loss),
minority interest in earnings (losses), interest expense (net),
amortization, depreciation and non-cash compensation. Adjusted
EBITDA, also a non-GAAP measure, 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
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. EBITDA (Modified) and Adjusted EBITDA as defined in
this release may differ from similarly titled measures presented by
other companies. The following table sets forth a reconciliation of
net loss to EBITDA (Modified) and Adjusted EBITDA for the periods
shown (in thousands). Three Months Ended Year Ended December 31,
December 31, ----------------------- ------------------- 2005 2004
2005 2004 ----------- ----------- --------- --------- Net loss
$(110,938) $(464,809)$(139,008)$(109,531) Discontinued operations,
net of tax benefit 22,042 291,044 22,357 3,451 Income tax expense
(benefit) 3,705 32,003 (86) 3,087 Other expense 25,952 27,555
13,020 8,201 Early repurchase of debt 19,303 37,731 -- 5,869
Minority interest in earnings (losses) 39,794 37,686 (4,234)
(4,010) Interest expense (net) 183,489 191,581 48,838 45,763
Amortization 889 1,193 222 217 Depreciation 144,484 141,967 36,446
38,042 Non-cash compensation 2,794 643 2,174 161 -----------
----------- --------- --------- EBITDA (Modified) 331,514 296,594
(20,271) (8,750) Third party interest in EBITDA of certain parks
(a) (44,674) (43,042) 3,014 2,767 ----------- ----------- ---------
--------- Adjusted EBITDA $286,840 $253,552 $(17,257) $(5,983)
=========== =========== ========= ========= The following table
sets forth a reconciliation of Adjusted EBITDA to Adjusted EBITDA
before giving effect to the reclassification of Six Flags
AstroWorld as a discontinued operation and to expenses directly
associated with the senior management and corporate strategy
changes. Years Ended December 31, ----------------- 2005 2004
-------- -------- Adjusted EBITDA $ 286,840 $253,552 AstroWorld
EBITDA(b) 7,801 5,044 Management change operating expenses (c)
12,605 -- -------- -------- Adjusted EBITDA $ 307,246 $258,596
======== ======== 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, 2006. 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 2006 to expected EBITDA 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 2006, expected
interest expense (net) is approximately $190,000 and expected
minority interest in earnings is approximately $42,000. Year Ending
December 31, 2006 ----------------- Income from operations (d) $
233,300 Amortization 900 Depreciation 150,000 Non-cash compensation
(e) 2,800 ----------------- EBITDA (Modified) 387,000 Third-party
interest in EBITDA of certain parks(a) (47,000) -----------------
Adjusted EBITDA $ 340,000 ================= (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. (b) Excludes costs associated with the closure of the park
of approximately $3.0 million in 2005. (c) Includes approximately
$7.9 million in severance and related costs, $3.1 million
associated with the write-off of costs incurred in preparing for
the development of a hotel at the Company's park in New Jersey, and
miscellaneous other expenses. (d) Excludes additional expenses
associated with senior management and corporate strategy changes
which are being incurred in 2006. (e) Excludes costs related to
stock option grants which will be expensed beginning in 2006. *T
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