Cash Outflow for First Quarter 2021 Better than
Expectations
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 revenue of $82 million
and attendance of 1.3 million for first quarter 2021. Results for
first 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 beginning on March 14, 2020.
The company believes it is most relevant to compare its results in
the first quarter of 2021 to the first quarter of 2019, in addition
to the first quarter of 2020.
As anticipated, the company reported a decline in attendance for
first quarter 2021 as compared to the same periods in 2020 and
2019. Because of fewer operating days and capacity restrictions,
total attendance for first quarter 2021 declined 15% compared to
2020 and 38% compared to 2019.
Since the company’s parks began re-opening with limited
operations in June 2020, attendance trends compared to 2019 have
continued to improve. In first quarter 2021, attendance at the
company’s open parks was 95%1 of first quarter 2019 at those same
parks; unlike first quarter 2019, first quarter 2021 included the
Easter holiday period. Year-to-date through April 25, which
includes the Easter holiday period in both 2021 and 2019,
attendance at the company’s open parks was approximately 79%
compared to the same period in 2019. The company has re-opened or
announced re-opening dates for all its theme parks with the
exception of its theme park in Montreal. Park opening dates for the
2021 season are set forth in Schedule A.
“I am extremely proud of the way our team members have
maintained the readiness of our parks so that we can quickly ramp
up to entertain our guests and capture the strong consumer demand
for regional, outdoor, out-of-home entertainment,” said Mike
Spanos, President and CEO. “Our focus is on safely re-opening all
of our parks and working with local health officials to eliminate
capacity constraints so we can delight the millions of people who
count on Six Flags to deliver fun for all.”
“We continue to make progress on our transformation plan as we
implement new technology to modernize the guest experience and
drive operational efficiencies. We are already seeing significant
benefits in 2021,” continued Spanos. “We expect the transformation
to result in meaningful profit growth once our plan is fully
executed and we return to a more normal operating environment.”
First Quarter 2021
Highlights
- Attendance was 1.3 million guests, a decline of 238,000 guests
and 822,000 guests from first quarter 2020 and 2019, respectively.
This represented 85% of first quarter 2020 total attendance, and
approximately 95% of first quarter 2019 attendance, at the parks
that were open.
- Total Revenue was $82 million, a decline of $20 million and $46
million from first quarter 2020 and 2019, respectively.
- Net loss was $96 million, a decline of $11 million and $27
million compared to first quarter 2020 and 2019, respectively.
- Adjusted EBITDA2 was a loss of $46 million, $4 million worse
than first quarter 2020 and $14 million worse than first quarter
2019.
- Net cash outflow for first quarter 2021 was $95 million, an
average of $32 million per month.
First Quarter 2021
Results
(In millions, except per share and per
capita amounts)
Three Months Ended
April 4, 2021
March 31, 2020
March 31, 2019
% Change vs. 2020
% Change vs. 2019
Total revenues
$
82
$
103
$
128
(20
)%
(36
)%
Net loss attributable to Six Flags
Entertainment Corporation
$
(96
)
$
(85
)
$
(69
)
N/M
N/M
Loss per share, diluted
$
(1.12
)
$
(1.00
)
$
(0.82
)
N/M
N/M
Adjusted EBITDA
$
(46
)
$
(42
)
$
(32
)
(9
)%
(44
)%
Attendance
1.3
1.6
2.2
(15
)%
(38
)%
Total guest spending per capita
$
56.16
$
56.60
$
48.48
(1
)%
16
%
Admissions spending per capita
$
32.95
$
37.77
$
30.49
(13
)%
8
%
In-park spending per capita
$
23.21
$
18.83
$
17.99
23
%
29
%
Pro-forma allocation of Admissions
Spending to In-park Spending
Total guest spending per capita
$
56.16
$
56.60
$
48.48
(1
)%
16
%
Admissions spending per capita
$
32.95
$
33.83
$
28.05
(3
)%
17
%
In-park spending per capita
$
23.21
$
22.77
$
20.43
2
%
14
%
In first quarter 2021, the company generated $82 million of
revenue with attendance of 1.3 million guests, a net loss of $96
million, and an Adjusted EBITDA loss of $46 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 first
quarter 2021 versus both 2020 and 2019, and during these additional
days the company had attendance of 293,000 guests in 2021. The
Adjusted EBITDA calculation reflects an add-back adjustment of
approximately $10 million of non-recurring costs related to the
transformation plan, including $1 million of employee termination
costs, $2 million of technology costs, and $7 million of consulting
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 first quarter 2021 compared to first quarter
2020
The decrease in attendance was due to the temporary
pandemic-related limitations on park operations at several of the
company’s parks, and capacity restrictions at most of the parks
that were open. In 2020, the company temporarily suspended
operations at all of its parks in mid-March due to the
pandemic.
The decrease in revenue was primarily a result of decreased
attendance. The decrease in revenue was also attributable to a $6
million reduction in sponsorship, international agreements, and
accommodations revenue, primarily related to the suspension of most
sponsorship revenue while certain parks were not operating, and the
pandemic-related suspension of the majority of the company’s
accommodations operations. The company partially offset the
decrease in revenue by implementing cost savings measures during
the quarter driven by its transformation plan, lower advertising
costs, and lower salaries, wages and other costs related to the
fact that several of the company’s parks that were operating in
first quarter 2020 were not operating in first quarter 2021.
Total guest spending per capita in first quarter 2021 decreased
1% compared to first quarter 2020. Applying a pro forma allocation
from Admissions spending to In-park spending in 2020, Admissions
spending per capita decreased 3% and In-park spending per capita
increased 2%.
Results of first quarter 2021 compared to first quarter
2019
The decrease in attendance was due to the temporary
pandemic-related limitations on park operations at several of the
company’s parks, and capacity restrictions at most of the parks
that were open. Attendance compared to first quarter 2019 was
positively impacted due to the Easter holiday falling on April 4,
2021 versus April 21, 2019, which shifted a portion of the
company’s operating calendar from the second quarter to the first
quarter in 2021, inclusive of the four additional calendar days in
first quarter 2021 due to the change in reporting calendar.
The decrease in revenue was primarily a result of decreased
attendance, offset by improved guest spending per capita. The
decrease was also attributable to 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; the suspension of
most sponsorship revenue while certain parks were not operating,
and the pandemic-related suspension of the majority of the
company’s accommodations operations. The company partially offset
the decrease in revenue by implementing cost savings measures
during the quarter driven by its transformation plan, lower
advertising costs, and lower salaries, wages and other costs
related to the fact that several of the company’s parks that were
operating in first quarter 2019 were not operating in first quarter
2021.
Total guest spending per capita in first quarter 2021 increased
16% compared to first quarter 2019, driven by higher realized
ticket yields for both single day tickets and from the Active Pass
Base, which includes all members and season pass holders. In
addition, the increase in In-park spending reflects high consumer
demand for the company’s products. Applying a pro forma allocation
from Admissions spending to In-park spending in 2019, Admissions
spending per capita increased 17% and In-park spending per capita
increased 14% in first quarter 2021 compared to first quarter
2019.
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.
As a result of these retention efforts, the Active Pass Base
increased 1% as of the end of first quarter 2021 compared to first
quarter 2020 and decreased 9% compared to first quarter 2019. The
Active Pass Base included 1.7 million members as of the end of
first quarter 2021, approximately flat compared to the end of 2020.
However, as the company reopens its parks, paused members have
resumed payments. Approximately 5% of memberships remained paused
as April 4, 2021, compared to approximately 19% of members as of
December 31, 2020. The Active Pass Base also included 2.4 million
traditional season pass holders compared to 2.1 million season pass
holders at the end of 2020.
Deferred revenue was $245 million as of April 4, 2021, an
increase of $96 million, or 65%, from March 31, 2020, and $67
million, or 38%, from March 31, 2019. The increase in deferred
revenue was primarily due to the deferral of revenue from members
and season pass holders whose benefits were extended through
2021.
Balance Sheet and
Liquidity
As of April 4, 2021, the company had cash on hand of $63 million
and $461 million available under its revolving credit facility, net
of $20 million of letters of credit, or total liquidity of $524
million. This compares to $618 million of liquidity as of December
31, 2020. The company’s net cash outflow was $95 million for first
quarter 2021, or an average of $32 million per month, which was an
improvement from the company’s prior guidance range of $53 to $58
million per month. The company’s cash flow primarily benefited from
higher than expected attendance and season pass sales.
The company estimates that it will be cashflow positive for the
last nine months of 2021.3 However, this will depend on all of the
company’s parks remaining open and attendance levels continuing to
normalize.
For first quarter 2021, the company invested $23 million in new
capital projects. Net debt as of April 4, 2021, calculated as total
reported debt of $2,624 million less cash and cash equivalents of
$63 million, was $2,561 million.
On August 26, 2020, the company further 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 $44 million has been incurred through
first 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
Three Months Ended
Life to Date
December 31, 2020
April 4, 2021
April 4, 2021
Amounts included in “Other expense,
net”
Consultant costs
$
20,460
$
6,787
$
27,247
Technology modernization costs
—
2,094
2,094
Employee termination costs
4,362
815
5,177
Amounts included in “Loss on disposal
of assets”
Ride / asset write-offs
9,754
—
9,754
Total transformation costs
$
34,576
$
9,696
$
44,272
As previously communicated, 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 benefits in 2021, independent of attendance
levels, and to achieve the remaining benefits through incremental
revenue opportunities, lower fixed costs, and lower variable costs
once the plan is fully implemented and the company is operating in
a normal business environment. Relative to the mid-point of the
company’s pre-pandemic guidance range of $450 million, this implies
a new Adjusted EBITDA baseline of $530 to $560 million once the
plan is fully implemented and the company is operating in a normal
business environment.4
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 Sunday5 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
The second quarter of 2021 will have four additional days
compared to the second quarters of 2020 and 2019, and will include
the majority of the July 4th holiday weekend.
Conference Call
At 7:00 a.m. Central Time today, April 28, 2021, the company
will host a conference call to discuss its first 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 May 5, 2021 by dialing
1-855-859-2056 or +1-404-537-3406 and requesting conference ID
7486573.
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 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 and any
expectations we may have with respect thereto including efficacy
and deployment of the COVID-19 vaccines, (ii),our ability to
continue to safely and profitably operate our parks, or reopen our
parks that are temporarily closed, in accordance with local health
and government guidelines, (iii) expectations regarding the scope
and duration of pandemic-related limitations on park operations,
(iv) our ability to be cash flow positive for the last nine months
of 2021, (v) the adequacy of our preparations for or the
sufficiency of our liquidity, (vii 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, (vii) our ability to
significantly improve our financial performance and the guest
experience, (viii) expectations regarding consumer demand for
regional, outdoor, out-of-home entertainment, including for our
parks, and (ix) expectations regarding tax liability for 2020 and
the ability of our federal operating loss carryforwards to offset
future tax liability. 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 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 April 4, 2021, versus January 7, 2019, through April
7, 2019. The 2021 fiscal period includes 75 additional operating
days versus the 2019 comparable period due to several parks
extending their holiday events into January 2021; several parks
opening earlier in the season in 2021 than in 2019, primarily due
to the earlier timing of the Easter holiday; several drive-through
and walk-through experiences operated in 2021, including our safari
in New Jersey; and Six Flags Over Texas operating weekends and
holidays in January and February 2021, but not during the same
period in 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
(loss) income.
(3)
Projected net monthly cashflow reflects
the company’s current estimate of reduced revenues, ongoing park
and operating costs, capital expenditures, contractual obligations
of the company’s parks that are less than wholly-owned (Six Flags
Over Texas, Six Flags Over Georgia and Six Flags White Water
Atlanta), federal and state income tax obligations, debt
amortization and interest, including the most recent financing
transactions completed in 2020, and the costs associated with the
company’s transformation plan, assuming more normalized operations
at all the company’s parks. As described in its forward looking
statements, the company’s ability to predict the impact of the
COVID-19 global pandemic on its brands and future prospects is
limited. In addition, the magnitude, duration and speed of the
pandemic is uncertain. As a consequence, the company cannot
estimate the impact on its business, financial condition or near-
or longer-term financial or operational results with certainty.
(4)
Information reconciling forward-looking
Adjusted EBITDA to net (loss) income is unavailable to the company
without unreasonable effort. The company is not able to provide
reconciliations of Adjusted EBITDA to net (loss) income 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.
Schedule A - Park Opening Dates for 2021
Season
Name of Park
City
Actual or Anticipated Opening
Date1
Six Flags Over Texas
Arlington, TX
Open Year-Round
Six Flags Fiesta Texas
San Antonio, TX
Open Year-Round
Hurricane Harbor Oaxtepec
Oaxtepec, Mexico
February 27
Six Flags Over Georgia
Austell, GA
March 6
Six Flags America
Largo, MD
March 6
Frontier City
Oklahoma City, OK
March 13
Hurricane Harbor Phoenix
Phoenix, AZ
March 13
Six Flags Mexico
Mexico City, Mexico
March 18
Six Flags St. Louis
Eureka, MO
March 20
Six Flags Great Escape Lodge & Indoor
Waterpark
Queensbury, NY
March 26
Six Flags Great Adventure
Jackson, NJ
March 27
Six Flags Magic Mountain
Valencia, CA
April 1
Six Flags Discovery Kingdom
Vallejo, CA
April 1
Six Flags Great America
Gurnee, IL
April 24
The Great Escape
Queensbury, NY
May 1
Hurricane Harbor Splashtown
Houston, TX
May 1
Hurricane Harbor Arlington
Arlington, TX
May 1
Six Flags White Water
Marietta, GA
May 8
Six Flags New England
Agawam, MA
May 14
Hurricane Harbor New Jersey
Jackson, New Jersey
May 15
Hurricane Harbor OKC
Oklahoma City, OK
May 15
Hurricane Harbor Los Angeles
Valencia, CA
May 15
Six Flags Darien Lake
Darien Lake, NY
May 21
Hurricane Harbor Concord
Concord, CA
May 22
Hurricane Harbor Chicago
Gurnee, IL
May 29
Hurricane Harbor Rockford
Rockford, IL
May 29
La Ronde
Montreal, Quebec
TBD
(1) Park opening dates are subject to
change based on local, state, and federal guidelines related to
COVID-19.
Statement of Operations Data
(1)
Three Months Ended
Twelve Months Ended
(Amounts in thousands, except per share
data)
April 4, 2021
March 31, 2020
March 31, 2019
April 4, 2021
March 31, 2020
March 31, 2019
Park admissions
$
44,334
$
59,806
$
66,080
$
187,174
$
809,508
$
809,823
Park food, merchandise and other
31,224
29,806
38,978
127,724
565,268
550,259
Sponsorship, international agreements and
accommodations
6,466
12,891
23,135
21,198
87,117
102,854
Total revenues
82,024
102,503
128,193
336,096
1,461,893
1,462,936
Operating expenses (excluding depreciation
and amortization shown separately below)
92,643
105,864
114,522
376,505
599,133
586,746
Selling, general and administrative
expenses (excluding depreciation, amortization, and stock-based
compensation shown separately below)
29,489
31,910
36,219
125,344
181,611
178,686
Costs of products sold
7,215
7,760
10,275
33,574
127,789
121,615
Other net
periodic pension benefit
(1,643
)
(996
)
(1,055
)
(5,837
)
(4,127
)
(4,947
)
Depreciation
28,827
30,063
28,470
117,923
117,418
113,698
Amortization
6
601
603
419
2,403
2,439
Stock-based compensation
6,637
4,280
3,891
21,887
13,663
(47,346
)
Loss (gain) on disposal of assets
520
(120
)
1,136
8,329
906
1,104
Interest expense, net
38,420
27,157
28,348
165,986
112,111
109,706
Loss on debt extinguishment
—
1,019
—
5,087
7,503
—
Other expense (income), net
7,619
1,560
(427
)
31,052
4,529
1,146
(Loss) income before income taxes
(127,709
)
(106,595
)
(93,789
)
(544,173
)
298,954
400,089
Income tax (benefit) expense
(31,870
)
(22,049
)
(24,657
)
(150,788
)
94,550
90,873
Net (loss) income
(95,839
)
(84,546
)
(69,132
)
(393,385
)
204,404
309,216
Less: Net income attributable to
noncontrolling interests
—
—
—
(41,288
)
(40,753
)
(40,007
)
Net (loss) income attributable to Six
Flags Entertainment Corporation
$
(95,839
)
$
(84,546
)
$
(69,132
)
$
(434,673
)
$
163,651
$
269,209
Weighted-average common shares
outstanding:
Basic:
85,209
84,656
84,126
84,940
84,479
84,019
Diluted:
85,209
84,656
84,126
84,940
84,952
85,192
Net (loss) income per average common share
outstanding:
Basic:
$
(1.12
)
$
(1.00
)
$
(0.82
)
$
(5.12
)
$
1.94
$
3.20
Diluted:
$
(1.12
)
$
(1.00
)
$
(0.82
)
$
(5.12
)
$
1.93
$
3.16
Balance Sheet Data
As of
(Amounts in thousands)
April 4, 2021
December 31, 2020
March 31, 2020
Cash and cash equivalents
$
62,905
$
157,760
$
22,811
Total assets
2,673,965
2,772,691
2,720,549
Deferred revenue
245,310
205,125
149,111
Short-term borrowings
—
—
40,000
Current portion of long-term debt
—
—
8,000
Long-term debt
2,624,361
2,622,641
2,215,794
Redeemable noncontrolling interests
523,376
523,376
529,276
Total stockholders' deficit
(1,236,464
)
(1,158,547
)
(852,864
)
Shares outstanding
85,369
85,076
84,667
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 table sets forth a reconciliation of net (loss)
income to Adjusted EBITDA for the three months periods and twelve
month periods ended April 4, 2021, March 31, 2020 and March 31,
2019:
Three Months Ended
Twelve Months Ended
(Amounts in thousands, except per share
data)
April 4, 2021
March 31, 2020
March 31, 2019
April 4, 2021
March 31, 2020
March 31, 2019
Net (loss) income
$
(95,839
)
$
(84,546
)
$
(69,132
)
$
(393,385
)
$
204,404
$
309,216
Income tax (benefit) expense
(31,870
)
(22,049
)
(24,657
)
(150,788
)
94,550
90,873
Other expense (income), net (2)
7,619
1,560
(427
)
31,052
4,529
1,146
Loss on debt extinguishment
—
1,019
—
5,087
7,503
—
Interest expense, net
38,420
27,157
28,348
165,986
112,111
109,706
Loss (gain) on disposal of assets
520
(120
)
1,136
8,329
906
1,104
Amortization
6
601
603
419
2,403
2,439
Depreciation
28,827
30,063
28,470
117,923
117,418
113,698
Stock-based compensation
6,637
4,280
3,891
21,887
13,663
(47,346
)
Impact of Fresh Start valuation
adjustments (3)
—
—
—
—
-
15
Modified EBITDA (4)
(45,680
)
(42,035
)
(31,768
)
(193,490
)
557,487
580,851
Third party interest in EBITDA of certain
operations (5)
—
—
—
(41,288
)
(40,753
)
(40,007
)
Adjusted EBITDA (4)
$
(45,680
)
$
(42,035
)
$
(31,768
)
$
(234,778
)
$
516,734
$
540,844
Weighted-average common shares
outstanding
85,209
84,656
84,126
84,940
84,479
84,019
The following table sets forth a reconciliation of net cash
(used in) provided by operating activities to Adjusted Free Cash
Flow for the three month periods and twelve month periods ended
April 4, 2021, March 31, 2020 and March 31, 2019:
Three Months Ended
Twelve Months Ended
(Amounts in thousands, except per share
data)
April 4, 2021
March 31, 2020
March 31, 2019
April 4, 2021
March 31, 2020
March 31, 2019
Net cash (used in) provided by operating
activities
$
(80,398
)
$
(60,387
)
$
(40,823
)
$
(210,891
)
$
391,009
$
395,116
Changes in working capital
(10,629
)
(6,722
)
(17,151
)
(179,845
)
39,168
61,523
Interest expense, net
38,420
27,157
28,348
165,986
112,111
109,706
Income tax (benefit) expense
(31,870
)
(22,049
)
(24,657
)
(150,788
)
94,550
90,873
Amortization of debt issuance costs
(1,978
)
(856
)
(1,007
)
(7,657
)
(3,412
)
(4,024
)
Other expense (income), net (2)
9,070
(106
)
(344
)
45,886
6,695
4,443
Interest accretion on notes payable
(277
)
(320
)
(338
)
(1,114
)
(1,292
)
(1,347
)
Changes in deferred income taxes
31,982
21,248
24,204
144,933
(81,342
)
(75,454
)
Impact of Fresh Start valuation
adjustments (3)
—
—
—
—
—
15
Third party interest in EBITDA of certain
operations (5)
—
—
—
(41,288
)
(40,753
)
(40,007
)
Capital expenditures, net of property
insurance recovery
(23,133
)
(51,416
)
(47,459
)
(70,081
)
(144,133
)
(138,100
)
Cash paid for interest, net
(63,897
)
(31,658
)
(31,426
)
(130,790
)
(113,229
)
(99,315
)
Cash taxes (6)
(268
)
(1,959
)
(5,310
)
(4,226
)
(24,858
)
(28,325
)
Adjusted Free Cash Flow (7)
$
(132,978
)
$
(127,068
)
$
(115,963
)
$
(439,875
)
$
234,514
$
275,104
Weighted-average common shares outstanding
- basic:
85,209
84,656
84,126
84,940
84,479
84,019
(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 expense
(income), net” include amounts related to our transformation
initiative, including consulting costs of $6.8 million and $27.2
million, technology modernization costs of $2.1 million, and
employee termination costs of $0.8 million and $5.2 million for the
three and twelve months ended April 4, 2021, respectively. 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/20210428005377/en/
Stephen Purtell Senior Vice President/ Investor Relations,
Treasury and Strategy +1-972-595-5180 investors@sftp.com
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