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 first quarter 2022
financial results.
“Six Flags has been quickly executing to improve the guest
experience, improving ride throughput by increasing ride uptime and
implementing single rider lanes on busy days; improving staffing
and training of our team members; upgrading our park appearance,
including our front gates, restrooms and restaurants; providing
better food quality; and offering more guest amenities such as
benches, shade structures, and children’s areas,” said Selim
Bassoul, President and CEO. “We have reoriented our culture to
prioritize the guest in everything we do, and we fundamentally
believe this will drive significant and sustainable long-term
earnings growth.”
First Quarter
2022 Results
Three Months Ended
(Amounts in millions, except per share
data)
April 3, 2022
April 4, 2021
% Change vs. 2021
Total revenue
$
138
$
82
68
%
Net loss attributable to Six Flags
Entertainment
$
(66
)
$
(96
)
N/M
Loss per share, diluted
$
(0.76
)
$
(1.12
)
N/M
Adjusted EBITDA (1)
$
(16
)
$
(46
)
N/M
Attendance
1.7
1.3
25
%
Total guest spending per capita
$
75.46
$
56.16
34
%
Admissions spending per capita
$
43.28
$
32.95
31
%
In-park spending per capita
$
32.18
$
23.21
39
%
Total revenue for first quarter 2022 increased $56 million, or
68%, compared to first quarter 2021, driven by higher attendance
and guest spending per capita. The increase in attendance was
driven by increased operating days the quarter compared to the
prior year period, which was negatively impacted by
pandemic-related closures and operating restrictions. The increase
in operating days was offset by a visitation shift of approximately
200 thousand guests from the first quarter to the second quarter
2022 due to the later timing of the Easter holiday, which caused
some schools to schedule spring-break vacations in the second
quarter of 2022 versus the first quarter in 2021. In addition,
there were three additional days included in first quarter 2021
compared to first quarter 2022 due to adoption of a fiscal
reporting calendar in the quarter commencing January 1, 2021, which
accounted for 89 thousand additional guests in first quarter
2021.2
The $19.30 increase in guest spending per capita compared to
first quarter 2021 was driven by a $10.33 increase in Admissions
spending per capita and a $8.97 increase in In-park spending per
capita. The increase in Admissions spending per capita was
primarily driven by higher realized ticket pricing and revenue from
memberships beyond the initial 12-month commitment period—in first
quarter 2021, the company did not recognize membership revenue from
members whose home park was closed due to the pandemic. The higher
In-park spending reflects the company’s in-park pricing initiatives
and positive consumer spending trends.
Since most of the parks are not scheduled to be open during the
first quarter, the company had a net loss of $66 million in first
quarter 2022. The loss per share was $(0.76) compared to a loss per
share of ($1.12) in first quarter 2021. Adjusted EBITDA was a loss
of $16 million, an improvement of $30 million compared to first
quarter 2021, reflecting higher revenue and improved margins.
In first quarter 2022, the company invested $29 million in new
capital, net of insurance recoveries. Net debt as of April 3, 2022,
calculated as total reported debt of $2,631 million less cash and
cash equivalents of $252 million, was $2,379 million. Deferred
revenue was $185 million as of April 3, 2022, a decrease of $60
million, or 25%, from April 4, 2021. The decrease was primarily due
to the deferral of revenue in the prior year period from guests
whose benefits were extended from 2020 into 2021 due to the
pandemic.
Conference Call
At 7:00 a.m. Central Time today, May 12, 2022, the company will
host a conference call to discuss its first quarter 2022 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 or
conference ID 3749243. A replay of the call will be available
through May 26, 2022 on the company’s investor relations site
https://investors.sixflags.com.
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)
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, (iii) our ability to significantly improve our
financial performance and the guest experience, (iv) expectations
regarding consumer demand for regional, outdoor, out-of-home
entertainment, including for our parks, and (v) 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)
Comparable periods are January 1 through
April 4, 2021, compared to January 3 through April 3, 2022,
resulting in three additional days from January 1 through January 3
in 2021.
Statement of Operations Data
(1)
Three Months Ended
Twelve Months Ended
(Amounts in thousands, except per share
data)
April 3, 2022
April 4, 2021
April 3, 2022
April 4, 2021
Park admissions
$
72,987
$
44,334
$
824,302
$
187,174
Park food, merchandise and other
54,269
31,224
678,496
127,724
Sponsorship, international agreements and
accommodations
10,851
6,466
50,190
21,198
Total revenues
138,107
82,024
1,552,988
336,096
Operating expenses (excluding depreciation
and amortization shown separately below)
109,944
92,643
664,033
376,505
Selling, general and administrative
expenses (excluding depreciation, amortization, and stock-based
compensation shown separately below)
35,107
29,489
196,008
125,344
Costs of products sold
10,115
7,215
128,628
33,574
Other net periodic pension benefit
(1,451
)
(1,643
)
(5,655
)
(5,837
)
Depreciation
29,043
28,827
114,628
117,923
Amortization
6
6
22
419
Stock-based compensation
4,225
6,637
19,050
21,887
(Gain) loss on disposal of assets
(2,100
)
520
9,517
8,329
Interest expense, net
37,530
38,420
151,546
165,986
Loss on debt extinguishment
—
—
—
5,087
Other expense, net
463
7,619
10,966
31,052
(Loss) income before income taxes
(84,775
)
(127,709
)
264,245
(544,173
)
Income tax (benefit) expense
(19,113
)
(31,870
)
62,379
(150,788
)
Net (loss) income
(65,662
)
(95,839
)
201,866
(393,385
)
Less: Net income attributable to
noncontrolling interests
—
—
(41,766
)
(41,288
)
Net (loss) income attributable to Six
Flags Entertainment Corporation
$
(65,662
)
$
(95,839
)
$
160,100
$
(434,673
)
Weighted-average common shares
outstanding:
Basic:
86,197
85,209
85,958
84,940
Diluted:
86,197
85,209
86,913
84,940
Net (loss) income per average common share
outstanding:
Basic:
$
(0.76
)
$
(1.12
)
$
1.86
$
(5.12
)
Diluted:
$
(0.76
)
$
(1.12
)
$
1.84
$
(5.12
)
As of
April 3, 2022
January 2, 2022
April 4, 2021
(Amounts in thousands, except share
data)
(unaudited)
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
252,203
$
335,585
$
62,905
Accounts receivable, net
86,461
97,722
46,420
Inventories
39,161
27,273
39,057
Prepaid expenses and other current
assets
55,454
55,455
69,166
Total current assets
433,279
516,035
217,548
Property and equipment, net:
Property and equipment, at cost
2,528,135
2,501,829
2,427,318
Accumulated depreciation
(1,280,969
)
(1,250,902
)
(1,182,641
)
Total property and equipment, net
1,247,166
1,250,927
1,244,677
Other assets:
Right-of-use operating leases, net
184,643
186,754
194,768
Debt issuance costs
4,365
4,899
6,501
Deposits and other assets
10,779
6,170
6,661
Goodwill
659,618
659,618
659,618
Intangible assets, net of accumulated
amortization of $266, $261 and $244 as of April 3, 2022, January 2,
2022 and April 4, 2021, respectively
344,182
344,187
344,192
Total other assets
1,203,587
1,201,628
1,211,740
Total assets
$
2,884,032
$
2,968,590
$
2,673,965
LIABILITIES AND STOCKHOLDERS'
DEFICIT
Current liabilities:
Accounts payable
$
65,652
$
38,251
$
31,771
Accrued compensation, payroll taxes and
benefits
22,444
51,473
25,674
Accrued insurance reserves
32,423
32,182
27,568
Accrued interest payable
33,217
50,554
33,290
Other accrued liabilities
94,052
101,790
91,848
Deferred revenue
185,094
177,831
245,310
Short-term lease liabilities
11,383
11,158
10,547
Total current liabilities
444,265
463,239
466,008
Noncurrent liabilities:
Long-term debt
2,631,246
2,629,524
2,624,361
Long-term lease liabilities
180,464
178,200
190,362
Other long-term liabilities
10,502
9,469
35,337
Deferred income taxes
133,264
148,291
70,985
Total noncurrent liabilities
2,955,476
2,965,484
2,921,045
Total liabilities
3,399,741
3,428,723
3,387,053
Redeemable noncontrolling interests
522,067
522,067
523,376
Stockholders' deficit:
Preferred stock, $1.00 par value
—
—
—
Common stock, $0.025 par value,
280,000,000 shares authorized; 86,248,545, 86,162,879 and
85,369,434 shares issued and outstanding at April 3, 2022, January
2, 2022 and April 4, 2021, respectively
2,156
2,154
2,134
Capital in excess of par value
1,124,603
1,120,084
1,104,904
Accumulated deficit
(2,088,913
)
(2,023,251
)
(2,249,207
)
Accumulated other comprehensive loss, net
of tax
(75,622
)
(81,187
)
(94,295
)
Total stockholders' deficit
(1,037,776
)
(982,200
)
(1,236,464
)
Total liabilities and stockholders'
deficit
$
2,884,032
$
2,968,590
$
2,673,965
Three Months Ended
(Amounts in thousands)
April 3, 2022
April 4, 2021
Cash flows from operating
activities:
Net loss
$
(65,662
)
$
(95,839
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
29,049
28,833
Stock-based compensation
4,225
6,637
Interest accretion on notes payable
278
277
Loss on debt extinguishment
—
—
Amortization of debt issuance costs
1,978
1,978
Other, including loss (gain) on disposal
of assets
3,120
(931
)
Change in accounts receivable
11,535
(9,897
)
Change in inventories, prepaid expenses
and other current assets
(11,512
)
3,907
Change in deposits and other assets
(4,600
)
436
Change in ROU operating leases
2,585
2,113
Change in accounts payable, deferred
revenue, accrued liabilities and other long-term liabilities
6,815
42,146
Change in operating lease liabilities
2,161
(1,182
)
Change in accrued interest payable
(17,337
)
(26,894
)
Deferred income taxes
(18,347
)
(31,982
)
Net cash used in operating activities
(55,712
)
(80,398
)
Cash flows from investing
activities:
Additions to property and equipment
(32,071
)
(23,133
)
Property insurance recoveries
3,081
—
Proceeds from sale of assets
—
33
Net cash used in investing activities
(28,990
)
(23,100
)
Cash flows from financing
activities:
Repayment of borrowings
—
(2,000
)
Proceeds from borrowings
—
2,000
Payment of cash dividends
(14
)
(201
)
Proceeds from issuance of common stock
299
9,078
Reduction in finance lease liability
(201
)
(76
)
Stock repurchases
(3
)
(3
)
Net cash provided by financing
activities
81
8,798
Effect of exchange rate on cash
1,239
(155
)
Net change in cash and cash
equivalents
(83,382
)
(94,855
)
Cash and cash equivalents at beginning of
period
335,585
157,760
Cash and cash equivalents at end of
period
$
252,203
$
62,905
Supplemental cash flow
information
Cash paid for interest
$
52,157
$
63,937
Cash paid for income taxes (6)
$
885
$
268
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 EBITDA
minus capex. 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 (loss)
income to Adjusted EBITDA for the three-month periods and
twelve-month periods ended April 3, 2022 and April 4, 2021:
Three Months Ended
Twelve Months Ended
(Amounts in thousands, except per share
data)
April 3, 2022
April 4, 2021
April 3, 2022
April 4, 2021
Net (loss) income
$
(65,662
)
$
(95,839
)
$
201,866
$
(393,385
)
Income tax expense (benefit)
(19,113
)
(31,870
)
62,379
(150,788
)
Other expense, net (2)
463
7,619
10,966
31,052
Loss on debt extinguishment
—
—
—
5,087
Interest expense, net
37,530
38,420
151,546
165,986
(Gain) loss on disposal of assets
(2,100
)
520
9,517
8,329
Amortization
6
6
22
419
Depreciation
29,043
28,827
114,628
117,923
Stock-based compensation
4,225
6,637
19,050
21,887
Modified EBITDA (3)
(15,608
)
(45,680
)
569,974
(193,490
)
Third party interest in EBITDA of certain
operations (4)
—
—
(41,766
)
(41,288
)
Adjusted EBITDA (3)
$
(15,608
)
$
(45,680
)
$
528,208
$
(234,778
)
Capital expenditures, net of property
insurance recovery (5)
(28,990
)
(23,133
)
(127,599
)
(23,133
)
Adjusted EBITDA minus capex (3)
$
(44,598
)
$
(68,813
)
$
400,609
$
(257,911
)
(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, net”
include certain non-recurring costs incurred in conjunction with
changes made to our organizational structure in December 2021 and
the transformation plan initiated in early 2020.
(3)
“Modified EBITDA,” a non-GAAP measure, is
defined as our consolidated income (loss) from continuing
operations: excluding the following: 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 Modified 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.
“Adjusted EBITDA minus capex,” a non-GAAP
measure, is defined as Adjusted EBITDA minus capital expenditures,
net of property insurance recoveries. Adjusted EBITDA minus capex
as defined herein may differ from similarly titled measures
presented by other companies. Our board of directors and managed
use Adjusted EBITDA minus capex to measure our performance and our
current management incentive compensation plans are based largely
on Adjusted EBITDA minus capex. We believe that Adjusted EBITDA
minus capex 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. Adjusted EBITDA minus
capex, as computer by us, may not be comparable to similar metrics
used by other companies in our industry.
(4)
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.
(5)
Capital expenditures, net of property
insurance recovery (“capex”) represents cash spent on property,
plant and equipment, net of property insurance recoveries.
(6)
Cash taxes represents statutory taxes
paid, primarily driven by Mexico and state level obligations. Based
on our current federal net operating loss carryforwards, we
anticipate paying minimal federal income taxes in 2022 and do not
anticipate becoming a full cash taxpayer until at least 2024.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220512005303/en/
Stephen Purtell Senior Vice President Corporate Communications,
Investor Relations and Treasurer +1-972-595-5180
investors@sftp.com
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