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 second quarter 2022 financial results.

“This is a transitional year for Six Flags, as we reset the foundations of our business model to focus on delivering a premium guest experience, while at the same time, correcting for decades of heavy price discounting,” said Selim Bassoul, President and CEO. “Our guest satisfaction scores are well above 2021 and our guest spending per capita has increased more than fifty percent versus pre-pandemic levels. We believe our initial progress validates the potential of our new strategy, and provides a very healthy earnings base from which we can grow.”

Second Quarter 2022 Results

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

(Amounts in millions, except per share data)

 

July 3, 2022

 

July 4, 2021

 

% Change vs. 2021

Total revenue

 

$

435

 

$

460

 

(5

)%

Net income attributable to Six Flags Entertainment

 

$

45

 

$

71

 

(36

)%

Net income per share, diluted

 

$

0.53

 

$

0.81

 

(35

)%

Adjusted EBITDA (1)

 

$

155

 

$

170

 

(9

)%

Attendance

 

 

6.7

 

 

8.5

 

(22

)%

Total guest spending per capita

 

$

63.87

 

$

51.94

 

23

%

Admissions spending per capita

 

$

36.35

 

$

28.68

 

27

%

In-park spending per capita

 

$

27.52

 

$

23.26

 

18

%

Total revenue for second quarter 2022 decreased $24 million, or 5%, compared to second quarter 2021, driven by lower attendance and a $5 million reduction in sponsorship, international agreements and accommodations revenue. The decrease in attendance was net of a favorable visitation shift of approximately 200 thousand guests from first quarter to second quarter 2022 due to the later timing of the Easter holiday in 2022, which impacted operating calendars as a result of schools scheduling spring-break vacations in the second quarter of 2022 versus the first quarter in 2021. The decrease in attendance was partially offset by higher guest spending per capita.

The $11.93 increase in guest spending per capita compared to second quarter 2021 was driven by a $7.67 increase in Admissions spending per capita and a $4.26 increase in In-park spending per capita. The increase in Admissions spending per capita was primarily driven by higher realized ticket pricing and a higher mix of single day tickets. The higher In-park spending reflects the company’s in-park pricing initiatives.

The company partially offset the decrease in revenue with lower cash operating costs. The reduction in operating costs reflected full-time headcount reductions, fewer total employee hours worked, and lower advertising costs. These efficiency measures were offset by higher wage rates, increases in repair and maintenance, utilities, and other costs due to inflation.

The company had a net income of $45 million in second quarter 2022. The income per share was $0.53 compared to an income per share of $0.81 in second quarter 2021, driven by lower revenue and a $17 million loss on extinguishment of debt. Adjusted EBITDA was $155 million, a decrease of $15 million compared to second quarter 2021. During the second quarter 2021, the company received $11.3 million related to one of its terminated international development agreements in China. Excluding the impact of the payment, Adjusted EBITDA decreased $4 million compared to second quarter 2021.

First Half 2022 Results

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

(Amounts in millions, except per share data)

 

July 3, 2022

 

July 4, 2021

 

% Change vs. 2021

Total revenue

 

$

574

 

 

$

542

 

 

6

%

Net loss attributable to Six Flags Entertainment

 

$

(20

)

 

$

(25

)

 

N/M

 

Net loss per share, diluted

 

$

(0.24

)

 

$

(0.30

)

 

N/M

 

Adjusted EBITDA (1)

 

$

140

 

 

$

125

 

 

12

%

Attendance

 

 

8.3

 

 

 

9.9

 

 

(16

)%

Total guest spending per capita

 

$

66.21

 

 

$

52.51

 

 

26

%

Admissions spending per capita

 

$

37.75

 

 

$

29.26

 

 

29

%

In-park spending per capita

 

$

28.46

 

 

$

23.25

 

 

22

%

Total revenue for first half 2022 increased $32 million, or 6%, compared to first half 2021, driven by higher per capita spending. This was offset by lower attendance. As a result of the change to the company’s reporting calendar, three fewer days were included in first half 2022 compared to the first half 2021, which accounted for 89 thousand additional guests in first half 2021.2

The $13.70 increase in guest spending per capita compared to first half 2021 was driven by an $8.49 increase in Admissions spending per capita and a $5.21 increase in In-park spending per capita. The increase in Admissions spending per capita was primarily driven by higher realized ticket pricing and a higher mix of single day tickets. The higher In-park spending reflects the company’s in-park pricing initiatives.

The increase in revenue was offset by higher operating costs, driven by increased operating days in first half 2022 compared to the prior year period, which was negatively impacted by pandemic-related closures and operating restrictions. In addition, the company experienced higher wage rates, and increases in repair and maintenance, utilities, and other costs, due to inflation. These cost increases were offset by efficiency measures including reductions in full-time headcount, fewer total seasonal employee hours worked, and lower advertising costs.

The company had a net loss of $20 million in first half 2022. The loss per share was ($0.24) compared to a loss per share of ($0.30) in first half 2021. Adjusted EBITDA was $140 million, an improvement of $15 million compared to first half 2021, reflecting higher revenues and improved margins. During the second quarter 2021, the company received $11.3 million related to one of its terminated international development agreements in China. Excluding the impact of the payment, Adjusted EBITDA increased $26 million compared to first half 2021.

Balance Sheet and Capital Allocation

Net debt as of July 3, 2022, calculated as total reported debt of $2,478 million less cash and cash equivalents of $75 million, was $2,403 million, representing a 4.7 times Adjusted net leverage ratio. Deferred revenue was $171 million as of July 3, 2022, a decrease of $139 million, or 45%, from July 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 and lower unit sales of season passes and memberships.

On July 1, 2022, the company redeemed $360 million in aggregate principal amount of its senior secured 7.000% Notes due 2025 at a redemption price of 103.5%. Additionally, the company repurchased 3.5 million shares of its common stock at an aggregate cost of $96.8 million, leaving 83.0 million shares outstanding as of July 3, 2022, and $134.9 million remaining on the previously authorized share repurchase program. In first half 2022, the company invested $55 million in new capital, net of insurance recoveries.

Conference Call

At 7:00 a.m. Central Time today, August 11, 2022, the company will host a conference call to discuss its second quarter 2022 financial performance. The call is accessible through either the Six Flags Investor Relations website at investors.sixflags.com or by dialing 1-833-629-0614 in the United States or +1-412-317-9257 outside the United States and requesting the Six Flags earnings call. A replay of the call will be available 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 61 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 and Monkeypox, 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 or other health emergencies such as Monkeypox, including with respect to business operations, safety protocols and public gatherings; economic impact of political instability and conflicts globally, including the war in Ukraine; 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; macro-economic conditions (including impact of inflation on 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 July 4, 2021, compared to January 3 through July 3, 2022, resulting in three additional days from January 1 through January 3 in 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Statement of Operations Data (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

Twelve Months Ended

(Amounts in thousands, except per share data)

 

July 3, 2022

 

July 4, 2021

 

July 3, 2022

 

July 4, 2021

 

July 3, 2022

 

July 4, 2021

Park admissions

 

$

241,777

 

 

$

245,165

 

 

$

314,764

 

 

$

289,499

 

 

$

820,914

 

 

$

421,377

 

Park food, merchandise and other

 

 

183,081

 

 

 

198,897

 

 

 

237,350

 

 

 

230,121

 

 

 

662,680

 

 

 

322,098

 

Sponsorship, international agreements and accommodations

 

 

10,564

 

 

 

15,725

 

 

 

21,415

 

 

 

22,191

 

 

 

45,029

 

 

 

33,265

 

Total revenues

 

 

435,422

 

 

 

459,787

 

 

 

573,529

 

 

 

541,811

 

 

 

1,528,623

 

 

 

776,740

 

Operating expenses (excluding depreciation and amortization shown separately below)

 

 

173,582

 

 

 

183,768

 

 

 

283,526

 

 

 

276,411

 

 

 

653,847

 

 

 

497,592

 

Selling, general and administrative expenses (excluding depreciation, amortization, and stock-based compensation shown separately below)

 

 

50,350

 

 

 

47,204

 

 

 

85,457

 

 

 

76,693

 

 

 

199,154

 

 

 

141,748

 

Costs of products sold

 

 

35,710

 

 

 

39,194

 

 

 

45,825

 

 

 

46,409

 

 

 

125,144

 

 

 

70,554

 

Other net periodic pension benefit

 

 

(1,920

)

 

 

(1,690

)

 

 

(3,371

)

 

 

(3,333

)

 

 

(5,885

)

 

 

(6,533

)

Depreciation

 

 

27,532

 

 

 

28,047

 

 

 

56,575

 

 

 

56,874

 

 

 

114,113

 

 

 

116,938

 

Amortization

 

 

5

 

 

 

5

 

 

 

11

 

 

 

11

 

 

 

22

 

 

 

22

 

Stock-based compensation

 

 

3,223

 

 

 

3,001

 

 

 

7,448

 

 

 

9,638

 

 

 

19,272

 

 

 

18,868

 

Loss (gain) on disposal of assets

 

 

98

 

 

 

719

 

 

 

(2,002

)

 

 

1,239

 

 

 

8,896

 

 

 

8,535

 

Interest expense, net

 

 

35,978

 

 

 

38,048

 

 

 

73,508

 

 

 

76,468

 

 

 

149,476

 

 

 

152,987

 

Loss on debt extinguishment

 

 

17,533

 

 

 

 

 

 

17,533

 

 

 

 

 

 

17,533

 

 

 

 

Other expense, net

 

 

898

 

 

 

831

 

 

 

1,361

 

 

 

8,450

 

 

 

11,033

 

 

 

27,631

 

Income (loss) before income taxes

 

 

92,433

 

 

 

120,660

 

 

 

7,658

 

 

 

(7,049

)

 

 

236,018

 

 

 

(251,602

)

Income tax expense (benefit)

 

 

24,716

 

 

 

29,257

 

 

 

5,603

 

 

 

(2,613

)

 

 

57,838

 

 

 

(65,870

)

Net income (loss)

 

 

67,717

 

 

 

91,403

 

 

 

2,055

 

 

 

(4,436

)

 

 

178,180

 

 

 

(185,732

)

Less: Net income attributable to noncontrolling interests

 

 

(22,325

)

 

 

(20,883

)

 

 

(22,325

)

 

 

(20,883

)

 

 

(43,208

)

 

 

(41,527

)

Net income (loss) attributable to Six Flags Entertainment Corporation

 

$

45,392

 

 

$

70,520

 

 

$

(20,270

)

 

$

(25,319

)

 

$

134,972

 

 

$

(227,259

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

 

84,992

 

 

 

85,673

 

 

 

85,594

 

 

 

85,437

 

 

 

85,789

 

 

 

85,183

 

Diluted:

 

 

85,242

 

 

 

86,751

 

 

 

85,594

 

 

 

85,437

 

 

 

86,525

 

 

 

85,183

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per average common share outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic:

 

$

0.53

 

 

$

0.82

 

 

$

(0.24

)

 

$

(0.30

)

 

$

1.57

 

 

$

(2.67

)

Diluted:

 

$

0.53

 

 

$

0.81

 

 

$

(0.24

)

 

$

(0.30

)

 

$

1.56

 

 

$

(2.67

)

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

 

July 3, 2022

 

January 2, 2022

 

July 4, 2021

(Amounts in thousands, except share data)

 

(unaudited)

 

 

 

 

(unaudited)

ASSETS

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

74,802

 

 

$

335,585

 

 

$

252,887

 

Accounts receivable, net

 

 

70,473

 

 

 

97,722

 

 

 

124,846

 

Inventories

 

 

47,531

 

 

 

27,273

 

 

 

36,038

 

Prepaid expenses and other current assets

 

 

69,990

 

 

 

55,455

 

 

 

66,094

 

Total current assets

 

 

262,796

 

 

 

516,035

 

 

 

479,865

 

Property and equipment, net:

 

 

 

 

 

 

 

 

 

Property and equipment, at cost

 

 

2,552,144

 

 

 

2,501,829

 

 

 

2,445,453

 

Accumulated depreciation

 

 

(1,297,710

)

 

 

(1,250,902

)

 

 

(1,205,950

)

Total property and equipment, net

 

 

1,254,434

 

 

 

1,250,927

 

 

 

1,239,503

 

Other assets:

 

 

 

 

 

 

 

 

 

Right-of-use operating leases, net

 

 

180,836

 

 

 

186,754

 

 

 

193,254

 

Debt issuance costs

 

 

3,832

 

 

 

4,899

 

 

 

5,966

 

Deposits and other assets

 

 

8,101

 

 

 

6,170

 

 

 

6,006

 

Goodwill

 

 

659,618

 

 

 

659,618

 

 

 

659,618

 

Intangible assets, net of accumulated amortization of $272, $261 and $249 as of July 3, 2022, January 2, 2022 and July 4, 2021, respectively

 

 

344,176

 

 

 

344,187

 

 

 

344,187

 

Total other assets

 

 

1,196,563

 

 

 

1,201,628

 

 

 

1,209,031

 

Total assets

 

$

2,713,793

 

 

$

2,968,590

 

 

$

2,928,399

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

67,925

 

 

$

38,251

 

 

$

65,526

 

Accrued compensation, payroll taxes and benefits

 

 

24,968

 

 

 

51,473

 

 

 

47,846

 

Accrued insurance reserves

 

 

37,017

 

 

 

32,182

 

 

 

26,998

 

Accrued interest payable

 

 

24,713

 

 

 

50,554

 

 

 

25,289

 

Other accrued liabilities

 

 

102,626

 

 

 

101,790

 

 

 

108,330

 

Deferred revenue

 

 

171,238

 

 

 

177,831

 

 

 

310,441

 

Short-term borrowings

 

 

200,000

 

 

 

 

 

 

 

Short-term lease liabilities

 

 

11,394

 

 

 

11,158

 

 

 

10,801

 

Total current liabilities

 

 

639,881

 

 

 

463,239

 

 

 

595,231

 

Noncurrent liabilities:

 

 

 

 

 

 

 

 

 

Long-term debt

 

 

2,277,910

 

 

 

2,629,524

 

 

 

2,626,082

 

Long-term lease liabilities

 

 

175,786

 

 

 

178,200

 

 

 

188,687

 

Other long-term liabilities

 

 

5,475

 

 

 

9,469

 

 

 

32,750

 

Deferred income taxes

 

 

152,041

 

 

 

148,291

 

 

 

102,853

 

Total noncurrent liabilities

 

 

2,611,212

 

 

 

2,965,484

 

 

 

2,950,372

 

Total liabilities

 

 

3,251,093

 

 

 

3,428,723

 

 

 

3,545,603

 

 

 

 

 

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 

543,720

 

 

 

522,067

 

 

 

542,950

 

 

 

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

 

Preferred stock, $1.00 par value

 

 

 

 

 

 

 

 

 

Common stock, $0.025 par value, 280,000,000 shares authorized; 83,026,556, 86,162,879 and 85,871,956 shares issued and outstanding at July 3, 2022, January 2, 2022 and July 4, 2021, respectively

 

 

2,075

 

 

 

2,154

 

 

 

2,147

 

Capital in excess of par value

 

 

1,103,534

 

 

 

1,120,084

 

 

 

1,108,680

 

Accumulated deficit

 

 

(2,114,697

)

 

 

(2,023,251

)

 

 

(2,178,493

)

Accumulated other comprehensive loss, net of tax

 

 

(71,932

)

 

 

(81,187

)

 

 

(92,488

)

Total stockholders' deficit

 

 

(1,081,020

)

 

 

(982,200

)

 

 

(1,160,154

)

Total liabilities and stockholders' deficit

 

$

2,713,793

 

 

$

2,968,590

$

2,928,399

 

 

 

 

 

 

 

 

 

Six Months Ended

(Amounts in thousands)

 

July 3, 2022

 

July 4, 2021

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

2,055

 

 

$

(4,436

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

56,586

 

 

 

56,885

 

Stock-based compensation

 

 

7,448

 

 

 

9,638

 

Interest accretion on notes payable

 

 

555

 

 

 

554

 

Loss on debt extinguishment

 

 

17,533

 

 

 

 

Amortization of debt issuance costs

 

 

3,965

 

 

 

3,956

 

Other, including loss (gain) on disposal of assets

 

 

(5,405

)

 

 

(445

)

Change in accounts receivable

 

 

27,327

 

 

 

(88,193

)

Change in inventories, prepaid expenses and other current assets

 

 

(34,698

)

 

 

10,393

 

Change in deposits and other assets

 

 

(1,928

)

 

 

1,099

 

Change in ROU operating leases

 

 

5,517

 

 

 

4,382

 

Change in accounts payable, deferred revenue, accrued liabilities and other long-term liabilities

 

 

11,012

 

 

 

175,266

 

Change in operating lease liabilities

 

 

(1,615

)

 

 

(4,457

)

Change in accrued interest payable

 

 

(25,841

)

 

 

(34,895

)

Deferred income taxes

 

 

726

 

 

 

(414

)

Net cash provided by operating activities

 

 

63,237

 

 

 

129,333

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Additions to property and equipment

 

 

(59,006

)

 

 

(42,250

)

Property insurance recoveries

 

 

3,664

 

 

 

 

Proceeds from sale of assets

 

 

 

 

 

41

 

Net cash used in investing activities

 

 

(55,342

)

 

 

(42,209

)

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Repayment of borrowings

 

 

(360,000

)

 

 

(2,000

)

Proceeds from borrowings

 

 

200,000

 

 

 

2,000

 

Stock repurchases

 

 

(96,774

)

 

 

 

Redemption premium payments on debt extinguishment

 

 

(12,600

)

 

 

 

Payment of cash dividends

 

 

(3

)

 

 

(210

)

Proceeds from issuance of common stock

 

 

1,665

 

 

 

11,784

 

Reduction in finance lease liability

 

 

(490

)

 

 

(350

)

Payment of tax withholdings on equity-based compensation through shares withheld

 

 

(260

)

 

 

(2,179

)

Purchase of redeemable noncontrolling interest

 

 

(556

)

 

 

(1,115

)

Net cash (used in) provided by financing activities

 

 

(269,018

)

 

 

7,930

 

 

 

 

 

 

 

 

Effect of exchange rate on cash

 

 

340

 

 

 

73

 

 

 

 

 

 

 

 

Net change in cash and cash equivalents

 

 

(260,783

)

 

 

95,127

 

Cash and cash equivalents at beginning of period

 

 

335,585

 

 

 

157,760

 

Cash and cash equivalents at end of period

 

$

74,802

 

 

$

252,887

 

 

 

 

 

 

 

 

Supplemental cash flow information

 

 

 

 

 

 

Cash paid for interest

 

$

95,141

 

 

$

107,855

 

Cash paid for income taxes (6)

 

$

1,661

 

 

$

564

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, six month periods and twelve-month periods ended July 3, 2022, and July 4, 2021:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

Twelve Months Ended

(Amounts in thousands, except per share data)

 

July 3, 2022

 

July 4, 2021

 

July 3, 2022

 

July 4, 2021

 

July 3, 2022

 

July 4, 2021

Net income (loss)

 

$

67,717

 

 

$

91,403

 

 

$

2,055

 

 

$

(4,436

)

 

$

178,180

 

 

$

(185,732

)

Income tax expense (benefit)

 

 

24,716

 

 

 

29,257

 

 

 

5,603

 

 

 

(2,613

)

 

 

57,838

 

 

 

(65,870

)

Other expense, net (2)

 

 

898

 

 

 

831

 

 

 

1,361

 

 

 

8,450

 

 

 

11,033

 

 

 

27,631

 

Loss on debt extinguishment

 

 

17,533

 

 

 

 

 

 

17,533

 

 

 

 

 

 

17,533

 

 

 

 

Interest expense, net

 

 

35,978

 

 

 

38,048

 

 

 

73,508

 

 

 

76,468

 

 

 

149,476

 

 

 

152,987

 

Loss (gain) on disposal of assets

 

 

98

 

 

 

719

 

 

 

(2,002

)

 

 

1,239

 

 

 

8,896

 

 

 

8,535

 

Amortization

 

 

5

 

 

 

5

 

 

 

11

 

 

 

11

 

 

 

22

 

 

 

22

 

Depreciation

 

 

27,532

 

 

 

28,047

 

 

 

56,575

 

 

 

56,874

 

 

 

114,113

 

 

 

116,938

 

Stock-based compensation

 

 

3,223

 

 

 

3,001

 

 

 

7,448

 

 

 

9,638

 

 

 

19,272

 

 

 

18,868

 

Modified EBITDA (3)

 

 

177,700

 

 

 

191,311

 

 

 

162,092

 

 

 

145,631

 

 

 

556,363

 

 

 

73,379

 

Third party interest in EBITDA of certain operations (4)

 

 

(22,325

)

 

 

(20,883

)

 

 

(22,325

)

 

 

(20,883

)

 

 

(43,208

)

 

 

(41,527

)

Adjusted EBITDA (3)

 

$

155,375

 

 

$

170,428

 

 

$

139,767

 

 

$

124,748

 

 

$

513,155

 

 

$

31,852

 

Capital expenditures, net of property insurance recovery (5)

 

 

(26,352

)

 

 

(19,117

)

 

 

(55,342

)

 

 

(42,250

)

 

 

(134,834

)

 

 

(67,505

)

Adjusted EBITDA minus capex (3)

 

$

129,023

 

 

$

151,311

 

 

$

84,425

 

 

$

82,498

 

 

$

378,321

 

 

$

(35,653

)

(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.

 

Stephen Purtell Senior Vice President Corporate Communications, Investor Relations and Treasurer +1-972-595-5180 investors@sftp.com

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