Exhibit 99.1
[SIX FLAGS LOGO]
SIX FLAGS REPORTS STRONG FOURTH QUARTER AND FULL YEAR 2005 RESULTS
Results Driven by Attendance and Spending Growth
New Management Team Reaffirms Guidance for 2006
New York, NY - March 8, 2006 - Six Flags, Inc. (NYSE: PKS) today announced
the results of its operations for the fourth quarter and full year ended
December 31, 2005.
For the full year 2005, as reported revenues were $1.09 billion, compared to
$1.0 billion for 2004, an increase of $91.1 million or 9.1%. The Company's net
loss for 2005 was $110.9 million, compared to a net loss of $464.8 million in
2004. The 2005 as reported Adjusted EBITDA totaled $286.8 million, compared to
$253.6 million in 2004.(1)
The 2005 as reported Adjusted EBITDA includes expenses totaling $12.6 million
for severance and other costs directly associated with the senior management and
corporate strategy changes. The 2005 as reported Adjusted EBITDA excludes $7.8
million in Adjusted EBITDA related to Six Flags AstroWorld in Houston which is
classified as a discontinued operation.
Including the Six Flags AstroWorld results and excluding the expenses not
directly related to the Company's ongoing operations, Adjusted EBITDA for 2005
would have totaled $307.2 million, exceeding the Company's prior guidance.
Strengthening the Brand and Improving the Six Flags Guest Experience
"Repositioning the brand, diversifying our entertainment offerings and improving
the guest experience are our immediate company-wide priorities," said Mark
Shapiro, who joined the Company in December 2005 as President and Chief
Executive Officer. "However, these operating results illustrate the already
fundamental strength of the Six Flags experience and its value to our guests.
The Company finished 2005 on a strong note of recovery and we are proceeding
with several new initiatives intended to place Six Flags on a path to deliver
sustainable growth, reduce debt and enhance shareholder value."
- -----------------------------
(1) See Note 2 to the following tables for a discussion of EBITDA (Modified) and
Adjusted EBITDA, and for a reconciliation of these amounts to net income (loss).
"While most see 2006 as a transition year, by reaffirming previous management's
guidance we are underscoring confidence that our redefined strategy, coupled
with the celebration of our 45th Anniversary, will broaden our customer base by
attracting families as well as teenagers, boosting our per capita revenue."
Shapiro continued, "It is our intention to drive increased attendance through
enhanced broad-based marketing strategies while capturing the full value of
admissions, parking and concessions by introducing more competitive and
standardized pricing in our parks. We also plan to realize additional revenue
streams through an array of new business initiatives, including marketing
alliances and sponsorships with some of today's most popular consumer brands."
He concluded, "Every single day we will remain focused on bringing our guests an
entertainment package that they can't experience anywhere else close to home:
family rides, thrill rides, special events, concerts and shows, daily parades,
fireworks, shopping, dining and games, as well as significantly increased
interaction with, and appearances by, Looney Tunes and Justice League
characters."
Financial Review
Full Year (As Reported)
For the full year 2005, as reported revenues were $1.09 billion, compared to
$1.0 billion for 2004, an increase of $91.1 million or 9.1%. Attendance for full
year 2005 increased from 32.1 million to 33.7 million, a 4.9% gain from the
previous year, while total revenue per capita increased 4.0%, from $31.12 in
2004 to $32.37. The Houston AstroWorld park, whose operating results for 2005
are not included in the Company's results from continuing operations, generated
2005 attendance and revenue of 1.3 million and $41.3 million, respectively. This
compares to 2004 attendance and revenue for the park of 1.4 million and $39.1
million, respectively.
For the year, operating costs and expenses, including depreciation, amortization
and non-cash compensation, were $906.3 million, compared to $845.8 million in
2004, an increase of 7.2%.
Net loss applicable to common stock in 2005 was $132.9 million, or $1.43 per
share, compared with a loss of $486.8 million, or $5.23 per share in 2004. The
2005 loss included a loss from discontinued operations of $22.0 million, $0.24
per share. The 2004 loss included a loss from discontinued operations of $291.0
million, $3.13 per share.
As reported Adjusted EBITDA for 2005 was $286.8 million in 2005, compared to
$253.6 million in 2004, an increase of 13.1%.
Fourth Quarter (As Reported)
For the fourth quarter, revenues were $111.8 million, compared to $105.4 million
for the fourth quarter 2004, an increase of $6.4 million or 6.1%. Attendance for
the fourth quarter 2005 was 3.6 million, down 1.0% compared to the prior year,
while total revenue per capita increased 7.1%, from $29.26 in 2004 to $31.33 in
2005.
Operating costs and expenses were $170.9 million for the fourth quarter of 2005,
compared to $152.6 million for the fourth quarter of 2004, an increase of 12.0%.
This increase was primarily attributable to $12.6 million of selling, general
and administrative and operating expenses, and $2.0 million of non-cash
compensation expense, both of which were directly associated with the senior
management and corporate strategy changes.
Net loss applicable to common stock in the fourth quarter 2005 was $144.5
million, or $1.55 per share, compared to a fourth quarter 2004 loss of $115.0
million, or $1.24 per share. The 2005 loss included a loss from discontinued
operations of $22.4 million, $0.24 per share. The 2004 loss included a loss from
discontinued operations of $3.5 million, $0.04 per share.
As reported Adjusted EBITDA for the fourth quarter of 2005 was a loss of $17.3
million, compared to a loss of $6.0 million in 2004.
Operating Highlights
Since mid-December, the Company has taken a number of major steps to strengthen
its management team, improve operating performance, and enhance the guest
experience at each of its parks:
o The corporate management team was restructured, with the following
appointments:
o Jeffrey Speed was named Executive Vice President and will become
Chief Financial Officer, effective April 1.
o Four new divisions were created:
o Park Strategy and Management, headed by Mark Quenzel.
o In-Park Services, headed by Andrew Schleimer.
o Marketing and Entertainment, headed by Mike Antinoro.
o Corporate Alliances, headed by Lou Koskovolis.
o New general managers have been named at five Six Flags parks - New
Jersey, Chicago, Washington DC, Denver and Louisville.
o Six new members of the Board of Directors were named, including Mr.
Shapiro; Daniel M. Snyder, owner of the Washington Redskins; Harvey
Weinstein, Co-Chairman of the Weinstein Companies; and Dwight Schar,
Chairman and CEO of NVR, Inc., a home-building company.
o Several specific initiatives were announced to improve the park
experience, including:
o A broader range of family-oriented in-park events and activities,
including daily parades, fireworks, shows and the creation of a
Looney Tunes and Justice League character program, featuring
appearances, photo and dining opportunities with guests.
o A universal employee training program to motivate and educate
employees to consistently deliver high quality customer service.
o A new system-wide non-smoking policy.
o Six Flags has signed marketing and sponsorship agreements with Sunkist and
with National CineMedia (a venture of three movie theatre chains - AMC
Entertainment, Cinemark USA and Regal Entertainment Group). The Company
also is in advanced discussions with Papa John's Pizza.
o Six Flags hired OgilvyOne Worldwide, the world's largest one-to-one
marketing agency, to help broaden and deepen the Company's relationships
with its guests through direct and interactive marketing.
o Six Flags appointed MindShare, the global full-service media company, as
the media-buying agency for Six Flags theme parks nationwide, enabling the
Company - and its 29 theme parks - to implement an overall media strategy
that communicates at the local level the Company's focus on its
positioning as the country's leading local family entertainment
destination, its commitment to guest service, and the Company's 45th
Anniversary celebration.
Outlook
Key financial priorities for the Company are to drive free cash flow and reduce
debt levels over the next several years.
For 2006, the Company is reaffirming previous guidance of $340 million of
Adjusted EBITDA (excluding certain severance and other costs related to the
management and corporate strategy changes). This represents a 13.5% increase
over 2005 comparable park performance. This growth is expected to be generated
by a combination of both attendance and per capita spending growth as a result
of enhanced in-park entertainment and activities, new marketable attractions in
11 of our 19 theme parks, as well as more focused and efficient marketing
initiatives, highlighted by the 45th Anniversary celebration of Six Flags.
The Company expects that operating costs for 2006 will reflect expenses
attributable to increased staffing and in-park initiatives. These costs are an
integral part of new management's strategy, which is intended to drive enhanced
guest satisfaction, particularly among families, resulting in greater attendance
and higher per capita spending.
In addition, the Company intends to reduce annual capital expenditures to
approximately $100 million in the future from the expected 2006 season spend of
approximately $140 million, as the Company focuses its capital investments on
more broad-based family entertainment attractions.
The Company also has previously announced its intention to sell its Houston
AstroWorld property as well as its Oklahoma City parks and is in the process of
assessing other potential opportunities to dispose of non-core assets, including
underutilized real estate. Proceeds from these dispositions are intended to be
utilized to reduce debt levels and provide the Company with enhanced operational
and financial flexibility.
About Six Flags
Six Flags, Inc. is the world's largest regional theme park company. Founded
in 1961, Six Flags is celebrating its 45th Anniversary in 2006. It is a
publicly-traded corporation (NYSE: PKS) headquartered in New York City.
Forward Looking Statements:
The information contained in this news release, other than historical
information, consists of forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act. These statements may involve risks and uncertainties that could cause
actual results to differ materially from those described in such statements.
These risks and uncertainties include, among others, Six Flags' success in
implementing its new business strategy. Although Six Flags believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to have been correct.
Important factors, including factors impacting attendance, such as local
conditions, events, disturbances and terrorist activities, risk of accidents
occurring at Six Flags' parks, adverse weather conditions, general economic
conditions (including consumer spending patterns), competition, pending,
threatened or future legal proceedings and other factors could cause actual
results to differ materially from Six Flags' expectations. Reference is made to
a more complete discussion of forward-looking statements and applicable risks
contained under the caption "Cautionary Note Regarding Forward-Looking
Statements" and "Business-Risk Factors" in Six Flags' Annual Report on Form 10-K
for the year ended December 31st, 2004, which is available free of charge on Six
Flags' website http://www.sixflags.com.
Contact:
Wendy Goldberg - (212) 599-4690
Six Flags, Inc.
Statement of Operations Data
Years and Quarters Ended December 31, 2005 and 2004
(In Thousands, Except Per Share Amounts)
Year Ended Three Months Ended
December 31, December 31,
Statement of Operations Data(1)
-------------------------- --------------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
Revenue ................................... $ 1,089,682 $ 998,590 $ 111,823 $ 105,429
Costs and expenses (excluding depreciation,
amortization and non-cash compensation).. 758,168 701,996 132,094 114,179
Depreciation .............................. 144,484 141,967 36,446 38,042
Amortization .............................. 889 1,193 222 217
Non-cash compensation ..................... 2,794 643 2,174 161
----------- ----------- ----------- -----------
Income (loss) from operations ............. 183,347 152,791 (59,113) (47,170)
----------- ----------- ----------- -----------
Interest expense (net) .................... 183,489 191,581 48,838 45,763
Minority interest in earnings (losses) .... 39,794 37,686 (4,234) (4,010)
Early repurchase of debt .................. 19,303 37,731 -- 5,869
Other expense ............................. 25,952 27,555 13,020 8,201
----------- ----------- ----------- -----------
Loss from continuing operations
before income taxes..................... (85,191) (141,762) (116,737) (102,993)
Income tax (expense) benefit .............. (3,705) (32,003) 86 (3,087)
----------- ----------- ----------- -----------
Loss from continuing operations ........... (88,896) (173,765) (116,651) (106,080)
Discontinued operations, net of net tax
benefit of $57,406 in the year ended
2004 ................................... (22,042) (291,044) (22,357) (3,451)
----------- ----------- ----------- -----------
Net loss .................................. $ (110,938) $ (464,809) $ (139,008) $ (109,531)
=========== =========== =========== ===========
Net loss applicable to common stock ....... $ (132,908) $ (486,777) $ (144,500) $ (115,021)
=========== =========== =========== ===========
Per share - basic and diluted:
Loss from continuing operations ........ $ (1.19) $ (2.10) $ (1.31) $ (1.20)
Discontinued operations ................ (0.24) (3.13) (0.24) (0.04)
----------- ----------- ----------- -----------
Net loss ............................... $ (1.43) $ (5.23) $ (1.55) $ (1.24)
=========== =========== =========== ===========
Other Data:
EBITDA (Modified) (2) ..................... $ 331,514 $ 296,594 $ (20,271) $ (8,750)
Adjusted EBITDA(2) ........................ $ 286,840 253,552 (17,257) $ (5,983)
EBITDA (Modified) (including Houston
AstroWorld and excluding management
change items) (2) ...................... $ 351,920 $ 301,638 $ (7,118) $ (10,062)
Adjusted EBITDA (including Houston
AstroWorld and excluding management
change items) (2) ...................... $ 307,246 $ 258,596 $ (4,104) $ (7,295)
Average weighted shares outstanding -
basic and diluted ......................... 93,110 $ 93,036 $ 93,124 93,042
Net cash provided by (used in) operating
activities ................................ $ 121,324 $ 33,199 $ (90,038) $ (81,460)
Balance Sheet Data
(In Thousands)
# # #
Balance Sheet Data December 31, 2005 December 31, 2004
------------------ -----------------
Cash and cash equivalents (excluding
restricted cash)............................. $ 81,534 $ 68,807
Total assets................................. 3,493,119 3,642,227
Current portion of long-term debt (excluding
debt called for repayment in 2004)........ 113,601 24,394
Long-term debt (excluding current portion)... 2,128,756 2,125,121
Mandatorily redeemable preferred stock....... 283,371 282,245
Total stockholders' equity .................. 694,208 826,065
- --------------------------------------------
(1) Revenues and expenses of international operations are converted into
dollars on a current basis as provided by accounting principles generally
accepted in the United States ("GAAP").
(2) EBITDA (Modified), a non-GAAP measure, is defined as net loss before
discontinued operations, income tax expense (benefit), other expense,
early repurchase of debt (formerly an extraordinary loss), minority
interest in earnings (losses), interest expense (net), amortization,
depreciation and non-cash compensation. Adjusted EBITDA, also a non-GAAP
measure, is defined as EBITDA (Modified) minus the interest of third
parties in EBITDA of the four parks that are less than wholly owned. The
Company believes that EBITDA (Modified) and Adjusted EBITDA (collectively,
the "EBITDA-Based Measures") provide useful information to investors
regarding the Company's operating performance and its capacity to incur
and service debt and fund capital expenditures. The Company believes that
the EBITDA-Based Measures are used by many investors, equity analysts and
rating agencies as a measure of performance. In addition, Adjusted EBITDA
is approximately equal to "Consolidated Cash Flow" as defined in the
indentures relating to the Company's senior notes. Neither of the
EBITDA-Based Measures is defined by GAAP and neither should be considered
in isolation or as an alternative to net income (loss), income (loss) from
continuing operations, net cash provided by (used in) operating, investing
and financing activities or other financial data prepared in accordance
with GAAP or as an indicator of the Company's operating performance.
EBITDA (Modified) and Adjusted EBITDA as defined in this release may
differ from similarly titled measures presented by other companies.
The following table sets forth a reconciliation of net loss to EBITDA
(Modified) and Adjusted EBITDA for the periods shown (in thousands).
Year Ended Three Months Ended
December 31, December 31,
------------------------ ----------------------
2005 2004 2005 2004
----------- ----------- ---------- ----------
Net loss $ (110,938) $ (464,809) $ (139,008) $ (109,531)
Discontinued operations,
net of tax benefit 22,042 291,044 22,357 3,451
Income tax expense (benefit) 3,705 32,003 (86) 3,087
Other expense 25,952 27,555 13,020 8,201
Early repurchase of debt 19,303 37,731 -- 5,869
Minority interest in earnings
(losses) 39,794 37,686 (4,234) (4,010)
Interest expense (net) 183,489 191,581 48,838 45,763
Amortization 889 1,193 222 217
Depreciation 144,484 141,967 36,446 38,042
Non-cash compensation 2,794 643 2,174 161
----------- ----------- ---------- ----------
EBITDA (Modified) 331,514 296,594 (20,271) (8,750)
Third party interest in EBITDA
of certain parks (a) (44,674) (43,042) 3,014 2,767
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
Adjusted EBITDA $ 286,840 $ 253,552 $ (17,257) $ (5,983)
=========== =========== ========== ==========
The following table sets forth a reconciliation of Adjusted EBITDA to
Adjusted EBITDA before giving effect to the reclassification of Six Flags
AstroWorld as a discontinued operation and to expenses directly associated with
the senior management and corporate strategy changes.
Years Ended
December 31,
-----------------------------------
2005 2004
----------------- ----------------
Adjusted EBITDA $ 286,840 $ 253,552
AstroWorld EBITDA(b) 7,801 5,044
Management change operating 12,605 --
expenses (c)
----------------- ----------------
Adjusted EBITDA $ 307,246 $ 258,596
================= ================
The Company is not able as of this date to provide a reliable estimate
of its income tax benefit and other income (expense) for the year ending
December 31, 2006. Therefore, a reliable estimate of its net loss for that year
is not available. Accordingly, the following table sets forth a reconciliation
of expected income from operations for 2006 to expected EBITDA and expected
Adjusted EBITDA for such year. Since the EBITDA-Based Measures are calculated
before income taxes and other expense, the absence of estimates with respect to
these items would not affect the expected EBITDA-Based Measures presented. For
2006, expected interest expense (net) is approximately $190,000 and expected
minority interest in earnings is approximately $42,000.
Year Ending
December 31,
2006
-----------------
Income from operations (d) $ 233,300
Amortization 900
Depreciation 150,000
Non-cash compensation (e) 2,800
-----------------
EBITDA (Modified) 387,000
Third-party interest in EBITDA of (47,000)
certain parks(a) -----------------
Adjusted EBITDA $ 340,000
=================
(a) Represents interest of third parties in EBITDA of Six Flags Over Georgia,
Six Flags Over Texas, Six Flags White Water Atlanta and Six Flags Marine
World.
(b) Excludes costs associated with the closure of the park of approximately
$3.0 million in 2005.
(c) Includes approximately $7.9 million in severance and related costs, $3.1
million associated with the write-off of costs incurred in preparing for
the development of a hotel at the Company's park in New Jersey, and
miscellaneous other expenses.
(d) Excludes additional expenses associated with senior management and
corporate strategy changes which are being incurred in 2006.
(e) Excludes costs related to stock option grants which will be expensed
beginning in 2006.
# # #