EXHIBIT 99.1
[SIX FLAGS LOGO]
SIX FLAGS REPORTS FOURTH QUARTER 2006 RESULTS
---------------------------------------------
Q4 Revenues Flat as 19% Per Capita Growth Offsets Attendance Decline;
Q4 Loss from Continuing Operations Improves to $1.12 Per Share
New York, NY - March 15, 2007 - Six Flags, Inc. (NYSE: SIX) today announced
operating results for its fourth quarter and year ended December 31, 2006.
Reported results from continuing operations for the quarters and years ended
December 31, 2006 and 2005 exclude the operations of the Company's parks in
Buffalo, New York; Columbus, Ohio; Concord, California; Denver, Colorado;
Houston, Texas; Oklahoma City, Oklahoma; Sacramento, California; and Seattle,
Washington ("Discontinued Operations Parks"), which have been classified as
discontinued operations due to the Company's decision to sell those parks.(1)
Total revenue from continuing operations for the quarter of $104.3 million was
flat compared to $104.5 million in the prior-year period. Increased per capita
revenue for the quarter (up 19%) was offset by a decline in attendance (down
16%). As the vast majority of the Company's parks are closed during most of the
fourth quarter due to the seasonal nature of the Company's business, the fourth
quarter generates significantly less attendance and revenue than the second or
third quarters.
The Company's loss from continuing operations for the quarter improved by $6.1
million to $100.5 million. Net loss for the quarter was $189.7 million, compared
to the prior-year net loss of $139.0 million, reflecting the $6.1 million
reduction in loss from continuing operations, offset by a $56.8 million
increased loss from discontinued operations. The loss from discontinued
operations primarily reflects a non-cash loss related to the Company's decision,
announced on January 11, 2007, to sell seven of its parks. The non-cash loss
resulted from the excess of the Company's carrying amount in the net assets over
the expected net sales proceeds, which reflects goodwill from previous business
combinations that was allocated to the seven parks.
For the year, the Company's net loss was $305.6 million, compared to the
prior-year loss of $110.9 million, reflecting: (i) $95.5 million in increased
losses from discontinued operations; (ii) $56.5 million in increased cash
operating costs due to increases in salaries, wages, and other expenses
primarily associated with increased staffing levels, maintenance, and other
services undertaken to improve the guest experience; (iii) $11.1 million of
reduced revenues from continuing operations, reflecting a decline in attendance,
partially offset by substantial growth in per capita revenue; and (iv) $30.7
million in increased non-cash costs ($17.8 million in depreciation, amortization
and fixed asset losses and $12.9 million in stock-based compensation costs,
reflecting the Company's adoption of Statement of Financial Accounting Standards
No. 123 (R) "Share-Based Payment" at the beginning of 2006).
"While 2006 was a transition year for Six Flags, we made real progress toward
setting the company on the right path, from repositioning our parks to target
families and investing in the in-park experience, to reaching an agreement to
sell selected parks which will enable us to reduce debt and re-focus our capital
and management resources," said Mark Shapiro, Six Flags President and CEO.
"The 2007 season will fully reflect the new management team's influence on all
aspects of our business, from budgeting, planning, marketing and pricing to the
oversight of day to day operations. I am encouraged by early season indicators,
which show season pass sales up 32% over last year; marketable capital will be
delivered on time and on budget; and guest service will be markedly improved. We
are hitting the ground running with an entertainment experience that will
deliver for every member of the family."
Fourth Quarter Results
Attendance for the quarter was 2.7 million, down 16% from 3.3 million in the
fourth quarter 2005. Total revenue per capita for the quarter increased 19% to
$37.95 from the prior-year level of $31.80. Per capita guest spending, which
excludes sponsorship and other revenues not related to guest spending, increased
$4.24, or 15%, to $33.32 from $29.08 in the fourth quarter 2005, as guests
continued to spend more on admissions, parking, food and beverage, merchandise
and rentals.
Costs and expenses from continuing operations, which includes payroll,
advertising, cost of sales, repairs and maintenance, utilities, insurance, real
estate taxes, depreciation, amortization, stock-based compensation and loss on
fixed assets, were $157.9 million for the quarter, compared to $157.0 million
for the fourth quarter of 2005, an increase of $0.9 million. The cost increase
was primarily driven by increased staffing and services and stock-based
compensation costs, partially offset by costs associated with senior management
and corporate strategy changes ("Management Change Costs") in the fourth quarter
of 2005.
Loss from continuing operations for the fourth quarter 2006 was $100.5 million
or $1.12 per share - basic and diluted, compared to $106.6 million or $1.20 per
share - basic and diluted in the prior-year period. Total net loss applicable to
common stock in the fourth quarter 2006 was $195.2 million, or $2.07 per share -
basic and diluted, compared to net loss applicable to common stock of $144.5
million, or $1.55 per share - basic and diluted in the prior-year period.
Adjusted EBITDA(2) for the fourth quarter was a loss of $6.3 million, compared
to a loss of $12.1 million in the fourth quarter of 2005. Excluding the
Management Change Costs, Adjusted EBITDA would have been a loss of $6.1 million
for the fourth quarter, compared to earnings of $0.5 million in the prior-year
period.
2006 Results
For the year ended December 31, 2006, total revenues from continuing operations
declined $11.1 million, or 1%, to $945.7 million from $956.8 million in the
prior year. Attendance for the year was 24.8 million, down 13% from 28.7 million
in 2005.
The prior year included 0.5 million in attendance and $13.1 million in revenue
from the New Orleans park, which has not operated since the end of August 2005
due to damage sustained from Hurricane Katrina. Excluding the impact of the
closed New Orleans park, revenues were up $2.0 million compared with the prior
year, and attendance was down 12%. Included in reduced attendance were a 1.2
million reduction from season pass holders and 1.7 million less attendance from
groups and promotions. Attendance for the year was adversely affected by reduced
and delayed media and unfavorable weather comparisons to the prior year,
particularly on weekends at certain Six Flags-branded parks.
Total revenue per capita increased $4.72, or 14%, to $38.07, from $33.35 in the
prior year. Per capita guest spending, which excludes sponsorship and other
revenues not related to guest spending, increased $4.18, or 13%, to $36.12 from
$31.94 in the prior year.
Costs and expenses from continuing operations increased $87.2 million to $895.6
million for 2006, compared to $808.4 million in 2005. The key drivers of the
increase were increases in salaries, wages, and other expenses primarily
associated with increased staffing levels, maintenance, and other services
undertaken to improve the guest experience ($59.7 million), depreciation,
amortization and loss on fixed assets ($17.8 million) and stock-based
compensation ($12.9 million), partially offset by reduced cost of sales ($3.2
million).
Loss from continuing operations for 2006 and 2005 were $207.0 million and $108.9
million, or $2.43 and $1.41 per share - basic and diluted, respectively.
Total net loss applicable to common stock for 2006 was $327.6 million, or $3.48
per share, compared to net loss applicable to common stock of $132.9 million, or
$1.43 per share in the prior year. The net loss reflects approximately $247.0
million, or $2.62 per share, of non-cash and other items not directly related to
the ongoing operation of the business. Excluding these items, net loss
applicable to common stock for 2006 would have been $0.86 per share, compared to
a loss of $0.33 per share for 2005. (See the attached table for a reconciliation
from net loss applicable to common stock to net loss from continuing operations
before these non-cash and other items.)
Adjusted EBITDA for 2006 declined from $248.0 million in the prior year to
$180.8 million, primarily as a result of increased costs. Excluding the
Management Change Costs, Adjusted EBITDA would have been $194.7 million,
compared to $260.7 million in the prior year.
Cash and Liquidity
As of December 31, 2006, the Company had $105.0 million outstanding on its
$300.0 million revolving credit facility, no amounts drawn on its $82.5 million
multi-currency revolving facility (excluding letters of credit in the amount of
$33.1 million), and $24.3 million in cash.
About Six Flags
Six Flags, Inc. is the world's largest regional theme park company. Founded
in 1961, Six Flags celebrated its 45th Anniversary in 2006. It is a
publicly-traded corporation (NYSE: SIX) 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 "Risk Factors" in Six Flags' Annual Report on Form 10-K for the
year ended December 31, 2006, which will be available free of charge on Six
Flags' website http://www.sixflags.com.
# # #
Contact:
Wendy Goldberg - (212) 652-9393
- ----------
(1) Six Flags AstroWorld in Houston, Texas is also classified as a discontinued
operation; however, it had no park operations during 2006 and the sale of its
underlying land was completed in June 2006.
(2) See the following tables and Note 2 to those tables for a discussion of
EBITDA (Modified), Adjusted EBITDA and a reconciliation to these amounts from
net income (loss).
Six Flags, Inc.
Three and Twelve Months Ended December 31, 2006 and 2005
(In Thousands, Except Per Share Amounts)
Statement of Operations (1) Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Revenue $104,343 $104,525 $945,665 $956,757
Costs and expenses (excluding
depreciation, amortization,
stock-based compensation
and loss on fixed assets) 114,721 119,617 720,520 664,038
Depreciation 33,295 32,024 131,416 126,778
Amortization 220 220 879 880
Stock-based compensation 2,676 2,174 15,728 2,794
Loss on fixed assets 6,953 2,989 27,057 13,906
--------- --------- --------- ---------
Income (loss) from operations (53,522) (52,499) 50,065 148,361
--------- --------- --------- ---------
Interest expense (net) 51,309 48,854 199,991 183,547
Minority Interest in earnings (loss) (5,179) (4,234) 40,223 39,794
Equity in operations of partnerships 486 -- 948 --
Early repurchase of debt -- -- -- 19,303
Other Expense 24 9,518 11,560 10,877
--------- --------- --------- ---------
Loss from continuing operations
before income taxes (100,162) (106,637) (202,657) (105,160)
Income tax (expense) benefit (333) 86 (4,318) (3,705)
--------- --------- --------- ---------
Loss from continuing operations
before discontinued operations and
cumulative effect of a change in
accounting principle (100,495) (106,551) (206,975) (108,865)
Discontinued Operations (89,233) (32,457) (97,605) (2,073)
--------- --------- --------- ---------
Loss before cumulative effect of a
change in accounting principle (189,728) (139,008) (304,580) (110,938)
Cumulative effect of a change
in accounting principle -- -- (1,038) --
--------- --------- --------- ---------
Net loss $(189,728) $(139,008) $(305,618) $(110,938)
========= ========= ========= =========
Net loss applicable to common stock $(195,221) $(144,500) $(327,588) $(132,908)
========= ========= ========= =========
Per share - basic:
Loss from continuing operations $ (1.12) $ (1.20) $ (2.43) $ (1.41)
Discontinued operations $ (0.95) $ (0.35) $ (1.04) $ (0.02)
Cumulative effect of a change in
accounting principle $ -- $ -- $ (0.01) $ --
--------- --------- --------- ---------
Net loss $ (2.07) $ (1.55) $ (3.48) $ (1.43)
========= ========= ========= =========
Per share - diluted:
Loss from continuing operations $ (1.12) $ (1.20) $ (2.43) $ (1.41)
Discontinued operations $ (0.95) $ (0.35) $ (1.04) $ (0.02)
Cumulative effect of a change in
accounting principle $ -- $ -- $ (0.01) $ --
--------- --------- --------- ---------
Net loss $ (2.07) $ (1.55) $ (3.48) $ (1.43)
========= ========= ========= =========
Balance Sheet Data
(In Thousands)
Balance Sheet Data December 31, 2006 December 31, 2005
----------------- -----------------
Cash and cash equivalents
(excluding restricted cash) $ 24,295 $ 80,510
Total assets 3,187,616 3,491,922
Current portion of long-term debt 114,059 113,601
Long-term debt (excluding current
portion) 2,126,888 2,128,756
Mandatory redeemable preferred
stock 284,497 283,371
Total Stockholders equity 376,140 694,208
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
Other Data: 2006 2005 2006 2005
--------- --------- --------- ---------
EBITDA (Modified) (2) $ (10,378) $ (15,092) $ 225,145 $ 292,719
Adjusted EBITDA (2) $ (6,326) $ (12,078) $ 180,793 $ 248,045
Weighted average shares
outstanding - basic 94,385 93,124 94,242 93,110
Weighted average shares
outstanding - diluted 94,385 93,124 94,242 93,110
Net cash provided by
operating activities $ (76,343) $ (89,952) $ 9,804 $ 121,410
The following table sets forth a reconciliation of net income (loss) to EBITDA
(Modified) and Adjusted EBITDA for the periods shown (in thousands):
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
Other Data: 2006 2005 2006 2005
--------- --------- --------- ---------
Net loss $(189,728) $(139,008) $(305,618) $(110,938)
Cumulative effect of a change in
accounting principle -- -- 1,038 --
Discontinued operations 89,233 32,457 97,605 2,073
Income tax expense 333 (86) 4,318 3,705
Other expense 24 9,518 11,560 10,877
Early repurchase of debt -- -- -- 19,303
Equity in operations of partnerships 486 -- 948 --
Minority interest in earnings (5,179) (4,234) 40,223 39,794
Interest expense (net) 51,309 48,854 199,991 183,547
Loss on fixed assets 6,953 2,989 27,057 13,906
Amortization 220 220 879 880
Depreciation 33,295 32,024 131,416 126,778
Stock-based compensation 2,676 2,174 15,728 2,794
--------- --------- --------- ---------
EBITDA (Modified) (10,378) (15,092) 225,145 292,719
Third party interest in EBITDA
of certain parks (3) 4,052 3,014 (44,352) (44,674)
--------- --------- --------- ---------
Adjusted EBITDA $ (6,326) $ (12,078) $ 180,793 $ 248,045
========= ========= ========= =========
The following table sets forth a reconciliation of net income (loss) applicable
to common stock to net income (loss) from continuing operations before certain
non-cash and other items. (4)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------- ----------------------
2006 2005 2006 2005
--------- --------- --------- ---------
Net loss applicable to common stock $(195,221) $(144,500) $(327,588) $(132,908)
Loss on fixed assets 6,953 2,989 27,057 13,906
Early repurchase of debt -- -- -- 19,303
Discontinued operations 89,233 32,457 97,605 2,073
Cumulative effect of change in
accounting treatment -- -- 1,038 --
Stock-based compensation 2,676 2,174 15,728 2,794
Management Change Costs 196 12,605 13,885 12,605
Tax valuation allowance 69,039 58,034 91,661 51,832
--------- --------- --------- ---------
Sub-total 168,097 108,259 246,974 102,513
--------- --------- --------- ---------
Net loss from continuing operations
before certain non-cash costs and
other items $ (27,124) $ (36,241) $ (80,614) $ (30,395)
========= ========= ========= =========
Per share- basic:
Net loss applicable to common stock $ (2.07) $ (1.55) $ (3.48) $ (1.43)
Less: Certain non-cash costs and other
items $ (1.78) $ (1.16) $ (2.62) $ (1.10)
--------- --------- --------- ---------
Net loss from continuing operations
before certain non-cash costs and
other items $ (0.29) $ (0.39) $ (0.86) $ (0.33)
========= ========= ========= =========
NOTES
(1) Revenues and expenses of international operations are converted into U.S.
dollars on a current basis as provided by U.S. generally accepted accounting
principles ("GAAP").
(2) EBITDA (Modified), a non-GAAP measure, is defined as net income (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,
stock-based compensation, and gain (loss) on disposal of assets. Adjusted
EBITDA, also a non-GAAP measure, is defined as EBITDA (Modified) minus interests
of third parties in EBITDA of the four parks plus our interest in one hotel,
that are less than wholly owned. The company believes that EBITDA (Modified) and
Adjusted EBITDA (collectively, "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.
(3) Represents interest of third parties in EBITDA of Six Flags Over Georgia,
Six Flags Over Texas, Six Flags White Water Atlanta, and Six Flags Discovery
Kingdom (formerly, Marine World), plus the Company's interest in EBITDA of Six
Flags Great Escape Lodge & Indoor Waterpark.
(4) The Company's reported results include items of income and expense that the
Company believes are typically excluded by securities analysts in their
published estimates for the Company's financial results. The Company therefore
believes that presentation of net income (loss) from continuing operations
before certain non-cash and other items is relevant and useful to investors.
Excluded items include loss on disposal of assets, early repurchase of debt,
discontinued operations, cumulative effect of a change in accounting principle,
stock-based compensation, Management Change Costs and effects of any deferred
tax asset valuation allowance.