Six Flags reports revenue, attendance increases

Reporting its second quarter earnings today, Six Flags announced a six percent year-over-year revenue increase, from $325 million in Q2 2006 to $344.8 million. Attendance increased three percent, from 8.6 to 8.9 million. Unfortunately, the company also saw its loss increase

from the prior-year quarter, from $39.1 million in the second quarter of '06 to $41.8 million in Q2 '07.

"Although our peak business period occurs in the third quarter, we witnessed encouraging results for the first six months, especially when you consider 4% fewer operating days and unprecedented rain in the state of Texas. The fact that in-park spending and guest satisfaction scores are at an all-time high indicates both the return of families to Six Flags and their approval of the makeover. We are in position for the long-term turnaround we envisioned for our shareholders," said Mark Shapiro, Six Flags President and CEO.

Complete release below.

Six Flags, Inc. (NYSE: SIX) today announced operating results for its second quarter and six months ended June 30, 2007.

Total revenue for the quarter increased 6% to $344.8 million from $325.0 million in the prior-year quarter. Attendance increased 0.3 million, or 3%, to 8.9 million from 8.6 million in the prior-year quarter. The Company believes the attendance increase reflects enhanced marketing and promotional programs along with continued improvement in the overall guest experience.
Total revenue per capita for the quarter increased by $1.17, or 3%, to $38.85, reflecting increased per capita guest spending and sponsorship revenues. Per capita guest spending increased $0.82, or 2%, to $37.02 from $36.20 in the second quarter of 2006, as guests spent more on admissions, food and beverages, parking, rentals and games.

The Company's loss from continuing operations for the quarter was $41.8 million, compared to a loss of $39.1 million in the second quarter of 2006, reflecting increased revenues and increased costs and expenses. Higher costs and expenses primarily reflected increased marketing expense ($14.1 million) and additional in-park costs.

Mark Shapiro, Six Flags President and CEO, commented: "Although our peak business period occurs in the third quarter, we witnessed encouraging results for the first six months, especially when you consider 4% fewer operating days and unprecedented rain in the state of Texas. The fact that in-park spending and guest satisfaction scores are at an all-time high indicates both the return of families to Six Flags and their approval of the makeover. We are in position for the long-term turnaround we envisioned for our shareholders."

The prior-year second quarter was negatively impacted by $11.3 million in other expenses, primarily due to the change in the Company's management, including reimbursement of proxy costs. The current-year quarter included $10.4 million in net losses from debt extinguishment, reflecting the write-off of capitalized debt issuance costs associated with the Company's recently refinanced senior secured credit facility and the repurchase of $85 million of senior unsecured debt, partially offset by gains from repurchasing senior unsecured debt at a discount.
Net loss applicable to common stock in the second quarter 2007 was $50.9 million, or $0.54 per share, compared to a net loss applicable to common stock of $45.1 million, or $0.48 per common share in the prior-year period. The increased net loss for the quarter reflects the results of continuing operations and $3.1 million, or $0.03 per common share, of increased loss from discontinued operations.

Adjusted EBITDA(2) for the quarter was $57.9 million, compared to $58.6 million in the second quarter of 2006.

Six Month Results

For the six months ended June 30, 2007 (the "First Half 2007"), total revenues increased $28.4 million, or 8%, to $395.5 million from $367.1 million in the prior-year period.
First Half 2007 total revenue per capita increased $1.62, or 4%, to $39.17, from $37.55 in the prior-year period, reflecting increased per capita guest spending and sponsorship revenues. Increased per capita guest spending of $0.96, or 3%, to $36.65 from $35.69 in the prior-year period was driven by increased admissions, food and beverages, parking, rentals and games revenues. Attendance for the First Half 2007 was 10.1 million, an increase of 0.3 million, or 3%, from 9.8 million during the prior-year period.

Total costs and expenses, including cost of sales, depreciation, amortization, stock-based compensation and loss on fixed assets, decreased $6.8 million to $468.0 million for the First Half 2007, compared to $474.8 million in the 2006 period. The key drivers of the change were a reduced loss on fixed assets ($14.1 million), prior-year costs related to the change in management ($11.8 million), and lower stock-based compensation ($6.4 million), partially offset by increased marketing expense ($17.9 million) and additional in-park costs.

Net loss applicable to common stock for the First Half 2007 was $226.9 million, or $2.40 per share, compared to a net loss applicable to common stock of $291.6 million, or $3.10 per common share in the prior-year period. The decreased net loss in First Half 2007 of $64.7 million reflects a reduced loss from discontinued operations ($32.2 million), improved results from continuing operations ($31.5 million) reflecting increased revenues and reduced costs and expenses, and the impact of a prior-year change in accounting principles ($1.0 million).

Adjusted EBITDA for the First Half 2007 improved by $18.6 million over the prior-year period to a loss of $10.9 million, reflecting increased revenues partially offset by increased costs and expenses.

Cash and Liquidity

As of June 30, 2007, the Company had no balance outstanding on its $275 million revolving credit facility (excluding letters of credit in the amount of $34.8 million), and $81.9 million in unrestricted cash.