Fourth Consecutive Record Year at Six Flags

Revenue Climbs 7 Percent and Adjusted EBITDA(1) 19 Percent in Fourth Quarter 2013

19 Feb, 2014, 08:00 ET from Six Flags Entertainment Corporation

GRAND PRAIRIE, Texas, Feb. 19, 2014 /PRNewswire/ -- Six Flags Entertainment Corporation (NYSE: SIX), the world's largest regional theme park company, today announced its fourth consecutive year of record financial performance as it generated a company-high $404 million of Adjusted EBITDA1 in 2013, representing a $21 million or 6 percent increase over 2012. On a comparable basis, after adjusting for the September 2012 divestiture of its minority interest in dick clark productions2, Adjusted EBITDA increased $27 million or 7 percent over prior year.

"Strategic focus and excellent execution have been the key drivers of our fourth year of record financial performance," said Jim Reid-Anderson, Chairman, President and CEO. "With 2013 guest-satisfaction scores also at a record high, our guests recognize we are providing innovative rides and attractions, superb service, and great value for their money. We are well-positioned as we enter the 2014 season and remain focused on delivering our target of $500 million of Modified EBITDA by 2015, equating to almost $3 of cash earnings per share."

Full year revenue grew 4 percent to $1.1 billion due to higher admissions, in-park, sponsorship and accommodations revenue. In addition, due to the company's success in delivering excellent value and upselling guests to season passes and memberships, annual attendance for 2013 grew 2 percent to 26.1 million guests. Season pass and membership attendance mix increased to 48 percent from 44 percent in 2012.

Total guest spending per capita in 2013 increased 2 percent over 2012 to $40.18 despite a higher mix of season pass holder and membership attendance. Admissions per capita for the year increased 3 percent or $0.62 to $23.03 while in-park spending per capita grew 1 percent to $17.15.

Cash Earnings Per Share3 of $2.45 increased 13 percent or 29 cents after adjusting for the June 2013 two-for-one stock split. Modified EBITDA4 in 2013 was $444 million and Modified EBITDA margin improved to a new industry high of 40.0 percent.

Diluted earnings per share for 2013 was $1.18 versus $3.30 in 2012. On a comparable basis, full year 2013 diluted earnings per share grew 73 cents or 162 percent after adjusting for the 2012 favorable impact of  the $249 million partial reversal of the net operating loss carryforward valuation allowance and the $67 million gain on sale of our equity interest in dick clark productions.

In the fourth quarter 2013, Adjusted EBITDA improved $6 million or 19 percent to a record $36 million while revenue grew 7 percent. The revenue improvement was primarily due to an 8 percent increase in admissions revenue and a 7 percent increase in in-park revenue. Fourth quarter guest spending per capita was up 6 percent to $37.99, which included a 7 percent or $1.32 increase in admissions per capita and a 5 percent or $0.86 increase in in-park revenue per capita. Fourth quarter attendance was 3.7 million guests.

For the fourth quarter 2013, Cash Earnings Per Share was $0.15, up from a loss of 2 cents in 2012.

Diluted earnings per share for the fourth quarter 2013 was $0.13 versus $1.40 in the same quarter 2012. On a comparable basis, which includes adjusting 2012 for the $249 million valuation reserve reversal referenced above, fourth quarter 2013 diluted earnings per share grew $1.00.

In 2013 the company invested $102 million, or 9 percent of revenue, in new capital. It also returned $700 million to shareholders by paying $176 million, or $1.82 per share, of dividends and buying $524 million, or 15.5 million shares, of its common stock at an average per-share price of $33.76. In the fourth quarter the company paid $45 million in dividends, or $0.47 per share, and repurchased $20 million, or 0.5 million shares.

As a result of continued strength in season pass and membership sales, deferred revenue as of December 31, 2013 increased to $60 million, representing an $8 million or 15 percent increase over December 31, 2012.

Net Debt5 as of December 31, 2013 was $1,231 million, which translates to a 3.0 times net leverage ratio.

Conference Call At 8:00 a.m. Central Time today, the company will host a conference call to discuss its fourth quarter and full year 2013 financial performance. The call is accessible either through the Six Flags Investor Relations website at www.sixflags.com/investors 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. A replay of the call will be available by dialing 1-855-859-2056 or +1-404-537-3406 through February 26, 2014.

About Six Flags Entertainment Corporation Six Flags Entertainment Corporation is the world's largest regional theme park company with $1.1 billion in revenue and 18 parks across the United States, Mexico and Canada. For 53 years, Six Flags has entertained millions of families with world-class coasters, themed rides, thrilling water parks and unique attractions including up-close animal encounters, Fright Fest® and Holiday in the Park®. For more information, visit www.sixflags.com.

Forward Looking Statements The information contained in this 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, (i) the adequacy of cash flows from operations, available cash and available amounts under our credit facilities to meet our future liquidity needs, (ii) our ability to roll out our capital enhancements in a timely and cost effective manner, (iii) our ability to improve operating results by implementing strategic cost reductions, and organizational and personnel changes without adversely affecting our business, (iv) our operations and results of operations, and (v) the risk factors or uncertainties listed from time to time in the company's filings with the Securities and Exchange Commission ("SEC"). In addition, important factors, including factors impacting attendance, local conditions, contagious diseases, events, disturbances and terrorist activities, recall of food, toys and other retail products which we sell, risk of accidents occurring at the company's parks or other parks in the industry and adverse publicity concerning our parks, inability to achieve desired improvements and financial performance targets set forth in our aspirational goals, adverse weather conditions such as excess heat or cold, rain and storms, general financial and credit market conditions, 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 and other entertainment alternatives, dependence on a seasonal workforce, unionization activities and labor disputes, laws and regulations affecting labor and employee benefit costs, including potential increases in state and federally mandated minimum wages, and healthcare reform, pending, threatened or future legal proceedings and the significant expenses associated with litigation, cyber security risks and other factors could cause actual results to differ materially from the company's expectations. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give 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 the company's Annual and Quarterly Reports on Forms 10-K and 10-Q, and its other filings and submissions with the SEC, each of which are available free of charge on the company's investor relations website at  www.sixflags.com/investors and on the SEC's website at www.sec.gov.

Footnotes

(1)

See the following financial statements and Note 3 to those financial statements for a discussion of Adjusted EBITDA and its reconciliation to net income (loss).

(2)

The company's noncontrolling interest in dick clark productions, which was divested on September 28, 2012, generated $5.4 million, $1.9 million, $3.3 million and $0.3 million of Adjusted EBITDA for the company in Q4 2011, Q1 2012, Q2 2012 and Q3 2012, respectively.

(3)

Cash EPS (or Cash Earnings Per Share), which is defined as Free Cash Flow, as described in Note 6 to the following financial statements, divided by the weighted average basic shares outstanding, is not a U.S. GAAP defined measure. The company believes this measure provides meaningful profitability metrics, given current accumulated tax loss carryforwards and the net depreciation/amortization impacts relating to the revaluation of assets in connection with the company's emergence from Chapter 11 in April 2010.

(4)

See Note 3 to the following financial statements for a discussion of Modified EBITDA and its reconciliation to net income (loss).

(5)

Net Debt represents total long-term debt, including current portion, less cash and cash equivalents.

 

Six Flags Entertainment Corporation

(In Thousands, Except Per Share Amounts)

Statements of Operations Data (1)

Three Months Ended

December 31,

2013

2012

Theme park admissions

$ 78,911

$ 73,018

Theme park food, merchandise and other

62,200

58,222

Sponsorship, licensing and other fees

10,115

9,901

Accommodations revenue

2,962

2,778

Total revenue

154,188

143,919

Operating expenses (excluding depreciation and

 amortization shown separately below)

76,556

72,227

Selling, general and administrative expense (excluding

 depreciation, amortization and stock-based

 compensation shown separately below)

31,093

31,842

Costs of products sold

11,122

10,025

Depreciation

27,271

31,720

Amortization

3,597

3,603

Stock-based compensation

5,538

17,991

Loss on disposal of assets

1,620

458

Gain on sale of investee

-

(278)

Interest expense, net

18,565

12,390

Loss on debt extinguishment

789

587

Other expense, net

37

317

Loss from continuing operations before

 reorganization items, income taxes and 

 discontinued operations

(22,000)

(36,963)

Reorganization items, net

-

460

Loss from continuing operations

 before income taxes and discontinued operations

(22,000)

(37,423)

Income tax benefit

(34,760)

(192,606)

Income from continuing operations before

 discontinued operations

12,760

155,183

Income from discontinued operations

549

116

Net income

$ 13,309

$ 155,299

Less: Net income attributable to

  noncontrolling interests

6

455

Net income attributable to

  Six Flags Entertainment Corporation

$ 13,315

$ 155,754

Per share - basic:

     Income from continuing operations

       attributable to Six Flags Entertainment

       Corporation common stockholders

$    0.13

$     1.46

     Income from discontinued operations

       attributable to Six Flags Entertainment

       Corporation common stockholders

$    0.01

$           -

Net income attributable to Six Flags Entertainment

   Corporation common stockholders

$    0.14

$     1.46

Per share - diluted:

     Income from continuing operations

       attributable to Six Flags Entertainment

       Corporation common stockholders

$    0.12

$     1.40

     Income from discontinued operations

       attributable to Six Flags Entertainment

       Corporation common stockholders

$    0.01

$           -

Net income attributable to Six Flags Entertainment

   Corporation common stockholders

$    0.13

$     1.40

Weighted average shares outstanding - basic

95,070

106,998

Weighted average shares outstanding - diluted

98,661

110,928

 

Six Flags Entertainment Corporation

(In Thousands, Except Per Share Amounts)

Statements of Operations Data (1)

Year Ended

December 31,

2013

2012

Theme park admissions

$ 602,204

$ 576,708

Theme park food, merchandise and other

448,547

437,382

Sponsorship, licensing and other fees

42,179

39,977

Accommodations revenue

17,000

16,265

Total revenue

1,109,930

1,070,332

Operating expenses (excluding depreciation and

 amortization shown separately below)

417,482

411,679

Selling, general and administrative expense (excluding

 depreciation, amortization and stock-based

 compensation shown separately below)

162,184

163,000

Costs of products sold

86,663

80,169

Depreciation

113,682

132,397

Amortization

14,393

15,648

Stock-based compensation

27,034

62,875

Loss on disposal of assets

8,579

8,105

Gain on sale of investee

-

(67,319)

Interest expense, net

74,145

46,624

Equity in loss of investee

-

2,222

Loss on debt extinguishment

789

587

Other expense, net

1,234

612

Restructure recovery

-

(47)

Income from continuing operations before

 reorganization items, income taxes and 

 discontinued operations

203,745

213,780

Reorganization items, net

(180)

2,168

Income from continuing operations

 before income taxes and discontinued operations

203,925

211,612

Income tax expense (benefit)

47,601

(184,154)

Income from continuing operations before

 discontinued operations

156,324

395,766

Income from discontinued operations

549

7,273

Net income

$156,873

$403,039

Less: Net income attributable to

  noncontrolling interests

(38,321)

(37,104)

Net income attributable to

  Six Flags Entertainment Corporation

$ 118,552

$ 365,935

Per share - basic:

     Income from continuing operations

       attributable to Six Flags Entertainment

       Corporation common stockholders

$     1.21

$     3.33

     Income from discontinued operations

       attributable to Six Flags Entertainment

       Corporation common stockholders

$     0.01

$     0.07

Net income attributable to Six Flags Entertainment

   Corporation common stockholders

$     1.22

$     3.40

Per share - diluted:

     Income from continuing operations

       attributable to Six Flags Entertainment

       Corporation common stockholders

$     1.17

$     3.23

     Income from discontinued operations

       attributable to Six Flags Entertainment

       Corporation common stockholders

$     0.01

$     0.07

Net income attributable to Six Flags Entertainment

   Corporation common stockholders

$     1.18

$     3.30

Weighted average shares outstanding - basic

96,940

107,684

Weighted average shares outstanding - diluted

100,371

110,936

 

The following table sets forth a reconciliation of net income to Adjusted EBITDA and Free Cash Flow for the 

periods shown (in thousands):

Three Months Ended

December 31,

2013

2012

Net income

$ 13,309

$ 155,299

Income from discontinued operations

(549)

(116)

Income tax benefit

(34,760)

(192,606)

Reorganization items, net

-

460

Other expense, net

37

317

Loss on debt extinguishment

789

587

Interest expense, net

18,565

12,390

Loss on disposal of assets

1,620

458

Gain on sale of investee

-

(278)

Amortization

3,597

3,603

Depreciation

27,271

31,720

Stock-based compensation

5,538

17,991

Impact of Fresh Start valuation adjustments (2)

152

255

Modified EBITDA (3)

35,569

30,080

Third party interest in EBITDA

  of certain operations (4)

(3)

(122)

Adjusted EBITDA (3)

$ 35,566

$ 29,958

Cash paid for interest, net

(6,619)

(11,449)

Capital expenditures

(12,671)

(19,374)

Cash taxes (5)

(2,321)

(1,243)

Free Cash Flow (6)

$ 13,955

$  (2,108)

Weighted average shares outstanding - basic

95,070

106,998

Cash Earnings (Loss) Per Share

$    0.15

$   (0.02)

The following table sets forth a reconciliation of net income to Adjusted EBITDA and Free Cash Flow for the 

periods shown (in thousands):

Year Ended

December 31,

2013

2012

Net income

$ 156,873

$ 403,039

Income from discontinued operations

(549)

(7,273)

Income tax expense (benefit)

47,601

(184,154)

Restructure recovery

-

(47)

Reorganization items, net

(180)

2,168

Other expense, net

1,234

612

Loss on debt extinguishment

789

587

Equity in loss of investee

-

2,222

Interest expense, net

74,145

46,624

Loss on disposal of assets

8,579

8,105

Gain on sale of investee

-

(67,319)

Amortization

14,393

15,648

Depreciation

113,682

132,397

Stock-based compensation

27,034

62,875

Impact of Fresh Start valuation adjustments (2)

594

993

Modified EBITDA (3)

444,195

416,477

Third party interest in EBITDA

  of certain operations (4)

(40,083)

(33,848)

Adjusted EBITDA (3)

$ 404,112

$ 382,629

Cash paid for interest, net

(51,349)

(41,713)

Capital expenditures (net of property insurance recoveries in 2012)

(101,853)

(98,495)

Cash taxes (5)

(13,768)

(9,435)

Free Cash Flow (6)

$ 237,142

$ 232,986

Weighted average shares outstanding - basic

96,940

107,684

Cash Earnings Per Share

$     2.45

$     2.16

 

Balance Sheet Data (1)

(In Thousands)

Balance Sheet Data

December 31, 2013

December 31, 2012

Cash and cash equivalents

  (excluding restricted cash)

$ 169,310

$ 629,208

Total assets

2,607,814

3,056,391

Deferred income

60,443

52,703

Current portion of long-term debt

6,269

6,240

Long-term debt (excluding current

  portion)

1,394,334

1,398,966

Redeemable noncontrolling interests 

437,569

437,941

Total equity

373,337

888,666

Shares outstanding

94,857

107,638

(1)

Revenues and expenses of international operations are converted into U.S. dollars on an average basis as provided by GAAP.  Amounts have been recast to reflect the June 2013 stock split and reflect corrected valuation allowance amounts.

(2)

Amounts recorded as valuation adjustments and included in reorganization items for the month of April 2010 that would have been included in Modified EBITDA and Adjusted EBITDA, had fresh start accounting not been applied.  Balance consists primarily of discounted insurance reserves that will be accreted through the statement of operations each quarter through 2018.

(3)

"Modified EBITDA", a non-GAAP measure, is defined as the Company's consolidated income (loss) from continuing operations: excluding 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. The Company believes that Modified EBITDA is useful to investors, equity analysts and rating agencies as a measure of the Company's performance.  The Company believes that Modified EBITDA is a measure that can be readily compared to other companies, and the Company uses Modified EBITDA in its internal evaluation of operating effectiveness and decisions regarding the allocation of resources.  Modified EBITDA is not defined by GAAP and should not 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.  Modified EBITDA as defined herein may differ from similarly titled measures presented by other companies.

"Adjusted EBITDA", a non-GAAP measure, is defined as Modified EBITDA minus the interests of third parties in the Adjusted EBITDA of properties that are less than wholly owned (consisting of Six Flags Over Georgia, Six Flags White Water Atlanta, Six Flags Over Texas, and Six Flags Great Escape Lodge & Indoor Waterpark (the "Lodge") of which the Company purchased the noncontrolling interests from its partners in the Lodge in 2013) plus the Company's interest in the Adjusted EBITDA of dick clark productions, inc., which was sold in September 2012.  The Company believes that Adjusted EBITDA provides useful information to investors regarding the Company's operating performance and its capacity to incur and service debt and fund capital expenditures.  Adjusted EBITDA is approximately equal to "Parent Consolidated Adjusted EBITDA" as defined in the Company's secured credit agreement, except that Parent Consolidated Adjusted EBITDA excludes Adjusted EBITDA from equity investees that is not distributed to the Company in cash on a net basis and has limitations on the amounts of certain expenses that are excluded from the calculation.  Adjusted EBITDA is not defined by GAAP and should not 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.  Adjusted EBITDA as defined herein may differ from similarly titled measures presented by other companies.

(4)

Represents interests of third parties in the Adjusted EBITDA of Six Flags Over Georgia, Six Flags Over Texas, Six Flags White Water Atlanta and the Lodge, plus the Company's interest in the Adjusted EBITDA of dick clark productions, inc., which are less than wholly owned.  The Company purchased the noncontrolling interests from its partners in the Lodge in 2013 and sold its interest in dick clark productions, inc. in September 2012.

(5)

Based on our current federal net operating loss carryforwards, we believe we will continue to pay minimal amounts for cash taxes for the next three to four years.  Cash taxes paid represents statutory taxes paid, primarily in Mexico.

(6)

Free Cash Flow, a non-GAAP measure, is defined as Adjusted EBITDA less (i) cash paid for interest expense net of interest income receipts, (ii) capital expenditures net of property insurance recoveries, and (iii) cash taxes.  The Company has excluded from the definition of Free Cash Flow deferred financing costs related to the Company's debt due to the unusual nature of these items.  The Company believes that Free Cash Flow is useful to investors, equity analysts and rating agencies as a performance measure.  The Company uses Free Cash Flow in its internal evaluation of operating effectiveness and decisions regarding the allocation of resources.Free Cash Flow is not defined by GAAP and should not 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.  Free Cash Flow as defined herein may differ from similarly titled measures presented by other companies.

SOURCE Six Flags Entertainment Corporation



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