Six Flags Announces First Quarter 2019 Earnings

April 23, 2019
Revenue from Membership Program Accelerates Resulting in All-Time High Guest Spending Per Capita


GRAND PRAIRIE, Texas--(BUSINESS WIRE)-- Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and the largest operator of waterparks in North America, today announced that revenue for the first quarter of 2019 was $128 million and attendance was 2.2 million guests. Revenue declined $1 million or 1 percent from the first quarter of 2018, driven by a 189,000 or 8 percent decrease in the number of guests visiting Six Flags parks that was almost entirely offset by a 5 percent increase in total guest spending per capita and an increase in revenue from international agreements. When compared to prior year, attendance growth in the quarter was adversely impacted due to the Easter holiday falling on April 21st in 2019 versus April 1st in 2018, which shifted a portion of the company’s operating calendar and approximately 200,000 guest visits from the first quarter to the second quarter in 2019.
Total guest spending per capita for the first quarter of 2019 was at an all-time high of $48.48, an increase of $2.40 or 5 percent compared to the first quarter of 2018. This improvement was primarily due to the company’s continued success in upselling guests from single day tickets and season passes to higher-priced memberships. Admissions revenue per capita increased $2.34 or 8 percent to $30.49 and in-park spending per capita increased $0.06 to $17.99.
“I am pleased with our first quarter performance as strong membership penetration continues to be a key driver of our long-term growth strategy, providing both a platform of increasing recurring revenue at higher prices and the ability to further grow attendance, especially as we expand our portfolio of parks,” said Jim Reid-Anderson, Chairman, President and CEO. “With our record-high Active Pass Base, ongoing price increases, growing dining pass penetration, and both domestic and international expansion opportunities, we are very well-positioned to deliver our tenth consecutive year of record financial performance in 2019.”
Since most of the parks were not scheduled to be open during the first quarter, the company had a net loss1 of $69 million, an increased loss of $7 million compared to the prior year period. The net loss per share for the first quarter of 2019 was $0.82 compared to a loss per share of $0.74 in the first quarter of 2018. Adjusted EBITDA2for the first quarter was a loss of $32 million, an increased loss of $13 million compared to the prior year period primarily due to the timing of Easter and incremental lease and other costs from the company’s five new U.S.parks acquired on June 1, 2018—costs that the company did not incur in the first quarter of 2018.
As anticipated, deferred revenue of $178 million as of March 31, 2019, decreased by $4 million or 2 percent from March 31, 2018, primarily due to both a higher mix of longer-tenured members versus last year and lower pass sales in the quarter as several parks opened later this year due to the timing of the Easter holiday. Going forward, the company expects deferred revenue growth will be muted and may decline as a growing pool of members retain their memberships beyond their initial twelve-month commitment period, at which time revenue is recognized monthly as cash is received and no longer contributes to deferred revenue.
The Active Pass Base, which includes all members and season pass holders, increased 5 percent year-over-year to a new all-time high for the first quarter despite the Easter shift of membership and season pass sales into the second quarter. The mix of memberships in the Active Pass Base increased significantly because of the company’s highly successful rollout of a new membership program with premium tiers. Members are the company’s most loyal and valuable guests, having higher retention rates and generating more recurring revenue and cash flow for the company than a single day guest or season pass holder. In addition, season passes and memberships provide an excellent hedge against inclement weather throughout the season.
In the first quarter of 2019, the company invested $47 million in new capital projects. The company also paid $69 million in dividends, or $0.82 per common share. Net Debt as of March 31, 2019, calculated as total reported debt of $2.2 billion less cash and cash equivalents of $20 million, represented a net leverage ratio of 4.1 times Adjusted EBITDA.
As previously announced, on April 17, 2019, the company completed the refinancing of its bank credit facilities, including increasing the amount of its Term Loan B from $584 million to $800 million and increasing its revolving credit facility from $250 million to $350 million. The company intends to use the net proceeds for general corporate purposes, including paying down the balance of the prior revolving credit facility and for share repurchases. The authorized share repurchase amount available as of March 31, 2019, was $232 million.
Conference Call
At 8:00 a.m. Central Time tomorrow, April 24, 2019, the company will host a conference call to discuss its first quarter 2019 financial performance. The call is accessible through either the Six Flags Investor Relations website at investors.sixflags.com 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 through May 1, 2019, by dialing 1-855-859-2056 or +1-404-537-3406 and requesting conference ID 8177678.