October 22, 2019
Active Pass Base up Two Percent at End of September
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 revenue was $621 million for the third quarter of 2019, a $1 million increase over the same period in 2018. The increase in revenue was attributable to attendance growth of 3 percent, or 440,000, to 14.0 million guests in the third quarter of 2019, which was partially offset by a 1 percent decrease in guest spending per capita and an expected 26 percent decrease in sponsorship, international agreements and accommodations revenue.
Net income1 for the third quarter of 2019 decreased $5 million, or 2 percent, compared to the prior year period, and diluted earnings per share decreased 2 percent to $2.11. These decreases were primarily driven by a change in a state tax law that provided a benefit in the prior year period. Adjusted EBITDA2 increased $547,000 to a record $307 million compared to the prior year period. Cash operating and selling, general and administrative costs decreased 1 percent in the third quarter of 2019 compared to the prior year period.
“We were pleased to achieve record attendance and revenue for the first nine months of 2019, with solid growth across both our legacy and newly acquired parks,” said Jim Reid-Anderson, Chairman, President and CEO. “As a team, we are laser focused on achieving our tenth consecutive record year by driving our strategic growth areas, including growing penetration of our membership programs to benefit from the enhanced loyalty and lifetime value of members.”
Total guest spending per capita for the third quarter of 2019 was $42.44, a reduction of $0.58 compared to the third quarter of 2018. Admissions per capita decreased 3 percent to $25.17 and in-park spending per capita increased $0.11 to $17.27 compared to the same period in 2018. Several factors contributed to the reduction in admissions per capita. First, there was a higher proportion of attendance from the company’s Active Pass Base, representing the total number of guests who are enrolled in the company’s membership program or who have a season pass, which puts downward pressure on admissions per capita spending. Second, the company engaged in strategically targeted promotions to drive membership penetration. Third, there were attendance gains at the company’s new parks, which have significantly lower admissions per capita than the existing parks. Finally, a portion of new membership revenue is deferred into the following year due to the 12-month commitment period spanning the calendar year-end. These impacts were partially offset by ticket price increases and sales of higher-priced membership tiers.
For the first nine months of 2019, revenue was $1.2 billion, a 3 percent increase compared to the prior year period. This increase was primarily driven by a 4 percent increase in attendance, partially offset by a 1 percent decrease in guest spending per capita and a 3 percent decrease in sponsorship, international agreements and accommodations revenue. Net income decreased $6 million, or 3 percent, and diluted earnings per share decreased 3 percent to $2.24. These decreases were primarily driven by the same change in a state tax law discussed above that provided a benefit in the prior year period. Adjusted EBITDA was $455 million for the first nine months of 2019, a decrease of less than 1 percent compared to the prior year period due to incremental costs to lease, rebrand, and fund the additional off-season carry costs for the five parks acquired in June of last year. These costs were almost entirely offset by the attendance increase mentioned above, and to a lesser extent, the company’s new park in Rockford, Illinois, which the company began operating on April 1, 2019.
Attendance at the company’s parks for the first nine months of 2019 grew to 26.7 million guests, an increase of 989,000 guests compared to the first nine months of 2018. The increase in attendance was primarily driven by the higher Active Pass Base, growth in the parks the company began operating on June 1, 2018, and the new park in Rockford, Illinois. Guest spending per capita decreased less than 1 percent to $42.86 for the first nine months of 2019, compared to the prior year period, with admissions per capita decreasing 2 percent to $25.15 and in-park spending per capita increasing 1 percent to $17.71.
The Active Pass Base increased 2 percent year-over-year as a result of the company’s continued success in upselling guests from single day tickets to memberships and season passes. The mix of memberships in the Active Pass Base increased significantly as a result of the company’s efforts to increase penetration. Members are the company’s most loyal and valuable guests, with higher revenue, retention rates and lifetime value compared to traditional season passes. Deferred revenue of $198 million, a record high for the third quarter, increased by $5 million, or 2 percent, compared to September 30, 2018.
In the first nine months of 2019, the company invested $122 million in new capital projects, net of insurance recoveries, and paid $209 million in dividends, or $0.82 per common share per quarter. The authorized amount available for share repurchases as of September 30, 2019, was $232 million. Net Debt as of September 30, 2019, calculated as total reported debt of $2,277 million less cash and cash equivalents of $212 million, was $2,065 million, representing a 3.7 times Adjusted EBITDA net leverage ratio.
At 8:00 a.m. Central Time tomorrow, October 23, 2019, the company will host a conference call to discuss its third 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 October 30, 2019 by dialing 1-855-859-2056 or +1-404-537-3406 and requesting conference ID 7837469.
About Six Flags Entertainment Corporation
Six Flags Entertainment Corporation is the world’s largest regional theme park company and the largest operator of waterparks in North America, with $1.5 billion in revenue and 26 parks across the United States, Mexico and Canada. For 58 years, Six Flags has entertained millions of families with world-class coasters, themed rides, thrilling waterparks and unique attractions. For more information, visit www.sixflags.com.
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 plans and ability to roll out our capital enhancements and planned initiatives 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 dividend policy and ability to pay dividends on our common stock, (v) the effect of and cost and timing of compliance with newly enacted laws, regulations and accounting policies, (vi) our ability to realize future growth and execute and deliver on our strategic initiatives, (vii) our expectations regarding uncertain tax positions, (viii) our expectations regarding our deferred revenue growth, (ix) our operations and results of operations, and (x) 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, such as local conditions, natural disasters, contagious diseases, events, disturbances and terrorist activities; recall of food, toys and other retail products sold at our parks; accidents occurring at our parks or other parks in the industry and adverse publicity concerning our parks or other parks in the industry; inability to achieve desired improvements and our aspirational financial performance 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 and ride downtime; competition with other theme parks, waterparks and entertainment alternatives; dependence on a seasonal workforce; unionization activities and labor disputes; laws and regulations affecting labor and employee benefit costs, including increases in state and federally mandated minimum wages, and healthcare reform; pending, threatened or future legal proceedings and the significant expenses associated with litigation; cybersecurity 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 investors.sixflags.com and on the SEC’s website at www.sec.gov.
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