Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Six Flags Reports Third Quarter 2023 Performance By: Six Flags Entertainment Corporation via Business Wire November 02, 2023 at 06:01 AM EDT Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and the largest operator of water parks in North America, today reported third quarter Revenue of $547 million, Net Income of $111 million, and Adjusted EBITDA of $220 million. “We have put forth substantial effort this year to establish a baseline for sustainable and meaningful growth, and our third quarter was focused on investment in the guest experience,” said Selim Bassoul, President and CEO. "I am proud of our team for the great strides made in advancing our digital transformation and the expansion and acceleration of our events calendar. We are also pleased with the progress we are seeing in sales for next year's season passes, which are well ahead of this time last year and a sign of the excitement our guests are feeling about our parks. In a year challenged by unusually difficult weather, we have been able to grow our attendance and increase revenues while simultaneously investing in our park infrastructure, attractions, and technology, as well as pay down debt." Third Quarter 2023 Results Three Months Ended (Amounts in millions, except per share data) October 1, 2023 October 2, 2022 % Change vs. 2022 Total revenue $ 547 $ 505 8 % Net income attributable to Six Flags Entertainment (5) $ 111 $ 114 (3 )% Net income per share, diluted (5) $ 1.32 $ 1.37 (3 )% Adjusted EBITDA (1) , (3) $ 220 $ 225 (2 )% Attendance 9.3 8.0 16 % Spending per capita figures: (2) Total guest spending per capita $ 56.37 $ 60.96 (8 )% Admissions spending per capita $ 30.86 $ 34.93 (12 )% In-park spending per capita $ 25.51 $ 26.03 (2 )% Total revenue for third quarter 2023 increased $43 million, or 8%, compared to third quarter 2022, driven by higher attendance and higher sponsorship revenue, partially offset by lower total guest spending per capita. The increase in attendance was driven primarily by higher season pass sales in third quarter 2023 versus prior year, combined with increased advertising and media spend through the third quarter, as well as an accelerated start to the Fall events schedule. The $4.59 decrease in total guest spending per capita compared to third quarter 2022 consisted of a $4.07 decrease in admissions spending per capita and a $0.52 decrease in in-park spending per capita. The decrease in admissions spending per capita was driven primarily by the planned effort to optimize season pass and single-day ticket pricing, which resulted in lower average admissions pricing in third quarter 2023 versus third quarter 2022. The decrease in in-park spending per capita was driven primarily by lower spend on parking, retail, and flash passes, resulting from a higher mix of attendance from season passes in third quarter 2023 versus the prior year. Due to certain benefits available to season pass holders, guests visiting on a season pass spend less per visit on certain in-park products than guests visiting on a single-day ticket. The season pass mix-driven decline in in-park spending per capita was partially offset by higher food and beverage sales in third quarter 2023 versus the prior year. The company had net income of $111 million in third quarter 2023, compared to net income of $114 million in third quarter 2022. The net income per share was $1.32 compared to net income per share of $1.37 in third quarter 2022 (5). Expenses increased in third quarter 2023 versus prior year due to several factors, including an increase in cost of sales and cash operating costs (4) driven by higher attendance in third quarter 2023, increased advertising spend to promote season passes, higher costs associated with an earlier start to the Fall events schedule, and investments in new entertainment, events, shows, and guest-facing digital initiatives. Adjusted EBITDA in third quarter 2023 was 220 million, a $5 million decrease from the prior year (3). First Nine Months 2023 Results Nine Months Ended (Amounts in millions, except per share data) October 1, 2023 October 2, 2022 % Change vs. 2022 Total revenue $ 1,133 $ 1,078 5 % Net income attributable to Six Flags Entertainment (5) $ 61 $ 91 (33 )% Net income per share, diluted (5) $ 0.73 $ 1.07 (32 )% Adjusted EBITDA (1) , (3) $ 363 $ 362 — % Attendance 17.9 16.4 9 % Spending per capita figures (2) Total guest spending per capita $ 60.28 $ 63.63 (5 )% Admissions spending per capita $ 33.52 $ 36.36 (8 )% In-park spending per capita $ 26.76 $ 27.27 (2 )% Total revenue for first nine months 2023 increased $55 million, or 5%, compared to first nine months 2022, driven by higher attendance and higher sponsorship, partially offset by lower total guest spending per capita. The increase in attendance was driven primarily by a higher season pass sales in first nine months 2023 versus prior year, combined with increased advertising and media spend throughout the first nine months, as well as an accelerated start to the Fall events schedule. The $3.35 decrease in total guest spending per capita compared to first nine months 2022 consisted of a $2.84 decrease in admissions spending per capita and a $0.51 decrease in in-park spending per capita. The decrease in admissions spending per capita was driven primarily by the planned effort to optimize season pass and single-day ticket pricing, which resulted in lower average admissions pricing in third quarter 2023 versus third quarter 2022. The decrease in in-park spending per capita was driven primarily by lower spend on parking, retail, and flash passes, resulting from a higher mix of attendance from season passes in first nine months 2023 versus the prior year. Due to certain benefits available to season pass holders, guests visiting on a season pass spend less per visit on certain in-park products than guests visiting on a single-day ticket. The season pass mix-driven decline in in-park spending per capita was partially offset by higher food and beverage sales in first nine months 2023 versus the prior year. The company had net income of $61 million in first nine months 2023, compared to net income of $91 million in first nine months 2022. The net income per share was $0.73 compared to net income per share of $1.07 in first nine months 2022 (5). In second quarter 2023, the company incurred an increase in self-insurance reserves of $38 million. Our self-insurance reserves are periodically reviewed for changes in facts and circumstances and adjustments are made as necessary. During second quarter 2023, we revised the estimate of our ultimate loss indications for both identified claims and incurred but not reported (“IBNR”) claims in connection with our general liability and worker’s compensation self-insurance reserves. The increase in our revised estimate was based on greater than previously estimated reserve adjustments on certain identified claims as well as an observed pattern of increasing litigation and settlement costs and changes to key actuarial assumptions utilized in determining estimated ultimate losses, including loss development factors. Additionally, expenses increased in first nine months 2023 versus prior year due to several factors, including an increase in cost of sales and cash operating costs (4) driven by higher attendance in first nine months 2023, increased advertising spend to promote season passes, higher costs associated with an earlier start to the Fall events schedule, and investments in new entertainments, shows, events, and guest-facing digital initiatives. Adjusted EBITDA in first nine months 2023, which excludes the $38 million self-insurance reserves estimate adjustment, was $363 million, a $1 million increase from the prior year (3). As of October 1, 2023, the company had total reported debt of $2,273 million, and cash or cash equivalents of $67 million. In third quarter 2023, the company repaid $80 million in aggregate net principal amount of debt. Deferred revenue was $148 million as of October 1, 2023, an increase of $21 million, or 17%, from October 2, 2022. The increase was primarily due to higher season pass sales year-to-date through October 1, 2023 versus October 2, 2022. In first nine months 2023, the company invested $109 million in new capital, net of insurance recoveries. The company will no longer host a conference call to discuss its third quarter 2023 financial performance on November 9, 2023 as previously announced.. About Six Flags Entertainment Corporation Six Flags Entertainment Corporation is the world’s largest regional theme park company with 27 parks across the United States, Mexico and Canada. For 63 years, Six Flags has entertained hundreds of millions of guests with world-class coasters, themed rides, thrilling water parks and unique attractions. Six Flags is committed to creating an inclusive environment that fully embraces the diversity of our team members and guests. For more information, visit www.sixflags.com. ___________________________________ Forward Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding (i) the effect, impact, potential duration or other implications of the COVID-19 pandemic or virus variants, and any expectations we may have with respect thereto including the continuing efficacy of the COVID-19 vaccines, (ii) the adequacy of our cash flows from operations, available cash and available amounts under our credit facilities to meet our liquidity needs, including in the event of a prolonged closure of one or more of our parks, (iii) our ability to execute our strategy to significantly improve our financial performance and the guest experience, (iv) expectations regarding consumer demand for regional, outdoor, out-of-home entertainment, including for our parks, and (v) expectations regarding our annual income tax liability and the availability and effect of net operating loss carryforwards and other tax benefits. Forward-looking statements include all statements that are not historical facts and often use words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "may," "should," "could" and variations of such words or similar expressions. 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, factors impacting attendance, such as local conditions, natural disasters, contagious diseases, including COVID-19 and Monkeypox, or the perceived threat of contagious diseases, events, disturbances and terrorist activities; regulations and guidance of federal, state and local governments and health officials regarding the response to COVID-19 or other health emergencies such as Monkeypox, including with respect to business operations, safety protocols and public gatherings; economic impact of political instability and conflicts globally, including the war in Ukraine; recall of food, toys and other retail products sold at our parks; accidents or incidents involving the safety of guests and employees, or contagious disease outbreaks occurring at our parks or other parks in the industry and adverse publicity concerning our parks or other parks in the industry; availability of commercially reasonable insurance policies at reasonable rates; inability to achieve desired improvements and our financial performance targets; adverse weather conditions such as excess heat or cold, rain and storms; general financial and credit market conditions, including our ability to access credit or raise capital; the increased cost of capital due to raising interest rates; macro-economic conditions (including supply chain issues and the impact of inflation on customer spending patterns); changes in public and consumer tastes; construction delays in capital improvements or ride downtime; competition with other theme parks, water parks 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; environmental laws and regulations; laws and regulations affecting corporate taxation; 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, including the risk factors or uncertainties listed from time to time in the company’s filings with the Securities and Exchange Commission (the “SEC”). Although we believe that the expectations reflected in such forward-looking statements are reasonable, we make 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 our Annual and Quarterly Reports on Forms 10-K and 10-Q, and our 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. Footnotes (1) See the following financial statements and Note 4 to those financial statements for a discussion of Adjusted EBITDA (a non-GAAP financial measure) and its reconciliation to net income (loss). (2) We use certain per capita operational metrics that measure the performance of our business on a per guest basis and believe that these metrics provide relevant and useful information for investors because they assist in comparing our operating performance on a consistent basis, make it easier to compare our results with those of other companies and our industry and allows investors to review performance in the same manner as our management. Total guest spending per capita is the total revenue generated from our guests, on a per guest basis, through admissions and in-park spending. Total guest spending per capita is calculated by dividing the sum of park admissions revenue and park food merchandise and other revenue by total attendance. Admissions revenue per capita is the total revenue generated from our guests, on a per guest basis, to enter our parks. Admissions revenue per capita is calculated by dividing park admission revenue by total attendance. In-park spending per capita is the total revenue generated from our guests, on a per guest basis, on items sold within our parks, such as food, games and merchandise. In-park spending per capita is calculated by dividing park food, merchandise and other revenue by total attendance. (3) During 2023, we reclassified the net pension-related expense (benefit) to “Other (income) expense, net”, in our consolidated statements of operations. This reclassification has been reflected in all periods presented. As a result, Adjusted EBITDA for the three-month period and the nine-month period ended October 2, 2022, declined by $1.2 million and $4.0 million, respectively, as compared to the previously reported figures. (4) “Cash operating costs” includes operating expenses (excluding depreciation and amortization) and selling, general and administrative expenses (excluding stock-based compensation). (5) Reflects revisions made to previously issued financial statements for immaterial errors in the unaudited interim financial statements for the periods ended April 3, 2022, July 3, 2022 and October 2, 2022 related to the recognition of stock-compensation. As a result of these revisions, selling, general and administrative expense for the three-month and nine-month periods ending October 2, 2022, increased $2.3 million and $4.3 million, respectively, as compared to the previously reported figures. Statement of Operations Data Three Months Ended Nine Months Ended Twelve Months Ended October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 (Amounts in thousands, except per share data) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Park admissions $ 286,319 $ 280,502 $ 601,585 $ 595,266 $ 741,734 $ 756,199 Park food, merchandise and other 236,703 209,099 480,281 446,449 604,797 591,280 Sponsorship, international agreements and accommodations 24,433 15,230 51,486 36,645 66,697 47,691 Total revenues 547,455 504,831 1,133,352 1,078,360 1,413,228 1,395,170 Operating expenses (excluding depreciation and amortization shown separately below) 206,461 180,937 489,000 464,013 615,647 606,508 Selling, general and administrative expenses (excluding depreciation and amortization shown separately below) (1) (2) 57,952 40,481 192,647 135,194 226,943 196,691 Costs of products sold 42,885 40,164 87,437 85,989 109,594 111,208 Depreciation and amortization 27,942 30,186 85,966 86,772 116,318 116,268 Impairment of park assets — — — — 16,943 — Loss on disposal of assets 1,760 5,038 6,745 3,036 7,636 13,310 Operating income 210,455 208,025 271,557 303,356 320,147 351,185 Interest expense, net 38,263 34,197 118,060 107,705 151,945 145,448 Loss on debt extinguishment — — 13,982 17,533 13,982 17,533 Other (income) expense, net 1,155 (659 ) (1,938 ) (2,069 ) 47 5,072 Income before income taxes 171,037 174,487 141,453 180,187 154,173 183,132 Income tax expense 36,570 38,654 32,525 44,257 35,228 49,949 Net income $ 134,467 $ 135,833 $ 108,928 $ 135,930 $ 118,945 $ 133,183 Less: Net income attributable to noncontrolling interests (23,767 ) (22,326 ) (47,533 ) (44,651 ) (47,533 ) (44,651 ) Net income attributable to Six Flags Entertainment Corporation $ 110,700 $ 113,507 $ 61,395 $ 91,279 $ 71,412 $ 88,532 Weighted-average common shares outstanding: Basic: 83,510 83,094 83,365 84,760 83,313 85,084 Diluted: 83,780 83,107 83,736 84,919 83,585 86,264 Earnings per average common share outstanding: Basic: $ 1.33 $ 1.37 $ 0.74 $ 1.08 $ 0.86 $ 1.04 Diluted: $ 1.32 $ 1.37 $ 0.73 $ 1.07 $ 0.85 $ 1.03 ____________________________________________________________________________ (1) Includes stock-based compensation of $3,525 and $3,998 for the three-month periods ended October 1, 2023, and October 2, 2022, respectively, stock-based compensation of $9,018 and $13,404 for the nine-month periods ended October 1, 2023 and October 2, 2022, respectively, and stock-based compensation of $10,832 and $18,229 for the twelve-month periods ended October 1, 2023, and October 2, 2022. (2) Reflects revisions to be made to previously issued financial statements for immaterial errors in the unaudited interim financial statements for the periods ended April 3, 2022, July 3, 2022 and October 2, 2022 related to the recognition of stock-based compensation in the Company's quarterly report on Form 10-Q for the three months ended October 1, 2023. As a result of these revisions, selling, general and administrative expense for the three-month, nine-month and twelve-month periods ended October 2, 2022, increased by $2.3 million, $4.3 million and $5.2 million, respectively, as compared to the previously reported figures in the statements of operations. Stock-based compensation increased by $4.2 million in the statement of cash flows. Accumulated deficit decreased and capital in excess of par value increased by $15.2 million and $11.9 million as of January 1, 2023 and October 2, 2022, respectively on our balance sheet. As of October 1, 2023 January 1, 2023 October 2, 2022 (Amounts in thousands, except share data) (unaudited) (unaudited) ASSETS Current assets: Cash and cash equivalents $ 66,763 $ 80,122 $ 73,314 Accounts receivable, net 90,877 49,405 72,299 Inventories 38,298 44,811 48,493 Prepaid expenses and other current assets 74,234 66,452 77,329 Total current assets 270,172 240,790 271,435 Property and equipment, net: Property and equipment, at cost 2,699,159 2,592,485 2,559,635 Accumulated depreciation (1,431,176 ) (1,350,739 ) (1,320,141 ) Total property and equipment, net 1,267,983 1,241,746 1,239,494 Goodwill 659,618 659,618 659,618 Intangible assets, net of accumulated amortization 344,147 344,164 344,170 Right-of-use operating leases, net 150,528 158,838 176,178 Other assets, net 24,685 20,669 13,171 Total assets $ 2,717,133 $ 2,665,825 $ 2,704,066 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 46,121 $ 38,887 $ 47,808 Accrued compensation, payroll taxes and benefits 20,547 15,224 14,838 Self-insurance reserves 65,505 34,053 44,563 Accrued interest payable 44,062 38,484 26,616 Other accrued liabilities 69,323 67,346 102,382 Deferred revenue 147,650 128,627 126,578 Short-term borrowings 89,000 100,000 110,000 Current portion of long-term debt 56,867 — — Short-term lease liabilities 11,217 11,688 11,451 Total current liabilities 550,292 434,309 484,236 Noncurrent liabilities: Long-term debt 2,127,495 2,280,531 2,279,220 Long-term lease liabilities 152,575 164,804 162,569 Other long-term liabilities 28,893 30,714 5,519 Deferred income taxes 193,175 184,637 194,358 Total liabilities 3,052,430 3,094,995 3,125,902 Redeemable noncontrolling interests 544,764 521,395 543,719 Stockholders' deficit: Preferred stock, $1.00 par value — — — Common stock, $0.025 par value, 280,000,000 shares authorized; 83,540,861, 83,178,294 and 83,152,582 shares issued and outstanding at October 1, 2023, January 1, 2023 and October 2, 2022, respectively 2,088 2,079 2,079 Capital in excess of par value (2) 1,128,376 1,119,222 1,116,959 Accumulated deficit (2) (1,939,207 ) (2,000,671 ) (2,010,774 ) Accumulated other comprehensive loss, net of tax (71,318 ) (71,195 ) (73,819 ) Total stockholders' deficit (880,061 ) (950,565 ) (965,555 ) Total liabilities and stockholders' deficit $ 2,717,133 $ 2,665,825 $ 2,704,066 Nine Months Ended October 1, 2023 October 2, 2022 (Amounts in thousands) (unaudited) (unaudited) Cash flows from operating activities: Net income $ 108,928 $ 135,930 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 85,966 86,772 Stock-based compensation (2) 9,018 13,404 Interest accretion on notes payable 716 833 Loss on debt extinguishment 13,982 17,533 Amortization of debt issuance costs 4,139 5,531 Loss on disposal of assets 6,745 3,036 Deferred income tax expense 13,731 43,434 Other (3,741 ) (276 ) Changes in operating assets and liabilities: (Increase) decrease in accounts receivable - trade (40,177 ) 25,519 Increase in inventories, prepaid expenses and other current assets (11,139 ) (43,543 ) (Increase) decrease in deposits and other assets 3,376 (3,697 ) Decrease in ROU operating leases 8,708 10,176 (Decrease) increase in accounts payable, deferred revenue and accrued liabilities and other long-term liabilities 53,738 (62,274 ) Decrease in operating lease liabilities (12,310 ) (14,628 ) (Decrease) increase in accrued interest payable 5,578 (23,938 ) Net cash provided by operating activities 247,258 193,812 Cash flows from investing activities: Additions to property and equipment (110,371 ) (78,038 ) Property insurance recoveries 1,089 4,655 Net cash used in investing activities (109,282 ) (73,383 ) Cash flows from financing activities: Repayment of borrowings (1,133,623 ) (450,000 ) Proceeds from borrowings 1,023,984 200,000 Payment of debt issuance costs (19,821 ) — Stock repurchases — (96,774 ) Redemption premium payments on debt extinguishment — (12,600 ) Payment of cash dividends — (199 ) Proceeds from issuance of common stock — 1,665 Payment of tax withholdings on equity-based compensation through shares withheld (339 ) (414 ) Reduction in finance lease liability (750 ) (2,025 ) Purchase of redeemable noncontrolling interest (328 ) (556 ) Distributions to noncontrolling interests (23,766 ) (22,326 ) Net cash used in financing activities (154,643 ) (383,229 ) Effect of exchange rate on cash 3,308 529 Net decrease in cash and cash equivalents (13,359 ) (262,271 ) Cash and cash equivalents at beginning of period 80,122 335,585 Cash and cash equivalents at end of period $ 66,763 $ 73,314 Supplemental cash flow information Cash paid for interest $ 109,518 $ 125,919 Cash paid for income taxes $ 14,173 $ 3,582 Definition and Reconciliation of Non-GAAP Financial Measures We prepare our financial statements in accordance with United States generally accepted accounting principles ("GAAP"). In our press release, we make reference to non-GAAP financial measures including Modified EBITDA, Adjusted EBITDA and Adjusted EBITDA minus capex. The definition for each of these non-GAAP financial measures is set forth below in the notes to the reconciliation tables. We believe that these non-GAAP financial measures provide important and useful information for investors to facilitate a comparison of our operating performance on a consistent basis from period to period and make it easier to compare our results with those of other companies in our industry. We use these measures for internal planning and forecasting purposes, to evaluate ongoing operations and our performance generally, and in our annual and long-term incentive plans. By providing these measures, we provide our investors with the ability to review our performance in the same manner as our management. However, because these non-GAAP financial measures are not determined in accordance with GAAP, they are susceptible to varying calculations, and not all companies calculate these measures in the same manner. As a result, these non-GAAP financial measures as presented may not be directly comparable to a similarly titled non-GAAP financial measure presented by another company. These non-GAAP financial measures are presented as supplemental information and not as alternatives to any GAAP financial measures. When reviewing a non-GAAP financial measure, we encourage our investors to fully review and consider the related reconciliation as detailed below. The following tables set forth a reconciliation of net income to Adjusted EBITDA for the three-month periods, nine-month periods and twelve-month periods ended October 1, 2023, and October 2, 2022: Three Months Ended Nine Months Ended Twelve Months Ended (Amounts in thousands, except per share data) October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 Net income $ 134,467 $ 135,833 $ 108,928 $ 135,930 $ 118,945 $ 133,183 Income tax expense 36,570 38,654 32,525 44,257 35,228 49,949 Other (income) expense, net (3) 1,155 (659 ) (1,938 ) (2,069 ) 47 5,072 Loss on debt extinguishment — — 13,982 17,533 13,982 17,533 Interest expense, net 38,263 34,197 118,060 107,705 151,945 145,448 Loss on disposal of assets 1,760 5,038 6,745 3,036 7,636 13,310 Depreciation and amortization 27,942 30,186 85,966 86,772 116,318 116,268 Impairment of park assets — — — — 16,943 — Stock-based compensation (2) 3,525 3,998 9,018 13,404 10,832 18,229 Self-insurance reserve adjustment (4) — — 37,558 — 37,558 — Modified EBITDA (5) $ 243,682 $ 247,247 $ 410,844 $ 406,568 $ 509,434 $ 498,992 Third party interest in EBITDA of certain operations (6) (23,767 ) (22,326 ) (47,533 ) (44,651 ) (47,533 ) (44,651 ) Adjusted EBITDA (5) $ 219,915 $ 224,921 $ 363,311 $ 361,917 $ 461,901 $ 454,341 Capital expenditures, net of property insurance recoveries (7) (42,241 ) (18,041 ) (109,282 ) (73,383 ) (147,408 ) (133,310 ) Adjusted EBITDA minus CAPEX (5) $ 177,674 $ 206,880 $ 254,029 $ 288,534 $ 314,493 $ 321,031 ____________________________________________________________________________ (3) Amounts recorded as “Other (income) expense, net” include certain non-recurring costs incurred in conjunction with changes made to our organizational structure in December 2021. During 2023, we reclassified the net pension-related expense (benefit) to other (income) expense, net. in our consolidated statements of operations. This reclassification has been reflected in all periods presented. As a result of this reclassification, Adjusted EBITDA for the three-month, nine-month and twelve-month periods ended October 2, 2022, declined by $1.2 million, $4.0 million and $6.1 million, respectively, as compared to the previously reported figures. (4) Amount relates to an adjustment to our self-insurance reserves resulting from a change in accounting estimate that increased our ultimate loss indications on both identified claims and incurred but not reported claims, as discussed in more detail above in our review of second quarter 2023 results. We have excluded this adjustment from our reported Adjusted EBITDA because we believe (i) the change in actuarial assumptions and related change in accounting estimate that gave rise to the adjustment is unusual and not expected to be recurring; (ii) excluding it provides more meaningful comparisons to our historical results; and (iii) excluding it provides more meaningful comparisons to other companies in our industry. (5) Modified EBITDA,” a non-GAAP measure, is defined as our consolidated income (loss) from continuing operations: excluding the following: 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, fresh start accounting valuation adjustments and other significant non-recurring items. Modified EBITDA, as defined herein, may differ from similarly titled measures presented by other companies. Management uses non-GAAP measures for budgeting purposes, measuring actual results, allocating resources and in determining employee incentive compensation. We believe that Modified EBITDA provides relevant and useful information for investors because it assists in comparing our operating performance on a consistent basis, makes it easier to compare our results with those of other companies in our industry as it most closely ties our performance to that of our competitors from a park-level perspective and allows investors to review performance in the same manner as our management. "Adjusted EBITDA," a non-GAAP measure, is defined as Modified EBITDA minus the interests of third parties in the Modified EBITDA of properties that are less than wholly owned (consisting of Six Flags Over Georgia, Six Flags White Water Atlanta and Six Flags Over Texas). Adjusted EBITDA is approximately equal to “Parent Consolidated Adjusted EBITDA” as defined in our secured credit agreement, except that Parent Consolidated Adjusted EBITDA excludes Adjusted EBITDA from equity investees that is not distributed to us in cash on a net basis and has limitations on the amounts of certain expenses that are excluded from the calculation. Adjusted EBITDA as defined herein may differ from similarly titled measures presented by other companies. Our board of directors and management use Adjusted EBITDA to measure our performance and our current management incentive compensation plans are based largely on Adjusted EBITDA. We believe that Adjusted EBITDA is frequently used by all our sell-side analysts and most investors as their primary measure of our performance in the evaluation of companies in our industry. In addition, the instruments governing our indebtedness use Adjusted EBITDA to measure our compliance with certain covenants and, in certain circumstances, our ability to make certain borrowings. Adjusted EBITDA, as computed by us, may not be comparable to similar metrics used by other companies in our industry. “Adjusted EBITDA minus capex,” a non-GAAP measure, is defined as Adjusted EBITDA minus capital expenditures, net of property insurance recoveries. Adjusted EBITDA minus capex as defined herein may differ from similarly titled measures presented by other companies. Our board of directors and management use Adjusted EBITDA minus capex to measure our performance and our current management incentive compensation plans are based largely on Adjusted EBITDA minus capex. We believe that Adjusted EBITDA minus capex is frequently used by analysts and investors as a measure of our performance. Adjusted EBITDA minus capex, as computed by us, may not be comparable to similar metrics used by other companies in our industry. (6) Represents interests of non-controlling interests in the Adjusted EBITDA of Six Flags Over Georgia, Six Flags Over Texas and Six Flags White Water Atlanta. (7) Capital expenditures, net of property insurance recovery (“CAPEX”) represents cash spent on property, plant and equipment, net of property insurance recoveries. View source version on businesswire.com: https://www.businesswire.com/news/home/20231102643050/en/Contacts Evan Bertrand Vice President, Investor Relations and Treasurer +1-972-595-5180 investorrelations@sftp.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Six Flags Reports Third Quarter 2023 Performance By: Six Flags Entertainment Corporation via Business Wire November 02, 2023 at 06:01 AM EDT Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and the largest operator of water parks in North America, today reported third quarter Revenue of $547 million, Net Income of $111 million, and Adjusted EBITDA of $220 million. “We have put forth substantial effort this year to establish a baseline for sustainable and meaningful growth, and our third quarter was focused on investment in the guest experience,” said Selim Bassoul, President and CEO. "I am proud of our team for the great strides made in advancing our digital transformation and the expansion and acceleration of our events calendar. We are also pleased with the progress we are seeing in sales for next year's season passes, which are well ahead of this time last year and a sign of the excitement our guests are feeling about our parks. In a year challenged by unusually difficult weather, we have been able to grow our attendance and increase revenues while simultaneously investing in our park infrastructure, attractions, and technology, as well as pay down debt." Third Quarter 2023 Results Three Months Ended (Amounts in millions, except per share data) October 1, 2023 October 2, 2022 % Change vs. 2022 Total revenue $ 547 $ 505 8 % Net income attributable to Six Flags Entertainment (5) $ 111 $ 114 (3 )% Net income per share, diluted (5) $ 1.32 $ 1.37 (3 )% Adjusted EBITDA (1) , (3) $ 220 $ 225 (2 )% Attendance 9.3 8.0 16 % Spending per capita figures: (2) Total guest spending per capita $ 56.37 $ 60.96 (8 )% Admissions spending per capita $ 30.86 $ 34.93 (12 )% In-park spending per capita $ 25.51 $ 26.03 (2 )% Total revenue for third quarter 2023 increased $43 million, or 8%, compared to third quarter 2022, driven by higher attendance and higher sponsorship revenue, partially offset by lower total guest spending per capita. The increase in attendance was driven primarily by higher season pass sales in third quarter 2023 versus prior year, combined with increased advertising and media spend through the third quarter, as well as an accelerated start to the Fall events schedule. The $4.59 decrease in total guest spending per capita compared to third quarter 2022 consisted of a $4.07 decrease in admissions spending per capita and a $0.52 decrease in in-park spending per capita. The decrease in admissions spending per capita was driven primarily by the planned effort to optimize season pass and single-day ticket pricing, which resulted in lower average admissions pricing in third quarter 2023 versus third quarter 2022. The decrease in in-park spending per capita was driven primarily by lower spend on parking, retail, and flash passes, resulting from a higher mix of attendance from season passes in third quarter 2023 versus the prior year. Due to certain benefits available to season pass holders, guests visiting on a season pass spend less per visit on certain in-park products than guests visiting on a single-day ticket. The season pass mix-driven decline in in-park spending per capita was partially offset by higher food and beverage sales in third quarter 2023 versus the prior year. The company had net income of $111 million in third quarter 2023, compared to net income of $114 million in third quarter 2022. The net income per share was $1.32 compared to net income per share of $1.37 in third quarter 2022 (5). Expenses increased in third quarter 2023 versus prior year due to several factors, including an increase in cost of sales and cash operating costs (4) driven by higher attendance in third quarter 2023, increased advertising spend to promote season passes, higher costs associated with an earlier start to the Fall events schedule, and investments in new entertainment, events, shows, and guest-facing digital initiatives. Adjusted EBITDA in third quarter 2023 was 220 million, a $5 million decrease from the prior year (3). First Nine Months 2023 Results Nine Months Ended (Amounts in millions, except per share data) October 1, 2023 October 2, 2022 % Change vs. 2022 Total revenue $ 1,133 $ 1,078 5 % Net income attributable to Six Flags Entertainment (5) $ 61 $ 91 (33 )% Net income per share, diluted (5) $ 0.73 $ 1.07 (32 )% Adjusted EBITDA (1) , (3) $ 363 $ 362 — % Attendance 17.9 16.4 9 % Spending per capita figures (2) Total guest spending per capita $ 60.28 $ 63.63 (5 )% Admissions spending per capita $ 33.52 $ 36.36 (8 )% In-park spending per capita $ 26.76 $ 27.27 (2 )% Total revenue for first nine months 2023 increased $55 million, or 5%, compared to first nine months 2022, driven by higher attendance and higher sponsorship, partially offset by lower total guest spending per capita. The increase in attendance was driven primarily by a higher season pass sales in first nine months 2023 versus prior year, combined with increased advertising and media spend throughout the first nine months, as well as an accelerated start to the Fall events schedule. The $3.35 decrease in total guest spending per capita compared to first nine months 2022 consisted of a $2.84 decrease in admissions spending per capita and a $0.51 decrease in in-park spending per capita. The decrease in admissions spending per capita was driven primarily by the planned effort to optimize season pass and single-day ticket pricing, which resulted in lower average admissions pricing in third quarter 2023 versus third quarter 2022. The decrease in in-park spending per capita was driven primarily by lower spend on parking, retail, and flash passes, resulting from a higher mix of attendance from season passes in first nine months 2023 versus the prior year. Due to certain benefits available to season pass holders, guests visiting on a season pass spend less per visit on certain in-park products than guests visiting on a single-day ticket. The season pass mix-driven decline in in-park spending per capita was partially offset by higher food and beverage sales in first nine months 2023 versus the prior year. The company had net income of $61 million in first nine months 2023, compared to net income of $91 million in first nine months 2022. The net income per share was $0.73 compared to net income per share of $1.07 in first nine months 2022 (5). In second quarter 2023, the company incurred an increase in self-insurance reserves of $38 million. Our self-insurance reserves are periodically reviewed for changes in facts and circumstances and adjustments are made as necessary. During second quarter 2023, we revised the estimate of our ultimate loss indications for both identified claims and incurred but not reported (“IBNR”) claims in connection with our general liability and worker’s compensation self-insurance reserves. The increase in our revised estimate was based on greater than previously estimated reserve adjustments on certain identified claims as well as an observed pattern of increasing litigation and settlement costs and changes to key actuarial assumptions utilized in determining estimated ultimate losses, including loss development factors. Additionally, expenses increased in first nine months 2023 versus prior year due to several factors, including an increase in cost of sales and cash operating costs (4) driven by higher attendance in first nine months 2023, increased advertising spend to promote season passes, higher costs associated with an earlier start to the Fall events schedule, and investments in new entertainments, shows, events, and guest-facing digital initiatives. Adjusted EBITDA in first nine months 2023, which excludes the $38 million self-insurance reserves estimate adjustment, was $363 million, a $1 million increase from the prior year (3). As of October 1, 2023, the company had total reported debt of $2,273 million, and cash or cash equivalents of $67 million. In third quarter 2023, the company repaid $80 million in aggregate net principal amount of debt. Deferred revenue was $148 million as of October 1, 2023, an increase of $21 million, or 17%, from October 2, 2022. The increase was primarily due to higher season pass sales year-to-date through October 1, 2023 versus October 2, 2022. In first nine months 2023, the company invested $109 million in new capital, net of insurance recoveries. The company will no longer host a conference call to discuss its third quarter 2023 financial performance on November 9, 2023 as previously announced.. About Six Flags Entertainment Corporation Six Flags Entertainment Corporation is the world’s largest regional theme park company with 27 parks across the United States, Mexico and Canada. For 63 years, Six Flags has entertained hundreds of millions of guests with world-class coasters, themed rides, thrilling water parks and unique attractions. Six Flags is committed to creating an inclusive environment that fully embraces the diversity of our team members and guests. For more information, visit www.sixflags.com. ___________________________________ Forward Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding (i) the effect, impact, potential duration or other implications of the COVID-19 pandemic or virus variants, and any expectations we may have with respect thereto including the continuing efficacy of the COVID-19 vaccines, (ii) the adequacy of our cash flows from operations, available cash and available amounts under our credit facilities to meet our liquidity needs, including in the event of a prolonged closure of one or more of our parks, (iii) our ability to execute our strategy to significantly improve our financial performance and the guest experience, (iv) expectations regarding consumer demand for regional, outdoor, out-of-home entertainment, including for our parks, and (v) expectations regarding our annual income tax liability and the availability and effect of net operating loss carryforwards and other tax benefits. Forward-looking statements include all statements that are not historical facts and often use words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "may," "should," "could" and variations of such words or similar expressions. 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, factors impacting attendance, such as local conditions, natural disasters, contagious diseases, including COVID-19 and Monkeypox, or the perceived threat of contagious diseases, events, disturbances and terrorist activities; regulations and guidance of federal, state and local governments and health officials regarding the response to COVID-19 or other health emergencies such as Monkeypox, including with respect to business operations, safety protocols and public gatherings; economic impact of political instability and conflicts globally, including the war in Ukraine; recall of food, toys and other retail products sold at our parks; accidents or incidents involving the safety of guests and employees, or contagious disease outbreaks occurring at our parks or other parks in the industry and adverse publicity concerning our parks or other parks in the industry; availability of commercially reasonable insurance policies at reasonable rates; inability to achieve desired improvements and our financial performance targets; adverse weather conditions such as excess heat or cold, rain and storms; general financial and credit market conditions, including our ability to access credit or raise capital; the increased cost of capital due to raising interest rates; macro-economic conditions (including supply chain issues and the impact of inflation on customer spending patterns); changes in public and consumer tastes; construction delays in capital improvements or ride downtime; competition with other theme parks, water parks 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; environmental laws and regulations; laws and regulations affecting corporate taxation; 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, including the risk factors or uncertainties listed from time to time in the company’s filings with the Securities and Exchange Commission (the “SEC”). Although we believe that the expectations reflected in such forward-looking statements are reasonable, we make 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 our Annual and Quarterly Reports on Forms 10-K and 10-Q, and our 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. Footnotes (1) See the following financial statements and Note 4 to those financial statements for a discussion of Adjusted EBITDA (a non-GAAP financial measure) and its reconciliation to net income (loss). (2) We use certain per capita operational metrics that measure the performance of our business on a per guest basis and believe that these metrics provide relevant and useful information for investors because they assist in comparing our operating performance on a consistent basis, make it easier to compare our results with those of other companies and our industry and allows investors to review performance in the same manner as our management. Total guest spending per capita is the total revenue generated from our guests, on a per guest basis, through admissions and in-park spending. Total guest spending per capita is calculated by dividing the sum of park admissions revenue and park food merchandise and other revenue by total attendance. Admissions revenue per capita is the total revenue generated from our guests, on a per guest basis, to enter our parks. Admissions revenue per capita is calculated by dividing park admission revenue by total attendance. In-park spending per capita is the total revenue generated from our guests, on a per guest basis, on items sold within our parks, such as food, games and merchandise. In-park spending per capita is calculated by dividing park food, merchandise and other revenue by total attendance. (3) During 2023, we reclassified the net pension-related expense (benefit) to “Other (income) expense, net”, in our consolidated statements of operations. This reclassification has been reflected in all periods presented. As a result, Adjusted EBITDA for the three-month period and the nine-month period ended October 2, 2022, declined by $1.2 million and $4.0 million, respectively, as compared to the previously reported figures. (4) “Cash operating costs” includes operating expenses (excluding depreciation and amortization) and selling, general and administrative expenses (excluding stock-based compensation). (5) Reflects revisions made to previously issued financial statements for immaterial errors in the unaudited interim financial statements for the periods ended April 3, 2022, July 3, 2022 and October 2, 2022 related to the recognition of stock-compensation. As a result of these revisions, selling, general and administrative expense for the three-month and nine-month periods ending October 2, 2022, increased $2.3 million and $4.3 million, respectively, as compared to the previously reported figures. Statement of Operations Data Three Months Ended Nine Months Ended Twelve Months Ended October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 (Amounts in thousands, except per share data) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Park admissions $ 286,319 $ 280,502 $ 601,585 $ 595,266 $ 741,734 $ 756,199 Park food, merchandise and other 236,703 209,099 480,281 446,449 604,797 591,280 Sponsorship, international agreements and accommodations 24,433 15,230 51,486 36,645 66,697 47,691 Total revenues 547,455 504,831 1,133,352 1,078,360 1,413,228 1,395,170 Operating expenses (excluding depreciation and amortization shown separately below) 206,461 180,937 489,000 464,013 615,647 606,508 Selling, general and administrative expenses (excluding depreciation and amortization shown separately below) (1) (2) 57,952 40,481 192,647 135,194 226,943 196,691 Costs of products sold 42,885 40,164 87,437 85,989 109,594 111,208 Depreciation and amortization 27,942 30,186 85,966 86,772 116,318 116,268 Impairment of park assets — — — — 16,943 — Loss on disposal of assets 1,760 5,038 6,745 3,036 7,636 13,310 Operating income 210,455 208,025 271,557 303,356 320,147 351,185 Interest expense, net 38,263 34,197 118,060 107,705 151,945 145,448 Loss on debt extinguishment — — 13,982 17,533 13,982 17,533 Other (income) expense, net 1,155 (659 ) (1,938 ) (2,069 ) 47 5,072 Income before income taxes 171,037 174,487 141,453 180,187 154,173 183,132 Income tax expense 36,570 38,654 32,525 44,257 35,228 49,949 Net income $ 134,467 $ 135,833 $ 108,928 $ 135,930 $ 118,945 $ 133,183 Less: Net income attributable to noncontrolling interests (23,767 ) (22,326 ) (47,533 ) (44,651 ) (47,533 ) (44,651 ) Net income attributable to Six Flags Entertainment Corporation $ 110,700 $ 113,507 $ 61,395 $ 91,279 $ 71,412 $ 88,532 Weighted-average common shares outstanding: Basic: 83,510 83,094 83,365 84,760 83,313 85,084 Diluted: 83,780 83,107 83,736 84,919 83,585 86,264 Earnings per average common share outstanding: Basic: $ 1.33 $ 1.37 $ 0.74 $ 1.08 $ 0.86 $ 1.04 Diluted: $ 1.32 $ 1.37 $ 0.73 $ 1.07 $ 0.85 $ 1.03 ____________________________________________________________________________ (1) Includes stock-based compensation of $3,525 and $3,998 for the three-month periods ended October 1, 2023, and October 2, 2022, respectively, stock-based compensation of $9,018 and $13,404 for the nine-month periods ended October 1, 2023 and October 2, 2022, respectively, and stock-based compensation of $10,832 and $18,229 for the twelve-month periods ended October 1, 2023, and October 2, 2022. (2) Reflects revisions to be made to previously issued financial statements for immaterial errors in the unaudited interim financial statements for the periods ended April 3, 2022, July 3, 2022 and October 2, 2022 related to the recognition of stock-based compensation in the Company's quarterly report on Form 10-Q for the three months ended October 1, 2023. As a result of these revisions, selling, general and administrative expense for the three-month, nine-month and twelve-month periods ended October 2, 2022, increased by $2.3 million, $4.3 million and $5.2 million, respectively, as compared to the previously reported figures in the statements of operations. Stock-based compensation increased by $4.2 million in the statement of cash flows. Accumulated deficit decreased and capital in excess of par value increased by $15.2 million and $11.9 million as of January 1, 2023 and October 2, 2022, respectively on our balance sheet. As of October 1, 2023 January 1, 2023 October 2, 2022 (Amounts in thousands, except share data) (unaudited) (unaudited) ASSETS Current assets: Cash and cash equivalents $ 66,763 $ 80,122 $ 73,314 Accounts receivable, net 90,877 49,405 72,299 Inventories 38,298 44,811 48,493 Prepaid expenses and other current assets 74,234 66,452 77,329 Total current assets 270,172 240,790 271,435 Property and equipment, net: Property and equipment, at cost 2,699,159 2,592,485 2,559,635 Accumulated depreciation (1,431,176 ) (1,350,739 ) (1,320,141 ) Total property and equipment, net 1,267,983 1,241,746 1,239,494 Goodwill 659,618 659,618 659,618 Intangible assets, net of accumulated amortization 344,147 344,164 344,170 Right-of-use operating leases, net 150,528 158,838 176,178 Other assets, net 24,685 20,669 13,171 Total assets $ 2,717,133 $ 2,665,825 $ 2,704,066 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 46,121 $ 38,887 $ 47,808 Accrued compensation, payroll taxes and benefits 20,547 15,224 14,838 Self-insurance reserves 65,505 34,053 44,563 Accrued interest payable 44,062 38,484 26,616 Other accrued liabilities 69,323 67,346 102,382 Deferred revenue 147,650 128,627 126,578 Short-term borrowings 89,000 100,000 110,000 Current portion of long-term debt 56,867 — — Short-term lease liabilities 11,217 11,688 11,451 Total current liabilities 550,292 434,309 484,236 Noncurrent liabilities: Long-term debt 2,127,495 2,280,531 2,279,220 Long-term lease liabilities 152,575 164,804 162,569 Other long-term liabilities 28,893 30,714 5,519 Deferred income taxes 193,175 184,637 194,358 Total liabilities 3,052,430 3,094,995 3,125,902 Redeemable noncontrolling interests 544,764 521,395 543,719 Stockholders' deficit: Preferred stock, $1.00 par value — — — Common stock, $0.025 par value, 280,000,000 shares authorized; 83,540,861, 83,178,294 and 83,152,582 shares issued and outstanding at October 1, 2023, January 1, 2023 and October 2, 2022, respectively 2,088 2,079 2,079 Capital in excess of par value (2) 1,128,376 1,119,222 1,116,959 Accumulated deficit (2) (1,939,207 ) (2,000,671 ) (2,010,774 ) Accumulated other comprehensive loss, net of tax (71,318 ) (71,195 ) (73,819 ) Total stockholders' deficit (880,061 ) (950,565 ) (965,555 ) Total liabilities and stockholders' deficit $ 2,717,133 $ 2,665,825 $ 2,704,066 Nine Months Ended October 1, 2023 October 2, 2022 (Amounts in thousands) (unaudited) (unaudited) Cash flows from operating activities: Net income $ 108,928 $ 135,930 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 85,966 86,772 Stock-based compensation (2) 9,018 13,404 Interest accretion on notes payable 716 833 Loss on debt extinguishment 13,982 17,533 Amortization of debt issuance costs 4,139 5,531 Loss on disposal of assets 6,745 3,036 Deferred income tax expense 13,731 43,434 Other (3,741 ) (276 ) Changes in operating assets and liabilities: (Increase) decrease in accounts receivable - trade (40,177 ) 25,519 Increase in inventories, prepaid expenses and other current assets (11,139 ) (43,543 ) (Increase) decrease in deposits and other assets 3,376 (3,697 ) Decrease in ROU operating leases 8,708 10,176 (Decrease) increase in accounts payable, deferred revenue and accrued liabilities and other long-term liabilities 53,738 (62,274 ) Decrease in operating lease liabilities (12,310 ) (14,628 ) (Decrease) increase in accrued interest payable 5,578 (23,938 ) Net cash provided by operating activities 247,258 193,812 Cash flows from investing activities: Additions to property and equipment (110,371 ) (78,038 ) Property insurance recoveries 1,089 4,655 Net cash used in investing activities (109,282 ) (73,383 ) Cash flows from financing activities: Repayment of borrowings (1,133,623 ) (450,000 ) Proceeds from borrowings 1,023,984 200,000 Payment of debt issuance costs (19,821 ) — Stock repurchases — (96,774 ) Redemption premium payments on debt extinguishment — (12,600 ) Payment of cash dividends — (199 ) Proceeds from issuance of common stock — 1,665 Payment of tax withholdings on equity-based compensation through shares withheld (339 ) (414 ) Reduction in finance lease liability (750 ) (2,025 ) Purchase of redeemable noncontrolling interest (328 ) (556 ) Distributions to noncontrolling interests (23,766 ) (22,326 ) Net cash used in financing activities (154,643 ) (383,229 ) Effect of exchange rate on cash 3,308 529 Net decrease in cash and cash equivalents (13,359 ) (262,271 ) Cash and cash equivalents at beginning of period 80,122 335,585 Cash and cash equivalents at end of period $ 66,763 $ 73,314 Supplemental cash flow information Cash paid for interest $ 109,518 $ 125,919 Cash paid for income taxes $ 14,173 $ 3,582 Definition and Reconciliation of Non-GAAP Financial Measures We prepare our financial statements in accordance with United States generally accepted accounting principles ("GAAP"). In our press release, we make reference to non-GAAP financial measures including Modified EBITDA, Adjusted EBITDA and Adjusted EBITDA minus capex. The definition for each of these non-GAAP financial measures is set forth below in the notes to the reconciliation tables. We believe that these non-GAAP financial measures provide important and useful information for investors to facilitate a comparison of our operating performance on a consistent basis from period to period and make it easier to compare our results with those of other companies in our industry. We use these measures for internal planning and forecasting purposes, to evaluate ongoing operations and our performance generally, and in our annual and long-term incentive plans. By providing these measures, we provide our investors with the ability to review our performance in the same manner as our management. However, because these non-GAAP financial measures are not determined in accordance with GAAP, they are susceptible to varying calculations, and not all companies calculate these measures in the same manner. As a result, these non-GAAP financial measures as presented may not be directly comparable to a similarly titled non-GAAP financial measure presented by another company. These non-GAAP financial measures are presented as supplemental information and not as alternatives to any GAAP financial measures. When reviewing a non-GAAP financial measure, we encourage our investors to fully review and consider the related reconciliation as detailed below. The following tables set forth a reconciliation of net income to Adjusted EBITDA for the three-month periods, nine-month periods and twelve-month periods ended October 1, 2023, and October 2, 2022: Three Months Ended Nine Months Ended Twelve Months Ended (Amounts in thousands, except per share data) October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 Net income $ 134,467 $ 135,833 $ 108,928 $ 135,930 $ 118,945 $ 133,183 Income tax expense 36,570 38,654 32,525 44,257 35,228 49,949 Other (income) expense, net (3) 1,155 (659 ) (1,938 ) (2,069 ) 47 5,072 Loss on debt extinguishment — — 13,982 17,533 13,982 17,533 Interest expense, net 38,263 34,197 118,060 107,705 151,945 145,448 Loss on disposal of assets 1,760 5,038 6,745 3,036 7,636 13,310 Depreciation and amortization 27,942 30,186 85,966 86,772 116,318 116,268 Impairment of park assets — — — — 16,943 — Stock-based compensation (2) 3,525 3,998 9,018 13,404 10,832 18,229 Self-insurance reserve adjustment (4) — — 37,558 — 37,558 — Modified EBITDA (5) $ 243,682 $ 247,247 $ 410,844 $ 406,568 $ 509,434 $ 498,992 Third party interest in EBITDA of certain operations (6) (23,767 ) (22,326 ) (47,533 ) (44,651 ) (47,533 ) (44,651 ) Adjusted EBITDA (5) $ 219,915 $ 224,921 $ 363,311 $ 361,917 $ 461,901 $ 454,341 Capital expenditures, net of property insurance recoveries (7) (42,241 ) (18,041 ) (109,282 ) (73,383 ) (147,408 ) (133,310 ) Adjusted EBITDA minus CAPEX (5) $ 177,674 $ 206,880 $ 254,029 $ 288,534 $ 314,493 $ 321,031 ____________________________________________________________________________ (3) Amounts recorded as “Other (income) expense, net” include certain non-recurring costs incurred in conjunction with changes made to our organizational structure in December 2021. During 2023, we reclassified the net pension-related expense (benefit) to other (income) expense, net. in our consolidated statements of operations. This reclassification has been reflected in all periods presented. As a result of this reclassification, Adjusted EBITDA for the three-month, nine-month and twelve-month periods ended October 2, 2022, declined by $1.2 million, $4.0 million and $6.1 million, respectively, as compared to the previously reported figures. (4) Amount relates to an adjustment to our self-insurance reserves resulting from a change in accounting estimate that increased our ultimate loss indications on both identified claims and incurred but not reported claims, as discussed in more detail above in our review of second quarter 2023 results. We have excluded this adjustment from our reported Adjusted EBITDA because we believe (i) the change in actuarial assumptions and related change in accounting estimate that gave rise to the adjustment is unusual and not expected to be recurring; (ii) excluding it provides more meaningful comparisons to our historical results; and (iii) excluding it provides more meaningful comparisons to other companies in our industry. (5) Modified EBITDA,” a non-GAAP measure, is defined as our consolidated income (loss) from continuing operations: excluding the following: 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, fresh start accounting valuation adjustments and other significant non-recurring items. Modified EBITDA, as defined herein, may differ from similarly titled measures presented by other companies. Management uses non-GAAP measures for budgeting purposes, measuring actual results, allocating resources and in determining employee incentive compensation. We believe that Modified EBITDA provides relevant and useful information for investors because it assists in comparing our operating performance on a consistent basis, makes it easier to compare our results with those of other companies in our industry as it most closely ties our performance to that of our competitors from a park-level perspective and allows investors to review performance in the same manner as our management. "Adjusted EBITDA," a non-GAAP measure, is defined as Modified EBITDA minus the interests of third parties in the Modified EBITDA of properties that are less than wholly owned (consisting of Six Flags Over Georgia, Six Flags White Water Atlanta and Six Flags Over Texas). Adjusted EBITDA is approximately equal to “Parent Consolidated Adjusted EBITDA” as defined in our secured credit agreement, except that Parent Consolidated Adjusted EBITDA excludes Adjusted EBITDA from equity investees that is not distributed to us in cash on a net basis and has limitations on the amounts of certain expenses that are excluded from the calculation. Adjusted EBITDA as defined herein may differ from similarly titled measures presented by other companies. Our board of directors and management use Adjusted EBITDA to measure our performance and our current management incentive compensation plans are based largely on Adjusted EBITDA. We believe that Adjusted EBITDA is frequently used by all our sell-side analysts and most investors as their primary measure of our performance in the evaluation of companies in our industry. In addition, the instruments governing our indebtedness use Adjusted EBITDA to measure our compliance with certain covenants and, in certain circumstances, our ability to make certain borrowings. Adjusted EBITDA, as computed by us, may not be comparable to similar metrics used by other companies in our industry. “Adjusted EBITDA minus capex,” a non-GAAP measure, is defined as Adjusted EBITDA minus capital expenditures, net of property insurance recoveries. Adjusted EBITDA minus capex as defined herein may differ from similarly titled measures presented by other companies. Our board of directors and management use Adjusted EBITDA minus capex to measure our performance and our current management incentive compensation plans are based largely on Adjusted EBITDA minus capex. We believe that Adjusted EBITDA minus capex is frequently used by analysts and investors as a measure of our performance. Adjusted EBITDA minus capex, as computed by us, may not be comparable to similar metrics used by other companies in our industry. (6) Represents interests of non-controlling interests in the Adjusted EBITDA of Six Flags Over Georgia, Six Flags Over Texas and Six Flags White Water Atlanta. (7) Capital expenditures, net of property insurance recovery (“CAPEX”) represents cash spent on property, plant and equipment, net of property insurance recoveries. View source version on businesswire.com: https://www.businesswire.com/news/home/20231102643050/en/Contacts Evan Bertrand Vice President, Investor Relations and Treasurer +1-972-595-5180 investorrelations@sftp.com
Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and the largest operator of water parks in North America, today reported third quarter Revenue of $547 million, Net Income of $111 million, and Adjusted EBITDA of $220 million. “We have put forth substantial effort this year to establish a baseline for sustainable and meaningful growth, and our third quarter was focused on investment in the guest experience,” said Selim Bassoul, President and CEO. "I am proud of our team for the great strides made in advancing our digital transformation and the expansion and acceleration of our events calendar. We are also pleased with the progress we are seeing in sales for next year's season passes, which are well ahead of this time last year and a sign of the excitement our guests are feeling about our parks. In a year challenged by unusually difficult weather, we have been able to grow our attendance and increase revenues while simultaneously investing in our park infrastructure, attractions, and technology, as well as pay down debt." Third Quarter 2023 Results Three Months Ended (Amounts in millions, except per share data) October 1, 2023 October 2, 2022 % Change vs. 2022 Total revenue $ 547 $ 505 8 % Net income attributable to Six Flags Entertainment (5) $ 111 $ 114 (3 )% Net income per share, diluted (5) $ 1.32 $ 1.37 (3 )% Adjusted EBITDA (1) , (3) $ 220 $ 225 (2 )% Attendance 9.3 8.0 16 % Spending per capita figures: (2) Total guest spending per capita $ 56.37 $ 60.96 (8 )% Admissions spending per capita $ 30.86 $ 34.93 (12 )% In-park spending per capita $ 25.51 $ 26.03 (2 )% Total revenue for third quarter 2023 increased $43 million, or 8%, compared to third quarter 2022, driven by higher attendance and higher sponsorship revenue, partially offset by lower total guest spending per capita. The increase in attendance was driven primarily by higher season pass sales in third quarter 2023 versus prior year, combined with increased advertising and media spend through the third quarter, as well as an accelerated start to the Fall events schedule. The $4.59 decrease in total guest spending per capita compared to third quarter 2022 consisted of a $4.07 decrease in admissions spending per capita and a $0.52 decrease in in-park spending per capita. The decrease in admissions spending per capita was driven primarily by the planned effort to optimize season pass and single-day ticket pricing, which resulted in lower average admissions pricing in third quarter 2023 versus third quarter 2022. The decrease in in-park spending per capita was driven primarily by lower spend on parking, retail, and flash passes, resulting from a higher mix of attendance from season passes in third quarter 2023 versus the prior year. Due to certain benefits available to season pass holders, guests visiting on a season pass spend less per visit on certain in-park products than guests visiting on a single-day ticket. The season pass mix-driven decline in in-park spending per capita was partially offset by higher food and beverage sales in third quarter 2023 versus the prior year. The company had net income of $111 million in third quarter 2023, compared to net income of $114 million in third quarter 2022. The net income per share was $1.32 compared to net income per share of $1.37 in third quarter 2022 (5). Expenses increased in third quarter 2023 versus prior year due to several factors, including an increase in cost of sales and cash operating costs (4) driven by higher attendance in third quarter 2023, increased advertising spend to promote season passes, higher costs associated with an earlier start to the Fall events schedule, and investments in new entertainment, events, shows, and guest-facing digital initiatives. Adjusted EBITDA in third quarter 2023 was 220 million, a $5 million decrease from the prior year (3). First Nine Months 2023 Results Nine Months Ended (Amounts in millions, except per share data) October 1, 2023 October 2, 2022 % Change vs. 2022 Total revenue $ 1,133 $ 1,078 5 % Net income attributable to Six Flags Entertainment (5) $ 61 $ 91 (33 )% Net income per share, diluted (5) $ 0.73 $ 1.07 (32 )% Adjusted EBITDA (1) , (3) $ 363 $ 362 — % Attendance 17.9 16.4 9 % Spending per capita figures (2) Total guest spending per capita $ 60.28 $ 63.63 (5 )% Admissions spending per capita $ 33.52 $ 36.36 (8 )% In-park spending per capita $ 26.76 $ 27.27 (2 )% Total revenue for first nine months 2023 increased $55 million, or 5%, compared to first nine months 2022, driven by higher attendance and higher sponsorship, partially offset by lower total guest spending per capita. The increase in attendance was driven primarily by a higher season pass sales in first nine months 2023 versus prior year, combined with increased advertising and media spend throughout the first nine months, as well as an accelerated start to the Fall events schedule. The $3.35 decrease in total guest spending per capita compared to first nine months 2022 consisted of a $2.84 decrease in admissions spending per capita and a $0.51 decrease in in-park spending per capita. The decrease in admissions spending per capita was driven primarily by the planned effort to optimize season pass and single-day ticket pricing, which resulted in lower average admissions pricing in third quarter 2023 versus third quarter 2022. The decrease in in-park spending per capita was driven primarily by lower spend on parking, retail, and flash passes, resulting from a higher mix of attendance from season passes in first nine months 2023 versus the prior year. Due to certain benefits available to season pass holders, guests visiting on a season pass spend less per visit on certain in-park products than guests visiting on a single-day ticket. The season pass mix-driven decline in in-park spending per capita was partially offset by higher food and beverage sales in first nine months 2023 versus the prior year. The company had net income of $61 million in first nine months 2023, compared to net income of $91 million in first nine months 2022. The net income per share was $0.73 compared to net income per share of $1.07 in first nine months 2022 (5). In second quarter 2023, the company incurred an increase in self-insurance reserves of $38 million. Our self-insurance reserves are periodically reviewed for changes in facts and circumstances and adjustments are made as necessary. During second quarter 2023, we revised the estimate of our ultimate loss indications for both identified claims and incurred but not reported (“IBNR”) claims in connection with our general liability and worker’s compensation self-insurance reserves. The increase in our revised estimate was based on greater than previously estimated reserve adjustments on certain identified claims as well as an observed pattern of increasing litigation and settlement costs and changes to key actuarial assumptions utilized in determining estimated ultimate losses, including loss development factors. Additionally, expenses increased in first nine months 2023 versus prior year due to several factors, including an increase in cost of sales and cash operating costs (4) driven by higher attendance in first nine months 2023, increased advertising spend to promote season passes, higher costs associated with an earlier start to the Fall events schedule, and investments in new entertainments, shows, events, and guest-facing digital initiatives. Adjusted EBITDA in first nine months 2023, which excludes the $38 million self-insurance reserves estimate adjustment, was $363 million, a $1 million increase from the prior year (3). As of October 1, 2023, the company had total reported debt of $2,273 million, and cash or cash equivalents of $67 million. In third quarter 2023, the company repaid $80 million in aggregate net principal amount of debt. Deferred revenue was $148 million as of October 1, 2023, an increase of $21 million, or 17%, from October 2, 2022. The increase was primarily due to higher season pass sales year-to-date through October 1, 2023 versus October 2, 2022. In first nine months 2023, the company invested $109 million in new capital, net of insurance recoveries. The company will no longer host a conference call to discuss its third quarter 2023 financial performance on November 9, 2023 as previously announced.. About Six Flags Entertainment Corporation Six Flags Entertainment Corporation is the world’s largest regional theme park company with 27 parks across the United States, Mexico and Canada. For 63 years, Six Flags has entertained hundreds of millions of guests with world-class coasters, themed rides, thrilling water parks and unique attractions. Six Flags is committed to creating an inclusive environment that fully embraces the diversity of our team members and guests. For more information, visit www.sixflags.com. ___________________________________ Forward Looking Statements This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding (i) the effect, impact, potential duration or other implications of the COVID-19 pandemic or virus variants, and any expectations we may have with respect thereto including the continuing efficacy of the COVID-19 vaccines, (ii) the adequacy of our cash flows from operations, available cash and available amounts under our credit facilities to meet our liquidity needs, including in the event of a prolonged closure of one or more of our parks, (iii) our ability to execute our strategy to significantly improve our financial performance and the guest experience, (iv) expectations regarding consumer demand for regional, outdoor, out-of-home entertainment, including for our parks, and (v) expectations regarding our annual income tax liability and the availability and effect of net operating loss carryforwards and other tax benefits. Forward-looking statements include all statements that are not historical facts and often use words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects," "may," "should," "could" and variations of such words or similar expressions. 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, factors impacting attendance, such as local conditions, natural disasters, contagious diseases, including COVID-19 and Monkeypox, or the perceived threat of contagious diseases, events, disturbances and terrorist activities; regulations and guidance of federal, state and local governments and health officials regarding the response to COVID-19 or other health emergencies such as Monkeypox, including with respect to business operations, safety protocols and public gatherings; economic impact of political instability and conflicts globally, including the war in Ukraine; recall of food, toys and other retail products sold at our parks; accidents or incidents involving the safety of guests and employees, or contagious disease outbreaks occurring at our parks or other parks in the industry and adverse publicity concerning our parks or other parks in the industry; availability of commercially reasonable insurance policies at reasonable rates; inability to achieve desired improvements and our financial performance targets; adverse weather conditions such as excess heat or cold, rain and storms; general financial and credit market conditions, including our ability to access credit or raise capital; the increased cost of capital due to raising interest rates; macro-economic conditions (including supply chain issues and the impact of inflation on customer spending patterns); changes in public and consumer tastes; construction delays in capital improvements or ride downtime; competition with other theme parks, water parks 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; environmental laws and regulations; laws and regulations affecting corporate taxation; 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, including the risk factors or uncertainties listed from time to time in the company’s filings with the Securities and Exchange Commission (the “SEC”). Although we believe that the expectations reflected in such forward-looking statements are reasonable, we make 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 our Annual and Quarterly Reports on Forms 10-K and 10-Q, and our 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. Footnotes (1) See the following financial statements and Note 4 to those financial statements for a discussion of Adjusted EBITDA (a non-GAAP financial measure) and its reconciliation to net income (loss). (2) We use certain per capita operational metrics that measure the performance of our business on a per guest basis and believe that these metrics provide relevant and useful information for investors because they assist in comparing our operating performance on a consistent basis, make it easier to compare our results with those of other companies and our industry and allows investors to review performance in the same manner as our management. Total guest spending per capita is the total revenue generated from our guests, on a per guest basis, through admissions and in-park spending. Total guest spending per capita is calculated by dividing the sum of park admissions revenue and park food merchandise and other revenue by total attendance. Admissions revenue per capita is the total revenue generated from our guests, on a per guest basis, to enter our parks. Admissions revenue per capita is calculated by dividing park admission revenue by total attendance. In-park spending per capita is the total revenue generated from our guests, on a per guest basis, on items sold within our parks, such as food, games and merchandise. In-park spending per capita is calculated by dividing park food, merchandise and other revenue by total attendance. (3) During 2023, we reclassified the net pension-related expense (benefit) to “Other (income) expense, net”, in our consolidated statements of operations. This reclassification has been reflected in all periods presented. As a result, Adjusted EBITDA for the three-month period and the nine-month period ended October 2, 2022, declined by $1.2 million and $4.0 million, respectively, as compared to the previously reported figures. (4) “Cash operating costs” includes operating expenses (excluding depreciation and amortization) and selling, general and administrative expenses (excluding stock-based compensation). (5) Reflects revisions made to previously issued financial statements for immaterial errors in the unaudited interim financial statements for the periods ended April 3, 2022, July 3, 2022 and October 2, 2022 related to the recognition of stock-compensation. As a result of these revisions, selling, general and administrative expense for the three-month and nine-month periods ending October 2, 2022, increased $2.3 million and $4.3 million, respectively, as compared to the previously reported figures. Statement of Operations Data Three Months Ended Nine Months Ended Twelve Months Ended October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 (Amounts in thousands, except per share data) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) Park admissions $ 286,319 $ 280,502 $ 601,585 $ 595,266 $ 741,734 $ 756,199 Park food, merchandise and other 236,703 209,099 480,281 446,449 604,797 591,280 Sponsorship, international agreements and accommodations 24,433 15,230 51,486 36,645 66,697 47,691 Total revenues 547,455 504,831 1,133,352 1,078,360 1,413,228 1,395,170 Operating expenses (excluding depreciation and amortization shown separately below) 206,461 180,937 489,000 464,013 615,647 606,508 Selling, general and administrative expenses (excluding depreciation and amortization shown separately below) (1) (2) 57,952 40,481 192,647 135,194 226,943 196,691 Costs of products sold 42,885 40,164 87,437 85,989 109,594 111,208 Depreciation and amortization 27,942 30,186 85,966 86,772 116,318 116,268 Impairment of park assets — — — — 16,943 — Loss on disposal of assets 1,760 5,038 6,745 3,036 7,636 13,310 Operating income 210,455 208,025 271,557 303,356 320,147 351,185 Interest expense, net 38,263 34,197 118,060 107,705 151,945 145,448 Loss on debt extinguishment — — 13,982 17,533 13,982 17,533 Other (income) expense, net 1,155 (659 ) (1,938 ) (2,069 ) 47 5,072 Income before income taxes 171,037 174,487 141,453 180,187 154,173 183,132 Income tax expense 36,570 38,654 32,525 44,257 35,228 49,949 Net income $ 134,467 $ 135,833 $ 108,928 $ 135,930 $ 118,945 $ 133,183 Less: Net income attributable to noncontrolling interests (23,767 ) (22,326 ) (47,533 ) (44,651 ) (47,533 ) (44,651 ) Net income attributable to Six Flags Entertainment Corporation $ 110,700 $ 113,507 $ 61,395 $ 91,279 $ 71,412 $ 88,532 Weighted-average common shares outstanding: Basic: 83,510 83,094 83,365 84,760 83,313 85,084 Diluted: 83,780 83,107 83,736 84,919 83,585 86,264 Earnings per average common share outstanding: Basic: $ 1.33 $ 1.37 $ 0.74 $ 1.08 $ 0.86 $ 1.04 Diluted: $ 1.32 $ 1.37 $ 0.73 $ 1.07 $ 0.85 $ 1.03 ____________________________________________________________________________ (1) Includes stock-based compensation of $3,525 and $3,998 for the three-month periods ended October 1, 2023, and October 2, 2022, respectively, stock-based compensation of $9,018 and $13,404 for the nine-month periods ended October 1, 2023 and October 2, 2022, respectively, and stock-based compensation of $10,832 and $18,229 for the twelve-month periods ended October 1, 2023, and October 2, 2022. (2) Reflects revisions to be made to previously issued financial statements for immaterial errors in the unaudited interim financial statements for the periods ended April 3, 2022, July 3, 2022 and October 2, 2022 related to the recognition of stock-based compensation in the Company's quarterly report on Form 10-Q for the three months ended October 1, 2023. As a result of these revisions, selling, general and administrative expense for the three-month, nine-month and twelve-month periods ended October 2, 2022, increased by $2.3 million, $4.3 million and $5.2 million, respectively, as compared to the previously reported figures in the statements of operations. Stock-based compensation increased by $4.2 million in the statement of cash flows. Accumulated deficit decreased and capital in excess of par value increased by $15.2 million and $11.9 million as of January 1, 2023 and October 2, 2022, respectively on our balance sheet. As of October 1, 2023 January 1, 2023 October 2, 2022 (Amounts in thousands, except share data) (unaudited) (unaudited) ASSETS Current assets: Cash and cash equivalents $ 66,763 $ 80,122 $ 73,314 Accounts receivable, net 90,877 49,405 72,299 Inventories 38,298 44,811 48,493 Prepaid expenses and other current assets 74,234 66,452 77,329 Total current assets 270,172 240,790 271,435 Property and equipment, net: Property and equipment, at cost 2,699,159 2,592,485 2,559,635 Accumulated depreciation (1,431,176 ) (1,350,739 ) (1,320,141 ) Total property and equipment, net 1,267,983 1,241,746 1,239,494 Goodwill 659,618 659,618 659,618 Intangible assets, net of accumulated amortization 344,147 344,164 344,170 Right-of-use operating leases, net 150,528 158,838 176,178 Other assets, net 24,685 20,669 13,171 Total assets $ 2,717,133 $ 2,665,825 $ 2,704,066 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 46,121 $ 38,887 $ 47,808 Accrued compensation, payroll taxes and benefits 20,547 15,224 14,838 Self-insurance reserves 65,505 34,053 44,563 Accrued interest payable 44,062 38,484 26,616 Other accrued liabilities 69,323 67,346 102,382 Deferred revenue 147,650 128,627 126,578 Short-term borrowings 89,000 100,000 110,000 Current portion of long-term debt 56,867 — — Short-term lease liabilities 11,217 11,688 11,451 Total current liabilities 550,292 434,309 484,236 Noncurrent liabilities: Long-term debt 2,127,495 2,280,531 2,279,220 Long-term lease liabilities 152,575 164,804 162,569 Other long-term liabilities 28,893 30,714 5,519 Deferred income taxes 193,175 184,637 194,358 Total liabilities 3,052,430 3,094,995 3,125,902 Redeemable noncontrolling interests 544,764 521,395 543,719 Stockholders' deficit: Preferred stock, $1.00 par value — — — Common stock, $0.025 par value, 280,000,000 shares authorized; 83,540,861, 83,178,294 and 83,152,582 shares issued and outstanding at October 1, 2023, January 1, 2023 and October 2, 2022, respectively 2,088 2,079 2,079 Capital in excess of par value (2) 1,128,376 1,119,222 1,116,959 Accumulated deficit (2) (1,939,207 ) (2,000,671 ) (2,010,774 ) Accumulated other comprehensive loss, net of tax (71,318 ) (71,195 ) (73,819 ) Total stockholders' deficit (880,061 ) (950,565 ) (965,555 ) Total liabilities and stockholders' deficit $ 2,717,133 $ 2,665,825 $ 2,704,066 Nine Months Ended October 1, 2023 October 2, 2022 (Amounts in thousands) (unaudited) (unaudited) Cash flows from operating activities: Net income $ 108,928 $ 135,930 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 85,966 86,772 Stock-based compensation (2) 9,018 13,404 Interest accretion on notes payable 716 833 Loss on debt extinguishment 13,982 17,533 Amortization of debt issuance costs 4,139 5,531 Loss on disposal of assets 6,745 3,036 Deferred income tax expense 13,731 43,434 Other (3,741 ) (276 ) Changes in operating assets and liabilities: (Increase) decrease in accounts receivable - trade (40,177 ) 25,519 Increase in inventories, prepaid expenses and other current assets (11,139 ) (43,543 ) (Increase) decrease in deposits and other assets 3,376 (3,697 ) Decrease in ROU operating leases 8,708 10,176 (Decrease) increase in accounts payable, deferred revenue and accrued liabilities and other long-term liabilities 53,738 (62,274 ) Decrease in operating lease liabilities (12,310 ) (14,628 ) (Decrease) increase in accrued interest payable 5,578 (23,938 ) Net cash provided by operating activities 247,258 193,812 Cash flows from investing activities: Additions to property and equipment (110,371 ) (78,038 ) Property insurance recoveries 1,089 4,655 Net cash used in investing activities (109,282 ) (73,383 ) Cash flows from financing activities: Repayment of borrowings (1,133,623 ) (450,000 ) Proceeds from borrowings 1,023,984 200,000 Payment of debt issuance costs (19,821 ) — Stock repurchases — (96,774 ) Redemption premium payments on debt extinguishment — (12,600 ) Payment of cash dividends — (199 ) Proceeds from issuance of common stock — 1,665 Payment of tax withholdings on equity-based compensation through shares withheld (339 ) (414 ) Reduction in finance lease liability (750 ) (2,025 ) Purchase of redeemable noncontrolling interest (328 ) (556 ) Distributions to noncontrolling interests (23,766 ) (22,326 ) Net cash used in financing activities (154,643 ) (383,229 ) Effect of exchange rate on cash 3,308 529 Net decrease in cash and cash equivalents (13,359 ) (262,271 ) Cash and cash equivalents at beginning of period 80,122 335,585 Cash and cash equivalents at end of period $ 66,763 $ 73,314 Supplemental cash flow information Cash paid for interest $ 109,518 $ 125,919 Cash paid for income taxes $ 14,173 $ 3,582 Definition and Reconciliation of Non-GAAP Financial Measures We prepare our financial statements in accordance with United States generally accepted accounting principles ("GAAP"). In our press release, we make reference to non-GAAP financial measures including Modified EBITDA, Adjusted EBITDA and Adjusted EBITDA minus capex. The definition for each of these non-GAAP financial measures is set forth below in the notes to the reconciliation tables. We believe that these non-GAAP financial measures provide important and useful information for investors to facilitate a comparison of our operating performance on a consistent basis from period to period and make it easier to compare our results with those of other companies in our industry. We use these measures for internal planning and forecasting purposes, to evaluate ongoing operations and our performance generally, and in our annual and long-term incentive plans. By providing these measures, we provide our investors with the ability to review our performance in the same manner as our management. However, because these non-GAAP financial measures are not determined in accordance with GAAP, they are susceptible to varying calculations, and not all companies calculate these measures in the same manner. As a result, these non-GAAP financial measures as presented may not be directly comparable to a similarly titled non-GAAP financial measure presented by another company. These non-GAAP financial measures are presented as supplemental information and not as alternatives to any GAAP financial measures. When reviewing a non-GAAP financial measure, we encourage our investors to fully review and consider the related reconciliation as detailed below. The following tables set forth a reconciliation of net income to Adjusted EBITDA for the three-month periods, nine-month periods and twelve-month periods ended October 1, 2023, and October 2, 2022: Three Months Ended Nine Months Ended Twelve Months Ended (Amounts in thousands, except per share data) October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 October 1, 2023 October 2, 2022 Net income $ 134,467 $ 135,833 $ 108,928 $ 135,930 $ 118,945 $ 133,183 Income tax expense 36,570 38,654 32,525 44,257 35,228 49,949 Other (income) expense, net (3) 1,155 (659 ) (1,938 ) (2,069 ) 47 5,072 Loss on debt extinguishment — — 13,982 17,533 13,982 17,533 Interest expense, net 38,263 34,197 118,060 107,705 151,945 145,448 Loss on disposal of assets 1,760 5,038 6,745 3,036 7,636 13,310 Depreciation and amortization 27,942 30,186 85,966 86,772 116,318 116,268 Impairment of park assets — — — — 16,943 — Stock-based compensation (2) 3,525 3,998 9,018 13,404 10,832 18,229 Self-insurance reserve adjustment (4) — — 37,558 — 37,558 — Modified EBITDA (5) $ 243,682 $ 247,247 $ 410,844 $ 406,568 $ 509,434 $ 498,992 Third party interest in EBITDA of certain operations (6) (23,767 ) (22,326 ) (47,533 ) (44,651 ) (47,533 ) (44,651 ) Adjusted EBITDA (5) $ 219,915 $ 224,921 $ 363,311 $ 361,917 $ 461,901 $ 454,341 Capital expenditures, net of property insurance recoveries (7) (42,241 ) (18,041 ) (109,282 ) (73,383 ) (147,408 ) (133,310 ) Adjusted EBITDA minus CAPEX (5) $ 177,674 $ 206,880 $ 254,029 $ 288,534 $ 314,493 $ 321,031 ____________________________________________________________________________ (3) Amounts recorded as “Other (income) expense, net” include certain non-recurring costs incurred in conjunction with changes made to our organizational structure in December 2021. During 2023, we reclassified the net pension-related expense (benefit) to other (income) expense, net. in our consolidated statements of operations. This reclassification has been reflected in all periods presented. As a result of this reclassification, Adjusted EBITDA for the three-month, nine-month and twelve-month periods ended October 2, 2022, declined by $1.2 million, $4.0 million and $6.1 million, respectively, as compared to the previously reported figures. (4) Amount relates to an adjustment to our self-insurance reserves resulting from a change in accounting estimate that increased our ultimate loss indications on both identified claims and incurred but not reported claims, as discussed in more detail above in our review of second quarter 2023 results. We have excluded this adjustment from our reported Adjusted EBITDA because we believe (i) the change in actuarial assumptions and related change in accounting estimate that gave rise to the adjustment is unusual and not expected to be recurring; (ii) excluding it provides more meaningful comparisons to our historical results; and (iii) excluding it provides more meaningful comparisons to other companies in our industry. (5) Modified EBITDA,” a non-GAAP measure, is defined as our consolidated income (loss) from continuing operations: excluding the following: 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, fresh start accounting valuation adjustments and other significant non-recurring items. Modified EBITDA, as defined herein, may differ from similarly titled measures presented by other companies. Management uses non-GAAP measures for budgeting purposes, measuring actual results, allocating resources and in determining employee incentive compensation. We believe that Modified EBITDA provides relevant and useful information for investors because it assists in comparing our operating performance on a consistent basis, makes it easier to compare our results with those of other companies in our industry as it most closely ties our performance to that of our competitors from a park-level perspective and allows investors to review performance in the same manner as our management. "Adjusted EBITDA," a non-GAAP measure, is defined as Modified EBITDA minus the interests of third parties in the Modified EBITDA of properties that are less than wholly owned (consisting of Six Flags Over Georgia, Six Flags White Water Atlanta and Six Flags Over Texas). Adjusted EBITDA is approximately equal to “Parent Consolidated Adjusted EBITDA” as defined in our secured credit agreement, except that Parent Consolidated Adjusted EBITDA excludes Adjusted EBITDA from equity investees that is not distributed to us in cash on a net basis and has limitations on the amounts of certain expenses that are excluded from the calculation. Adjusted EBITDA as defined herein may differ from similarly titled measures presented by other companies. Our board of directors and management use Adjusted EBITDA to measure our performance and our current management incentive compensation plans are based largely on Adjusted EBITDA. We believe that Adjusted EBITDA is frequently used by all our sell-side analysts and most investors as their primary measure of our performance in the evaluation of companies in our industry. In addition, the instruments governing our indebtedness use Adjusted EBITDA to measure our compliance with certain covenants and, in certain circumstances, our ability to make certain borrowings. Adjusted EBITDA, as computed by us, may not be comparable to similar metrics used by other companies in our industry. “Adjusted EBITDA minus capex,” a non-GAAP measure, is defined as Adjusted EBITDA minus capital expenditures, net of property insurance recoveries. Adjusted EBITDA minus capex as defined herein may differ from similarly titled measures presented by other companies. Our board of directors and management use Adjusted EBITDA minus capex to measure our performance and our current management incentive compensation plans are based largely on Adjusted EBITDA minus capex. We believe that Adjusted EBITDA minus capex is frequently used by analysts and investors as a measure of our performance. Adjusted EBITDA minus capex, as computed by us, may not be comparable to similar metrics used by other companies in our industry. (6) Represents interests of non-controlling interests in the Adjusted EBITDA of Six Flags Over Georgia, Six Flags Over Texas and Six Flags White Water Atlanta. (7) Capital expenditures, net of property insurance recovery (“CAPEX”) represents cash spent on property, plant and equipment, net of property insurance recoveries. View source version on businesswire.com: https://www.businesswire.com/news/home/20231102643050/en/
Evan Bertrand Vice President, Investor Relations and Treasurer +1-972-595-5180 investorrelations@sftp.com
