Six Flags First Quarter Revenue up 35%

[Evan1127]

http://biz.yahoo.com/ap/080417/six_flags_sales.html?.v=1

 

NEW YORK (AP) -- Six Flags Inc. said Thursday first-quarter revenue climbed 35 percent, helped by increased attendance and guest spending.

 

The theme park operator reported quarterly sales of $68 million compared with $50.7 million a year earlier.

 

Analysts predicted revenue of $53.4 million, according to a Thomson Financial poll.

 

Attendance climbed 19 percent to more than 1.4 million during the quarter, helped by an earlier Easter holiday than last year. First-quarter results typically make up 5 percent of full-year attendance, the company said.

 

First-quarter guest spending rose 13 percent to $38.95 from $34.44 per person, reflecting higher admission prices, food and beverage, parking and other revenue.

 

Revenue from sponsorship and international fees climbed to $11.1 million from $7.8 million.

 

"With the cost of airline tickets going up and the hassle and frustration of air travel increasing, we believe Six Flags is well-positioned to be a preferred entertainment option this summer," President and Chief Executive Mark Shapiro said in a statement.

 

Six Flags has 21 theme parks in the U.S., Mexico and Canada.

[Scaparri]

That's awesome news and doesn't really surprise me. I can only see it getting better really. Compared to my experiences in the past several years, I've been nothing but blown away by all the Six Flags parks I've been to this year, save one. And even the one that wasn't a good experience was still exceptionally clean and nice. People (including myself, at times) may complain about things like the locker nazis, but overall, I think the SF brass is really figuring things out and have a bright future.

[AllenA07]

That is a huge gain, glad to see the chain pulling out of the nose dive it has been in for the past few years.

[ginzo]

Great news. It's nice that Six Flags is finally seeing some results under the current regime.

 

A few more years of good quarters and maybe we'll see them build out those El Toro clones we all want.

[Teacups Make Me Sick]

Ummm...this really shouldnt be much of a surprise since PRICES WENT UP!!!????

 

[carolinacaniac]

I don't know that prices went up significantly enough for it to be the only reason revenue went up, but I would think it was possibly a factor. The main thing here is that it is a great step for the company going in the right direction. I am hoping for the best for the company!

[Hercules]

There is a lot more to it than just prices going up. Things like lowering expenses can factor into a revenue gain. Plus, even if the prices went up, that doesn't mean that the same amount of people will even be going through the gates. If attendance goes down enough, higher prices wouildn't even really matter that much, it would probably make revenue go down. Plus, I haven't been paying much attention, have prices even really gone up?

 

I have to say, nice job Six Flags.

[VivaLaVibora]

I can imagine the reason for the increase being is the fact that parks are getting new roller coasters this year, parking has increased in price, the 4 million dollar sponsorships added, and maybe food has been raised as always.

 

People might be buying season passes now because they know that SFOT, and SFFT are getting new rides. SFDK is also open, and they are getting Tony Hawk also. SFMM is just a retheme to a new ride. So, to me it makes sense why revenue is up from the year before in my opinion.

 

These parks are getting more new rides from last year as in thrills, and people want to buy a season pass right now so they can go for the rest of the season. SFOT, and SFDK didn't add anything thrilling last year. The spring breakers are usually the people that want thrill rides.

 

Don't forget about weather. That's a huge factor. Last year, Shapiro was complaining about Texas have so much rain that attendance went down drastically. Maybe, the weather is better this year. It's many factors. I don't think it's just because of one reason.

 

Heck, that advertising on yahoo for the real cheap season pass could have raised attendance. The season pass was like $40 for that one day. People got that, and came to the parks. Maybe, they needed to buy a parking pass which is around $45-$65 because they will be going to the park so much.

 

At my park, they say that a pizza, and a drink costs like $10.00. If people are buying that 2 times a day, guess what happens? That's $20.00 just for food. That could have went up, but I don't know.

 

Lockers are revenue, and than you have some parks I don't think had flash pass, and now they do. For instance, SFDK didn't have flash pass, but now it does. Heck, maybe every park has a Flash pass even though they didn't before. I'm not going to check, but even SFKK has one, and I don't think they did before. It's only $10.

 

Flash pass prices could have went up. How much revenue are they getting from the commercials on the tv? They didn't have those last year. Admission prices were dirt cheap during this time. It is still $29.99 to go SFOT on the Internet. Talk about under-pricing.

 

That's a great point about expenses being down. This is the company that is removing rides left, and right. At my park, they are going to open one section of the park an hour later even. SFNE and SFMM dumped a lot of rides. SFOT won't open Casa Magnetica, and the bumper cars anymore. Great Adventure also knocked out 5 rides.

 

I thought revenue though just has to do with the money you are earning, and not operating expenses???

[SharkTums]

Where is Larry!?!?

 

Oh, he must be out buying more stock!

 

Good for Six Flags! Hope this trend continues!

[Scaparri]

Ummm...this really shouldnt be much of a surprise since PRICES WENT UP!!!????

 

 

I don't really get that argument. The face value might be higher, but prices are the cheapest they've been in years if you simply buy your tickets on the SF website.

[robbalvey]

I haven't been paying much attention, have prices even really gone up?

No, they haven't. I think people are just making up facts and figures out of thin air again.

 

--Robb

[Revolucion]

Revenue=Tickets, Parking, Merchandise, Food Sales

Expenses=Labor, Overhead, Cost of Food, Cost of Merchandise

Revenue minus Expenses=Operating Income

Other Expenses=Depreciation, Amortization, Taxes, One-Time Write Offs

Operating Income - Other Expenses = Net Income

 

Though revenue is up, my guess is that expenses (particularly other expenses) are WAY up. The removal of all those rides resulted in one-time write-offs. It's pretty expensive to remove a ride. Maybe Jay will chime in and tell us it cost to remove Flashback & Psyclone, but my guess is hundreds of thousands of dollars for big roller coasters. The good news is that a coaster like Flashback can produce $50.00 of scrap metal to offset the cost of removal. The bad news is that Psyclone is probably considered toxic waste--modern wooden roller coasters are pressure treated with toxic chemicals as a fire retardant.

 

Depreciation and amortization are annual expenses for one-time costs (like a roller coaster) that is deducted over the "useful life".

 

The number to watch is operating income, and I hope that number is way up for the year. The 19% increase in attendance is a good sign, but the article attributes that to Spring Break.

 

 

There is a lot more to it than just prices going up. Things like lowering expenses can factor into a revenue gain. Plus, even if the prices went up, that doesn't mean that the same amount of people will even be going through the gates. If attendance goes down enough, higher prices wouildn't even really matter that much, it would probably make revenue go down. Plus, I haven't been paying much attention, have prices even really gone up?

 

I have to say, nice job Six Flags.

[Moose]

With the price of steel as high as it is, I am guessing that the $50 you state is way off. Scrap steel is getting some of the highest prices it ever has.

 

Good for six flags. Very few companies right now can say that they made more this year than last. It's quite an acheivement in today's economy.

[VivaLaVibora]

^^^Have flash passes, and food prices gone up from last year? At SFOT, I saw horror stories of people waiting 5 hours for Titan. Why wouldn't want to buy a flash pass?

 

When people say prices, they don't just mean admission. Admission prices haven't gone up as far as I know, but what about everything else?

 

At SFMM, what was the flash pass last year, and what is it this year?

 

For parking, they are going up for SFGAm. Now, they want you to pay $25.00 for the whole entire front lot. In the back lot, they make you pay $15.00. Last year, they only had the first part of the front lot be $25.00, and the rest of the front lot was $15.00. The parking pass has gone up $5.00.

[gisco]

Attendance climbed 19 percent to more than 1.4 million during the quarter, helped by an earlier Easter holiday than last year. First-quarter results typically make up 5 percent of full-year attendance, the company said.

 

Easter was in March this year, would the attendance still have gone up if Easter had been in April?? Most of the parks were not open last year in March so does this really tell us anything yet? This accounts for only 5% of a years revenue.

 

The stock has only jumped 11% to $1.71 on this announcement.

 

The real test will come at the end of the next quarter. Hopefully the trend will be up.

[Revolucion]

I was being sarcastic. The scrap value is probably mid to high five figures, but it still probably doesn't come close to covering the cost of removal.

 

With the price of steel as high as it is, I am guessing that the $50 you state is way off. Scrap steel is getting some of the highest prices it ever has.

 

Good for six flags. Very few companies right now can say that they made more this year than last. It's quite an acheivement in today's economy.

[mcjaco]

Where is Larry!?!?

 

Oh, he must be out buying more stock!

 

Good for Six Flags! Hope this trend continues!

 

I was thinking he'd probably be selling!

[coaster05]

This doesn't surprise me as the last seven SF parks I have visited (SFOG,SFKK,SFGAM,SFNE, SFGADV,SFA,Great Escape) have all been pretty awesome days. Good service, clean, etc. Again they are not perfect, but they seem much better then that other chain that grew too fast.

[Teacups Make Me Sick]

Ummm...this really shouldnt be much of a surprise since PRICES WENT UP!!!????

 

 

I don't really get that argument. The face value might be higher, but prices are the cheapest they've been in years if you simply buy your tickets on the SF website.

 

First-quarter guest spending rose 13 percent to $38.95 from $34.44 per person, reflecting higher admission prices, food and beverage, parking and other revenue.

 

I'm not a rainman when it comes to remembering numbers....but a cup of beer went up a dollar which if it was at 5.99 last year...that makes it a rough 20% increase.

 

The drive through safari is no longer included in a day ticket (for Great Adventure).

 

The games are now 3-5 dollars/game.

 

Those are only a few examples of the price increases....true, the admission tickets stayed the same price.

[cedarpointfangirl]

Even some of the little things they do make a difference. Things like requiring you to buy a new souvenir bottle every year. I noticed this year that my Six Flags Over Texas Goldpass benefits went down. They give you only one unrestricted bring a friend free pass instead of the two we had last year. The 25% for food and merchandise went down to 15%.

[YoshiFan]

^^ Soft Pretzels also went up to $5.99 from $4.99. Butterfly Fries are now $6.99. And new this year is Vitamin Water for $4.00 a bottle.

 

The value deal went up to $149.99 from $99.99. It included admission, flashpass and I think a meal or two plus a game.

[coaster05]

As long as they continue to increase things like games and food I could care less. I never eat more then one meal at a chain park and never play games. The parking doesn't bother me either because I have been to an ND football game and Nascar races. I would rather have parks increase prices and stay in business as opposed to the alternative.

[packfanlv]

I visited ten Six Flags parks last year and have to say other than La Ronde, they all provided great experiences. (La Ronde is a total DUMP!) Most of our visits came before the summer season and when they were short staffed on a Friday, often times the managers were out running the rides with a smile.

 

As for season passes coming with less, they don't charge much for them anyway and if they take away a free day for a friend or something small like that I don't really care. (Last year I paid $50 for my season pass.) I also don't eat very much inside the parks and last year we bought a souvenir mug at SFFT and carried it with us to all of the parks to get $.99 refills.

 

After visiting some of the theme parks in Australia, Malaysia and in Thailand over the past couple of months, I can say that compared to these parks, Six Flags runs a good operation. The parks here in Southeast Asia make me long for the rude ride ops at SFMM. With that said, the parks are far from perfect and they still have a lot of work but I am a believer in the turn around after personally seeing what they are doing in the parks. Shapiro seems to be producing.

[Shockwave]

Nice to see things are still on the wagon. But there's still a long way to go before things are even close to clearing the debt.

 

I still think the season pass is way undervalued. But I guess it's only a matter of time before the management address that. I'd expect to see something similar to Cedar Fair, where the multi park offering is about double what a single park season pass would cost.

[packfanlv]

I agree. The debt is still a huge obstacle, but all the current management can do is provide a better experience and hope that their cash flow improves so they can start to pay down the debt. In following the stock, it seems that a lot of analysts are worried because a good portion of their debt comes due next year. Their credit rating is very low and many people think they will be unable to restructure the debt and will be forced to file bankruptcy. I hope this doesn't happen. Good news like this report are at least steps in the right direction even if the main reason for the increase was because Easter came earlier this year.