Six Flags [FUN] Corporate Discussion Thread

[swfan1988]

Six Flags released their Q4 earnings today:

https://investors.sixflags.com/news-and-events/press-releases/2022/02-24-2022-110026329

ARLINGTON, Texas--(BUSINESS WIRE)-- Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and the largest operator of waterparks in North America, today reported attendance of 6 million guests and total revenue of $317 million for fourth quarter 2021. Results for fourth quarter and full year 2021 are not directly comparable to the same prior-year periods due to the company’s COVID-19 related suspension of operations and operating restrictions that began in mid-March 2020. The company believes it is most relevant to compare its results in 2021 to the same periods in 2019.

In the fourth quarter (October 4, 2021, through January 2, 2022), attendance at the company’s parks was approximately 98% compared to the comparable fiscal period in 2019 (October 7, 2019, through January 5, 2020). Attendance by pre-booked groups, inclusive of school groups who typically book in advance, has been significantly diminished due to the pandemic. Excluding pre-booked groups, attendance at the company’s parks in fourth quarter 2021 was approximately 100% compared to the same period in 2019.

“In my first 100 days, we have established a new, customer-obsessed culture, a lean and empowered organization, and a strategic focus on delivering a premium guest experience” said Selim Bassoul, President and CEO. “With our foundation now in place, we are moving quickly to invigorate the magic of Six Flags.”

Fourth Quarter 2021 Highlights

Attendance was 6 million guests, inclusive of a negative calendar shift of 363 thousand guests due to a change in the company’s reporting calendar, for a decrease of 354 thousand guests compared to fourth quarter 2019.

Total Revenue was $317 million, an increase of $56 million compared to fourth quarter 2019.

Net Loss was $2 million, an improvement of $9 million compared to fourth quarter 2019.

Adjusted EBITDA1 was $95 million, an increase of $23 million compared to fourth quarter 2019.

Net cash outflow for fourth quarter 2021 was $54 million.

Full Year 2021 Highlights

Attendance was 28 million guests, a decrease of 5 million guests compared to full year 2019.

Total Revenue was $1,497 million, an increase of $9 million compared to full year 2019.

Net Income was $130 million, a decrease of $49 million compared to full year 2019.

Adjusted EBITDA was $498 million, a decrease of $29 million compared to full year 2019.

Net cash flow for full year 2021 was $178 million.

...

Total guest spending per capita in fourth quarter 2021 increased 32% compared to fourth quarter 2019. Applying the pro forma allocation from admissions spending to in-park spending for 2019, admissions spending per capita increased 28% and in-park spending per capita increased 36%. The increase in admissions spending per capita was driven by higher pricing on single day tickets, particularly during the company’s Fright Fest event, and a higher mix of single-day ticket attendance. The increase in in-park spending per capita was due to strong consumer trends and a higher mix of single-day guests, who tend to spend more than season pass holders and members on a per day basis.

They also are scr*wing around with their fiscal year calendar for some reason...yeah I don't get it either.

On the conference call apparently the new CEO talked up food and guest experience, and wants to focus less on attendance and new rides.

 

Seems to me that this new CEO (this was his first earnings call) wants to move a way from the "every park gets something new every year" strategy, and instead focus on increasing in-park spending. Being he's from Spirit Airlines, I'm not sure if he really wants to invest in guest experience, or if it's code for "We're gonna cut costs like crazy". The company is still loosing money, so maybe he wants to fix that and than invest more? I don't know...kinda hard to say. They did emphasize that in-park spending is higher with "single-day guests" over season pass holders and members, so that might help to explain the current pass situation. My guess is that they found that while the monthly income from members was great (especially during COVID), the members didn't spend as much in the parks and the new CEO said "If they're not making us as much money, let's force them into categories that will make us more money". We'll see what happens I guess though, would expect a quiet 2022 for sure it seems.

[Dan the Coaster Man]

I went ahead and read the transcript from the conference call today. It was really our first opportunity to get official public statements from the new CEO Selim Bassoul and what he envisions, plus comments from VP and CFO Sandeep Reddy. Six Flags is the chain I frequent the most, but it's not by choice, it's just how it works out geographically for me. Six Flags has always left me wanting more, it's my least favorite major chain. Bassoul had a great statement today: "no more over reliance simply on our brand and our history. We must elevate our game to the next level". Six Flags has caught some backlash with their recent changes, including from me. But realistically, most of us agree Six Flags is inferior to other chains. And that is not going to change without a shakeup. @swfan1988 covered the financials pretty well above with some overarching thoughts. I thought I would list other takeaways from the conference call that sheds some light on the future.

• Bassoul spent the first 100 days decentralizing the company and "empowering business unit leaders" (park presidents)
• The culture has been or will be reset. This goes back to "no more over reliance simply on our brand and our history. We must elevate our game to the next level". Their goal is to be the most innovating and customer-obsessed theme park company in the world. Big focus on premiumization
• They stated they have downsized, but that they have also added talent, particularly to culinary
• They plan on paying down debt and refinancing it "later this year"
• They have 6 initiatives to improving guest experience
  • Improving efficiency and convivence by reducing wait times, ride downtime and opening rides "when our guests arrive". They state they will accomplish this by moving staff from lower-value activities to rides and through a use of single rider lines for full cycles. They also mentioned they will experiment with "virtual fueling technology" (virtual queues?). They want to add digital boards through the parks that show wait times for rides and restaurants.
  • Creating fun through employee friendliness (this made me think of KI, Dollywood)
  • Park cleanliness. This includes "better curb appeal at the front gate", and Bassoul stated that several of the bigger parks are in the process of updating the front gate experience right now and hope to finish those by peak summer season
  • Better quality food. This was known, but Bassoul goes as far as saying they have been experimenting with their hot dogs, burgers and chicken tenders in his first 100 days and that based on what he has tasted so far "the quality of these items is better than any theme parks I've ever visited". He states this will be ready this spring. Over time he wants to include healthier options, more grilled items and better refreshments (states coffee and alcohol)
  • Guest amenities. More benches and shade are already on the way for this season
  • Guest facing technology. Basically upgrades to the app, to the point it will become "a remote control that facilitates a seamless guest experience"
• Bassoul says that surveys have revealed that Six Flags has left a lot of money on the table with guests who hardly spend any money. They are combating this with higher prices.
• The new pricing program in the past weeks has been a success and they are ready to roll it out chain wide. They have been very pleased with the early results.
• They will simplify ticket offerings but combine season passes and memberships into a new product lineup with fewer choices and targeted blackout dates
• For capital allocation strategy, #1 priority is reinvesting into the business and leading the industry in innovation. BUT he states that historically innovation was measured in term of thrill rights. He basically says that Six Flags already has enough thrills at their parks, "and while we continue to selectively add new coasters over time", the innovation he speaks of is in terms of guest facing technology, food, and other infrastructure. #2 priority is paying down debt.
• Over time they may consider mergers and acquisitions but Bassoul does not see it in the "foreseeable future"
• For labor, for anything that is not specifically guest facing, they are looking into automation. They specifically mention automating the back of the kitchen and security.
• They will be changing up marketing to explain the shift of their "rebrand". They plan to do this on social media, through influencers, and investing in search engine optimization 

Overall I think it is exciting for change. I have not fully supported everything that has happened over the park few months but it was nice to hear specifically what Bassoul has in mind for the future. A little concerned about rides going forward, but there's a decent amount to get excited about this season!

[prozach626]

So... what were we supposed to get excited about this season? All I read was better chicken strips and some sprucing up of front gates. Nothing seems to be near term.

 

I'm glad they recognize Six Flags Saint Louis has enough thrills. We've been spoiled ever since Boomerang.

[Dan the Coaster Man]

Executive VP and CFO Sandeep Reddy has resigned and taken a job at a different company effective March 27, a week after he helped announce Six Flags’ new vision for success and growth…

[Doppel Looping]

23 hours ago, Dan the Coaster Man said:

Executive VP and CFO Sandeep Reddy has resigned and taken a job at a different company effective March 27, a week after he helped announce Six Flags’ new vision for success and growth…

Maybe he had a bad hot dog?

[PeoplemoverMatt]

On 3/1/2022 at 11:05 AM, Dan the Coaster Man said:

Executive VP and CFO Sandeep Reddy has resigned and taken a job at a different company effective March 27, a week after he helped announce Six Flags’ new vision for success and growth…

If only he ate better chicken strips.

[Dan the Coaster Man]

Was looking around the app today and noticed two things.

For my 2 skip the line passes it says "Skip Two Lines Every Visit, Every Season". Maybe that sheds a little light on our worry about what benefits we might lose after a year / the grandfather age?

I also noticed that I get "Unlimited Soft Drinks Every Visit". Are they talking about the souvenir cup? Or is this Six Flags version of Cedar Fair's disposable cup plan? Also, does "unlimited" mean that I could order food with two friends and get them free drinks on my behalf? Or is it just for one individual? 

[anonymouscactus]

Free drinks for everyone!!!!!

 

 

Sorry for not being helpful. But I think it's safe to say that the benefit is only for yourself unless you decide to pour the drink into another cup and go again. There is supposed to be a "cool down" period to prevent that (ie: 'unlimited' every 5 minutes, or whatever is in the FAQ). They said they don't enforce it but they have every right to if you become a problem

 

[Nrthwnd]

On 3/2/2022 at 10:40 AM, PeoplemoverMatt said:

If only he ate better chicken strips.

Maybe it was bad cotton candy, perhaps?

[tndank]

11 hours ago, anonymouscactus said:

Free drinks for everyone!!!!  Sorry for not being helpful. But I think it's safe to say that the benefit is only for yourself unless you decide to pour the drink into another cup and go again. There is supposed to be a "cool down" period to prevent that (ie: 'unlimited' every 5 minutes, or whatever is in the FAQ). They said they don't enforce it but they have every right to if you become a problem

 

Not sure if any are doing it this year, but SFoG was switching to chipped cups end of last season for refills.  The 15 minute cooldown is probably in effect on those machines.

[adamico2]

^SFoT was doing chips last year as well, even on single purchase paper cups. This allowed for free refills at self-serve fountains. I doubt that free refills was their intention...

Also, if anyone is looking for the cheapest Six Flags season pass, Mexico still offers one for less than 50 USD. It gets you into "Over Texas, Fiesta Texas, Over Georgia, White Water, Frontier City, Harbor Arlington, Harbor Splash Town, Harbor OKC, Mexico, and Hurricane Harbor Oaxtepec."

[anonymouscactus]

Who knew you could make a 5 min sketch about Mr Six in 2022?

 

 

[coasternut]

I miss Mr Six... You can still see some of the buses at selected 6 Flags parks.

[Dan the Coaster Man]

I understand why they got rid of him but I do miss him

[rachelmadcow]

Six Flags is in the same position as American Auto Manufacturers were in the early 2000s. Their bad reputation is so many years in the making it will take a long time to reverse course. 

Six Flags has been known to have bad food for 20 years. Their stop gap was to allow Panda Express etc to operate inside the park, of course that should be only temporary since it reduces the exclusivity of the park. I mean who is paying 15 dollars for a PE plate that everyone knows is only 9 dollars at the strip mall PE down the street. The CEO realizes that nobody is that dumb and the guests would rather not eat. 

Six Flags used to be the Costco of amusement parks. Rides by the foot. Now it has changed into like Dollar General but with very high pricing. Cedar Fair has become the new Costco of amusement parks, their parks feel like values despite the ticket cost. 

[TallShortstop]

2 hours ago, rachelmadcow said:

Six Flags has been known to have bad food for 20 years. Their stop gap was to allow Panda Express etc to operate inside the park, of course that should be only temporary since it reduces the exclusivity of the park. I mean who is paying 15 dollars for a PE plate that everyone knows is only 9 dollars at the strip mall PE down the street. The CEO realizes that nobody is that dumb and the guests would rather not eat. 

I don't know about other parks but Over Texas took out Panda Express and replaced it with a "Chop Six" over by the Oil Derrick Observation Tower.

[coasternut]

12 minutes ago, TallShortstop said:

I don't know about other parks but Over Texas took out Panda Express and replaced it with a "Chop Six" over by the Oil Derrick Observation Tower.

Same at Magic Mountain too.

[anonymouscactus]

3 hours ago, rachelmadcow said:

I mean who is paying 15 dollars for a PE plate that everyone knows is only 9 dollars at the strip mall PE down the street. The CEO realizes that nobody is that dumb and the guests would rather not eat. 

Uhhh... Wut? That's like saying nobody eats at the Chick-fil-A at Cedar Point or King's Island because they charge double a normal one. Yet it typically has just as long of a line as Maverick next door, lol.

Not many people leave the park to eat. It's more convenient to pay an extra $6 than to leave the park, for most (not all) people.

[Dan the Coaster Man]

On 4/17/2022 at 6:46 PM, TallShortstop said:

I don't know about other parks but Over Texas took out Panda Express and replaced it with a "Chop Six" over by the Oil Derrick Observation Tower.

SFGAm and SFStL too

[southpuddle]

Should have kept Panda Express. Chop Six at SFFT was awful. Takes a lot to get orange chicken wrong. 

[Nrthwnd]

^ Seriously, "Asian food" at most theme parks is suspect.

Better to avoid it, and buy "in town" etc. Really. IMhO.

[tndank]

Discovery Kingdom members have started receiving notices of membership price increase of $1+ depending on level in May. 

Word is these will continue to increase as time goes by.  I think most thought they'd get another year before they started this process. 

[805Andrew]

On 4/17/2022 at 8:45 AM, anonymouscactus said:

Who knew you could make a 5 min sketch about Mr Six in 2022?

 

 

 

Loved this skit!

[bill_s]

On 4/17/2022 at 4:44 PM, rachelmadcow said:

I mean who is paying 15 dollars for a PE plate that everyone knows is only 9 dollars at the strip mall PE down the street. The CEO realizes that nobody is that dumb and the guests would rather not eat. 

Versus paying $15 for food that's $5 down the street, that's pretty good. Panda express at KD was always open and busy, but their in-house replacement is around as busy, and they probably make more off it.

[bert425]

was at SFFT yesterday and despite the heat (and the continuing staffing issues that result in ~1/2 the park not opening up until after Noon, despite 10am front gate/10:30 rope drop open), I really did have a fantastic time.

that said, the one thing I really did have an issue with yesterday - and I'm not sure if it's chain wide now, but I *absolutely* suspect it's coming from Six Flags Mgmt, and not the park itself:

NO MORE NAPKINS out on countertops. (no silver or condiments either. . but my big issue was the napkins).
Not good at the Ice Cream places, the messy nacho place, or the funnel cake stand where you're going to need multiple napkins.

I feel awful for Park Mgmt that's going to have to deal with the poor impression fallout that seems to be clearly coming from a level above the parks (and I know they're already dealing with many complaints from so many "Meal" and "Snack" options being removed from the meal plans - again, not an individual park decision.

so. . . just a heads up on this sudden change, and I'd love to know if it's happening at other Six Flags parks. . . I strongly suspect it is.