Six Flags Conference Call Details, 6 Parks Possibly For Sale

[Darien Laker]

I don't get it. Why do they want to sell the park if they recentely built Tatsu?

 

OMG how many times does it have to be said? Tatsu was green-lighted by the OLD management! It was already being built when Shapiro came to power. If he could have stopped it, he WOULD HAVE. Tatsu has nothing to do with SFMM being on the "chopping block".

[map2]

WOW! I really wish I had found this thread earlier. This article is very depressing as I will be visiting Six Flags in August. My parents visited it in the 80's and they said it had great family appeal then so I was exited to go with my mom but after reading this thread I'm not sure I even want to make the trip. To comment on other people's posts: A. Someone has already said this but historical value doesn't really mean anything if the historical stuff doesn't generate profit. If it did,we would still have Russian ice slides. And to correct some people-Revolution was not the first inversion-it was the first vertical loop but the first inversion was Corkscrew at Knotts Berry Farm-the ride is now located at Silverwood in Idaho. B. I don't think SF should sell Magic Mountain. Six Flags has already gone too far to make MM a teen-friendly park...some might say it's a bad thing but it HAS brought 3 million paeople-per-year to the park. I do agree that they could spend some time beautifying the park and getting the staff in line and definitely adding more security. Other than, that keep marketing it to teens! If MM doesn't fit in with the family theme, then take off the Six Flags label, take out the parades and characters, and quietly manage it. If people can't tell that it's a Six Flags park, you can keep entirely different from the rest of the chain and still gain profits. It's kind of like the Bonfante Gardens-former Paramount situation. I never knew that Paramount owned Bonfante(which I will also be visiting in August)! The reason is, Bonfante appeals to a different crowd than the rest of the chain but the crowds that go to Bonfante still made profits for Paramount. Well now that I've had my say, I'll probably silently keep wacthing this topic and wait for the outcome(you can't know what will happen until it is CONFIRMED)

 

 

 

Sorry if I made any errors in that-I tried to keep it as intellegent-sounding as possible for a 13-year-old.

 

I agree with you on part A, but not so much on part B. If you take off the SF labael, and market the park as a "teen friendly" park, the park will be losing money. Most teens who go to these "local" theme parks don't spend money once they have entered the park. Of course you have some teens that spend lots of money once in the park, but if they target the teen age with lots of thrills, the teens will spend less time buying things and more time riding. The target group for a park is also a factor of how much income a park gets. Take Disney for example, Disney is targeted for families, a lot of things to do for the kids and things to do for the adults. But of course when they advertise for Disney, they usually advertise things for the kids. Because they know the kids are too young to go by themselves, they know the parents will come with the kids. Because the park are targeted for families, and because the parents will more than likely be with the kids, Disney can get away with overcharging because they know the parents will be with them, and the parents are the ones with the money. If MM is targeted for teens, most parents feel that the kids are old enough to off by themselves, the parents with the money, give the kids a much more limited amount of money. MM cannot get away with overpricing their things if it is only targeted for teens because the teens have such a limited income, and if things are too pricy, they simply won't go.

[thomas2]

OMG how many times does it have to be said? Tatsu was green-lighted by the OLD management! It was already being built when Shapiro came to power. If he could have stopped it, he WOULD HAVE. Tatsu has nothing to do with SFMM being on the "chopping block".

 

Sorry if I don't read the whole 40 pages of this thread.

 

So basically the old management said "Let's built a new, expensive coaster for the park", while the new said "let's try to sell the park". That just doens't make sense. Why would Shapiro sell the park if the previouw owners didn't even think of that and even built a brand-new coaster? And sorry if the anwser was already posted, I don't have enough time to read the whole thread )

[Wes]

^ I don't get what's so hard to understand about it.

 

Old management (who basically ruined the Six Flags brand) decides to put in yet another large roller coaster.

 

New management comes in and looks for ways to try to revive the brand. They see SFMM as a trouble park that doesn't fit in with their new family image. They proceed to try to sell the park.

[CoasterFanatic]

^^ There is a reason that they are the "old management"

[gunslinger]

I absolutely LOATHE having to post hearsay, but I think it's justified. I was told by a friend who works at MM that employees were told they would be turning in their uniforms after Fright Fest this year, and the park was being closed. I don't believe it for a second, but I wanted to see if an employee could tell me I'm an idiot and to shut up. I'd feel a lot better.

[coasterjunkie91350]

Hey i was just there today and heard the park has just hired 1200 new employees so i dont know if this is a good sign plz let me know.

[texasgiantrules]

who told you they hired 1200 new employees?

[the_rock401]

Here's my two bits on this whole situation. [rant]

 

It is indeed ironic that SFMM may fall victim to the development that it was originally built to promote.

 

As for the potential for the addition of AT LEAST 125,000 new residents to the Santa Clara Valley over the next 10-15 years, you would think that a lot of official entities would be viciously opposed to this development. Such entities include:

 

-Local water utilities (After doing a little digging, there is no guaranteed water source for most new developments

-Local school districts (they can't build up schools fast enough)

-CalTrans (Apparently I-5 is already a joke over Newhall Pass, and where do you think all the new residents are going to work?)

Those are the only ones I could think of, although there are a ton of other entities (Sierra Club, etc) opposed.

 

Also, building in a floodplain is asking for trouble. The reason I'm saying this is that I live in an area northwest of Minneapolis that is growing exponentially because of a volatile combination of freeway access (I-94), farmers ready to retire, build-and-run developers, and city councils who approve anything that doesn't bite them first.

 

[/rant]

 

Paul

[calcajun]

Turn in their uniforms?

 

I thought all sf employees bought uniforms, which means it is theirs and they keep them. I have two years worth.

 

You know how much money the park would lose if they gave out uniforms with the high tunover of employees?

[SharkTums]

The park DOES give out uniforms for free. You have to pay to replace a part of it if you lose it, and when you leave/get fired/die/etc. if you don't turn it back in they take it out of your final check.

 

 

How's that belt doing Mike??

[coasterjunkie91350]

I was wondering when the city would step up and fight this

 

"GO SCV"!

 

 

http://www.dailynews.com/santaclarita/ci_4057464

[odene497]

I really hope they don't let SFDL go. It's pretty much all New Yorks got. Seabreeze is boring.

[Gnome]

Gnome wasnt viper and 4 other rides in encino man? hmmm

I've never heard of that movie in my life. Although I forgot that viper has been futured in several movies and the cheeto's commrecial. I just don't hold it to high regard personally.

 

I don't get it. Why do they want to sell the park if they recentely built Tatsu?

 

OMG how many times does it have to be said? Tatsu was green-lighted by the OLD management! It was already being built when Shapiro came to power. If he could have stopped it, he WOULD HAVE. Tatsu has nothing to do with SFMM being on the "chopping block".

But why would you want to axe a park noing there was 22mil spent on it, reguardless who was running the park? I know why, because it doesn't fit your ideal theme park.

[Jon Sabo]

The park DOES give out uniforms for free. You have to pay to replace a part of it if you lose it, and when you leave/get fired/die/etc. if you don't turn it back in they take it out of your final check.

 

 

How's that belt doing Mike??

 

 

Same with BGE (and wow! How many people take uniforms or partial uniforms). I heard of a girl who had $300 taken out of her check for that.

[BiCoastal Kid]

I don't get it. Why do they want to sell the park if they recentely built Tatsu?

 

OMG how many times does it have to be said? Tatsu was green-lighted by the OLD management! It was already being built when Shapiro came to power. If he could have stopped it, he WOULD HAVE. Tatsu has nothing to do with SFMM being on the "chopping block".

But why would you want to axe a park noing there was 22mil spent on it, reguardless who was running the park? I know why, because it doesn't fit your ideal theme park.

 

Because if they sold it they'd be getting enough to rebuild all of the coasters there coasters.... twice.

[Chaddyboy]

nothing is going to happen. somehow it got leaked that one of their options was to sell 6 of their parks, and everybody freaked out that all hell was breaking loose. i bet that they consider selling alot of their parks all the time, its just that this somehow got mainstream.

[Gnome]

^ it wasn't leak. It was an official press conference that was officially released.

[GAcoaster]

Well rumors around today's conference call are already interesting. I can't wait for 5:00 to see what happens...

[Chaddyboy]

i didn't quite mean leak, i meant it just spread to everyone who remotely cares about the subject. but it still remains that i dont think anything is going to come of this.

[coasterjunkie91350]

I really listened to this call this time and found out there main goal is selling them as parks not real estate finding buyers for the land would take alot longer then they thought. The valencia park is doing much better even with the bad rap its had over the last 5yrs. If things continue to inprove magic mountain wont close. Everyone who has had a panic attack over this park closeing for good needs to get the facts straight first .

 

 

I am really happy about the positive direction the park is attempting to take

[GAcoaster]

My notes from the conference call:

 

They announced there are parties interested in the parks for sale and they will be turning over the books (financial info) on them to the qualified interested buyers next week.

 

$100 Million (nothing more) Capex for 2007...all family rides with 2 coasters. All rides will be ready to open with EVERY park. The rides are already on order from the manufacturers.

 

October 1st, the 2007 Season Pass sales begin. There will be a HUGE campaign with a contest to kick off the Season Pass sales.

 

Right now EVERYTHING is coming together for the 2007 season (instead of January/February like this year).

 

Both SFMM and SFGAdv set per capita spending records at over $50 per guest (the company average is about $37)

 

The company has no plans to CLOSE any of the parks which were mentioned as potential sales. They are trying to sell them as a group and not individually. Most of the potential buyers are specifically looking to run the parks as parks, and would be interested in taking over with time to plan the 2007 season.

 

The SFNO park is still up in the air, and they are in discussions with the city.

 

El Toro is Shapiro's favorite ride, but Great Adventure is the biggest challenge of all the parks because of the years of neglect under the old leadership combined with the sheer size and number of employees, etc.

 

It sounds like the REAL details for the 2007 season are coming in the November conference call...

 

The Press Release:

Six Flags Reports Second Quarter Results

Wednesday August 2, 4:45 pm ET

Total Revenue Per Capita Up 15% as Company Continues to Improve Guest Experience

Company's Lenders Relax Loan Covenants, Providing Increased Financial Flexibility

 

 

NEW YORK, Aug. 2 /PRNewswire-FirstCall/ -- Six Flags, Inc. (NYSE: SIX - News) today announced operating results for its second quarter and the six months ended June 30, 2006.

 

Total revenue per capita for the quarter increased by $4.80, or 15%, to $36.95, reflecting the Company's ongoing strategy to rebuild its brand and price integrity by improving and diversifying the overall guest experience at its parks. Underscoring progress with this strategy, the Company said that guest satisfaction ratings reached five-year highs during the quarter, according to independent surveys conducted through June at Six Flags-branded parks.

 

Total revenue for the quarter declined 1%, from $360.6 million to $356.1 million, compared to the prior year period. Increased per capita revenue was offset by a decline in attendance. For the quarter, attendance declined 14% to 9.6 million from 11.2 million in the prior year quarter. The prior year quarter included 0.3 million in attendance from the New Orleans park, which is not operating in 2006 due to damage sustained from Hurricane Katrina.

 

The Company's net loss for the quarter was $39.6 million, compared to net income of $11.1 million in the second quarter of 2005.

 

Said Mark Shapiro, who was named President and Chief Executive Officer of Six Flags in December 2005, "In this transition year, we're focused on rebuilding the Six Flags brand by rebuilding the trust of our guests, particularly families. We view our investment to improve the quality of the Six Flags experience as an essential first step to position the Six Flags brand for future growth. We're encouraged by the continuing strength of our per cap spending, which was the key objective for this year, and by our guest satisfaction ratings coming in at a five-year high, which should spur attendance and restore credibility to our brand in the years to come."

 

Adjusted EBITDA(1) for the quarter was $63.0 million, compared to $94.9 million in the second quarter of 2005. Adjusted EBITDA includes approximately $1 million in costs associated with senior management and corporate strategy changes ("Management Change Costs"), and excludes the operations of our parks in Oklahoma City, Oklahoma; Sacramento, California; and Columbus, Ohio ("Discontinued Operations Parks") which have been classified as discontinued operations due to the Company's announced intention to dispose of those businesses(2).

 

The Company also announced that its lenders have agreed to waive compliance with certain financial covenants for the period ended June 30, 2006 and to relax those same covenants through December 31, 2007, thus providing the Company with increased financial flexibility.

 

Second Quarter Results

 

Second quarter 2006 total revenues were $356.1 million, compared to $360.6 million for the second quarter 2005, a decrease of $4.5 million, or 1%. Attendance for the second quarter 2006 was 9.6 million, down 14% from 11.2 million in the second quarter 2005. Attendance was impacted by a decrease in season pass attendance and by the closing of the Six Flags New Orleans park, which together accounted for roughly 0.9 million of the 1.6 million decline in attendance, as well as adverse weather.

 

Per capita guest spending, which excludes sponsorship and other revenues not related to guest spending, increased $4.43, or 14%, to $35.41 from $30.98 in the second quarter 2005, as guests continued to spend more on admissions, food and beverage, merchandise, rentals, games, and parking.

 

Total costs and expenses, including cost of sales, depreciation, amortization, stock-based compensation and loss on fixed assets were $307.1 million for the quarter, compared to $280.5 million for the second quarter of 2005, an increase of $26.6 million, or 9%. The increased costs were driven largely by anticipated and strategic increases in salaries, wages and other expenses primarily associated with additional staffing and services in order to improve the guest experience through greater character presence, increased cleanliness, employee training and other initiatives ($29.6 million), stock- based compensation ($1.5 million), Management Change Costs ($1.0 million), and offset by a reduction in loss on fixed assets ($5.5 million).

 

Net loss applicable to common stock in the second quarter 2006 was $45.1 million, or $0.48 per share, compared to net income applicable to common stock of $5.6 million, or $0.06 per common share in the prior year period. The increased net loss for the quarter reflects approximately $15.1 million, or $0.16 per common share, of non-cash costs and other items not directly related to the ongoing operation of the business. Excluding these charges, net loss applicable to common stock would have been $0.32 per common share, compared to net income applicable to common stock of $0.03 per common share in the prior year period. (See the attached table for a reconciliation from net income (loss) applicable to common stock to net income (loss) from continuing operations before these non-cash and other items.)

 

Adjusted EBITDA for the second quarter of 2006 was $63.0 million, compared to $94.9 million in the second quarter 2005. Excluding Management Change Costs and including the Discontinued Operations Parks, Adjusted EBITDA for the quarter would have been $64.7 million, compared to $96.9 million in the second quarter of 2005.

 

Six Month Results

 

For the six months ended June 30, 2006 (the "First Half 2006"), total revenues declined $11.3 million, or 3%, to $398.8 million from $410.1 million in the prior year period.

 

First Half 2006 total revenue per capita increased $4.71, or 15%, to $36.97, from $32.26 in the prior year period. Per capita guest spending, which excludes sponsorship and other revenues not related to guest spending, increased $4.38, or 14%, to $35.02 from $30.64 in the prior year period. Attendance for the period was 10.8 million, down 15% from 12.7 million during the prior year period.

 

Total costs and expenses, including cost of sales, depreciation, amortization, stock-based compensation and loss on fixed assets, increased $77.5 million to $519.0 million for the First Half 2006, compared to $441.5 million in the 2005 period. The key drivers of the increased costs were Management Change Costs ($12.6 million), stock-based compensation ($10.3 million), loss on fixed assets ($10.1 million) and increases in salaries, wages, and other expenses primarily associated with additional staffing, maintenance and other services ($44.5 million) undertaken to improve the guest experience.

 

Net loss applicable to common stock for the First Half 2006 was $291.6 million, or $3.10 per share, compared to net loss applicable to common stock of $178.6 million, or $1.92 per common share in the prior year period. The increased net loss in First Half 2006 reflects approximately $173.9 million, or $1.85 per common share, of non-cash costs and other items not directly related to the ongoing operation of the business. Excluding these charges, net loss applicable to common stock would have been $1.25 per common share, compared to $0.88 per common share in the second quarter 2005. (See the attached table for a reconciliation from net income (loss) applicable to common stock to net income (loss) from continuing operations before these non- cash and other items.)

 

Adjusted EBITDA for the First Half 2006 declined from $27.1 million in the prior year period to a loss of $34.0 million, primarily as a result of increased costs. Excluding the Management Change Costs, and including the Discontinued Operations Parks, Adjusted EBITDA would have been a loss of $22.9 million, compared to $26.8 million in the prior year period.

 

Cash and Liquidity

 

As of June 30, 2006, the Company had $190 million outstanding on its $300 million revolving credit facility, no amounts drawn on its $82.5 million multi-currency revolving facility (excluding letters of credit in the amount of $32.5 million), and $83.4 million in cash.

 

About Six Flags

 

Six Flags, Inc. is the world's largest regional theme park company. Founded in 1961, Six Flags is celebrating its 45th Anniversary in 2006. It is a publicly-traded corporation (NYSE: SIX - News) headquartered in New York City.

[weatherkid17]

I wonder which parks will get the new roller coasters. I wonder if they will be big or small too....

 

I can bet that it will not be SFGAm, SFGAdv, or SFMM.

 

Probably SFFT or SFSTL.

 

Maybe itll be SFOT, since they probably wont get another family ride, with the 10 they got this year.

 

Who knows?

[coasterjunkie91350]

Hey from what i heard they are suspending all coaster orders till 2008 and are waiting to see how much$$$$$ they get . Fright fest this year as we all know bye bye scary stuff i doubt they will have a big turnout this year. beside the only ride they at sfmm would have room for is a impulse.

[coasterdude5]

^ A coaster is probably the last thing SFMM is getting, I think.