Record Revenue for Ninth Consecutive Year at Six Flags
GRAND PRAIRIE, Texas--(BUSINESS WIRE)-- Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and the largest operator of waterparks in North America, today announced that 2018 represented its ninth consecutive record year as revenue increased $105 million or 8 percent to $1.5 billion. The full-year revenue growth was primarily driven by a 5 percent increase in attendance; a 2 percent increase in guest spending per capita, driven by a 4 percent admissions per capita increase due to improved pricing on all admissions products and sales of memberships with premium tiers; and a 7 percent increase in sponsorship, international agreements and accommodations revenue. Attendance at the company’s parks grew to 32.0 million guests in 2018, primarily driven by five domestic parks acquired in June 2018, the benefit of 365-day operations at Six Flags Magic Mountain, strong growth in Mexico, and growth at the company’s waterparks.
Net income1 for the year ended December 31, 2018, increased $2 million or 1 percent, driven by the growth in the business described above and a reversal of stock-based compensation expense related to the company’s Project 600 target not being achieved, partially offset by the positive cumulative effect of tax reform realized in the fourth quarter of 2017. Diluted earnings per share for 2018 was $3.23, representing an increase of $0.14 or 5 percent compared to 2017. Adjusted EBITDA2 for 2018 increased to a new high of $554 million, up $34 million or 7 percent compared to prior year, and Modified EBITDA3 for the year was $594 million. The company’s 2018 Modified EBITDA margin of 40.5 percent continues to lead the theme park industry. Foreign currency translation4 had a negative impact on full-year 2018 Adjusted EBITDA of $2 million.
“I am very proud that we have achieved our ninth consecutive record year,” said Jim Reid-Anderson, Chairman, President and CEO. “Our exceptional operating performance in the fourth quarter demonstrates the strength of our pricing power, membership strategy, and in-park spending programs, all of which, together with our domestic and international park expansion initiatives, will provide a strong platform for growth for many years to come.”
Record fourth quarter 2018 revenue of $270 million grew $13 million or 5 percent compared to the fourth quarter of 2017. The strong revenue growth was primarily driven by a 6 percent increase in guest spending per capita and a 3 percent increase in attendance. This growth was offset by an unfavorable revenue adjustment of $15 million related to the company’s international agreements due to delays in the expected opening dates of some of the parks in China caused by a challenging macroeconomic environment. This resulted in a 38 percent decline in sponsorship, international agreements and accommodations revenue compared to the fourth quarter of 2017.
Guest spending per capita for the fourth quarter increased $2.35, with admissions per capita increasing $1.74 or 8 percent and in-park spending per capita increasing $0.61 or 4 percent relative to the same period in 2017. Net income for the fourth quarter of 2018 was $79 million, a decrease of $19 million from the same period in 2017 due to the favorable impact of tax reform that was realized in the fourth quarter of 2017, offset by the 2018 reversal of stock-based compensation expense related to the Project 600 award and continued operating earnings growth. Adjusted EBITDA of $95 million represented an increase of $8 million or 9 percent compared to the fourth quarter of 2017.
Guest spending per capita in 2018 was $42.58, an improvement of $0.97 or 2 percent compared to 2017, primarily due to sales of premium membership tiers, ticket price increases and higher in-park spending driven by members and by sales of all season dining passes, partially offset by lower guest spending per capita in the five newly acquired parks. Admissions per capita increased $0.93 to $25.30, and in-park spending per capita increased $0.04 to $17.28.
Deferred revenue of $146 million, a year-end record high, increased by $4 million or 3 percent compared to December 31, 2017, primarily due to incremental sales and higher prices of memberships and all season dining passes. The Active Pass Base, which represents the total number of guests who are enrolled in the company’s membership program or have a season pass, increased 8 percent year-over-year as a result of the company’s continued success in upselling guests from single day tickets to memberships and season passes. The mix of memberships in the Active Pass Base increased significantly as a result of the company’s early 2018 roll-out of a new membership program with premium tiers. Members are the company’s most loyal and valuable guests, with higher retention rates and higher revenue—especially from the premium membership tiers—compared to traditional season passes. As the company is successful in growing memberships, it expects cash receipts to be delayed due to members making payments monthly versus traditional season pass holders, who pay for the entire season in advance. In addition, as these members are retained beyond the initial twelve-month compulsory period, the company expects deferred revenue growth to be muted as revenue is recognized monthly.
In 2018, the company generated $293 million of Adjusted Free Cash Flow5. The company invested $133 million in new capital projects and $23 million, less net working capital and other customary adjustments, to acquire the lease rights to five new parks; paid $267 million in dividends, or $3.16 per share for the year; and repurchased $111 million of its common stock. The authorized amount available for additional share repurchases as of December 31, 2018, was $232 million. Net Debt as of December 31, 2018, calculated as total reported debt of $2,107 million less cash and cash equivalents of $45 million, was $2,062 million, representing a net leverage ratio of 3.7 times Adjusted EBITDA.
I don't have the time to read too much into this right now so I'll just leave this here. Jesus...
Remember when reading about the "records" that they acquired 5 new parks in Q2, Magic Mountain went to daily operations and they added Holiday in the Park to Six Flags Great America. All of that makes these numbers (to put it lightly) less than impressive.
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