Partial Arrow owner wants to buyout the rest of the company

SF places several clauses into their ride contracts that allows them to withold final payment. Usually, SF makes a 25% down payment at contract signing, 25% about halfway through project completion and the final 50% net 30 after the ride has been signed off.

1.) If the attraction isnt running at 100% to Six Flags standards, they dont have to make final payment

2.) If the maker surpasses build deadlines, Six Flags doesnt have to make final payment until 120 after the ride is signed off of.

3.) If the ride is over 120 days past deadline, SF has the right to collecta percentage of potential revenue that it might have lost during the delays (this is where the 5.8 million comes from) and withold final payment until such lost revenues are collected.)

SF has been doing these contracts for 30+ years and they know what they need to do to cover their behinds legally when it comes to contract breaches.

I think both Arrow and Gary Story are both to blame for the messes. Gary basically rushed Arrow through their R&D process to get X done before the 2001 season began and they are stuck with not one but two unreliable coasters bought in the same year! Arrow saw an opportunity to get back into the game with the major coaster players in the world, gambled, and lost.

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WCUSA-The World's largest theme park is coming!
Theme parks will NEVER be the same! *** This post was edited by Chris Godsey on 6/7/2002. ***

Ok, if Q1 results don't do it for you, how about yearly results for the last two years:

Six Flags lost $58 million in 2001. Six Flags lost $52 million in 2000. Six Flags has no income as a corporation. They have not been out of the red yet. They have no P/E ratio. They are increasing the number of shares outstanding. They are increasing debt. They are in a cyclical, very volatile industry.

For more accurate information on Q1 results with regards to Six Flags, it included the entire 2001 results for any park acquired during that year (like SFWoa and LaRonde).

If you are borrowing from one lender to pay another lender because you cannot meet your current obligations, then you are in a negative cash flow situation. Jeff, if you borrow $n.nn from Visa to pay off your mortgage payment, you are negative. And there's only so long you can do that before you run out of credit, or you can't borrow enough to pay your current obligations. Where the hell did Six Flags get the money to buy new parks, build new rides, *and* pay interest on 2.3 billion dollars of debt? They borrowed a lot of it by increasing their debt load! I'll send you the SEC filings if you can't look them up for yourself! What happens when they have slightly more money due than resources to pay it? Bankruptcy, baby! Just where Arrow and Vekoma are sadly sitting.

You guys can twist your logic anyway you like, but I am looking at the numbers. I am looking at the analyst's recommendations. From a business standpoint, this is a sinking ship. Here's a good view of things from Quicken.com: http://www.quicken.com/investments/strategies/?symbol=PKS

I've seen too many other companies do the same thing: America West Airlines, Boston Market Restaurants, Noah's Bagles, Western Pacific, just to name a few.

Well here's how reliable analyst recommendations are. I found the following at the microsoft money site regarding the PKS stock. There's also a CNBC logo attached to the page so I'm not sure which the recommendation comes from exactly but they rate it a 9 out of a possible 10. They call the stock a mid-cap growth company that is expected to significantly outperform the market over the next 6 months with average risk. (their bold type, not mine)

That sounds pretty good to me, especially since I agree with that assessment entirely.

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www.coasterimage.com

Exactly... some of you guys don't get corporate finance. They aren't borrowing from one lender to pay off another... they're doing so to refinance. People do it with their mortgages all the time. If you refinance hundreds of millions of dollars at a lower rate, don't you see the cost savings there? A half-percent is huge! Sure, they acquired more debt along with it, but that's how they're growing the business. They're not borrowing to pay for operating expenses... lenders won't give you big dollars for that. They're borrowing for capital improvement and acquisitions. They're spending that money on liquid assets, not paying for people and upkeep.

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What happens when they have slightly more money due than resources to pay it?

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That's exactly my point... there is no indication that will ever happen unless several parks are wiped from the face of the Earth or sink into the ocean. They are cash flow positive, they're making their loan payments, they're reinvesting into the company. This is how companies grow.

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Jeff - Webmaster/Admin - CoasterBuzz.com, Sillynonsense.com
"As far as I can tell it doesn't matter who you are. If you can believe, there's something worth fighting for..." - Garbage, "Parade"
*** This post was edited by Jeff on 6/7/2002. ***

anyone who quotes first quarter earnings hasn't been around the theme park business very long. Let's also talk about value and assets. SF may be spending cash that they do not have but they are getting great value for their purchases. Those assets go to the positive side of the ledger. Before we paint SF as a villian let's remember that quite a few of these parks would be closed outright if SF had not purchased them. I do believe that a master plan is in place that will someday result in SF selling off pieces of the company to reduce debt. However it makes sense to buy in a "down" economy and sell in a good economy. SF may be in great shape to do that. I've known some of the SF people (Gary Story included) for a long time.. no matter what you may think I can tell you they are not dumb. That said.. buying Arrow or the rights to the 4D is questionable. SF does not currently have the expertise to design and assemble a ride of this nature in my opinion.

*** This post was edited by Parkman on 6/7/2002. *** *** This post was edited by Parkman on 6/7/2002. ***

Besides the obvious acquisitions such as the 4D designs, this could benefit them in many other ways if Six Flags went after more because they could do things cheaper than before if Arrow already has existing plans/upgrades for installed rides. Maybe they could do some in-house work to upgrade their existing Arrow coasters? How about some train work? I'm really surprised theya re only interested in the X property for that reason and also because they do have other inovative designs that have been selling.

However, I personally feel that they plan to acquire Arrow because of the X issue (resulting in a good buy) and then immediately do a resell to make a profit. Wouldn't you? Six Flags is in fact a shark but they are usually the best companies to invest in. Their primary concern is the bottom line. This is very interesting nonetheless and I am very curious as to what eventually happens. *** This post was edited by RTneedsTLC on 6/7/2002. ***

As I sit here at my computer screen, fingers orange with "Dorito Dust" and amped off off "Liquid Courage" I am just amazed.

Amazed at the sheer VOLUME of financial gurus we have here on the Buzz. Not only do we have the worlds greatest engineers who have never designed an installed ride in thier lives, but we also have the best financial wizards who have never headed an amusement business.

"Hello Fidelity? Yeah, this is Jeremy. I Want to speak to Peter Lynch. Pete? Wassup Homeboy? Check it, I want all my money back ASAP. No, it's not that your expertise is bad, but I've decided to heed the advice of the folks on CoasterBuzz. What? You've never hear of them? You mean you dont keep abreast of thier financial tips? OH **** then you SURELY cannot be trusted with *my* money! Send the Cashier's Check addressed to my company. Yeah, that's right 'DownTheDrain.com'. Thanks a lot Pete. Holla!"

Hell, if I were HALF as smart as some here purport to be, I'd quit my day job and play the market all day. What ever happened to common sense?
lata,
jeremy

I have to agree with what you say. My Dad was employed by SF for years in management so we heard a lot of things first hand about budgets and profit etc.. SF has always been a company "at the brink" since I can remember. Whether it was owned by Great Southwest Corporation or Penn Central or Bally's or Time-Warner- there has always been those who thought it was a shaky investment. Somehow SF always finds a way to stay in business. I'm certainly not a business "guru" but I do know my history. I think they will be around awhile.