Six Flags declares second quarter profit

And how many of those new attractions were NOT coasters? Hmmmmmm?

ProSlide is the new B&M. Muuuuahahahahahaha.

- CO

But you also have to admit, the weather this summer is much more condusive to amusement parks than last summer (at least it is here in Chicago)

Well, it didn't stink every year they were building coasters, either.

Here's the new SF Coaster Dork whine, learn it well:

SF turned a profit and all I got was a Steenking Tornado!

-CO

Good news for them! But, that sounds like just a drop in the bucket for their multi-billion dollar debt. Don't they have to pay off the debt in something like 8 years?*** This post was edited by Peabody 8/9/2005 10:11:49 AM ***

Waterparks, the new opiate of the masses.

Sure, there was an *increase* of people coming for waterparks, but what about the amount of people that were already going. If there is a 20% increase, that is only 20% of what was already coming for the coasters and thrill rides...

But awfully good compared to the typical 10% spike for a new coaster...to say nothing of the lower up-front expense and maintenance costs over time.

-'Playa

Six Flags showed a profit? What is the world coming to? First Apple releases a 4-button mouse, now this...!

--Dave Althoff, Jr.

The 2005 results benefited from a partial reversal of the tax valuation allowance established during the first quarter. Excluding the tax issue, continuing operations in the quarter would have been $2.2 million. During the year-ago period, the company realized a loss on the repurchase of debt -- and excluding that would have reported a $5.8 million loss.

By all means correct me IF I’m showing ignorance here…

They’ve gone from a real $5.8 mil loss to a real $2.2 mil gain (this is $8 mil better than last year)! No doubt this is a good trend, but $2.2 mil does not seem like a lot for 18 parks.

Furthermore, the $8 million dollar difference averages out to $444,000 per park (improvement) for the 2nd quarter. This does not seem like a large amount of improvement considering the debt they owe and the large number of parks they operate…? If you divide the real profit number of $2.2 mil by 18 parks you get a weak profit margin of $122,000 per park for the 2nd quarter. While they are not losing money, it seems there is not much room for error IF I'm reading the numbers correctly.

Management seems to credit weather and advertising for the supposed turnaround…? Is it really accurate to credit a waterslide with this “turnaround?” And even if the waterslide has something to do with the turnaround (which I believe it probably does somewhat), how much of that $8 mil turnaround can be attributed to the waterslide versus weather, advertising, improved customer service, etc…?

And…even if you decide to give 100% credit to the new waterslide (how many did they build?), it seems that $8 million is a rather weak improvement for an entire quarter. I’d love to know what the percentage return on investment is for the waterslide versus a new coaster? Doubt we would get those numbers. I’d love to know which is actually the smarter investment. My guess is that this is market-dependent.

I do not doubt that waterparks are the driving force in much of the amusement business today. I’ve seen it with my own eyes (in terms of crowds). However, the objective numbers in this article certainly do not seem to support an argument that a waterslide is a great savior while coasters are an aging dinosaur…

Let me know where my logic is flawed… :-)

*** This post was edited by Jeffrey R Smith 8/9/2005 10:54:44 AM ***

Yeah, I can't say that it's time to celebrate yet. Put together two straight years of profit (not quarters, since I assume they take 4Q/1Q losses in the off-season), and then there's something to talk about.

I didn't say the chain had been rescued! That would require much more fiberglass...:)

Correct, we won't get those numbers....

Initial estimates here in gatorville say that waterpark additions are more than twice as profitable (in ROI terms) as coaster additions...I wish it was the other way around, but I guess Captain Wavepool is more in tune with the masses than I am... ;)

Weather happens every year, good and bad, across the country. Just because SFI *finally* decides to make good business decisions doesn't mean the Lord Almighty is gonna change global climate patterns...but He *might*... ;)

Now if only the one-piece would come back into vogue. NOW.

*picks up phone*

Hello, this is nine-one-one piece. Can you explain the emergency?

Sir? Take your time. Try to breathe.

Polka dots? And a pierced....WHAT?

Help is on the way, sir. Yes, tranquilizer darts AND a circus tent. Just try not to look to your left till they arrive.

Okay, where were we?

-CO

Add to the fact that they did build the biggest, tallest, fastest coaster ever (even if it has been down), and I'm sure that is part of the increase as well.

So, SFI sold a buncha parks, added to the waterparks in a time that all the other parks seem to be getting an increase as well as 9/11 fears are fading, and they increase by $8mill in a year that has been hot, not rainy.

I'm beginning to think it was more about weather and fading fears more than anything for an $8mill increase. Thanks for doin the math, Jeffery!

I edited my post above when I realized the numbers show an average profit of $122,000 per park for the 2nd quarter. If I'm doing the math correctly...it would seem that a rainy August could indeed hurt their bottom line. Maybe all those years of blaming it on the weather were accurate... :-)

gator:

Are you accounting for the increased bodies through the gate that will in turn spend more at the park? I realize the initial cost of a coaster make the ROI a long and tedious process versus the relative cheapness of installing a waterslide. I just wonder how many people will return again and again for waterslides over time...?

I return to Holiday world and Cedar Point (from Vegas) every year to ride the coasters. I can get waterslides anywhere...

No offense to "Captain Wavepool", as I'm pretty sure he is on to something...but I'm not ready to fully accept it yet! :-)

Waterparks bring in guests, families specifically, there is no doubt. However, they call them 'Amusment' or 'Theme' parks, not waterparks. People don't go specifically for waterslides. That just happens to be a bonus. Heck, SFGAm added a brand new park to the one they already had, and didn't charge extra for it. Of course they'll get way more people thru the door, they're basically giving a 2 for one.

But go to a park with no included waterpark. They're still gonna get a boost when they have customer service and add rides. I'm not disputing that Water gets *More* people thru the gate. But people are still going to Amusment parks and Theme parks for what they've been offering for over 100 years.

A percentage increase is still just 'extra' people in the gate than what they would have already gotten with just coasters and flats, etc. Parks are stupid not to add water parks/overhaul waterparks. Then they cater to more types of people. Esp. if the park is included.

All the other parks getting an increase? Would that include CP (4% drop so far), KBF (6% drop so far) or WoF (down 11%)? Of course, their separate-gated parks are up 8% during the same period and MiA is up 15% with their new Tornado. Of course, DP's enjoying the typical 10% 'new coaster' spike--at multiple times the up-front expense. And guess what they're doing next year?

Of course, you hardly need SF--or even an unprecedented attendance jump at one of their larger park that didn't spike like that with a flying coaster or two coasters in a single season--to make that case.

You could just stick to the HW...who enjoyed attendance jumps with Zinga and Zimbabwe...or just look at the hotels going up at a cost of your average coaster park combined lift-hill-and-drop lineup.

Just slide a dark T-shirt over the pasty, flabby parts and join in the fun already. The rest of Planet Earth awaits!

-CO

*** This post was edited by CoastaPlaya 8/9/2005 11:21:35 AM ***

You guys are still living in denial. People do go to local parks (which is primarily what Six Flags is) for the water parks. Larger more destination oriented parks not so much, but the SFA's, SFDL's and SFNE's, you bet. It's all about the water parks. If that weren't true, the folks at ProSlide wouldn't be filling slides with cash and going down them head-first.

You guys are still living in denial. People do go to local parks (which is primarily what Six Flags is) for the water parks.

Not at all, I admit that waterparks cause increases. How is that denying it? I just don't think that waterparks are the 'the new opiate of the masses'.

Of course people go to local parks for water parks. I haven't said nor denied that. But what I am saying is that people have been going to those parks for 100s of years without water parks. I said *more* people are going to go with a waterpark in a park because that is targeted to a whole new market along with what you already have.

I'm all for water parks, I love em. In fact, I really was mad that I was under the impression that I'd have 2 hours at Boomerang Bay last year @ PKD because I REALLY want to try a Proslide Tornado. They look like fun.

But Waterparks are not the 'end all, be all', with no one going to Amusement/Theme Parks (local ones) for coasters and thrills. Otherwise, a company in major debt wouldn't have dropped a gazillion Gs on a new Tallest, Fastest, Most Broken Down coaster in the world.