Six Flags posts lower revenue, EBITDA and per capita spending for the quarter

Posted | Contributed by Jeff

From the press release:

ARLINGTON, Texas--(BUSINESS WIRE)-- Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and the largest operator of water parks in North America, today reported first quarter Revenue of $133 million, Net Loss of $83 million, and Adjusted EBITDA(1) loss of $26 million.

"Our 2024 season is off to a promising start, with 2024 season pass sales through April increasing by double-digits compared to last year, pre-booked group sales approaching pre-pandemic levels, and our park beautification and technology initiatives resonating strongly with our guests," said Selim Bassoul, President and CEO. “We remain focused on delivering a world-class experience for our guests, and we are excited to launch many thrilling new rides, attractions, and immersive experiences in time for the peak summer season. As we fully ramp up our operations between now and Memorial Day, we are confident in our ability to build upon early season momentum.”

Total revenue for first quarter 2024 decreased $9 million, or 6%, compared to first quarter 2023. The change was primarily attributable to a $12 million reduction in revenue related to memberships beyond the initial 12-month commitment period, which is recognized evenly each month and not recognized based on attendance, and a $4 million adjustment to international licensing revenue made in respect of a change in the estimated opening date of Six Flags Qiddiya to mid-2025. These decreases were partially offset by higher attendance, primarily driven by the earlier timing of the Easter holiday.

The $6.53 decrease in guest spending per capita compared to first quarter 2023 consisted of a $5.77 decrease in admissions spending per capita and a $0.76 decrease in in-park spending per capita. The change in guest spending per capita was driven by lower revenue from memberships beyond the initial 12-month commitment period, which includes revenue allocated to Park admissions and to Park food, merchandise, and other. Excluding the impact of lower revenue from memberships beyond the initial 12-month commitment period, guest spending per capita would have been higher than the previous year first quarter by $1.59, or 3%, including an increase in Admissions spending per capita of $0.31, or 1% and an increase of In-park spending per capita of $1.28, or 5%.

The company had a net loss of $83 million in first quarter 2024, compared to net loss of $70 million in first quarter 2023. The loss per share was $0.98 compared to loss per share of $0.84 in first quarter 2023, driven by lower revenue, $5 million in merger-related transaction costs and higher interest costsin first quarter 2024 compared to the prior year first quarter. Cash operating costs⁽³⁾ decreased by $1 million, or 1%, in first quarter 2024 versus first quarter 2023. Adjusted EBITDA loss for first quarter 2024, which excludes $5 million in merger-related transaction costs, was $26 million, versus an Adjusted EBITDA loss of $17 million in the prior year first quarter.

Balance Sheet and Capital Allocation

As of March 31, 2024, the company had total reported debt of $2,417 million, and cash or cash equivalents of $61 million. Deferred revenue was $165 million as of March 31, 2024, an increase of $13 million, or 9%, from April 2, 2023. In first quarter 2024, the company invested $37 million in new capital.

On May 2, 2024, the company completed the private sale of $850 million in aggregate principal amount of 6.625% senior secured notes due 2032 at an offering price of 100% of the principal amount thereof. Net proceeds from the sale were used to repay in full the principal amounts outstanding under the Existing Term Loan B and the Existing Revolving Facility. Additionally, the company delivered a notice of redemption to the trustee of the 2025 senior secured notes of its intention to repay $165 million of aggregate principal on July 1, 2024, towards which the remaining proceeds will be applied.

Cedar Fair Transaction

On November 2, 2023, the company and Cedar Fair (NYSE: FUN) entered into a definitive merger agreement to combine in a merger of equals transaction. On January 31, 2024, the Registration Statement on Form S-4 containing the proxy statement/prospectus relating to the transaction ("Registration Statement") was declared effective by the Securities and Exchange Commission ("SEC") and mailed to the company's shareholders on or about February 1, 2024. A shareholder meeting relating to the merger agreement and other related matters was held on March 12, 2024. At such meeting, the shareholders of the company approved the merger agreement and the transactions contemplated thereby. The merger is expected to close in the first half of 2024, following the receipt of regulatory approvals, including the pending antitrust review in the United States, and the satisfaction of customary closing conditions.