Six Flags releases Q4 results for 2024

Posted | Contributed by Jeff

From the press release:

Six Flags Entertainment Corporation (NYSE: FUN), the largest regional amusement park operator in North America, today announced its results for the 2024 fourth-quarter and full year ended Dec. 31, 2024, and provided Adjusted EBITDA guidance for 2025.

On July 1, 2024, legacy Cedar Fair and legacy Six Flags closed the merger transactions (the “Merger”) to form the new Six Flags Entertainment Corporation (the “Company” or the “Combined Company”). Legacy Cedar Fair has been determined to be the accounting acquirer for financial statement purposes. Accordingly, the reported results presented in this earnings release reflect the financial results for the Combined Company from Sept. 30, 2024, through Dec. 31, 2024. The reported results for the year ended Dec. 31, 2024, reflect combined operations for only July 1, 2024, through Dec. 31, 2024, and include only legacy Cedar Fair’s results (before giving effect to the Merger) for the first six months of 2024. Financial results and disclosures referring to periods prior to July 1, 2024, include legacy Cedar Fair's results before giving effect to the Merger, including the financial statements as of Dec. 31, 2023, and for the three and 12 months ended Dec. 31, 2023.

Fourth Quarter 2024 Highlights

• Total operating days were 878, of which 538 days were contributed by the legacy Six Flags operations added in the Merger.
• Net revenues totaled $687 million, $324 million of which relates to the legacy Six Flags operations added in the Merger.
• The net loss attributable to the Combined Company totaled $264 million, which included $3 million of net income from legacy Six Flags operations added in the Merger, and net income margin was negative 38.4%.
• Adjusted EBITDA⁽¹⁾ totaled $209 million, $113 million of which relates to the legacy Six Flags operations added in the Merger.
• Modified EBITDA margin⁽¹⁾ was 30.4%.
• Attendance totaled 10.7 million guests, 5.0 million of whom attended legacy Six Flags parks added in the Merger.
• In-park per capita spending⁽²⁾ was $61.60.
• Out-of-park revenues⁽²⁾ totaled $48 million, $14 million of which relates to legacy Six Flags operations added in the Merger.

CEO Commentary

“Our strong fourth-quarter results reflect an outstanding October performance and the incredible popularity of our fall and Halloween themed events,” said Six Flags President and CEO Richard A. Zimmerman. “We ended the year as the new Six Flags on a high note, delivering on our goal of improving demand and increasing in-park guest spending levels, while operating our parks more efficiently. We successfully achieved more than $50 million in gross cost synergies and drove meaningful improvement in guest satisfaction scores and higher guest demand.”

Commenting on the outlook for the 2025 season, Zimmerman noted, “In 2025, we are building on the momentum we established over the second half of 2024 on both the revenue and cost fronts. We are making progress toward realizing the remaining $70 million in anticipated cost synergies from the merger, representing a targeted 4% reduction in operating costs and expenses, while advancing strategic initiatives to drive attendance and guest spending levels higher. We are seeing solid early demand trends, as evidenced by a 2% increase in attendance over the first two fiscal months of 2025 compared to combined attendance of the two legacy companies in the prior year period, as well as a 3% increase in combined season pass unit sales over that same period. We are focused on continuing to drive guest demand as we reopen the remainder of our parks and are thrilled to be introducing an exciting lineup of new rides and attractions, including compelling new marketable products at 11 of our 14 largest locations. Our investments in new thrills and experience-enhancing initiatives demonstrate our commitment to delivering world-class entertainment for guests and meaningful growth and value creation for shareholders.”

Fourth Quarter 2024 Results

Operating days in the fourth quarter of 2024 totaled 878 days compared with 377 operating days for the fourth quarter of 2023. The increase in operating days reflects the addition of 538 operating days during the fourth quarter of 2024 at the legacy Six Flags parks. That increase was partially offset by 37 fewer operating days at the legacy Cedar Fair parks in the fourth quarter of 2024 compared to the fourth quarter of 2023 primarily due to a fiscal quarter calendar shift. The 2024 fourth quarter began on Sept. 30, 2024, and ended on Dec. 31, 2024, while the prior 2023 fourth quarter began on Sept. 25, 2023, and ended on Dec. 31, 2023.

Net revenues for the fourth quarter ended Dec. 31, 2024, increased $316 million to $687 million, compared to net revenues of $371 million for the fourth quarter ended Dec. 31, 2023. The increase in net revenues reflects $324 million in net revenues contributed by the legacy Six Flags operations in the three months ended Dec. 31, 2024, offset by $8 million in lower net revenues at legacy Cedar Fair operations during the fourth quarter of 2024 compared to the prior year period. The decline in legacy Cedar Fair net revenues was the direct result of fewer operating days due to the fourth quarter fiscal calendar shift, which negatively impacted net revenues by $36 million.

The $316 million increase in net revenues reflects the impact of a 4.9-million-visit increase in attendance, an $11 million increase in out-of-park revenues, and a $2.01, or 3%, increase in in-park per capita spending. The 4.9 million-visit increase in attendance included a 5.0-million-visit increase resulting from attendance at the legacy Six Flags parks during the fourth quarter of 2024, offset slightly by 115,000 fewer visits at the legacy Cedar Fair parks. The decrease in fourth quarter attendance at the legacy Cedar Fair parks was entirely due to the fiscal calendar shift and fewer operating days in the quarter, which resulted in 576,000 fewer visits in the 2024 fourth quarter.

Of the $2.01 increase in in-park per capita spending, $1.60 was related to the impact of in-park per capita spending at the legacy Six Flags parks, with the remaining $0.41 increase attributable to higher in-park guest spending on food, merchandise, games and extra-charge attractions at the legacy Cedar Fair parks. The increase in out-of-park spending was the result of the $14 million contributed by legacy Six Flags operations, offset by a $3 million decline in fourth quarter out-of-park revenues from legacy Cedar Fair operations due entirely to the fiscal calendar shift.

Operating costs and expenses in the fourth quarter of 2024 totaled $523 million, an increase of $217 million compared to the fourth quarter of 2023. The increase in operating costs and expenses reflects increases in operating expenses (up $167 million), SG&A expenses (up $23 million), and cost of goods sold (up $27 million), which were primarily the result of legacy Six Flags operations during the period. The increase in operating expenses included $180 million of operating expenses related to legacy Six Flags operations, offset by a $13 million net decrease in legacy Cedar Fair operating expenses primarily due to the fiscal quarter calendar shift. Excluding these factors, fourth-quarter operating expenses at legacy Cedar Fair increased $3 million, primarily the result of planned increases in seasonal labor costs. The increase in SG&A expenses included $27 million of expenses related to legacy Six Flags operations, offset by a $4 million decrease of SG&A expenses at legacy Cedar Fair. The increase in cost of goods sold included $26 million of cost of goods sold related to legacy Six Flags operations. Cost of goods sold as a percentage of food, merchandise and games revenue increased 170 basis points (bps), with the majority of the increase driven by the inclusion of the legacy Six Flags operations during the quarter.

Depreciation and amortization expense in the fourth quarter of 2024 totaled $106 million, an increase of $76 million compared with the three months ended Dec. 31, 2023. The increase reflected $57 million of depreciation expense that was attributable to legacy Six Flags, as well as the impact of a change in interim depreciation methodology for legacy Cedar Fair. During the fourth quarter of 2024, the Combined Company also recognized a $7 million loss on retirement of fixed assets in the normal course of business, including $2 million of retirements at the legacy Six Flags parks.

After the items above, operating income for the three months ended Dec. 31, 2024, totaled $51 million, including $32 million of operating income from the legacy Six Flags operations. This compares with $29 million of operating income for the three months ended Dec. 31, 2023.

Net interest expense for the quarter totaled $79 million, an increase of $44 million compared to the prior-year fourth quarter. The increase reflected $39 million of interest incurred on debt acquired in the Merger and incremental revolver borrowings in the fourth quarter. Meanwhile, net other expense totaled $27 million compared with $4 million of net other income during the fourth quarter of 2023. Both amounts primarily represented the remeasurement of U.S. dollar denominated notes to the functional currency of the Company’s Canadian entity.

During the three months ended Dec. 31, 2024, the Combined Company recorded a provision for taxes of $210 million, compared to a provision of $8 million for the fourth quarter of 2023. The higher provision for income taxes relates primarily to the non-cash tax effects of the change in tax status of a lower-tier partnership as part of an internal restructuring completed on Dec. 31, 2024.

After the items noted above, net loss attributable to the Combined Company for 2024 totaled $264 million, or $2.76 per diluted common share, which included $3 million of net income related to legacy Six Flags operations during the fourth quarter. This compares with a net loss of $10 million, or $0.20 per diluted limited partner unit, attributable to the Company, for the three months ended Dec. 31, 2023.

Adjusted EBITDA and Modified EBITDA margin, which management believes are meaningful measures of park-level operating results, increased $120 million to $209 million and 650 bps to 30.4%, respectively, compared to the fourth quarter of 2023. The increase in Adjusted EBITDA included $113 million from legacy Six Flags operations and a $7 million increase from legacy Cedar Fair operations, including the impact of the fiscal quarter calendar shift. The 650 bps increase in Modified EBITDA margin included a 410 bps increase related to legacy Six Flags operations and 240 bps increase due to legacy Cedar Fair operations. The $7 million increase in Adjusted EBITDA and 240 bps increase in Modified EBITDA margin from legacy Cedar Fair operations reflects a decrease in operating costs and expenses during the fourth quarter of 2024, offset by lower attendance and revenues, due to the fiscal quarter calendar shift. See the attached table for a reconciliation of net loss to Modified EBITDA and Adjusted EBITDA.

Balance Sheet and Liquidity Highlights

Deferred revenues on Dec. 31, 2024, totaled $308 million, compared with $192 million of deferred revenues on Dec. 31, 2023. The $117 million increase reflects the inclusion of $123 million of deferred revenues at the legacy Six Flags parks as of Dec. 31, 2024, offset somewhat by a decrease of $6 million, or 3%, at the legacy Cedar Fair parks. The decrease in deferred revenues at the legacy Cedar Fair parks reflects the normal amortization of prepaid lease payments related to California’s Great America, the elimination of transaction fees in California, and a slight decrease in sales of advance purchase products, including sales of season passes and related products, for the 2025 season.

Liquidity as of Dec. 31, 2024, totaled $578 million, including cash on hand and available borrowings under the Combined Company’s revolving credit facility.

Net debt⁽³⁾ on Dec. 31, 2024, calculated as total debt of $4.96 billion (before debt issuance costs and acquisition fair value layers) less cash and cash equivalents of $83 million, totaled $4.88 billion.

Six Flags Announces Investor Day and 2025 Financial Guidance

Six Flags announced today that it will host an Investor Day at its Cedar Point park on May 20, 2025, beginning at 9:00 AM ET. Additional details regarding event registration will be provided by the Investor Relations Department in the coming weeks.

For 2025, Six Flags is targeting Adjusted EBITDA of $1.08 billion to $1.12 billion, exclusive of any portfolio optimization efforts.

“Since finalizing the Merger nearly eight months ago, our team has been diligently executing against the initiatives within Project Accelerate, our long-term strategic plan to drive sustainable, long-term growth and maximize the full potential of the Merger,” said Zimmerman. “Our 2025 guidance reflects the strong progress we’ve made to date and our belief in the opportunities ahead as we execute our initiatives to drive higher levels of attendance and guest spending, while realizing cost synergies and maximizing operating efficiencies. At our Investor Day in May, we will share our vision for the future of Six Flags, outlining our comprehensive strategy to build on our momentum and providing long-term performance objectives. I am so proud of everything our team has accomplished to date, and excited about the tremendous opportunities ahead for Six Flags.”