Six Flags revenue up on lower attendance, greater loss in first quarter
Posted
From the press release:
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 $142 million, Net Loss of $70 million, and an Adjusted EBITDA loss of $17 million.
“We are pleased to have delivered record first quarter revenue and the second-highest first quarter Adjusted EBITDA in our company’s history, which we believe are proof points that our new strategy and our new culture are beginning to take hold,” said Selim Bassoul, President and CEO. “Looking ahead, our team is excited to launch numerous special events this summer, including Viva La Fiesta, Flavors of the World, Six Flags Fireworks Spectacular, and parades. These events, combined with exciting new rides and attractions and our focused investments in infrastructure, should help us deliver an enhanced guest experience this year. We are still in the early stages of our transformation, but with our season pass sales accelerating and our attendance improving, we are encouraged by our recent progress.”
Total revenue for first quarter 2023 increased $4 million, or 3%, compared to first quarter 2022, driven by higher guest spending per capita, partially offset by lower attendance. The decrease in attendance was driven primarily by severe weather in our California and Texas parks.
The $5.42 increase in guest spending per capita compared to first quarter 2022 consisted of a $4.53 increase in Admissions spending per capita and a $0.89 increase in In-park spending per capita. The increase in guest spending per capita was driven by higher revenue from memberships beyond the initial 12-month commitment period, which is recognized evenly each month and includes a portion of revenue that is allocated to Park admissions revenue and to Park food, merchandise and other revenue. Higher membership revenue in first quarter 2023 increased Admissions spending per capita and In-park spending per capita by approximately $5 and $1, respectively, versus the prior year. Excluding this impact, Admissions spending per capita and In-park spending per capita in first quarter 2023 were essentially flat versus the prior year period.
The company had a net loss of $70 million in first quarter 2023, compared to a net loss of $66 million in first quarter 2022. The loss per share was $0.84 compared to a loss per share of $0.76 in first quarter 2022, driven by higher operating costs partially offset by an increase in revenue. Operating costs increased in first quarter 2023 versus the prior year due primarily to higher advertising spend. Adjusted EBITDA loss in first quarter 2023 was $17 million, essentially flat with the prior year.
As of April 2, 2023, the company had total reported debt of $2,452 million, and cash or cash equivalents of $65 million. Deferred revenue was $152 million as of April 2, 2023, a decrease of $33 million, or 18%, from April 3, 2022. The decrease was primarily due to a lower Active Pass base as of April 2, 2023 versus April 3, 2022. In first quarter 2023, the company invested $25 million in new capital, net of insurance recoveries.
On May 3, 2023, the company completed the private sale of $800.0 million in aggregate principal amount of 7.25% senior unsecured notes due 2031. The net proceeds from this offering were used to repay $892.6 million, or 94.01% of the aggregate principal amount outstanding, of the 4.875% senior unsecured Notes due 2024. In addition, the company increased the capacity of the Revolving Credit Facility from $350 million to $500 million.
It all sounds fine if the strategy also included improvements to operations and service. But then I haven't been in the last 20 years so maybe those improvements were already implemented?
Yeah, I don't get that either. Agree with raising prices, but if I'm selling my Yugo (that'll date me), I can't expect to get a Porsche price for it.
Jeff - Editor - CoasterBuzz.com - My Blog
One way this could work: water park capacity is pretty much fixed by the number of slides you have. Staffing is almost secondary. You can't play with the number of trains on the track, etc. etc. like you can with a lot of the dry side of the park. And the "enjoyment" of a water park seems like it is closely tied to waits on the slides and whether or not you are on top of each other in the wave pool.
So, if the people who are still going are having a better time, that might translate into "value" for those folks.
I mean, it's worth a shot.
What I find a little odd is, it doesn't seem you can buy just the waterpark. If I only want to spend the day in the pool, I have to buy the ride-side and the waterpark is an add on. Which actually makes the waterpark more expensive than the ride park as a standalone.
(I assume there's not a separate gate, but maybe a wristband you get or something?)
A few years ago, I went to SFGA on a >100 degree day. (Which was fairly miserable, but never mind that.) At around 6:00 all sorts of people started entering the ride park, which we couldn't figure out until we realized they'd been at the waterpark all day. So - it doesn't seem impossible that this strategy could work? It's just kind of turned the waterpark into an upcharge like a large-scale skycoaster.
As for whether it makes sense to remove rides and charge more - FA&FO I guess.
hambone:
As for whether it makes sense to remove rides and charge more - FA&FO I guess
Geauga Lake found out
Not really industry news, but the former CEO, Mike Spanos, was just named COO at Delta. That's gotta be a pretty big step up.
Jeff - Editor - CoasterBuzz.com - My Blog
hambone:
What I find a little odd is, it doesn't seem you can buy just the waterpark.
Yes, I was surprised at this as well. In the middle of summer, when it is smoking hot and humid outside, I would say 75% of people at SFA are going for just the waterpark. This is basically forcing most park goers to buy the upgraded membership if they don't want to pay the upcharge. Interesting and not an angle I thought about. My initial thought was they would have a separate entrance to the water park for those who only want to go to that. They removed a bunch of fencing in the off season, which led me to that conclusion. I'll find out this weekend :)
The base passes are insane, but I paid an extra hundred per person for the Disney water parks. AND MINI GOLF. What are they paying extra per water park visit? IS THERE MINI GOLF?
Jeff - Editor - CoasterBuzz.com - My Blog
If the water park is the draw, it would seem odd to break it out as its own gate separate from the dry side. There is no way that could support a per cap comparable to the park as a whole in the prior year.
In other words, you don’t suddenly charge less for the thing everyone wants.
So you enter the park as you always do. They scan your pass and let you in. The entrance for the water park is the exact same, except they added gates where they scan your pass a second time. Before getting to that entrance, there is the sales center where you can buy your add on if your pass does not include the water park ($7 per person.)
Jeff:
IS THERE MINI GOLF?
"NO GOLF FOR YOU!" however you have the option of purchasing a "Beach Party Cabana" for $699. I am sure the cabana section gets rented during hot and busy days, but it was empty when I walked by today.
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