Posted
From the press release:
Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and the largest operator of waterparks in North America, today reported attendance of 6 million guests and total revenue of $317 million for fourth quarter 2021. Results for fourth quarter and full year 2021 are not directly comparable to the same prior-year periods due to the company’s COVID-19 related suspension of operations and operating restrictions that began in mid-March 2020. The company believes it is most relevant to compare its results in 2021 to the same periods in 2019. In the fourth quarter (October 4, 2021, through January 2, 2022), attendance at the company’s parks was approximately 98% compared to the comparable fiscal period in 2019 (October 7, 2019, through January 5, 2020). Attendance by pre-booked groups, inclusive of school groups who typically book in advance, has been significantly diminished due to the pandemic. Excluding pre-booked groups, attendance at the company’s parks in fourth quarter 2021 was approximately 100% compared to the same period in 2019. “In my first 100 days, we have established a new, customer-obsessed culture, a lean and empowered organization, and a strategic focus on delivering a premium guest experience” said Selim Bassoul, President and CEO. “With our foundation now in place, we are moving quickly to invigorate the magic of Six Flags.”
Fourth Quarter 2021 Highlights
- Attendance was 6 million guests, inclusive of a negative calendar shift of 363 thousand guests due to a change in the company’s reporting calendar, for a decrease of 354 thousand guests compared to fourth quarter 2019.
- Total Revenue was $317 million, an increase of $56 million compared to fourth quarter 2019.
- Net Loss was $2 million, an improvement of $9 million compared to fourth quarter 2019.
- Adjusted EBITDA1 was $95 million, an increase of $23 million compared to fourth quarter 2019.
- Net cash outflow for fourth quarter 2021 was $54 million.
Full Year 2021 Highlights
- Attendance was 28 million guests, a decrease of 5 million guests compared to full year 2019.
- Total Revenue was $1,497 million, an increase of $9 million compared to full year 2019.
- Net Income was $130 million, a decrease of $49 million compared to full year 2019.
- Adjusted EBITDA was $498 million, a decrease of $29 million compared to full year 2019.
- Net cash flow for full year 2021 was $178 million.
Fourth Quarter 2021 Results
In fourth quarter 2021, the company generated $317 million of total revenue with attendance of 6 million guests, a net loss of $2 million, and Adjusted EBITDA of $95 million. The company changed its fiscal reporting periods beginning in first quarter 2021. The change resulted in three fewer calendar days in October and two additional days in January for fourth quarter 2021 than were included in the fourth quarter for both 2020 and 2019. The net impact was a reduction of 363 thousand of attendance and approximately $26 million of revenue in fourth quarter 2021.3 The Adjusted EBITDA calculation reflects an add-back adjustment of approximately $10 million of non-recurring costs, including $9 million of employee termination costs and $1 million of technology costs.
Results of fourth quarter 2021 compared to fourth quarter 2019
The $56 million increase in total revenue was driven by higher guest spending per capita, offset by a 6% decrease in attendance and a $4 million reduction in sponsorship, international agreements and accommodations revenue due to the pandemic. The decrease in attendance was caused by a reduction in pre-booked groups due to the pandemic and the change in the company’s fiscal reporting calendar.
Total guest spending per capita in fourth quarter 2021 increased 32% compared to fourth quarter 2019. Applying the pro forma allocation from admissions spending to in-park spending for 2019, admissions spending per capita increased 28% and in-park spending per capita increased 36%. The increase in admissions spending per capita was driven by higher pricing on single day tickets, particularly during the company’s Fright Fest event, and a higher mix of single-day ticket attendance. The increase in in-park spending per capita was due to strong consumer trends and a higher mix of single-day guests, who tend to spend more than season pass holders and members on a per day basis.
Full Year 2021 Results
For full year 2021, the company generated $1,497 million of revenue with attendance of 28 million guests, net income of $130 million, and Adjusted EBITDA of $498 million. The company changed its fiscal reporting periods beginning in first quarter 2021. The change resulted in two additional calendar days for full year 2021 versus both 2020 and 2019. The impact was an additional 107 thousand in attendance and $6 million of revenue for full year 2021.4
The Adjusted EBITDA calculation reflects an add-back adjustment of approximately $21 million of non-recurring costs that were associated with the company’s transformation plan that commenced in March 2020. For 2021, this included $10 million of employee termination costs, $5 million of technology costs, and $7 million of consulting costs. The company has concluded the transformation plan, and does not expect to incur any further associated costs.
The company received a settlement payment of $11.3 million related to the termination of its agreements in China, which was recorded in second quarter 2021 and is included in Adjusted EBITDA. Of this amount, $6.7 million was allocated to revenue from international agreements and $4.6 million was a credit to expense.
Results of Full Year 2021 compared to Full Year 2019
The $9 million increase in total revenue was driven by higher guest spending per capita, offset by a 16% decrease in attendance due to the pandemic, and a $52 million reduction in sponsorship, international agreements and accommodations revenue, primarily related to the termination of the company’s agreements in China and Dubai in 2020 and 2019, respectively, and a reduction in sponsorship revenue and accommodations revenue due to the pandemic.
Total guest spending per capita for full year 2021 increased 24% compared to full year 2019. Applying the pro forma allocation from admissions spending to in-park spending for 2019, admissions spending per capita increased 22% and in-park spending per capita increased 26%. The increase in admissions spending per capita was driven by the company’s revenue management initiatives and a higher mix of single-day ticket attendance. The increase in in-park spending per capita was due to strong consumer trends and a higher mix of single-day guests, who tend to spend more than season pass holders and members on a per day basis.
Active Pass Base
The Active Pass Base of 8.3 million included 2.1 million members as of the end of fourth quarter 2021, compared to approximately 1.7 million at the end of fourth quarter 2020 and 2.6 million members at end of fourth quarter 2019. The Active Pass Base also included 6.2 million traditional season pass holders compared to 2.1 million season pass holders at the end of fourth quarter 2020 and 5.1 million season pass holders at the end of fourth quarter 2019. Deferred revenue was $178 million as of January 2, 2022, a decrease of $27 million, or 13%, from December 31, 2020, and an increase of $34 million, or 23%, from December 31, 2019. The deferred revenue growth versus 2019 was driven by the extension of membership benefits to members who have continued to make monthly payments but were unable to use their home park while it was closed during the pandemic.
Balance Sheet and Liquidity
As of January 2, 2022, the company had cash on hand of $336 million and $461 million available under its revolving credit facility, net of $20 million of letters of credit, or total liquidity of $797 million. This compares to $851 million of liquidity as of October 3, 2021. The company’s net cash outflow was $54 million for fourth quarter 2021, including $60 million of capital expenditures and $10 million of non-recurring costs.
For full year 2021, the company invested $122 million in new capital projects. Net debt as of January 2, 2022, calculated as total reported debt of $2,630 million less cash and cash equivalents of $336 million, was $2,294 million.
In 2020, the company entered into amendments to its credit facility which, among other things, allows the company to use operating results from 2019 rather than actual results for the corresponding quarters in 2021 to test its senior secured leverage ratio financial maintenance covenant throughout 2022. In connection with these amendments, the company agreed to various restrictions, including a prohibition from prepaying debt. The restriction on prepaying debt will end on the earlier of the end of 2022 or such time as the company demonstrates compliance with its financial maintenance covenant using actual results. Based on its improved liquidity position and financial outlook, and in order to be permitted to begin pre-paying its debt, the company voluntarily tested its senior secured leverage ratio financial maintenance covenant based on actual results beginning in fourth quarter 2021 and was in compliance.
Read the entire release on Business Wire.