August 9, 2000
New York, NY -- Six Flags, Inc. (NYSE: PKS and PKSPrA) announced today its results of operations for the three and six months ended June 30, 2000.
Revenues for the 2000 second quarter were $341.1 million, compared to $314.1 million for the comparable quarter of 1999, representing an 8.6% increase. Adjusted EBITDA for the second quarter, including the Company's share of the EBITDA from the partnership parks, was $142.9 million as compared to $132.5 million for the second quarter of 1999, representing a 7.9% increase. These increases were driven by a slight gain in overall park attendance and solid increases in per capita spending across the system. The company's performance was hampered by the negative impact of aberrational and unseasonably bad weather in many of its major markets in the United States through the first half of the season and the impact of the decline in European currencies during the reported periods, which partially offset strong performance at the Company's European parks. Revenue growth would have been approximately $4-5 million higher had European currency exchange rates remained at 1999 levels.
Operating costs and expenses (including depreciation and other non-cash charges) for the 2000 second quarter were $260.0 million, as compared to $232.9 million for the 1999 second quarter. Excluding depreciation and non-cash charges, total operating costs and expenses were $212.2 million in the second quarter of 2000, as compared to $190.5 million for the same period in 1999, representing an 11.4% increase.
A substantial portion of the increases in revenues and expenses during the period resulted from the inclusion for the full period of the operating results of the consolidated parks acquired last year.
"This season we have faced the most challenging operating conditions in our Company's history as a large number of our major markets experienced extended periods of substantially more rain and lower temperatures than usual," said Kieran E. Burke, Chairman and Chief Executive Officer. "This has included an extraordinary increase over last year in the number of "rain days" falling on the weekend. And while these conditions have clearly had a negative impact on our financial results for the quarter, we are very pleased with the way the Company has been able to continue raising per capita spending and expanding margins generally, in addition to driving significant operating gains in our re-branded parks. Our ability to achieve these results in the face of such poor weather conditions reflects the strength of our long-term strategy, our operating experience, and the power of the Six Flags brand."
"We have been particularly pleased by the very strong market reaction to our newly branded Six Flags parks. These four parks, which include our first two international Six Flags parks, have achieved aggregate increases through the end of July of 31.8% in attendance, 47.0% in revenues and 13.5% in per capita spending. Even this performance was restrained from potentially higher levels by these weather difficulties. Likewise, we have achieved more than 3 million season pass sales, a systemwide increase of over 9%, but we have experienced lower than normal utilization largely due to weather. Our lower revenue performance has also been offset somewhat by our continued success in driving excellent margin improvement. For the quarter, consolidated EBITDA increased $4.5 million over pro forma 1999 levels on the $7.2 million pro forma revenue increase."
"Finally, we got off to an excellent start on our strategy of leveraging the Six Flags brand by forging strategic marketing and sponsorship alliances during the quarter with world-class companies like Kodak, Univision and America Online. We expect these agreements and others that will follow to be an important driver of park attendance and revenues going forward."
Six Month Results
For the first six months of 2000, revenues were $372.0 million, compared to $352.7 million for the comparable period of 1999, representing a 5.5% increase. Adjusted EBITDA for the 2000 six-month period was $68.9 million as compared to $74.2 million in the prior year period. If the results of the parks acquired in 1999 were included for the full period, Adjusted EBITDA would have been $65.3 million for the six months ended June 30, 1999. Operating costs and expenses (including depreciation and other non-cash charges) were $400.9 million in the first six months of 2000, as compared to $364.7 million for 1999. Excluding depreciation and non-cash charges, total operating costs and expenses were $307.9 million in 2000 and $281.5 million i 1999, representing a 9.4% increase. A substantial portion of the increases in the period resulted from the inclusion for the full period of the operating results of the consolidated parks acquired last year.
Looking ahead to the balance of the year, Mr. Burke commented, "With four weeks remaining in our summer season, as well as an additional two months of our fall season, we cannot definitively estimate our full year performance figures at this time. What we do know is that the prolonged unseasonably wet and cool weather we have been experiencing impeded both park performance in the second quarter as well as the parks' ability to build momentum into the Company's core summer season. Further, these weather patterns continued in a number of Six Flags' major markets through July. As a result of the breadth of this continued pattern, rather than achieving a rebound after early season shortfalls, we have experienced ongoing difficulties in achieving expected growth in our core operating season. We have seen generally good performance in periods of fair weather, but this has been insufficient to allow us to close the gap to our expected performance levels.
"Based on year-to-date results and existing trends, as well as the continued impact of the decline in European currencies, the Company presently expects full year adjusted EBITDA to be between approximately $400 and $415 million, representing growth over 1999 results of approximately 10-15% and growth over pro forma 1998 levels of $141-156 million (approximately 55-60%)."
Mr. Burke concluded, "In the final analysis, the company's ability to perform well through extremely difficult conditions has only strengthened our confidence in Six Flags' ability to create significant and sustainable value over the long term."
Six Flags is the world's largest regional theme park Company, with thirty-six parks in markets throughout North America and Europe.