Six Flags 4th QTR. & Outlook for 2008

[PcMan]

Six Flags Provides Outlook for 2008
PR Newswire
March 10, 2008: 08:42 AM EST

NEW YORK, March 10 /PRNewswire-FirstCall/ -- Following this morning's release of results for the quarter and year ended December 31, 2007, Mark Shapiro, President and CEO ofSix Flags, Inc. and Jeffrey R. Speed, Executive Vice President and CFO, hosted a webcast conference call to discuss the Company's results and provide an updated operational outlook for 2008.

"The Six Flags product and brand are re-emerging," Mr. Shapiro stated. "The season is underway and despite a tightening economy, we remain cautiously optimistic -- first quarter attendance has good momentum; season pass sales are up strong double digits; our corporate sponsorship business continues to gain traction; and our strategic expansion into Dubai provides for yet another promising revenue stream."

    Mr. Shapiro expanded on the Company's initiatives for 2008:

    -- The Company is coming off a year of record per capita guest spending
       and guest satisfaction, driven by the implementation of the Company's
       new in-park strategy, which began in 2006, focusing on improving and
       diversifying the in-park entertainment experience.

    -- The new attraction program for 2008 continues the strategy of
       diversifying and improving the product offering with eight coasters in
       eight parks and continued expansion of the Wiggles World and Thomas the
       Tank Engine franchises.

    -- Additional guest spending growth is targeted for 2008; driven by
       upgrades of the in-park product offering and the continued roll-out of
       additional units of Papa John's , Johnny Rockets, and
       Cold Stone Creamery, as well as growth related to the Company's
       photography business operated by Kodak .

    -- The Company's corporate sponsorship business combined with new
       international licensing opportunities is expected to provide excellent
       growth, with approximately $51 million of revenue targeted for 2008.

    -- To facilitate sponsorship growth, the Company has been rapidly
       expanding its in-park signage, television and radio broadcasting to
       provide sponsors with a wide range of alternatives to reach potential
       customers.

    -- International expansion will be driven by annual fees, beginning this
       year, from third-party developers for brand exclusivity, design and
       development services, and, upon park opening, licensing royalties.

    -- The Company will continue to leverage its dynamic new venues for
       growth.  In 2007, the Company acquired 40% of Dick Clark Productions,
       Inc., ("DCP"), the producer of television event programming such as the
       Golden Globe Awards, the American Music Awards and the Academy of
       Country Music Awards. Recently, Six Flags announced it would assume
       management oversight of DCP, exploiting logical synergies within its
       stable of parks to create a fully integrated entertainment and
       sponsorship platform. The Company expects that DCP will experience
       strong earnings growth over the next several years, while paying Six
       Flags an annual management fee.

    -- Cash operating expenses are expected to decline by $55 million,
       reflecting reduced marketing and full-time labor costs, seasonal labor
       efficiencies from an automated labor scheduling system that the Company
       will expand throughout its parks, and the removal of inefficient rides
       and attractions.

    -- Marketing efforts for 2008 will be more targeted and efficient through
       the use of increased online channels and less radio advertising, while
       concentrating media on the front end of the season.  Additionally, the
       Company intends to capitalize on its ever-increasing database of
       customers, established in 2006.

    -- The risk to the Company from an economic slowdown is difficult to
       determine, but certain factors give rise to cautious optimism.  First,
       historically the Company's business has been relatively stable during
       recessionary periods.  Second, as a result of the increased appeal of
       its parks, the Company is poised to benefit from families who will
       likely stay closer to home and seek affordable entertainment options.
       Finally, the income tax rebates due to arrive in May should provide an
       economic stimulus that directly benefits the Company's business.


In his discussion, Mr. Speed spoke to the prospects for the Company to achieve positive free cash flow.(1) For 2008, with attendance flat at 24.9 million, the Company would generate Adjusted EBITDA of approximately $270 million and be within $25 million of achieving positive free cash flow, assuming the following:

    -- Increased per capita guest spending of $10 million;
    -- Sponsorship and international licensing growth of $13 million;
    -- Full-year benefit of DCP and Discovery Kingdom investments of $7
       million;
    -- Cash operating expense savings of $50 million;
    -- Reduced capital expenses to $100 million; and
    -- Cash interest, dividends and taxes of $195 million


With regard to the Company's ability to achieve positive free cash flow in 2008, Mr. Speed stated: "Through increased guest spending and new high margin revenue streams, combined with meaningful cost and capital expense efficiencies, we have positioned the Company to generate positive free cash flow for the first time in its history."

Investor Day

Mr. Speed also reminded investors and analysts that the company plans on hosting an Investor Day on April 29, 2008 at Six Flags Great Adventure in Jackson, New Jersey. Interested investors and analysts can sign up to receive information at www.sixflags.com/investors.

[WadeJ]

Ya know, its probably cheaper to buy a few shares just to get into the park that one night alone if I weren't a season pass holder

This looks good to me and we should probably see that ticker climb ever so slightly.

[PcMan]

I own many many many shares in SIX and more then paid with all the lose i uncured in the last 6 months
but it says for Institutional investors only ( usually they buy 100,000 + shares +  I think )
but I did apply from that link so I hope i get a email back
maybe I can get in some how   
Wade would you know the qualifications for entry ?

[PcMan]

some positive press for a change

The Devil Is in Six's Details
By Rick Aristotle Munarriz March 10, 2008

Even if the economy throws more curves than its signature coasters, Six Flags (NYSE: SIX) is positioning itself to weather the storm this year.

This morning's quarterly report out of the regional amusement park operator is encouraging, with momentum carrying over after a robust finish to 2007, and a 42% surge in EBITDA (adjusted earnings before interest, taxes, depreciation, and amortization) projected for 2008.

Investors normally should not read too much into the final quarter of a company that relies on the summer season to drive the bulk of its performance, but the abridged results bear pointing out. 

Thanks to a healthy December, Six Flags' revenue climbed 7% to $112.1 million. With a 4% spike in per-capita spending, stacked on top of a 4% increase in turnstile clicks, the company's top-line results topped Wall Street's expectations. It missed on the bottom line, though. The net loss from continuing operations widened -- from $1.12 a share to $1.43 a share -- but the deficit is padded by non-cash charges like accounting for the removal of poorly performing rides as well as additional stock-based compensation.

Perhaps the biggest news out of this morning's conference call is the upbeat outlook and improved recent performance. A strong December has carried over into year-over-year improvement so far during the first quarter. Sure, most of the parks are still closed, but it's encouraging to see Six Flags improving despite higher gasoline prices and an iffy economy. Those factors may actually be helping the company as locals spring for attractively priced season passes as a substitute for costlier getaways further away.

The company's guidance calls for $270 million in adjusted EBITDA this year, well ahead of the $189.5 million it generated last year. That is based on flat attendance and a modest 1% rise in guest spending. If admissions climb by 3% during the year instead, Six Flags would post its first year of positive free cash flow in recent history.

The cheery outlook was enough to send battered shares of the company soaring 12% at the open, but that's what the market gets for assuming that Six Flags was just going to keel over and file for bankruptcy.

Six Flags is a speculative enigma. Despite the puny market cap, its enterprise value is padded by a whopping $2.2 billion in long-term debt. That is the kind of leverage that will kill you in bad times but pay off handsomely on the other end of a turnaround.

The jury is still out as to how 2008 will play itself out for the amusement park industry. High-end players like Disney (NYSE: DIS) and Great Wolf Resorts (Nasdaq: WOLF) are seeing patrons willing to spend more than they did a year ago. It's now a mixed bag with the regional operators like Six Flags and Cedar Fair (NYSE: FUN).

Last month found Cedar Fair projecting just a 0% to 4% improvement in adjusted EBITDA for 2008. Six Flags is obviously expecting more. Granted, there are some company-specific factors weighing in the improvement at Six Flags.

Despite losing Home Depot (NYSE: HD) as a corporate partner, new partnerships and initial contributions from the company's licensing deal in Dubai, along with lower debt payments and operating improvements, give Six Flags more ground to make up this year.

With so much at stake, especially if Six Flags is able to turn it up a notch to quiet the critics by generating positive free cash flow, this ride may be as surprising as some of the chain's new enclosed coasters.