Net Debt Drops to $667 Million
GRAND PRAIRIE, Texas, USA /PRNewswire/ — Six Flags Entertainment Corporation (NYSE: SIX) announced that Adjusted EBITDA(1) grew to $251 million in the third quarter 2011, an increase of 5 percent over the third quarter 2010. During the same time period, Modified EBITDA(2) margin, the most directly comparable measure of the parks’ performance, increased 270 basis points to 56.6 percent, which represents a new all-time high for the company’s profitability. Revenue of $476 million during the third quarter was flat with prior year primarily driven by a 5 percent increase in guest spending per capita offset by a 4 percent decline in attendance due to unfavorable weather conditions at several Six Flags parks during the quarter.
For the first nine months of the year, Adjusted EBITDA grew 15 percent to $316 million on $22 million or 3 percent revenue growth. For the last twelve months (LTM) ended September 30, 2011, Adjusted EBITDA was $337 million. Modified EBITDA margin for the LTM period ended September 30, 2011 was 36.8 percent, a 620 basis point improvement over the comparable prior-year period.
“Implementation of our focused strategy has delivered superb results once again,” said Jim Reid-Anderson, Chairman, President and CEO. “Our multi-year goal to delight guests and improve the financial performance of the business is right on track as we generated all-time high guest satisfaction scores and record financial metrics through the first nine months of the year.”
Third quarter 2011 revenue of $476 million was flat to prior year, with a $4 million or 1 percent increase in admissions revenue offset by a $2 million or 1 percent decline in in-park revenue and a $2 million decline in sponsorships. Third quarter attendance of 11.2 million declined 4 percent versus prior year with 35 percent of operating days impacted by adverse weather and 40 percent of those days falling on weekends. Admissions revenue per capita of $23.48 increased $1.35 or 6 percent, and in-park revenue per capita of $17.35 increased $0.59 or 4 percent. Total revenue per capita for the third quarter was a record $42.40, as compared to $40.55 for the same period in 2010 — an increase of $1.85 or 5 percent.
Revenue of $876 million in the first nine months of 2011 grew by 3 percent over 2010. The increase was driven by a $22 million or 5 percent increase in admissions revenue, and a $5 million or 1 percent increase in in-park revenue, offset by a $6 million decline in revenue related to sponsorships, international licensing and management fees. Admissions revenue per capita of $22.83 increased $1.56 or 7 percent, and in-park revenue per capita of $17.28 increased $0.65 or 4 percent. Total revenue per capita for the first nine months of 2011 was $42.24, as compared to $40.24 for the same period in 2010 — an increase of $2.00 or 5 percent.
Cash expenses, including costs of goods sold, declined $14 million or 6 percent during the third quarter as compared to the third quarter of 2010 primarily due to reduced cash compensation and marketing expenses. For the first nine months of 2011 cash expenses, including cost of goods sold, were $25 million or 5 percent lower than the same period in 2010 primarily due to lower costs associated with cash compensation, marketing and outside services. The company’s noncontrolling interest position in dick clark productions, inc. negatively impacted year-over-year Adjusted EBITDA growth by $0.5 million, $1.2 million and $2.3 million for the three-month, nine-month and twelve-month periods ended September 30, 2011, respectively.
The company generated diluted earnings per share of $3.43 in the third quarter 2011, an increase of 42 percent over the same time period in 2010. Year to date diluted earnings per share was $1.40. Cash earnings per share(3) for the twelve months ended September 30, 2011 was $3.29. Since the company emerged from Chapter 11 on April 30, 2010 with a new capital structure, the comparable prior period cash earnings per share figure is not meaningful. The company believes cash earnings per share is a meaningful metric given the current $1.1 billion accumulated tax loss carryforward and the net depreciation and amortization impacts relating to fresh-start accounting.
Free Cash Flow(4) — which for the company is defined as Adjusted EBITDA less capital expenditures, cash interest and cash taxes — was $225 million in the third quarter and $204 million in the nine months ended September 30, 2011, and included $10 million and $69 million of capital spending, respectively.
Net Debt(5) as of September 30, 2011 was $667 million compared to $829 million as of June 30, 2011 and $763 million as of September 30, 2010 — an improvement of $162 million and $96 million, respectively. During the last twelve months, the company issued dividends of $8 million, paid a $30 million arbitration settlement, and repurchased approximately $42 million of its common stock.
The company had $305 million of cash on hand as of September 30, 2011 and a net debt to last-twelve-months Adjusted EBITDA ratio of 2.0 times, as compared to 2.6 times at June 30, 2011.
In early September Six Flags announced a package of thrill rides, family rides, shows and special events for its 2012 season. Among the highlights:
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