Six Flags Entertainment Corporation (NYSE: SIX), the world’s largest regional theme park company and largest operator of waterparks in North America, today announced that revenue for the second quarter of 2018 increased $23 million or 5 percent from the second quarter of 2017 to $445 million. The revenue growth resulted primarily from a 3 percent increase in attendance to 9.8 million guests, a 2 percent increase in guest spending per capita and a 9 percent increase in sponsorship, international licensing and accommodations revenue. Adjusting for the nearly 200,000 guest visits that occurred during the first quarter versus the second quarter due to the earlier timing of Easter in 2018 versus 2017, second quarter 2018 attendance grew 5 percent.
Net income for the quarter increased $22 million or 43 percent and diluted earnings per share increased 49 percent to $0.88, primarily due to a $37 million charge related to the early retirement of debt in April 2017 and the positive impact of tax reform, partially offset by an increase in stock-based compensation related to accounting for the company’s Project 600 award. Adjusted EBITDA in the second quarter 2018 increased $4 million or 3 percent to $170 million.
“I am very pleased with our continued strong momentum and execution in the quarter as we expanded our global footprint and successfully rolled-out our new, premium-tiered membership program,” said Jim Reid-Anderson, Chairman, President and CEO. “I am confident 2018 will be another record year for our shareholders as we continue to innovate and execute on our five-pillar strategy to drive our business to achieve our aspirational goal of $750 million of Modified EBITDA by 2020.”
Total guest spending per capita for the second quarter of 2018 was $42.63, which was an increase of $0.96 or 2 percent compared to the second quarter of 2017, as ticket price gains and premium membership sales more than offset both the higher mix of season pass holder and member attendance at all the company’s parks and lower per capita spending at the five new domestic parks, whose lease rights were acquired by the company in June 2018. Admissions per capita increased 5 percent to $24.61 and in-park spending per capita decreased 2 percent to $18.02.
For the first six months of 2018, revenue was $574 million, a 10 percent increase compared to the prior year period, driven primarily by a 7 percent increase in attendance, a 3 percent increase in guest spending per capita and a 12 percent increase in sponsorship, international licensing and accommodations revenue. The company had net income of $12 million and diluted earnings per share of $0.14 for the first six months of 2018 as compared to a diluted loss per share of $0.06 for the same period in 2017. Adjusted EBITDA was $151 million for the first six months of 2018, an increase of 16% versus the prior year period.
Attendance for the first six months of 2018 grew to 12.1 million guests or 7 percent as compared to the first six months of 2017. The increase in attendance was driven primarily by the five new domestic parks, the two new waterparks in Mexico and California, and the impact of 365-day operations at Six Flags Magic Mountain. Guest spending per capita increased 3 percent to $43.30 for the first six months of 2018, with admissions per capita increasing 5 percent and in-park spending per capita decreasing less than 1 percent to $25.30 and $18.00, respectively.
The company’s success in upselling guests from single day tickets to memberships and season passes resulted in an 8 percent year-over-year increase in its Active Pass Base, which represents the total number of guests who are enrolled in the company’s membership program or have a season pass. The mix of memberships in the Active Pass Base significantly increased as a result of the company’s roll-out of a new, premium-tiered membership program. Members are the company’s most loyal and valuable guests, with higher retention rates and higher revenue compared to traditional season passes. Deferred revenue of $227 million as of June 30, 2018, increased by $32 million or 16% percent over June 30, 2017, primarily due to the impact of the new North American parks, incremental sales of memberships, and higher sales of all-season dining products.
In the first half of 2018, the company invested $91 million in new capital projects and $23 million, less net working capital and other adjustments, to acquire the lease rights to five new parks; paid $131 million in dividends, or $0.78 per common share per quarter; and repurchased $81 million of its common stock. The authorized share repurchase amount available as of June 30, 2018, was $262 million. Net Debt as of June 30, 2018, calculated as total reported debt of $2,180 million less cash and cash equivalents of $69 million, was $2,112 million, representing a 3.9 times Adjusted EBITDA net leverage ratio.