Six Flags posted its 1Q results and held a conference call this afternoon. There were some interesting comments made by Mr. Shapiro and his team.
Various Properties - SFI now has a complete protfolio of all real estate and park values including possible value created by zoning changes. SFAW will be sold for $77 million. SFAW did bring in $5 million a year prior to its sale. The sale of the Oklahoma based parks are also proceeding as planned with the sale expected by the end of this year. There are meetings to be held next week in OK with prospective buyers. Also the waterparks in Ohio and Sacremento are being discontinued after this year. I know the Ohio one is being sold or released to the Zoo, but what happened in Sacremento?
SFNO will not be open at all in 2006. SFMM gets its own section in this topic later
14 of 30 Properties are branded Six Flags, these 14 parks account for 85% of revenue and business. - I believe that this statement makes it very clear which properties are on the block.
Gas Prices - Shapiro stated that there has been overwhleming response to the "President" gas price promo. They have even discussed doing a TV spot with Shapiro as "The President". Shapiro believes that prices will affect Disney due to higher airline costs, but that it will not affect Six Flags or Cedar Fair.
Numbers, Spending & Attendance - Attendance was down 350,000 when compared to March of last year. 100,000 of this can be attributed to a new law in Mexico that prohibits schools from taking field trips to amusement parks. Apparently the little buggers really like to get their coaster on south of the border, and SFI has mobilized a team of lawyers to defend that right. The other 250,00 was blamed on the shift of the Easter Holiday, bad weather in CA, and SFNO not in operation. If you compare this year to 2005 without SFNO, then attendance is actually up.
Shapiro later notes that as of 4/30 attendance is still down 300,000 from last year, and he is suprised that the Easter holiday in April did not ofset March losses. It should also be noted that 1Q generally represents less than 5% of total attendance volume for any given year.
How much do the "little things" cost? - New operating expense related to employees, characters, fireworks, etc. is $45 million dollars. $15 million of it was spent in 1Q with $10 million being the cost to implement all of the new characters at each park.
The new advertisements will cost $20 million. Six Flags has left it up to the shareholders to vote on whether or not to reimburse Red Zone LLC $10.4 of its $11.4 million spent in aquiring control of the board.
Per Capita Spending is up 14%. Shapiro admitted that this figure does include proceeds from sponsors, but that without accounting for sponsors, per capita is actually up 16%. They are behind last years 1Q in terms of sponsor revenue, and most of the big deals recently announced were signed early 2nd Quarter.
Food per capita is up 15% - Shapiro mentions that "Brunch with Bugs costs $14.99 per child and $17.99 per adult. He also mentions the Saturday sign-up at SFSTL for this program was 80 people.
Retail per capita is up 10% - Shapiro mentions that they made $5,000 on pony rides in SFGADV in just one day.
Flash Pass revenue is up 80% and ticket per capita is up 15%.
Ticket per capita was directly related to the higher prices. Discounts are now either $10 or $15 off, only SFMM & SFGADV have Buy one get one free Coke cans. When asked by a CA area analyst why SFI was raising prices while Cedar Fair was lowering prices, Shapiro stated that "I know KBF had a bad year last year", and "Cedar Fair is a regoinal operator, Six Flags is a national brand with regional operations". He re-affirmed his commitment to higher ticket prices especially season tickets likening cheap season tickets to a narcotic addiction.
Shapiro on SFMM - Shaprio mentions SFMM specifically when discussing his reasoning for higher SP prices. He mentions that TATSU will be opening Saturday making it only $59.99 to enjoy 17 coasaters. He asl ostates that the prime customers of the cheap season pass were "teens" who didn't spend much, and had a habit of "leaving thier cigarette butts on the ground". He hopes that the higher prices at SFMM "cleans up the clientele".
Shaprio on Mr. Six - We are inventing a new brand, a new image. "Having a Bald Scary Mr. Six begging you to come to the park is not going to work"
Asset Management - SFI has gotten permission from its lenders to sell up to $300 million in assets including rides and property on top of the SFAW sale. $100 million can be used for Capital expenditure, anything over that amount would repay debt.
SFI has also done an analysis of the "boneyards" at each park, determining which rides are usable, used for parts, or rides to be scrapped. Any ride scrapped was counted as a one time write off in 1Q.
In the Near Future Valet Parking will "be online" starting Memorial Day Weekend.
Currently working on 20-30 Sponsorship deals including new deals with A&E, Willy Wonka, Dippin Dots, & Panda Express. THey do not wan the parks to become too commercialized though, believing it hurts the brand.
Six Flags will be on the hood of Tony Stewart's #20 Home Depot NASCAR Nextel Series Car for one race to be determined.
Both the movie theater and Papa John campaigns start this month.
Not sure if the Parks will continue to use all three major credit card companies. "It depends on who wants preferred exclusivity"
All new rides should be online within 2 weeks, including the new "Marvin the Martian 3D" at SFGAM "formerly our IMAX theater there" - I don't quite know what he means by that, its still an IMAX, right?
Best Shapiro Quote - "We had a boneyard in Indiana! We don't even have a park there."
It's the most fun in the park when your laughing in the dark.
ihauntu2 wrote:All new rides should be online within 2 weeks, including the new "Marvin the Martian 3D" at SFGAM "formerly our IMAX theater there" - I don't quite know what he means by that, its still an IMAX, right?
Not anymore.... Try IWerks same people making the film.
Some notes on the Confrence call that I took away.
I love the Home Depot selling SF Tickets. How huge is that? Papa Johns also (although Pizza Hut would have been better, brand wise)
All these dopes who where forecasting this huge gloom and doom when Synder and Co. took over, Where's the mighty collapse? Where's the coasters being taken down? Where's the decrease in thrills?
Any person with a fuctioning brain in thier head, will know this was not a case.
As for Shapiro being in a Commercial for Six Flags reguarding the gas price commericals. Why not use the "Venga Bus" and turn it into a hybrid? Just a goofy thought there.
One thing I think I have noticed, Families are not afraid to spend money while in a park, IF they think they are getting a good deal with it.
IM seeing alot done by Six Flags to really drive people to the parks, However, Cedar Fair is doing very little if anything.
Im going to go out on a limb here, 3 to 5 Years from now, Six Flags will be a lean and fit profitable company.
SFI is losing a lot of money right now for the short term while they implement these changes.
I'm not so sure of Shapiro now. He really seems to be more about hype. I don't think that the company will meet its stated growth for the year, unless the attendance numbers pick up drastically.
Remember they are trying for 17% growth in EBITDA over last year while increasing operating expenses, and decreasing attendance. I just don't think the per capita spending will do it.
They will be holding a special "Mid season" meeting on 6/22 to discuss these issues, and take a realistic look at how the strategy is playing out.
Overall though I do believe this will pan out over the next few years, just not as soon as Shapiro was hoping.
It's the most fun in the park when your laughing in the dark.
The 1st qtr accounts for 5% of there year, of course they are going to lose money in qtr 1. When only SFMM is open, and he added all these changes and expenses. Give it time.
Lets see at the end of the year when a majority of parks are closed for the season where the company stands. I wonder what 2nd Q will look like after the waterparks open.
If it walks like socialist, quacks like socialist, smells like a socialist, .... it's a socialist. Hope, and change we can believe in.
I don't see Magic Mountain surviving much longer if the park is trying to scare away the teens from it. "It is a rollercoaster park." That's it, plain and simple. It has 16 functioning rollercoasters (-Flashback). If you get rid of the teens, that park doesn't have enough family rides to survive. There's Disney right around there. The price for admission at that park is equal to Disneyland, and Disney's California Adventure. Those two parks in attendance are in the top 10. Magic Mountain is somewhere in the 20s.
I wonder if he Shapiro will be thinking about relocating any of them considering that he doesn't want to buy anymore rollercoasters in the future???
"I've been staring at the world, waiting. All the trouble and all the pain we're facing. Too much light to be livin' in the dark. Why waste time? We only got one life. Together we can be the CHANGE. So go and let your heart burn bright"
ihauntu2 wrote:All new rides should be online within 2 weeks, including the new "Marvin the Martian 3D" at SFGAM "formerly our IMAX theater there" - I don't quite know what he means by that, its still an IMAX, right?
The sign on the building still says Worlds Largest IMAX Experience, but who knows. Also Marvin the Martian 3D "blasts off" this June according the posters at the entrance to Pictorium
http://themeparkcritic.com/scripts/profile/ViewProfile.asp?ViewID=2909 A furious storm once roared `cross the sea, catching ships in its path, helpless to flee. Instead of a certain and watery doom, the winds swept them here to Typhoon Lagoon!
Ilovthevu' wrote:I don't see Magic Mountain surviving much longer if the park is trying to scare away the teens from it. "It is a rollercoaster park." That's it, plain and simple. It has 16 functioning rollercoasters (-Flashback). If you get rid of the teens, that park doesn't have enough family rides to survive. There's Disney right around there. The price for admission at that park is equal to Disneyland, and Disney's California Adventure. Those two parks in attendance are in the top 10. Magic Mountain is somewhere in the 20s.
I wonder if he Shapiro will be thinking about relocating any of them considering that he doesn't want to buy anymore rollercoasters in the future???
I wouldn't be surprised if Magic Mountain gets some more family rides over the next few years.
If it walks like socialist, quacks like socialist, smells like a socialist, .... it's a socialist. Hope, and change we can believe in.
I think what i got out of this call was a lot of "we'll have to wait and see" when it comes to these things. We'll have to wait and see what Marvin the Martian will turn out to be, we'll have to wait and see if things pan out the way he has planned. Overall, I'm not to sure what I think yet, we'll have to wait and see.
RIP: Trailblazer and Deja Vu...heck, even Alien Encounter
I was told that the IMAX Equipment is no longer rented by SFGAM. So, its is no longer an IMAX Theater. It’s just a Theater with a Big Screen. Also, I have seen them doing some work in the theater, I assuming they replaced the projector ect. to use with the new 3D film coming out.
The 1st qtr accounts for 5% of there year, of course they are going to lose money in qtr 1. When only SFMM is open, and he added all these changes and expenses. Give it time.
Yes I did listen to the whole call.
Don't get me wrong, I think that Shapiro will turn this company around in the next few years big time.
I just think the goal for the first year is a little lofty, especially if you have to compare to numbers from last year that had 1.75 more parks running.
On the same note, I think that the next three years combined will be bigger than Shaprio could even hope for.
RBull4life - I sprinkled the topic with some Bob O Bait - no sign of him just yet.
It's the most fun in the park when your laughing in the dark.
Youre right Shapiro does want to turn this company around with all the things he wants to do for the parks. Maybe in a couple of years hell put in more thrill rides or not in some parks even if he doesnt want it. Who knows maybe for sixflags 50th aniversary hell put in a 500ft coaster in one park i doubt it. YES Well have to wait and see how the parks and the company turns out in a couple of years under his leadership that is if hes still working for Six Flags.
I think Shapiro has some good idea's in making the parks more family friendly and hopefully in time it will pan out.
But this is another bad quarter for the company. When you are over 2 billion in debt you hope you dont add another 241 million to that total.
I was surprised they only got 77 million for the land at SFAW, and when you subtract the 20 million in demolition costs that does little good in paying down a debt that stands over 2 billion.
I wonder what will happen to the parks next year in terms of adding rides/attractions. If Shapiro is true to his word there wont be many tatus's/Goliath's etc at any parks. So i wonder what he will do to increase attendance as parks need a constant influx of money to be kept up to date and add new attractions(even family friendly ones) and my guess he will cut big time into the capital budget to improve the bottom line.
The $77 mil for SFAW was under what Burke had been promising, but it was in line with analysis of real estate in the area.
In term of what will be done to add to parks, you can look at the previous topic on the last conference call. Shapiro wants to add more mid-level rides like Tornado, Large flats maybe, and ride packages like at SFOT.
Plus by adding to the overall experience and investing in entertainment, he is hoping to expand gate based on word of mouth. I have had more people come up to me this year at work and ask about SFSTL than I have over the last two years, so I gotta think maybe that aspect is already working.
It's the most fun in the park when your laughing in the dark.
ihauntu2 wrote:The $77 mil for SFAW was under what Burke had been promising, but it was in line with analysis of real estate in the area.
In term of what will be done to add to parks, you can look at the previous topic on the last conference call. Shapiro wants to add more mid-level rides like Tornado, Large flats maybe, and ride packages like at SFOT.
Plus by adding to the overall experience and investing in entertainment, he is hoping to expand gate based on word of mouth. I have had more people come up to me this year at work and ask about SFSTL than I have over the last two years, so I gotta think maybe that aspect is already working.
I've also heard that's the first time in a while that they were advertising commercials over there. Is this true or not? That makes sense why they were bugging you.
"I've been staring at the world, waiting. All the trouble and all the pain we're facing. Too much light to be livin' in the dark. Why waste time? We only got one life. Together we can be the CHANGE. So go and let your heart burn bright"
Just a goofy thought there.
Magic Mountain is somewhere in the 20s.
