Six Flags 2Q Conference Call 4:00 PM

[RagingBullFan]

Listen Live Here

Six Flags announces its 2nd quarter earnings and strategy updates. Should be interesting as investors are likely not to be pleased with the large downturn in attendance.

[w00dland]

I know I'm excited.

[Danhockey04]

I dont know if I am going to listen, but I am expecting numbers to be lower than thought.

[RagingBullFan]

Expect at least a 10% decline in attendance. I'd expect more towards even 15%+

[Danhockey04]

Second Quarter Results

Second quarter 2006 total revenues were $356.1 million, compared to $360.6 million for the second quarter 2005, a decrease of $4.5 million, or 1%. Attendance for the second quarter 2006 was 9.6 million, down 14% from 11.2 million in the second quarter 2005. Attendance was impacted by a decrease in season pass attendance and by the closing of the Six Flags New Orleans park, which together accounted for roughly 0.9 million of the 1.6 million decline in attendance, as well as adverse weather.

Per capita guest spending, which excludes sponsorship and other revenues not related to guest spending, increased $4.43, or 14%, to $35.41 from $30.98 in the second quarter 2005, as guests continued to spend more on admissions, food and beverage, merchandise, rentals, games, and parking.

Total costs and expenses, including cost of sales, depreciation, amortization, stock-based compensation and loss on fixed assets were $307.1 million for the quarter, compared to $280.5 million for the second quarter of 2005, an increase of $26.6 million, or 9%. The increased costs were driven largely by anticipated and strategic increases in salaries, wages and other expenses primarily associated with additional staffing and services in order to improve the guest experience through greater character presence, increased cleanliness, employee training and other initiatives ($29.6 million), stock- based compensation ($1.5 million), Management Change Costs ($1.0 million), and offset by a reduction in loss on fixed assets ($5.5 million).

That is from Six Flags's website, that is the results, more can be seen here.

[RagingBullFan]

Yawn, Shapiro trying to blame it on weather.. blah blah blah... I thought he wasn't going to use that excuse....

[Danhockey04]

Key notes I have....

-Attandance is down due to the lower sell of season passes and weather. "Bad weather days" increased by 16% from last year and the 14 Six Flags brand parks had 23% increase of "bad weather days."

-Attandance was down 14%.

-Per Capita is only down 1%.

-July performance: attandance down 1 million (13%); ticket per cap up 10%; waterparks have lower per cap than the theme park; revenue declined by 3% from last year

-Attendance down double digits, per cap up double digits

-Lost 427,000 in one week in attendance.

-"Hot temperatures and rainy east coast cause of low attendances" -Shaipro summarized

-Expecting good attendances in Chicago, New Jersey and rest of east coast for the upcoming weeks.

-All new rides open

-Five year highs: intent visit to begin, intent to have friends to come, exceeding expectations, guest happiness, speed of ride lines, cleanliness, shows, friendliness

-After visits to 6 parks: very pleased

-Chicago only park to have 2 parades

-SFMM: "numbers on fire", total revenue up 10%, per cap up 10%, hispanic basis up 11%, trying to target them; on a single day, set comapny record $50 per cap.

-SFGAdv: Biggest challange. They too did $50 per cap one day.

-Character appreciation up 20% from last year; brunch with bugs, flash pass, parades; marketing campaign for next year will be tied to it

-Brunch with Bugs is growing weekly

-Cleanliness, security, characters are causing higher spending.

-Flash pass revenue up 22%

-Hope to announce another two partnerships

-36% of season remaining to look ahead to

-In deep with 2007 planning to get ahead

-2 new family coasters ordered; will be open on opening day

-2007 season passes on sale in October and huge campaign for it

-A few more international programs for next year

-Planning new retail for 2007 right now

-People buying tickets on web is up 25%

-Tony Hawk was a total success, he significantly lifted attendance; and plans to have it again next year.

-Families are coming back to Six Flags and is encouraged.

-Gas is having some impact on the visits; is some reluctant due to gas to go out and visit SFMM to local citizens.

-Fewer repeat visits on season pass holders (like me )

-NOT CLOSING SFMM, NOT CLOSING SFEG, NOT CLOSING DL

Now to Q&A

-Concentrating on the branded parks

-Never going to be Disney, just a better alternative

-"Chicago, best waterpark in the country" -Shaipro

-"Altanta, best show park in the country" -Shaipro

-SFGAdv is not doing as best as it could with El Toro - "best wooden coaster in the world" (which I have heard is true); KK - running every day

-Still unsure about selling the parks; but currently, it is a "no"

-Put in a universal complaint system, which old Six Flags didnt have before, respond to every phone call and letter. Every park has phone number to GM online (expect Mexico City)

-The shooting in SFOG did affect the shooting despite being outside the park, went into a 3 week skid of attendance, jumped back up.

-Selling parks will be sold as a pakage of parks still intact; real estate could happen, but take longer time frame. Sell might happen before 2007 season if it happens.

-Decisions on selling of parks come from the right price offered.

-Season pass campaign will be exciting and run through July 4, 2007

CLOSING REMARKS

Fully staffed, rides fully up, guest spending up, stratergy is working, having a strong August and very much into 2007 planning.

[RBull4life]

2 new family coasters ordered; will be open on opening day

Family coasters!!!! What, no 30-40 million dollar B&M, or Intamin coasters??? The chain will most certainly fail now. What is Shaprio thinking?????

Seriously, I wonder what parks are getting those.

Hot temperatures and rainy east coast cause of low attendances

Hmmmm, sounds alot like what Cedar Fair is saying about there decline in revenue.

Fewer repeat visits on season pass holders (like me Sad )

and me too. I wanted to go, but honestly, I work in the heat all day, and don't really feel like walking around the park when its over 100 outside.

Fully staffed, rides fully up, guest spending up, stratergy is working, having a strong August and very much into 2007 planning.

As I have always said, give the man some time. Things don't happen overnight.

[skaterboarder254]

sounds like things aren't as bad as some people on this site have made it seem in other threads. i bet next year at this time six flags will be on a major rebound.

[Sedir]

-Fewer repeat visits on season pass holders (like me )

I've actually gone to the park more then I usually do this year. However quite a few of my trips have been cut short because of heat or rain. (Shapiro might actually be right in the drop of attendance because of weather.)

-"Chicago, best waterpark in the country" -Shaipro

Does he really mean the best waterpark by itself or the best waterpark at a theme park? (If he meant by itself then he's a little off.)

[Imeanbusiness]

I beg to differ, no park has the enviorment and ride package like SFHH-Chicago does.

[w00dland]

2007 season passes on sale in October and huge campaign for it

Whatever happened to only famalies? If you are going to put huge campaigns for season pass holding it's going to be just like the old Six Flags.

And that whole weather thing is a load of crap, it's as hot this year as every other year, and actualyl compared to last year the weather is fantastic for theme parks.

[CoasterDave316]

-"Chicago, best waterpark in the country" -Shaipro

We do have a awesome waterpark, the more I visit, the more fun I have in the waterpark...and to think I thought I wouldn't visit it much when they announced it. Now I find myself making trips just for the waterpark.

-Fewer repeat visits on season pass holders (like me )

I haven't gone nearly as much as I usually do.

-SFGAdv is not doing as best as it could with El Toro - "best wooden coaster in the world" (which I have heard is true)

Nah, it's a really great ride but Voyage is better.

[obekosomatic]

very nice indeed

[Ilovthevu']

2 new family coasters ordered; will be open on opening day

Family coasters!!!! What, no 30-40 million dollar B&M, or Intamin coasters??? The chain will most certainly fail now. What is Shaprio thinking?????

Seriously, I wonder what parks are getting those.

One for sure is Six Flags St. Louis. I believe the other one is Fiesta Texas. I don't believe that they replaced Joker's Revenge. So, they have space. At Six Flags St. Louis, they supposedly putting it in the Alligator type show area. That's what I've heard.

The dude tries to make excuses. Blame it on the weather. Can we see if Disney is really down this year. Raising prices is the problem. I'm going in the end of July, and it's really satisfactory. Before, I would have to be very crazy to go during that month. The overflow lot is not getting that many cars as last year it was really to the brink of being full.

It's too steep of a hike in one years time. Season passes are good for the park. They get the park a lot of money all at one time. For some people, they only go 2 times, and it's worth it to them.

If discounts are for $34.99, and people go two times, it's like $70.00. A season pass costs $85.00. Of course, this is for the people that only go twice. They do have family season passes also, remember.

[zjohn1988]

sounds like things aren't as bad as some people on this site have made it seem in other threads. i bet next year at this time six flags will be on a major rebound.

[rb1]

So far so good for the company but blaming bad weather and gas for the declining attendance is not the answer they should blame him for increasing ticket and parking prices which some family could barely afford and what about the food in the park talk about price hike 8 bucks for a pizza or a hotdog come on. No wonder families are staying away from the park its not affordable at all. Teens just go out to eat but they love the rides. Compared to Disney I guess families expects SF to be more affordable. Oh well what can we do about it at least its to increase the companies profit and maybe it will not be so crowded this year on FF walkons for everybody YEY!. Too bad hes not planning on putting any good rides for parks in 2007 this will definitely decrease season pass sale more for the 2007 season. So he better start planning something good for all the parks for the 2007 season right now add a 1million flat or a 2 to 3million cheap coaster SHAP to increase attendance.

[Danhockey04]

Too bad hes not planning on putting any good rides for parks in 2007 this will definitely decrease season pass sale more for the 2007 season. So he better start planning something good for all the parks for the 2007 season right now add a 1million flat or a 2 to 3million cheap coaster SHAP to increase attendance.

Umm...who says he's not putting in good rides? There are good rides that aren't coasters. Also, what makes you think that season passes are going to decrease. Try the opposite, they should be increasing to about $100-$120.

[rb1]

UMMM then no ones really going to buy it if its that much and look what it did not many people bought it this year because they hike up the price they offered more discounts this July which worked and increased park attendance by a little unless they put in a really good ride in 07 like you said then people will buy it. So affordable pricing means more attendance and increased revenue for the company which is not that bad of an idea at all. Families everybody will flocked to the park because they can afford it. Its up to Shapiro if prices could go up or down who knows what hell do for 07.

[Danhockey04]

After this conference call, I have gained faith that Shapiro will turn this company around. I believe that his actions now are actually working for the parks around the country. Attendance at SFGAm has gone up in the past few weeks, and will continue to grow. You can all believe what you want, but he is doing the right moves to make this once pathetic company (only during Premier's reign) called Six Flags, a respectable company.

[Director_Guy]

-SFMM: "numbers on fire", total revenue up 10%, per cap up 10%, hispanic basis up 11%, trying to target them; on a single day, set comapny record $50 per cap.

Hot damn, that's good news. Whew.

[Ilovthevu']

The ONLY reason for that is because everyone thinks it's going to close over there, and people don't want that park to go!!! It's nothing he did to change it around. It's already attended without the waterpark counting with the Magic Mountain attendance (I believe).

I don't get the package thing either. If some people want to put houses in Darien Lake, and they don't want Elitch's Garden's land, why do they need to buy both parks (in fact all 5 or 6)? This is stupid. He just wants to deal with one sale, and that's it.

[rb1]

After this conference call, I have gained faith that Shapiro will turn this company around. I believe that his actions now are actually working for the parks around the country. Attendance at SFGAm has gone up in the past few weeks, and will continue to grow. You can all believe what you want, but he is doing the right moves to make this once pathetic company (only during Premier's reign) called Six Flags, a respectable company.

WOW somebody needs a relaxing ride at Castaway Creek just joking Dan youre the man you rock and yup youre right we can believe whatever we want about him and his actions are working for the parks and hes making the right moves to put the company out of its miserable problems. But well not really going to find out not in a couple of years if his strategies are actually working.

[Chitown]

I think Shapiro is doing what is necessary to turn this company around. For those of you that expected outstanding results in attendance this year are just kidding yourselves.

I really think the ones that are anti-Shapiro already had it in for him when he announced back in the early part of the year that expensive thrill coasters would be cut down drastically.

While Shapiro stated that at the moment , the properties that were mentioned to possibly be sold would not happen at this time, I feel the writing is on the wall right now for SFDL and SFEG. SFDL discontinued their meet and greet with the Justice league and also discontinued Fright Fest. The last operating day for SFDL this year is now Oct. 1st.

SFEG just let go alot of people that played the Looney Tunes characters and is now down to just a handful.

I have a feeling both of these parks have found a potential buyer.

We shall find out in November at the next conference call.

[SFGAmfan]

Shapiro was definately right in that there were going to be big crowds this weekend at SFGAm. I went Friday, August 4 and the parking lot looked to be completely filled. The midways were packed, with Hurricane Harbor closing to capacity. Luckily, ride lines ranged from 30-45 minute waits. He was also right about the ride lines moving faster. All the lines we were in today were on a constant move, and even though there were a lot of people in the lines, the waits weren't bad at all.

The characters were out and I will say that families LOVED them. You could see all the families herding around these characters for a picture. I especially liked how they had the characters on the trolley going from Hometown Square to Mardi Gras greeting all the kids and spraying much needed water into the crowds (via watergun). I thought I was going to be frustrated and rushed with how big the crowds were, but it was the complete opposite. I had a great time, and everyone else at the park that I could see seemed to be loving the park as well.

I definately believe Shapiro is turning the company around in the right direction. It's just going to take some time. This is definately a long term project. I do however feel the company made a rather dumb decision with cutting hours across the board instead of doing it on a park-by-park basis, espcially with cutting an hour on Saturdays during Fright Fest. We'll see how the rest of the year turned out, and what Shapiro has planned for next year in the November conference call.