SIX Q3 Investors Conference Call

[BP317]

As usual, Mark Shapiro sounded a lot more confident than Jeff Speed who im sure had a hard time.

-Revenue down 9mil from Q3 06, 6% decrease.

-Per guest capita spending up $0.30 from Q3 06.

-Season pass revenues/attendance increase about 3%.

-Potential attendance lost because of accident in KY park.

-June 10% attendance growth, July undisclosed drop attendance, 1% August attendance growth, 8% September attendance growth

-24% total operating days in month of July affected by weather compared to 15% in 2006.

-Reduced group sales offset by high season pass sales.

-Continue goal of reducing operating days that generate little to no profitability.

-In 2008 goal of reducing expenses without impact on guest service.

-Less 3rd party corporate costs: website finished, staffing initiatives.

-Reduce labor and maintenence costs by removing attractions that are inneficiant, expensive, and low throughput.

-Save fulltime labor costs by more effictively using seasonal labor costs.
(I have a real problem with this, basically the whole backbone of the Kirean Burke ideology).

-Goal to reduce total cash costs by $50-60million.

-New management has turned around Six Flags brand.

-Record guest satisfaction scores in 2007.

-Shapiro made sure to bring up weather is NOT an excuse because it is always a problem in July.

-16% increase on brands (mainly food) in park in 07 from 05...."they are magnets" and good marketing opportunities.

-Wiggles World huge hit at 3 parks.

-New Englands Wiggles World had almost 1 million riders (about on par with Eagle)...

-Tony Hawk coaster attractive to tween and teens and relatively inexpensive. Fiesta Texas and St Louis both saw double digit attendance increases.

-Dark Knight coasters next year appeal to entire family and extensively themed, bring in revenue tied in with movie.

-Code of Conduct enforcement greatly incraesing guest service scores.

-Rides had higher capacity & less maintenence downtimes than 2006.

-Season pass sales 32% higher this point this year than this point last year thanks to early announcements of new attractions.

-More online spending than ever, less on radio. "Social advertising." Emphasis on MySpace & company profile on Facebook.

-Heavy up on media in May, June, July to make more noise in early parts of the season.

-Strength of brand is primary concern with sponsorships. Built up brand revenue from $13mil/$38mil since 06 with in park advertising and product sampling.

-Six Flags TV will be greatly emphasized next year, new plasma TV's in queue lines used for advertising. Goal is to have this business grow $100mil in the next 3 to 5 years.

-Season stretching to November for a few parks next year - parks TBA.

-Risk with Discovery Kingdom holiday in the park however they feel the package they offer will bring in profits.

-Be efficiant operating parks with real-time and weather without damaging the product. Guest service continues to be #1 priority. $40mil increase in park spending.

-Investor day at GAdv April 29 for investors/analysts.

-Sufficiant runway to excecute strategy, no liquidity problem at this time and is planned out until 2010.

-Totally turned around quality of parks in past 2 years, 2008 is "surgical cut," electronic uses to cut costs. He brought up SLTS which is the goal of seasonal employees can cut costs by swiping out in lightly crowded days, and taking out flat rides that are "not worth it." More efficiancy with park operation.

-Seeking to sell excess land in Maryland and New Jersey however do not believe now is the opportune time to "pull the trigger."

-No intention at this point to sell any parks.

[Trailblazer Tony]

Well, it sounds like we are doing really well overall. It's nice to see things turn around for the company and it's even nicer to see management put so much effort into improving our parks. These posts kind of emphasize the fact that this company doesn't just buy rides, place them somewhere in the park, and collect the money in the end, but that they actually think and plan out every move much better than before.

[Danhockey04]

Looks good, I do think this year that if the park still operated into to November, they would have had a great turnout. The weather was really nice for the first weekend and could have made more money. Even closing day this year was packed so they could have gone good there, but on a short notice though, maybe not. Who knows, hopefully this park can get an extra week at the end of the season and get some rides with some snow on the ground if we get the right weather.

[FParker185]

Figures are disappointing this year, but it is a good solid plan exept maybe for the full time labor cut, but that can be done if seasonal labor is held to higher standards than they were when the old SF tried that.

[cycamps]

Seems to me like it was a good year...

[Bob O]

http://www.reuters.com/article/bondsNew ... 7020071109

If anyone has any knowledge of business, this was another AWFUL year for the company no matter what BS the SF exec'x try to give as spin. Sharply lower profits and its debt going into deeper junk bond status is AWFUL news for a company that is already deeply in debt.

[BP317]

/\ The reason SF cant get out of debt is cause they keep spending on park improvements and have not had the attendance to compensate. I think 2008 will be a decent financial year because of majorly reduced operations costs with the removal of 2 DejaVu's, Chiller, and a lot of flat rides. They really should get rid of STE at SFMM....the insane amount of maintenence budget these rides consumed is what put Six Flags in the red in the first place. The big X overhaul is going to tear into budget pretty deep though. Whats promising about this is that they have pinpointed "THIS is why we're not making money" and "THIS is what were going to do about it."

Id also expect to see a lot more advertising integrated in the park next year with the new plasma tv's.

I personally think SFGAm saw tremendous improvements this year in appearance, cleanliness, and overall entertainment package, and the park did have decent attendance and make money. From the conference call, I would expect more of the same next year. Shapiro made it very clear he is not going to even think about sacrificing guest service and park appearance to budget.

One thing I do not like from this conference call is they want to reduce fulltime staff (undisclosed amount) and better utilize seasonal staff. Yes, it makes sense because the parks obviosley arent open fulltime therefore are dishing out more when the park isnt open to make money, but full time staff is extremely important in my opinion. You cannot expect to keep good people if they dont have competetive wages/full time jobs.

[Coaster Justin]

Isn't is so odd that Premier Parks wasn't making money and the stock was somewhat high, Now Mark Shapiro is getting the company more money and attendance and reducing debt and the stock is declining. How does that make sense?


I would have thought they were going to sell more parks, but thats just me.

I wonder why they didn't mention Six Flags New Orleans?

I wonder why they didn't mention if Thomas Town did well?

One reason why attendance was down in July in my opinion is that all those parks that added Wiggle's World were added after years of marketable thrill rides and didn't interest many teens who go there usually. Screamscape said "After years of trying to get a family crowd, people know Six Flags for their rides and not their shows... and thrill seekers have ventured to other parks" which I believe because I visited Great America only like 8 times this year. (It's really hard for a 19 year old single guy to go to Wiggle's World and not look weird or creepy.)

[KyleK414]

^

In the first part of that. I think it is the overall health of the stock market, not Six Flags in particular. It took a few good hits this year and has been the lowest it's been in many years. When SF Inc. was losing money, thier stocks problably hovered around the same mark or increased because the market was stable if not strong at the time.

To the last part. I will agree. Things happen in cycles genrally speaking. I think that with SF and theme parks, strategies are placed around that. Sure the great coaster boom of the 90s has contributed to the debt, but there wouldn't have been one if the demand wasn't there. Right now there are a lot of families with small children that want entertain them as a whole. When those kids get older, then more emphasis will be placed on the big coasters and thrill rides. Etc....

Kyle

[Tip Top Club]

About this whole, thing, but especialy in reguards to Bob O's Post, yes it was a terrible quarter by the numbers. But if anyone is surprised by that, then you obviously did not visit the park in July. It was the worst July I've ever seen, attendance was terrible. I do beleive that September was more crowded than July, and October was very strong at our park. So they did come back in the end (but that's for the next call, I suppose). And also, Low numbers are to be expected.

This company is not done with it's turnaround yet, it is still in the middle of a turnaround. I don't even think Sharpiro has realized how long it's going to take. He's talking about breaking even in the near future, but I would still expect at least two more seasons before we even come close to that. He talked about how people are sick of waiting...well get used to it. Anyone who's "Sick of waiting" obviously doesn't realize how damaged this brand is, and Shapiro can put on band-aid after band-aid, but the ground work has been laid, and now the only thing that can heal this company is time. It will take time for people to want to come back to the parks, so everyone just be patient, that includes investors (which, incidently includes myself), members of staff at both corporate and park level, and also the guests, which would include everyone on this site. Be Patient, all good things in time.

[Bob O]

http://investing.reuters.co.uk/news/art ... ESULTS.xml


"Its shares fell 18.2 percent to $2.20 on the New York Stock Exchange, the lowest point since their December 1997 listing on the Big Board."

There is no way to put a positive spin on these economic results.

You can use all your PR people to spin things and claim that surveys are great etc, but when you run a business the bottom line is what matters !!!

[KyleK414]

^Hmmmmm, mayhaps a "good" time to maybe purchase some Sif Flags stock, or shal I wait and see if there are slight increases indicating an upward momentum of the stock itself. And also, I should probably wait till the overall stock market gets better too....

Just thinking outloud!

[FParker185]

I thought the same when SF stock dropped from $40 to $18, it didn't work out so well.

Now maybe it'd be a decent short term investment, but it's still risky, if you buy a bunch of shares any loss at all even a few cents ends up loosing a large chunk of $$ for an investor, though if it goes up even a few cents and makes a sizable chunk of $$ it'd be time to sell asap. SF is not a stock you want to hold on to for any length of time.

[cycamps]

I agree with Tip Top Club. Overall it seems that Six Flags is doing better. I'm not saying it's a huge turnaround. But, over time, i can seem them doing better financially.

[DejaVuGurl1203]

Season stretching to November for a few parks, hmmmm. Gives me a good feeling.

Well, hope to see more improvement within the company in the coming months and with the coming season.

[Galvan]

^ I honestly doubt that Great America would be one of the parks stretching into November.

[Galvan]

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=hotStocksNewsUS&storyID=2007-11-09T162626Z_01_N09267352_RTRUKOC_0_US-SIXFLAGS-RESULTS.xml


"Its shares fell 18.2 percent to $2.20 on the New York Stock Exchange, the lowest point since their December 1997 listing on the Big Board."

There is no way to put a positive spin on these economic results.

You can use all your PR people to spin things and claim that surveys are great etc, but when you run a business the bottom line is what matters !!!

The Dow and stocks in general got killed this pasted week.

[w00dland]

Remember the last time SFGAm opened in November for "Last Blast" weekend?

It flopped. Great for us, terrible for business.

[Director_Guy]

^ I honestly doubt that Great America would be one of the parks stretching into November.

Well, considering Halloween is the last weekend in October and stretching into November. It'll at least be open until... what... the 3rd?

[Galvan]

^ We shall see, I guess when you put it that way, its not out of the relm of possibilities.

[Tip Top Club]

Since halloween is a friday next year, I imagine closing day will be november 2nd. It happened a few years ago. It probably won't be considered a "last blast" It just happens to fall on that date, much like opening day fluctuates from April to May depending on the year.

[Bob O]

http://money.cnn.com/news/newsfeeds/art ... 903757.htm

SF has its credit rating cut due to financial outlook.

The stock market had a down week, but overall the market is up for the year, but the same cant be said for SF, the companies that got hit will bounce back but the failing companies wont see the bounce back when it happens. And with credit ratings going down it will cost SF alot more to service the over 2 billion in debt they have.

[Galvan]

With the markets going down, and less consumer spending going down. EVERYONE'S credit rating is going down NOT just SF's.

[Tip Top Club]

SIX FLAGS CREDIT RATING WENT DOWN!
Shocker. Take a look at every conference call from the last five years and you'll see a mention of it's credit rating falling. It's happened every time...again..shcoker.