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Six Flags Entertainment's CEO Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: SIX

At this time, I will turn the call over to Jim.

Jim Reid-Anderson

Thank you very much, Nancy, and good morning to everyone on the call. As you can see from our press release, the second quarter was just fantastic for Six Flags, as we drove our ninth straight quarter of growth.

We grew revenue 11%, EBITDA 24% and cash EPS by 60%. On an LTM basis, the company generated $4 of cash earnings per share and achieved a new industry-high modified EBITDA margin of 38.7%.

Our success is directly linked to consistent execution of our strategy. We delivered exciting, innovative news in every park and launched clear and effective sales and marketing programs that helped us attract an incremental 1 million guests to our park in the quarter.

In the area of admissions pricing, we continue to benefit from strong ticket yield due to higher front gate pricing and improved fencing of discounts. On a per capita basis, these gains were offset by higher penetration of season pass visitation. Further penetration of season pass sales is one of our key initiatives.

Although the higher mix of season pass attendance put downward pressure on our per capita spending figures, season pass holders typically generate higher aggregate cash flow for the company than single-day visitors. Over the course of a year, season pass holders spend more than single day visitors on ticket as well as in-park items like food and merchandize.

I am extremely pleased with our success in this important initiative and you can observe the magnitude of our success from our strong revenue, EBITDA and cash flow performance in the quarter and from our deferred revenue balance at the end of June 2012, which was up $19 million to $106 million, which is a 22% increase from a year ago.

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