Six Flags Inc. (
Q4 2010 Earnings Call
February 22, 2011 9:00 am ET
Jim Reid-Anderson – Chairman, President, Chief Executive Officer
John Duffey – Chief Financial Officer
Al Weber – Chief Operating Officer
Nancy Krejsa – Senior Vice President, Investor Relations and Corporate Communications
Ian Corydon – B. Riley & Company
Brian Bittner – Oppenheimer & Company
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Good morning ladies and gentlemen and welcome to the Six Flags Fourth Quarter and Full Year 2010 Earnings conference call. My name is Steve and I will be your operator for today’s call. All lines have been placed on mute to prevent any background noise, and after the speakers’ remarks there will be a question and answer session. If you’d like to ask a question during that time, simply press star then the number one on your telephone keypad. If you’d like to withdraw your question, press the pound key.
I’ll now turn the call over to Nancy Krejsa, Senior Vice President, Investor Relations and Corporate Communications.
Good morning. Thank you for joining our fourth quarter and full year 2010 earnings call. A webcast of this call is available on the Investor Relations section of our Six Flags website. With me today are Jim Reid-Anderson, Chairman, President and CEO of Six Flags; Al Weber, our Chief Operating Officer; and John Duffey, our Chief Financial Officer.
Before we begin our prepared comments, the Company would like to caution you that comments made during this call will include forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in such statements, and the Company undertakes no obligation to update or revise them. For a detailed discussion of these risks, you may refer to the Company’s annual report on Form 10-K as filed with the SEC.
In addition, statements made on our call today include non-GAAP financial measures. These financial measures have been reconciled to the most directly comparable GAAP measure and included in our earnings release or other firms filed or furnished with the SEC. I would also like to remind you that as a policy, the Company will not be providing detailed financial guidance.
Now we would like to begin our prepared remarks, and I will turn the call over to Jim.
Thank you very much, Nancy, and hello to everyone. I appreciate you joining our call this morning. I think you’ll all agree that we had a fantastic ending to a great 2010. I look back with pride at all we accomplished at Six Flags in the past year.
First and foremost, we established a clear strategy focused on theme parks. In addition, we successfully emerged from Chapter 11, transitioned to a new senior leadership team, improved our credit ratings, refinanced our debt to secure lower interest rates, and used some of our excess cash flow to initiate a dividend.
From an operational perspective, we enhanced our safety and guest satisfaction metrics, increased attendance by 4% despite limited new rides in our parks, and eliminated costs to make our operations more efficient. All of these steps helped fuel comparable revenue growth of 7% and EBITDA growth of $98 million or 50% over prior year. This represents a whopping 870 basis point improvement in our modified EBITDA margin, which now stands at 33%. In addition, we generated $128 million in free cash flow for the year. The result and ultimate measure of the success of our accomplishments was an attractive return for our shareholders, an 85% appreciation in our stock price since the debt restructuring.
As it relates specifically to the fourth quarter, we generated excellent attendance revenue and record adjusted EBITDA of $22 million. Our operating performance benefited from modest price increases, improved in-park sales, and strong attendance at our signature Fright Fest events, which we host across all of our parks. Despite some rainy conditions on the west coast, we also registered solid attendance during December when we feature our Holiday in the Park attraction.
We took steps early in the quarter to further reduce overhead, and since we feel comfortable with our current headcount level our goal is to avoid further material restructuring costs going forward.
I’m going to have some more comments before we open the call to your questions, but now I’m going to hand over to John for more details on our fourth quarter and full-year financial results. John?
Thank you, Jim, and hello to everyone on the call. Our reported 20% growth in revenue in the fourth quarter was primarily driven by a 19% increase in attendance, which grew to 3.1 million guests. Adjusting for the Great Escape Lodge, which we were required to consolidate beginning January 1, 2010, revenue increased 18%.
As we mentioned in our press release, the strong attendance growth was the result of successful October Fright Fest and December Holiday in the Park offerings. We also continued to focus on improving our yields through enhanced pricing discipline and improved in-park sales.
On a comparable basis, per capita revenue for the quarter was flat as the high mix of season pass visitors offset front gate ticket pricing gains. Full year revenue increased $66 million or 7% on a comparable basis due to both a 4% increase in attendance and a 3% increase in per capita revenues. Total attendance for the year was 24.3 million, up 1 million guests from 2009, and per capita revenue was $40.18, up $1.55 from 2009 on a reported basis and up $1.10 on a comparable basis.