Six Flags Entertainment Q3 2010 Earnings Call Transcript

Six Flags Entertainment (SIX)

Q3 2010 Earnings Call

November 03, 2010 9:00 am ET

Executives

John Duffey - Chief Financial Officer

James Reid-Anderson - Chairman, Chief Executive Officer and President

Alexander Weber - Chief Operating Officer

Nancy Krejsa - Senior Vice President of Investor Relations & Corporate Communications

Analysts

Ian Corydon - B. Riley & Co., LLC

Kenneth Smalley

Ian Zaffino - Oppenheimer & Co. Inc.

Presentation

Operator

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Good morning. My name is Danny, and I will be your conference operator today. At this time, I would like to welcome everyone to the Six Flags' Third Quarter 2010 Earnings Conference Call. [Operator Instructions] Nancy Krejsa, Senior Vice President, Investor and Corporate Communications, you may begin your conference.

Nancy Krejsa

Thank you. Good morning, and thank you for joining our third quarter 2010 earnings call. 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 with our prepared comments, I would like to remind people that the executive management team of Six Flags will be hosting an investor meeting tomorrow morning, November 4, from 9 to 11 a.m. Eastern time at the Waldorf Astoria in New York City. We hope many of you can join us. If not, the meeting will be webcast live and be archived on the Investor Relations page of the Six Flags website. Tomorrow morning, in advance of the meeting, we will also post a copy of the meeting presentation on our website.

A webcast of this call is also being made available on the Investor Relations page of the Six Flags website. The company cautions 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 company's 2009 annual report on Form 10-K.

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 third quarter earnings release or other forms filed or furnished with the SEC. I would also like to share that as a policy, the company will not be providing detailed financial guidance.

Now we'd like to begin our prepared remarks, and I will turn the call over to Jim Reid-Anderson.

James Reid-Anderson

Thank you, Nancy, and greetings to everyone on the call. I do appreciate you joining us this morning, and thank you very much for your interest in our company. I want to start today by saying that my first few months with Six Flags have been excellent. Today, I'm even more excited about our future than I was when I joined the company in August.

First and foremost, I have found the parks to be in excellent condition. The grounds and attractions are clean, well maintained and up-to-date. Through the last few years, the company made smart investments to retain and enhance the appearance of the parks, and so we are in a position today where we can continue growing without the need to make significant investments above and beyond a normal run rate.

In addition, we have excellent safety records at all of our parks. The safety of our guests and employees is our top priority. That is why approximately 20% of all of our park operating expenses, 25% of our capital and approximately half of our full-time headcount is dedicated to maintenance and safety at our parks. I would also say that the corporate staff and park level leadership are very strong with deep expertise in the theme park industry. In combination with other recent personnel changes I've made since arriving at Six Flags, I feel quite honored to work with such a strong, experienced and capable team.

Our management team has gelled quite nicely, and we are moving forward rapidly. Consequently, you'll be pleased to know that no major management or organizational changes are anticipated going forward. In addition, those of you who know me realize that I do not like restructuring expenses. Our current plans do not anticipate any material restructuring charges in 2011 and beyond.

One of my several priorities when I joined the company was to develop a business strategy that would allow us to consistently deliver top results for our three primary constituents: our shareholders, our guests and our employees. The strategy that we have defined and implemented is straightforward, easy-to-understand and an effective way to ensure all our employees are working towards the same goal, day in and day out. We are a theme park company, and our strategy is based on delivering excellence in all that we do. And it includes five key imperatives. The imperatives provide focus for our employees and will help us ensure that we increase shareholder value over the long term. The five imperatives are one, enhancing our guest experiences. This ensures we retain existing guests and attract new ones. Two, developing guest focus products and programs, including adding exciting new attractions every year and appropriate theme park-based marketing at every park. Three, improving operational efficiencies both with more rational pricing and by improving the efficiency of our cost base. Four, delivering financial excellence by consistently improving our financial results. And finally, five, building a high-performance theme culture because I personally believe our employees are our greatest asset in ensuring we achieve our long-term goals.

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