Six Flags Entertainment Corporation (SIX) Barclays Capital Global Technology, Media and Telecommunications Conference Call May 23, 2012 11:15 ET Executives Jim Reid-Anderson – Chief Executive Officer Al Weber – President Tanner Howe – Treasurer and Vice President, Strategic Development Presentation Unidentified Analyst
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We have gone from strength-to-strength every single quarter and in fact, we have had eight quarters of very strong growth culminating in the last quarter, the first quarter of 2012. We have a very strong management team and (indiscernible) mentioned, Al who has joined me, he is sitting up here on the podium. Al is the Chief Operating Officer of the company and when you look at the lineup of management, you have got this incredible mix of folks from within the industry, both within Six Flags and from other companies within the industry and Al, he has got 45 years of experience.We have got several people with 30 years and 40 years and then we have got others such as myself, who have been with the company for a couple of years that bring experience from other industries and I think that this matches very well and really has led to this great success that we have had. We have very simple strategy that is supported by five key imperatives. The strategy is literally to deliver excellence and to be the leading regional theme park company. And it is very important that I outline this because historically, the company has not been clear as to what its strategy is and has tried to become a broad based entertainment company. We are the leading regional theme park company and that is where our focus is. If you look at the financials, there is a chart that shows strong profit and cash EPS. And you can see where we have come from. If you literally just state the EBITDA as one example two years ago, we were generating about $197 million of EBITDA in – as we ended 2011, we generated $350 million of EBITDA. And we set a new aspirational goal to the company that by 2015, we are targeting about $500 million of EBITDA, which would put us well in excess of $5 a share of cash EPS and given the fact that the company went through a bankruptcy, there is a step-up of assets. And so especially in the early years, it is really important to look at cash EPS versus traditional EPS. So why this industry, why should you think about not just Six Flags with the industry, and there are several factors that would lead me to say this is a great company and actually a great industry to invest in.
First and foremost, I think that over time, this company and the industry have really been overlooked. And I think that when you look at the situation here, I came out of healthcare, it was a very high recurring revenue base and in many cases, companies that were misunderstood very similar to Six Flags. This is high recurring revenue undervalued. When you look at the number of guests who visit our park, 94% of guests say they are going to comeback within the next year, very loyal. Secondly, there is a very high barrier to entry. If someone tries to create another Six Flags, it would cost in the region of $5 billion to $6 billion to do so.If they could approve, get approval from local government and if they had that money and were able to actually execute and get the land. So, we are actually in the top 10 DMA’s. We have got literally within a 100 miles of our parks about 175 million people and currently we serve 24 million. So, I think that there is an opportunity there. Read the rest of this transcript for free on seekingalpha.com