Heard On... Six Flags Entertainment's Q2 2021 Earnings Call

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Rounding out our look at the most recent theme park earnings is Six Flags Entertainment, which also generally had good news to share about their season thus far in 2021.  The company's press release is available at this link, but between that release and their earnings call there are some more items to share.  Let's take a look.

• Like the other operators, comparing this year to 2020 makes no sense, so comparisons to 2019 were offered.  For the quarter attendance was 8.5 million visitors, a decrease of 2 million from 2019.  Revenues were $460 million, a decrease of $17 million to 2019, and net income was $71 million, a decrease of only $9 million from 2019.  EBITDA was $170 million, also only a decrease of $9 million from 2019.

• Looking at the first six months of the year attendance was 9.9 million visitors, a decrease of 2.8 million visitors compared to 2019.  Total revenues were $542 million, down $64 million from 2019, net income was a loss of $25 million, down $36 million to 2019 and EBITDA was $125 million, down $23 million to 2019.

• The company has shifted some of their reporting periods starting in 2021 which did make the quarter have four extra days, including most of the July 4th weekend.  So that definitely padded their results a bit, to the tune of 614k in visitors and $32 million in revenue.

 

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• Right now none of the chain's parks in the U.S. have any capacity limitations.  They do have restrictions at parks in Canada and in Mexico.  They note that they held vaccination sites at several parks and gave away 140,000 tickets as incentive for people in their markets to get vaccinated.

• Through July 25th the attendance levels were at 82% of 2019 levels, with a big part of that being missing group visits.  Excluding group visits they estimate attendance levels to be at 89% of 2019 levels.  While not backed by a statistic, it sounds like trends increased even more in July.

• Six Flags received a payment of $11.3 million in the quarter related to the terminated park contracts in China, which as we know are no longer happening.

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• Total guest per capita spending in the second quarter of 2021 was up 23% compared to 2019.  This was driven by a strong increase in admissions per capita, but in park spending also increased by 22% - a trend we've seen from the other operators as well.  The admissions per capita was boosted by later than normal season pass sales this year, causing revenue to be recognized over a shorter period of time.  In park revenues were helped by mobile dining, going cashless in some areas, creating a QR code based Flash Pass system and more single-day ticket visitors.

• With regard to the active pass base, the total amount increased 65% at the end of the 2nd quarter 2021 when compared to the same quarter in 2020, and increased 2% when compared to 2019.  At the end of the second quarter in 2021 they had 6.3 million in the base, 2.1 million members and 4.2 million traditional season pass holders.

• With regard to liquidity, the company had $253 million in cash on hand as of July 4th, 2021, and $461 million available to borrow.  The net cash flow for the second quarter was $190 million.

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• Six Flags Entertainment is still focused on their "transformation" plan, which will cost $70 million to stimulate long term growth through "modernizing the guest experience through technology, continuously improving operational efficiency and driving financial excellence."  $60 million of that will be spend as cash and $10 million will be asset write offs through retired rides.  To date all the ride write offs have been recorded, which would imply the numerous ride removals might be done... for the moment at least.

• For capital expenditures the company has spent $42 million year to date.  They previously felt they would spend $98 million in 2021 but have now upped that to between $130 and $140 million.  To me that means they have increased the amount of spending to start projects for the 2022 season, but they also will spend on "high-priority and high-return park infrastructure and technology projects".  In the long term they plan to still spend between 9% and 10% of revenue on capital expenditures.  Once things are normalized with their debt levels they will again "consider strategic acquisition opportunities."