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Talk about anything that has to do with Six Flags Great America and Hurricane Harbor here.
Postby Sven18 on October 24th, 2018, 1:51 pm
A new heading for Financials is needed as in the past these have been posted in things such as updates, rumors, happenings.

SIX FLAGS Q3 RESULTS ARE A BIG MISS DESPITE CLAIMING RECORDS:

Six Flags Falls After Late-Night Release Can't Hide Weak Earnings
https://www.bloomberg.com/news/articles ... tifel-says

Six Flags -7% after EBITDA miss
https://seekingalpha.com/news/3400200-s ... email_link

Record September Year-to-Date Revenue at Six Flags
http://investors.sixflags.com/news-and- ... -035923638

SF press releases title sounds good and even numbers look good to the untrained eye as they report record level of revenue and EBIDTA. The problem is that they missed big on the estimates. Reporting small record increases when they added 5 new parks is not impressive. The blame for the downfall was weather w/ specific mentions of heat & rain in Tx and SFOT flooding. The first few minutes of the conf call was a long weather excuse. Later in the call SF claimed that Q3 had 1/3rd more bad weather days than 2017 and that by their metrics it cost them 500K visits compared to 2017 and based on 9yr avg 700K visits.

SF knew they had an attendance problem coming for years as they maxed out on the number of cheap passes they could sell. Hence the introduction and heavy push on memberships which have a higher price point. SF attendance growth has gone from 3M to 1.5M, to just 600K last year(despite adding 2 new water parks). Q2 attendance was up just 300K with the 5 new parks. Given the low attendance increase SF was asked on the Q2 conf call would attendance have been up w/o the new parks? SF refused to answer the question 3 times in Q2 conf call. Q3 attendance was up about 780K with the 5 new parks. For the first 9 months attendance is up just 1.4M, which is poor considering 5 new parks. When asked about unique visitors SF commented it better to look at that full year and that by end of year it's likely to be flat or slightly up. Not specifically stated, but answer pretty much says it's down year to date thus far.

Also, even the 39M revenue increases in Q3, 11M was from international increases year over year. So, excluding international with 5 new parks the Q3 revenue was up just 28M. SF also said the new parks have much lower margins than their older parks. This was a partial excuse for revenue/EBIDTA numbers as they also claimed costs increases w/ the new parks, but then also said overall cost across the chain were pretty much in line w/ inflation. That tempers the cost excuses slightly. Those 5 new parks alone should have done more than 28M revenue, (DL and FC are 1M+ attendance parks yearly) What thus really points to is SF core parks year over year compared to 2017 were surely down.

The entire call SF came off as very defensive and were elusive to just not answering important questions that would have given insight on the year over year on the non new parks. Let's just say the numbers and the analysts conclusions were that same park comps are down and that international ramp ups and new parks are making the top line records w/ the other parks down as a whole. That potential is worrisome and the market is showing it as the stock was down 14% by 3pm ET.

Other Tidbits:
-Avg membership price sold 25% higher than previous years w/o the tiers(expected)
-Membership base up 25% and all pass products 9% overall
-1st time their are over 1M dining passes
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Postby JackGlass on October 24th, 2018, 2:18 pm
Yikes! Those cheap season pass prices are great, but if they want more revenue, they have to increase those prices more than $2 a year, while not chasing away customers. That's going to be extremely difficult with their current strategy. As you said, selling Ice to an Eskimo.
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Postby Sven18 on October 24th, 2018, 2:51 pm
JackGlass wrote:Yikes! Those cheap season pass prices are great, but if they want more revenue, they have to increase those prices more than $2 a year, while not chasing away customers. That's going to be extremely difficult with their current strategy. As you said, selling Ice to an Eskimo.


That's the reasoning behind the memberships, to get more from each person. They claim membership levels are a record up 25% and the avg price is about 25% higher than the old memberships. They also claim the higher level memberships are selling above expectations. The effect is however delayed and is why SF is claiming a record level of deferred revenue at this point (about 200M) they are waiting to put on the books. The 1st 12 months memberships revenue is claimed like season passes(as 12 months is the minimum required obligation), essentially as a ratio of operating days of each quarter. . Beginning month 13 membership revenue is claimed the month it's billed, as the obligation becomes month to month. This will as more members mature beyond 12 months change the distribution of revenue a bit. Q1 and Q4 softer quarters will see a big big boost, while Q3 will see a little less than they used to receive on a person who is a converted pass to membership customer.
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Postby JackGlass on October 24th, 2018, 3:15 pm
From what it seems, even with the new parks added, attendance growth is beginning to flat line. I'm glad to see more people are buying memberships, but most choose the cheap passes over the more costly memberships. It seems like a steep and more fast paced increase in those season passes is the only sure fire way to get revenues up even when attendance growth flat lines. I noticed the pass prices this year increased $2, which was barely noticeable, but a $4-$5 increase seems like it would be a lot better, especially since we're getting a new coaster next year. It seems like a missed opportunity.
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Postby Sven18 on October 24th, 2018, 4:23 pm
JackGlass wrote:From what it seems, even with the new parks added, attendance growth is beginning to flat line.

2017 w/ 2 new water parks just 600K increase
2018 thru Q3 5 new parks just 1.4M increase- SF also essentially confirmed unique visitors are down in 2018.

JackGlass wrote:It seems like a steep and more fast paced increase in those season passes is the only sure fire way to get revenues up even when attendance growth flat lines. I noticed the pass prices this year increased $2, which was barely noticeable, but a $4-$5 increase seems like it would be a lot better, especially since we're getting a new coaster next year. It seems like a missed opportunity.


Memberships is SF's solution, they need ans want to raise per caps to raise North American revenue. The international stuff increasing rapidly and will blow up once parks actually start to open SF reiterated the push to convert pass holders and push memberships for new customers. The reason being the cheapest membership costs $10(SFFT) to as much as $22(SFNE) more than a season pass. SF has taken benefits away from the season pass and moved them on the membership. The pass is devalued, so hard to push price increases and also people are used to cheap pass prices. The membership is viewed as a new product, though they existed but were unnoticed by most. It's easier to push the price increase on a perceived "new product" with more benefits, even at the lowest level. The lowest membership is essentially what you used to get on a Gold Pass at a higher price, a backdoor price increase.
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Postby JackGlass on October 24th, 2018, 5:26 pm
I actually found those charts you were talking about in regards to Cedar Fair! This is very revealing and I wish Six Flags would release a chart like this to the public, so we could see exactly which parks are the most profitable and produce the most revenue!

That worries me, when I hear Dariend Lake, Forniter city and the new water parks have low margins compared to the large parks and don't produce that much revenue. Because of this "Every park gets something new every year" strategy and that solid 9% cap.... that essentially means less and less money for the bread winners like Great America, Magic Mountain and Great Adventure.

This year they didn't add anything to the 3 large parks that would bolster a large attendance increase. Great America got the worlds largest fruit loop, Magic Mountain got Crazinity and Great Adventure got Cyborg. All 3 are good flat rides, but not enough to drasticlaly spike attendance. Hopefully next year will be better since they're adding Maxx Force and West Coast Racers to two of theri biggets money makers. But if they keep adding these small parks that don't produce that much revenue and they keep this every park gets something new every year strategy. I'm afraid we'll see cheaper and cheaper additions even at the large parks and attendance will start to decrease.
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Postby Sven18 on October 24th, 2018, 6:07 pm
SF while saying the "new parks have much lowering margins" they are confident that they can change that. They had previously stated they think they can at least double the EBIDTA out of the new parks, which was 8-9M/yr under EPR. SF was adamant on Q3 call that he new parks will have great ROI's and in 2018 they have put "virtually no cpaital into them" while commenting on them as one of the drivers of the Q3 increased revenue. Parks are almost assured of getting less b/c SF has 3 times this year said the Capex % is not changing even with the new parks. They are happy with their gross spend and total Capex estimates for next year are actually going down slightly to 128M. SF has a growth strategy on 5 pillars and there is no reason to change it as of now. Unless they get several quarters of bad results or a full year that can't be plausibly blamed on weather, their main excuse for Q3 miss, they aren't changing. SF knows they have an upcoming ramp up with the international deals in 2019 and 2020. That can help paper over things on the top line numbers for a bit. The international parks are coming on line 2019 and really so in 2020. Those deals are 109M in revenue just in the last 12 months and all those parks EBIDTA contributions are estimated to double as they actually open. Just with the current signed 13 deals those parks will be worth minimum 250M/yr by 2020. SF has more deals in the works.

The CF charts are great especially if you look at the ones year by year 2011 thru 2016. You can see how certain parks had increases and which are almost stagnant or decreasing in their share. Chains are putting out less info each year, ie...CF has not made this info public for FY 2017.
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Postby JackGlass on October 24th, 2018, 7:09 pm
Hell yeah man! Those Cedar Fair charts are great! A lot of people complain about Michigan's Adventure being "neglected" by Cedar Fair, yet fail to realize that this is a business not a charity! The EBITDA of Michigan's Adventure is so weak compared to that of Knotts and Cedar Point, that it would be insane to treat it as an equal!


I hope Six Flags can double the EBITDA of these new parks! I just hope they can do it without messing up the attendance at their large parks!
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Postby Ilovthevu' on October 24th, 2018, 11:45 pm
They do a lot of stuff wrong, so if money / revenue is down, I say GOOD! I visit these parks, and the major thing for me are the rides. I really dislike what's going on though. I am all for another company buying this park out. Karma is going to get them in the end.
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Postby Sven18 on October 25th, 2018, 9:55 am
Ilovthevu' wrote:They do a lot of stuff wrong, so if money / revenue is down, I say GOOD! I visit these parks, and the major thing for me are the rides. I really dislike what's going on though. I am all for another company buying this park out. Karma is going to get them in the end.


Revenue & EBIDTA are not down, they missed their expectations for the quarter and are going to miss the goal for the year. Even missing these targets SF will report records, as they did this quarter and have so far YTD. FY 2018 essentially marks SF's beginning of an attempt to go from a pure high volume/low cost chain to a potentially a lower volume/less low cost chain. The lowest membership across the chain costs $12 - $22 more than a Gold Pass at the corresponding park. SF can potentially make more money with the higher price points, while taking a hit on attendance. Some people will be price sensitive potentially and lost as customers. The higher price point model is how Cedar Fair makes the same revenue as SF w/ 5M less visitors. There is no chance of SF selling SFGAM, it's viewed as a star by corporate and SF has never been in better financial shape. They have no need to liquidate. SF also has the reserve of the cash cow of the foreign license deals ramping up more and more each year. The hit on the stock price is actually an opportunity for SF to buyback their stock at 15+% less, they have $262M more worth of buybacks already approved for the beginning of the FY that have not being done.

The changing of the model will likely be good long term, maybe parks are slightly less crowded and the revenue and EBIDTA keep rising. However, SF is adamant on holding to their Capex formula despite new parks, which means inexpensive rides are going to be the norm.
Last edited by Sven18 on October 25th, 2018, 5:28 pm, edited 1 time in total.
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Postby JackGlass on October 25th, 2018, 4:16 pm
I hope Six Flags does transition into a higher cost and lower volume chain. They already have good attendance, if they could just maintain what they have and get those prices up, it would be great!
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Postby JackGlass on October 30th, 2018, 1:16 pm
Sorry to double post, but out of curiosity. When they RMC an existing coaster or when they do a stand up to floorless conversion... Does that come out of the asset maintinence budget or the new rides budget?
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Postby Sven18 on October 30th, 2018, 5:20 pm
JackGlass wrote:I hope Six Flags does transition into a higher cost and lower volume chain. They already have good attendance, if they could just maintain what they have and get those prices up, it would be great!


SF attendance the last few years is a "mirage" of growth, 300K in 2017 w/ 2 new water parks and 1.4M YTD with 5 new parks. The lack of organic growth in Revenue and EBIDTA is what Wall Street is worried about, hence 15% drop in stock price after Q3 report. Cedar Fair in contrast had a really good Q3 report. Records in Revenue, EBIDTA, Net Income and that was done w/o the addition of more parks, organic growth.



JackGlass wrote:Sorry to double post, but out of curiosity. When they RMC an existing coaster or when they do a stand up to floorless conversion... Does that come out of the asset maintinence budget or the new rides budget?

They never specified, but calculations surely put it in new ride budget based on the Capex formula and approximate costs of rides.
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Postby CoasterRiderSC on October 30th, 2018, 5:59 pm
Stupid question: does Six Flags own the new foreign parks or just allow their brand name on the park?
IF just the name, isn't the licensing fee pretty much pure profit??

Also for what it's worth, I'm totally fine with a price increase for the Gold Pass. I dont' really see myself buying the Membership unless they eliminate the pass. I have enough monthly bills already!

They can raise the Season Passes $6 or $8 per year . A $2 increase isn't even keeping up with inflation!
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Postby Sven18 on October 30th, 2018, 6:18 pm
CoasterRiderSC wrote:Stupid question: does Six Flags own the new foreign parks or just allow their brand name on the park?
IF just the name, isn't the licensing fee pretty much pure profit??

Also for what it's worth, I'm totally fine with a price increase for the Gold Pass. I dont' really see myself buying the Membership unless they eliminate the pass. I have enough monthly bills already!

They can raise the Season Passes $6 or $8 per year . A $2 increase isn't even keeping up with inflation!


The foreign parks are licensing and consulting deals, SF makes no Capex. so it's easy money with no risk. SF estimates EBIDTA 5-10M/yr pre opening & 10-20M/yr post opening for full parks. Smaller parks/water parks 2-4M/yr pre opening and 4-6M/yr post opening.
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Postby JackGlass on November 1st, 2018, 10:14 am
2020 is the year they're attempting to hit $750 Modified EBITDA (Project 750) I suspect they'll probably add something decent to Great Adventure, Great America and Magic Mountain that year to help ensure they hit their goal. However if they keep missing the mark like this, it might fall short.
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Postby Sven18 on February 7th, 2019, 9:36 am
Six Flags Dubai is officially on hold after financial problems based on the poor results from the other parks & facilities in the Motiongate Complex.

DUBAI, Feb 6 (Reuters) - DXB Entertainments PJSC said on Wednesday that the Six Flags theme park project in Dubai cannot proceed as a syndicated finance facility is no longer available.

DXB Entertainment said the decision came after its board mandated a strategic review of its future development plans and capital deployment.

“In the intervening period, actions, including formal notification by Six Flags, resulted in funders’ concerns being raised specifically in relation to the revised projections for the Six Flags Dubai Project,” the firm said in a statement.

This is now potentially the second foreign park to go belly up during development, the 1st being SF Vietnam. The park was suppose to open in late 2019 and provide 5-10M/yr EBIDTA during development and 10-20M/yr EBIDTA once fully open. Earnings call next week so we will see how and if SF addresses this in it's projections for 2020 Modified EBIDTA goals of 750M, which was already tenuous to be reached.
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Postby staticshadows on February 7th, 2019, 10:21 am
Sven18 wrote:The park was suppose to open in late 2019 and provide 5-10M/yr EBIDTA during development and 10-20M/yr EBIDTA once fully open.

According to the Q3 2018 earnings call, this was one of the smaller deals and the numbers were closer to 5M/yr during development and 10M/yr once fully open. Six Flags Zhejiang and Chongqing appear to be on track for their early and mid 2020 openings. Nanjing is projected to open in phases from 2021 through mid-2022. No info on when Fuzhou opens. Saudi is projected 2023 opening.
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Postby JackGlass on February 7th, 2019, 10:28 am
That sucks. I wonder what's going to happen to all the rides that have already been produced for this park? Will the ride manufacturers still get paid?
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Postby staticshadows on February 7th, 2019, 10:45 am
JackGlass wrote:That sucks. I wonder what's going to happen to all the rides that have already been produced for this park? Will the ride manufacturers still get paid?

If DXB Entertainment is unable or unwilling to pay for the rides, Six Flags might be able to pick up some of the rides at a discount (similar to the Vekoma Flying Dutchman deal). I am curious about those surveys in November featuring a Mack PowerSplash and B&M Dive Machine. Those rides don’t seem to fit with the current spending strategy.
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Postby JackGlass on February 7th, 2019, 11:24 am
I saw the artwork for Six Flags Dubai, and there was a Mack power splash in the artwork! There was also a Goliath clone.

That would be awesome if Six Flags were able to pick these rides up at a discount!
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Postby Sven18 on February 7th, 2019, 11:28 am
staticshadows wrote:
JackGlass wrote:That sucks. I wonder what's going to happen to all the rides that have already been produced for this park? Will the ride manufacturers still get paid?

If DXB Entertainment is unable or unwilling to pay for the rides, Six Flags might be able to pick up some of the rides at a discount (similar to the Vekoma Flying Dutchman deal). I am curious about those surveys in November featuring a Mack PowerSplash and B&M Dive Machine. Those rides don’t seem to fit with the current spending strategy.


Reports are rides already delivered for the possibly cancelled Six Flags Dubai theme park project can likely be paid for by Dubai Parks & Resorts and installed as new attractions at their Bollywood and Motiongate theme parks instead of at the Six Flags site
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Postby JackGlass on February 7th, 2019, 11:34 am
Nice! That would suck to see the manufacturers not get paid! Not to bash Six Flags, but this is why I like Cedar Fairs strategy a lot better. Focusing on organic growth at their domestic parks rather than purchasing operating leases and getting involved with these unstable overseas partnerships.


Hopefully these Chinese parks work well for them unlike the Vietnam and Dubai parks.
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Postby Sven18 on February 7th, 2019, 12:02 pm
JackGlass wrote:Nice! That would suck to see the manufacturers not get paid! Not to bash Six Flags, but this is why I like Cedar Fairs strategy a lot better. Focusing on organic growth at their domestic parks rather than purchasing operating leases and getting involved with these unstable overseas partnerships.


Hopefully these Chinese parks work well for them unlike the Vietnam and Dubai parks.


Six Flags is not focusing on organic growth. All their growth for several years domestically has been inorganic...ie..operating leases of water parks/theme parks. SF has been very defensive about it when questioned on it the last several conf calls b/c if you look at the attendance and EBIDTA excluding them adding the new lease parks, they are down a fair amount.
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Postby JackGlass on February 7th, 2019, 12:18 pm
You're 100% right! If Six Flags didn't add those new parks, they would be down!

Six Flags hasn't built a truly marketable attraction since 2006, when they built El Toro and Tatsu. Where as cedar Fair has continued to build them every single year! Cedar fair wins hands down when it comes to their long term growth strategy! Because it's real growth, not just aquiring park after park to give the illusion of growth!
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