Six Flags (SIX) Tops Off a Record Year

In 2010, Six Flags (SIX: Analysis) emerged from bankruptcy after reducing its debt by over a billion dollars. Since those dark days, Six Flags' outlook has brightened considerably. The Grand Prairie, Texas-based company, the largest regional theme park operator in the world, reported record full year 2012 results this month, as rising attendance and increased cost controls boost its top and bottom lines.

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For 2012, Six Flags reported $383 million in adjusted EBITDA on $1.1 billion in revenue - both record highs for the company.
It net income came in at $2.59 per share, or $143.83 million, a huge improvement over the loss of $102.01 million, or $1.85 per share, it posted in the prior year quarter. Cash earnings rose 23%.

Revenue also surged $6.4 million in the fourth quarter, thanks to increased attendance during its fall Fright Fest and holiday promotions in December.

CEO Jim Reid-Anderson commented, "If you can't tell, we are extremely excited about the future of Six Flags and the results we have achieved."

Attendance at its 18 parks rose 6% to 25.7 million guests in 2012, but the company did not provide specific revenue and attendance figures for individual parks.

Six Flags Great Adventure, located in Jackson, New Jersey, is a closely watched property. The company intends to combine its 160-acre theme park and 350-acre Wild Safari animal park into one 510 acre property, which Six Flags claims will be the world's largest theme park - beating out Disney Animal Kingdom in Orlando, Florida by approximately 10 acres. The newly renovated complex will also add a new major ride, "Screamin' Eagles".

The company said Great Adventure was unaffected by Hurricane Sandy last October, and is expected to open on March 23. Looking forward, Six Flags stated that it plans to spend 9% of total revenue on capital improvements. Net debt at the end of year was $776 million, a 6.9% increase from the $726 million it reported last year.

Since emerging from bankruptcy in May 2010, Six Flags' revenue has risen 14.46%, while EBITDA has surged 47.01%. Its cash position has also strengthened 59.41% to $281.44 million. Operating margin rose 98.99% to 17.53% as a result of tightened cost controls.

Six Flags also reported that hiring after its job fair surged to record levels, and it plans to hire 4,000 new employees over the next two months. 1,500 of those employees will be part-time seasonal workers.

Shares of Six Flags trade at 24.27 times forward earnings, with a 5-year PEG ratio of 3.17, which means that the stock is slightly overvalued with slower price growth on the horizon. However, the stock pays a quarterly dividend of 60 cents per share - a 5.2% yield at current prices.

Other News About SIX
Six Flags posts $143.8M 4Q profit on tax benefit Six Flags posts strong fourth quarter and full year earnings. Six Flags' CEO Discusses Q4 2012 Results Six Flags talks about the future. Other Stocks in the News
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Published on Feb 26, 2013
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

Copyrighted 2016. Content published with author's permission.

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