Six Flags Corporate Discussion Thread

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Re: Six Flags Bankruptcy & Restructuring Discussion

Postby traincrossin » Fri May 14, 2010 12:48 pm

Fooz wrote:Sometimes the best business decision is to simply not invest in a park.

I'm just wondering what the effects of this "wait and see" strategy would be. By doing this you'd be saving millions of dollars. Of course some people would be disappointed that there isn't a new attraction, but I don't think that would affect attendance that much. Or maybe instead of investing millions into a new ride, they could simply improve what they already have on a much smaller budget.
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Re: Six Flags Bankruptcy & Restructuring Discussion

Postby larrygator » Fri May 14, 2010 12:59 pm

SFA Regular wrote:Do you kind of understand what I am trying to say?



Yes, I do.

You are saying, "I'm stubborn, I like fast rides in buildings, I don't understand business, I refuse to listen to others, I want my park to get more rides, I want more haunted houses at FrightFest and I don't want to pay more money for at SFA to get these things".
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Re: Six Flags Bankruptcy & Restructuring Discussion

Postby Tiburon503 » Fri May 14, 2010 12:59 pm

larrygator wrote:
SFA Regular wrote:Again, business men like Snyder drained the resources of the company and left little room for growth


What resources? The company was so far in doubt it was beyond help. The existing doubt coupled with an economic downturn in the economy killed any chance of a turnaround. That's the whole point of the restructuring, to start over with minimal less debt AND TO NOT BUILD THE DEBT BACK UP AGAIN WITH HIGH PRICED INSTALLATIONS!

Larrygator, with all due respect, I could make the case for Premier Parks based on that same premise. Debt is not an issue if being managed well and in some cases can be an asset! Debt becomes an issue when it encumbers you from securing further lines of credit (which Six Flags wasn't facing), being able to make interest payments (again, Six Flags was fine there under Burke), or not being able to repay guaranteed notes or dividends (bazinga!) The effects of the post "9/11" downturn posed far greater impacts to the entire theme park industry. Attendance fell sharply due to unprecedented, unforeseen atrocities committed on U.S. soil. Credit markets dried up after "9/11" also, and the risky model PKS constructed for success fell like a house of cards. Had "9/11" not occurred, PKS would have returned to profitability soon if it could simply maintain 1998 or 1999 figures (I don't recall 2000, but I believe they were solid to flat). As it was, the "flagging" projects were largely completed and represented the actual drain on the bottom line. Removing the cost of "flagging" Six Flags would have been profitable in 1998 and 1999 as I recall.

What drove Six Flags to bankruptcy had everything do do with ignoring dividend payments and conversion of "PIERS" (Preferred Income Equity Redeemable Securities). "PIERS" is the biggest reason Six Flags filed for bankruptcy. They simply could not afford to convert them, nor was the company willing to make the required quarterly dividends. That squarely is Mark Shapiro's fault. Six Flags could not utilize existing lines of credit under current terms to repay "PIERS". August 2009 represented the timeframe where the conversion of "PIERS" would have converted automatically, and guaranteed holders $25/share. Considering "PIERS" ~ << $1, that would represent some windfall to an investor willing to put faith in an ability to convert. We need to let the "everything is Premier Parks fault" mentality die.

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Re: Six Flags Bankruptcy & Restructuring Discussion

Postby jedimaster1227 » Fri May 14, 2010 1:18 pm

larrygator wrote:Yes, I do.

You are saying, "I'm stubborn, I like fast rides in buildings, I don't understand business, I refuse to listen to others, I want my park to get more rides, I want more haunted houses at FrightFest and I don't want to pay more money for at SFA to get these things".


Larry for the win! :lol:

I can't help but notice how SFA Regular keeps looking at the parks in a certain light... Almost as if each was a child in the family that deserves as if by justified right, to receive equal treatment no matter the performance. If your one son goes out and wins a scholarship while the other gets a parking ticket of the same value, are you going to give both children toy cars because they are both your children who have accomplished something despite the result? If a park underperforms, it doesn't warrant continual investment unless the results are to offer a guaranteed turn around that would recoup the initial costs. Parks like Six Flags Great Adventure, Six Flags New England and Six Flags Magic Mountain tend to have a guaranteed return on investment for their major expenses (i.e. the larger coaster additions you seem to believe Six Flags America deserves just as much).

As I have said before, based on my own visit to Six Flags America (and many others here were on that same trip, so they can echo my regards), the park has potential to succeed, but it needs some serious redirection that a single new coaster can't provide on its own. The park was lacking in so many areas that it really felt like the least valued member of the family. I'm sure Six Flags will continue to invest in the park, but I don't expect to ever see it get the amount of attention that Great Adventure and Magic Mountain receive, mostly because major investments for the park take a great deal of time to recoup.
Last edited by jedimaster1227 on Fri May 14, 2010 1:19 pm.
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Re: Six Flags Bankruptcy & Restructuring Discussion

Postby Robbie » Fri May 14, 2010 1:36 pm

I'm a bit late, but I've been reading through the thread and I may be a "noob" for this, but what is fluffy, fluffy bunnies filled with medicine and goo?

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Re: Six Flags Bankruptcy & Restructuring Discussion

Postby ebl » Fri May 14, 2010 2:33 pm

^ Around here, that's what they call those $1.00 boxes where you can store your stuff while riding certain rides at the park. It's so much better and definitely more creative than what SFMM calls them.

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Re: Six Flags Bankruptcy & Restructuring Discussion

Postby Pirouettes907 » Fri May 14, 2010 3:05 pm

^^^ Very well said, Adam.

SFA Regular, it seems to me that you're looking at an issue that affects the Six Flags company as a whole from a very biased, rather naive viewpoint based on the fact that SFA is your home park. This thread has mostly degenerated into almost every other post being authored by your beating a dead horse with unfounded speculations (based largely on your obvious lack of a proper business education; take your recent "rich people" idea at KI vs. KD, or your ludicrous theory that investors in this capitalist society of ours would automatically stop investing in a company whose CEO runs it as nothing more than a business, just to name some examples) with a hint of whining (we get that you want major attractions installed at SFA, but just because it's your home park doesn't mean it deserves as much attention as some of the other parks in the chain).

I will placate you by saying your home park does indeed have potential (although Shapiro's claim about it being the best park in the chain by the end of 2010 seems a tad...how shall I put this nicely...far fetched). It certainly has the space to expand in the future. And yes, I would agree with you that as coaster enthusiasts, going ten years without a new coaster installation stinks--but you need to look at the reality of the situation and understand why that has happened instead of automatically assuming that SFA somehow "deserves" major installations as often as its sister parks (besides, I believe there was a rumor posted to Screamscape about a Tony Hawk's Big Spin being installed there next year or something, so there you go). The capitalist business world has never and never will operate on this principle.

Furthermore, expressing an opinion based on careful consideration and an understanding of the issue is one thing. I like to hear others' opinions and to try and learn something, especially when reading an important topic like this one. But stubbornly putting forth nonsensical speculation repeatedly gets us nowhere.

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Re: Six Flags Bankruptcy & Restructuring Discussion

Postby jedimaster1227 » Mon May 17, 2010 8:51 am

http://www.prnewswire.com/news-releases/six-flags-entertainment-announces-first-quarter-2010-results-93924859.html

Six Flags Entertainment Corporation (formerly Six Flags, Inc.) announced today its consolidated operating results for the quarter ended March 31, 2010.(1) The first quarter historically represents approximately 5% of the Company's annual revenues.
Three Month Results

Total revenue of $57.3 million increased 12% from the prior-year quarter's total of $51.1 million, primarily reflecting $4.3 million of revenues from the Six Flags Great Escape Lodge and Indoor Water Park ("Lodge"), the results of which were consolidated in the first quarter of 2010 as a result of adopting new consolidation accounting rules (Financial Accounting Standards Board Accounting Standards Codification Topic 810, Consolidation).(2) Excluding the consolidation of the Lodge, total revenues increased $1.8 million, or 4%, reflecting increases in food, merchandise and other revenues, as well as increased attendance.

Per capita guest spending, which excludes sponsorship, licensing and other fees, increased 3% to $35.44 in the first quarter of 2010 from $34.27 in the prior-year quarter, reflecting increased per capita in-park spending, partially offset by decreased season pass pricing. Included in the higher guest spending is the favorable exchange rate impact at our Mexico City park in the current-year quarter, affecting U.S. dollar translated results. Exchange rates accounted for approximately $1.02 of the guest spending per capita increase for the current quarter compared to the prior-year quarter.

Cash operating expenses(3) for the first quarter increased $6.0 million, or 5%, to $118.7 million compared to the first quarter of 2009, reflecting increased expenses primarily due to the consolidation of the Lodge, the currency impact at our Mexico City and Montreal parks and increased insurance and operating taxes, partially offset by decreased employee benefits and advertising costs. The Lodge consolidation and the currency impact at our Mexico City and Montreal parks accounted for $4.3 million of the $6.0 million increase over the prior-year period.

Non-cash operating expenses comprised of depreciation, amortization, stock-based compensation and loss on disposal of assets decreased $0.1 million in the first quarter of 2010 to $37.9 million, compared with $38.0 million in the first quarter of 2009.

The Company's loss from continuing operations in the first quarter of 2010 increased by 32% to $180.7 million compared to $137.0 million in the prior-year quarter. The increase was driven by (i) increased interest expense primarily reflecting post-petition interest owed on the $400 million Senior Notes due in 2016, partially offset by reduced interest expense reflecting the cessation of interest accruals on the Company's debt subject to compromise as a result of the Chapter 11 Filing, and lower effective interest rates, (ii) reorganization costs associated with the Chapter 11 Filing, (iii) increased cash operating expenses, and (iv) increased income tax expense, partially offset by increased revenue.

Adjusted EBITDA(4) loss for the current quarter remained relatively flat at a $60.0 million loss compared to a $59.5 million loss for the prior-year quarter, reflecting the impact of increased revenues partially offset by increased cash operating expenses.

Recent Developments

On June 13, 2009, Six Flags, Inc., Six Flags Operations Inc. and Six Flags Theme Parks Inc. ("SFTP") and certain of SFTP's domestic subsidiaries (collectively the "Debtors") filed voluntary petitions for relief (the "Chapter 11 Filing") under Chapter 11 in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") (Case No. 09-12019).

In February 2010, in connection with the Chapter 11 Filing, the Company decided to reject the lease with the Kentucky State Fair Board relating to the Company's Louisville park and the Company no longer operates the park. The results of operations for the Louisville park were classified as discontinued operations in all periods reported.

On April 1, 2010, the Debtors filed with the Bankruptcy Court their Modified Fourth Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code (the "Plan"). On April 30, 2010 (the "Effective Date"), the Bankruptcy Court entered an order confirming the Plan and the Debtors consummated their restructuring through a series of transactions contemplated by the Plan and the Plan became effective pursuant to its terms. On the Effective Date, Six Flags, Inc. changed its corporate name to "Six Flags Entertainment Corporation."

As a result of the consummation of the Plan, indebtedness of approximately $2.4 billion and the PIERS obligation of $306.6 million were cancelled, and new debt of approximately $1.0 billion was issued (excluding the Company's new $120 million revolving credit facility). As a result of the lower debt burden, the Company's annual cash interest expense will be significantly reduced to approximately $77 million, based on current interest rates.

The common stock of Six Flags, Inc. was also cancelled, and new common stock of Six Flags Entertainment Corporation was issued to the new stockholders. The Company intends to apply to list the new common stock on the New York Stock Exchange.

Pursuant to the 2010 annual offer, we received "put" notices from holders of partnership units in Six Flags Over Texas and Six Flags Over Georgia (including Six Flags White Water Atlanta) with an aggregate "put" price of approximately $5.6 million, of which the general partner of the Georgia limited partnership elected to purchase 50% of a portion of the Georgia units that were "put" for a total purchase price of approximately $0.8 million. As a result, we will purchase 1.77 units of the Texas partnership and 0.83 units of the Georgia partnership for approximately $4.8 million using our available cash.

On May 11, 2010, Alexander "Al" Weber, Jr., was named our President and Interim Chief Executive Officer, and we announced that we are retaining an executive search firm and will consider both internal and external candidates to serve as our Chief Executive Officer on a permanent basis. Effective as of May 11, 2010, Mark Shapiro is no longer serving as our President and Chief Executive Officer, and effective as of June 10, 2010, he will no longer be with the Company. In addition, Mark Jennings resigned as a member of our board of directors effective as of May 11, 2010.


Note that Mark Jennings has also resigned from the Board of Directors... It looks like the Board may be headed in a new direction after all...
Last edited by jedimaster1227 on Mon May 17, 2010 8:52 am.
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Re: Six Flags Bankruptcy & Restructuring Discussion

Postby Mozart67 » Mon May 17, 2010 5:48 pm

SharkTums wrote:
EBL wrote:I hope they keep serving Coca-Cola products and not those made by Pepsi. ;)

Eric


Paramount was always Coke...it's stupid Cedar Fair that's evil Pepsi!!!!


Hey..it beats Beverley, right?

I just wanted to say that this is probably the most absorbing and awesome thread I have read on this site so far, and may there be many many more after this. While I dont have any opinions (my wife has them all this month), one thing I have noticed throughout the years, on a generalized level, is a loss of morale and an absence of the whole aura of entertainment in general: a willing suspension of reality that parks used to deliver, and I notice it most often at a Flags park than in the nonmega-conglomerate parks. Example: last time I was at SFNE and boarding Superman, the crew looked like they were spiked on ketamine or something..totally zombified.
If the Flags can be resurrected even 50% to its former glory, and the new guy is the one to do that..awesome, but it would be unjust to state that Shapiro and Snyder did nothing to further that resurrection process. Just sayin'.

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Re: Six Flags Bankruptcy & Restructuring Discussion

Postby ebl » Mon May 17, 2010 6:22 pm

^ I last had Beverly in 2006 at Epcot---and I'm still trying to get that taste out of my mouth... :lol:

In my opinion, SFMM has improved quite a bit, but there is still a ways to go. Not until there are more attractions for the younger set will I say that Six Flags has "made it." It's hard to be a "family friendly" park when the little kids have a few dinky rides in a kids area and little or nothing else throughout the park. As we've discussed over in the SFMM Discussion Thread regarding the issue with the height limit of the forthcoming Mr. Six's DanceCoaster, here is a golden opportunity to actually double the number of coasters that the young 'uns can ride (Percy's Railway being the other). Perhaps this is why the coaster appears to be falling behind schedule---they're awaiting a variation from Vekoma about that (my speculation).

Anyway, Six Flags will get there and regain the family image it once had. We'll see where the new leadership and/or direction will take the company.

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