Six Flags Swings to Second-Quarter Profit

Revenue Increases Slightly as Theme Park Guests Spend More During Visits

Six Flags, the troubled theme park company chaired by Washington Redskins majority owner Daniel Snyder, yesterday reported a second-quarter profit due largely to cost reductions and a one-time accounting gain on the retirement of debt.

Six Flags increased total revenue slightly compared with the same period last year, to $345.7 million, further evidence that rising gas prices and an economic slowdown have not damaged the theme park industry as experts had feared.

Profit at Six Flags was $94.6 million (63 cents a share), compared with a loss of $45.4 million (54 cents) a year earlier, the company reported. Most of the profit was due to a gain from a $107 million exchange of unsecured debt notes, the company said.

"Revenues actually looked better than we thought," said Mike Tarsala, managing analyst at Thomson SquawkBox, which provides market analysis. "They did okay, as most of the theme parks did. In lieu of vacation and better than a 'stay-cation,' suburbanites will take their kids to an amusement park, and that's what they did in the second quarter."

The Walt Disney Co. last week reported a healthy increase in revenue at its theme parks.

Although attendance at the Six Flags parks slid 3 percent in the quarter, to 8.6 million guests, revenue per guest was up. In other words, each guest on average spent more money -- $40.02 compared with $38.72 last year -- while visiting the park.

Growth in sponsorship, licensing and other fees increased as well, while costs dropped $21 million.

"They made up the attendance drop on the bottom line in two ways," Tarsala said. "Spending per guest was up slightly, which means they charged more for parking and food and beverage. And they restructured and cut costs, and that was another big factor."

The company also said in a news release that it was on track to be cash-positive by the end of the year, which would be the first time in its 47-year history.

"While we still have a considerable portion of our season in front of us, I'm encouraged by the results, especially in the current economic climate," Six Flags President Mark Shapiro said in a statement.

Six Flags, with more than $2 billion in debt, last year sold seven parks to help clean up its balance sheet. It recently slashed admission prices by half at several parks to improve attendance.

Last month, it said it would no longer pay a dividend to holders of certain preferred shares for the second consecutive quarter. Two weeks ago, the company's stock price fell 71 percent after a massive sell-off. Shares dropped 9 cents yesterday, to close at $1.03.

Six Flags is the world's largest regional theme park company, with 20 parks across the United States, Mexico and Canada. Founded in 1961, the company features themed attractions based on the Looney Tunes characters, the Justice League of America, skateboarding legend Tony Hawk, the Wiggles and Thomas the Tank Engine.