Six Flags drew about a third of its normal crowd at its theme parks that were open in the third quarter of 2020, the company reported today.
The amusement park chain reported attendance of 2.6 million guests from July 1 through September 30 this year — a decline from the approximately 13 million guests it welcomed during the same period a year ago. While that's just 19 percent of last year's attendance, several of Six Flags' parks remained closed due to the pandemic during the period, including Six Flags' most popular theme park, Six Flags Magic Mountain in Valencia, California. Looking year over year at just the parks that were open, Six Flags reported that its third quarter 2020 attendance was 35 percent of those same parks' attendance the year before.
For the year to date, Six Flags reported total attendance of 4.6 million guests, down from 26.7 million visitors in the same period in 2019. Revenue was $126 million for the third quarter and $248 million for the year to date, both substantial declines due to lower attendance and park closures related to the pandemic. Six Flags reported that its net cash outflow situation is getting better, however, with an average of $27 million a month in the third quarter compared to $31 million over the year to date.
"I would like to thank our team members who have risen to the challenges presented by COVID-19 and improved business performance each month as we safely opened more parks, increased capacity of the parks that were open, and aggressively controlled costs," Six Flags President and CEO Mike Spanos said. "Additionally, I would like to thank our large base of loyal season pass holders and members who stayed with us during this difficult period and continue to come out to our parks in growing numbers."
"The early results of our operational transformation appear extremely promising, and I believe that we will emerge from the pandemic as a stronger and more profitable organization," Spanos said. "We made substantial progress towards our goal of modernizing the guest experience as we become a more agile, consumer-centric, productive, and technology-savvy organization. We expect the transformation to enable significant profit growth once our plan is fully executed in a post-pandemic environment."
Earlier this month, Six Flags announced plans to lay off 10 percent of its full-time workforce, as it looks to continue to cut costs in response to lower attendance and mandated park closures. The company also will continue to streamline operations to save costs, including closing some underperforming rides, Spanos said in an investor conference call this morning.
"A large portion of our non-headcount operating cost reductions will involve leveraging the scale of Six Flags as a whole, to centralize procurement, consolidate vendors and renegotiate contracts. As we go through this process, we are leaving no stone unturned, examining light items, as small as our lettuce expense, which serves as an interesting example. If we standardize that one order and by just one kind of lettuce, we will save $40,000 per year. We have hundreds of goods, where this concept would apply, from napkins to paint, to chlorine, to uniforms.
"In addition, optimizing our rides will save us enough capex to fund a new ride every single year. Our park Presidents, engineers and maintenance teams have studied the performance of each and every ride, calculating the cost against the ride's throughput productivity. We now know which rides to redeploy across parks, which rides need to be refurbished, and which can be removed entirely. We are eliminating 15 underperforming rides this year, reducing maintenance costs, and freeing up significant capex resources."
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It's interesting to me that SF is still bleeding cash with parks at 1/3 of normal, but @20% improved from earlier in the year when parks were completely closed. That should be enlightening for all followers of the industry amidst the pandemic and how tight margins truly are are in this business. Now, I'm sure some of this cash burn is because of previously negotiated contracts and debt servicing, but it should prove that even a significantly curtailed operation is better for these businesses than complete shutdowns, along with the forced efficiencies and leaner operations necessitated by reduced capacity.
Let me help them solve Part of the cash burn - lay off at least 50% of the executive and “leadership” team
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Six Flags: loses tons of money
Six Flags CEO: "We are doing really well, we laid off a bunch of people and now you can order food from your cell phone, so when the pandemic is over we might make money"