Six Flags Reports 60% Revenue Growth, Net Income Decline Following Merger Completion

Six Flags Entertainment Corporation, formed from the merger of Cedar Fair, L.P. and Former Six Flags, reported significant financial changes in its latest 10-Q filing for the three and nine months ended September 29, 2024. The merger, completed on July 1, 2024, has resulted in a substantial increase in net revenues, with the company reporting $1,348.4 million for the third quarter, a 60.1% increase from $842.0 million in the same period of 2023. For the nine months ended September 29, 2024, net revenues reached $2,021.6 million, up 41.6% from $1,427.5 million year-over-year.

Despite the revenue growth, profitability has been impacted. The company reported a net income of $135.5 million for the third quarter, down from $215.5 million in the prior year, and a net income of $57.6 million for the nine months, compared to $134.5 million in the same period of 2023. The decline in net income is attributed to increased operating costs, which rose by 91.3% to $894.2 million in Q3 2024, driven by higher expenses related to the merger and integration costs.

The merger has also led to significant changes in the balance sheet. As of September 29, 2024, cash and cash equivalents stood at $89.7 million, up from $65.5 million at the end of 2023, while long-term debt surged to $3.5 billion from $2.3 billion. Goodwill increased dramatically to $2.8 billion, reflecting the acquisition of Former Six Flags assets.

Operationally, attendance increased significantly, with 20.97 million visits in Q3 2024, a 68.7% rise from 12.43 million in the same quarter of 2023. The number of operating days also rose sharply, contributing to the revenue growth. However, the company recorded a $42.5 million goodwill impairment for the Schlitterbahn reporting unit during the third quarter, further affecting profitability.

The filing also noted ongoing legal challenges, including a $40 million settlement related to a putative securities class action lawsuit, fully funded by insurance. The company is under investigation by the SEC regarding disclosures related to its operations in China, which may have implications for its financial condition.

Overall, while the merger has bolstered revenue and attendance figures, it has also introduced significant costs and legal challenges that have impacted profitability and financial stability.