Loss narrowed, Six Flags upbeat in lean times

Amusement park chain Six Flags Inc. on Monday reported a narrower fourth-quarter loss after the company sold parks in eight locations and more visitors boosted revenue.

The net loss shrank to $126.9 million, or $1.39 a share, from a loss of $189.7 million, or $2.07, a year earlier, the New York-based company said. Sales rose 7.5% to $112.1 million, beating the average $108.6-million estimate among analysts surveyed by Bloomberg. Six Flags, the operator of Magic Mountain in Valencia, forecast adjusted earnings for the year.

Six Flags will be able to withstand a slowdown in consumer spending as gasoline prices rise because it’s an inexpensive, local option for entertainment, Chief Executive Mark Shapiro said.

Attendance increased 3.7% to 2.8 million people, helped by more visitors in December, while total spending per park visitor advanced 3.5%.

“We just don’t think people are going to stay home and play stickball all day,” he said. “They’re going to do something. It may not be a trip to Disney. It’s going to be something outside their house.”

Six Flags sold parks in or near Buffalo, N.Y.; Columbus, Ohio; Concord, Calif.; Denver; Houston; Oklahoma City; Sacramento and Seattle to reduce debt. The sales closed as of April 6, according to the statement. Excluding those, the company reported a loss from continuing operations of $130.8 million, compared with a loss of $100.5 million a year before.

The chain forecast 2008 adjusted earnings before interest, taxes, depreciation and amortization of about $270 million, assuming attendance would be unchanged at 24.9 million, according to a separate statement. Six Flags also projected it would be within $25 million of having positive free cash flow for the first time.

Six Flags said last week it was joining with Dubai Holding’s Tatweer unit to build theme parks overseas. The company will start seeing revenue from the deal “immediately,” Shapiro said.

Six Flags will get an annual payment from design and development through December 2011, when the park is scheduled to open, Shapiro said. The company will also get recurring fees for an exclusivity agreement and licensing fees.

Six Flags gained 1 cent to close at $1.63.