Over the weekend, Six Flags Inc. (OTC: SIXF) announced it was filing for Chapter 11 bankruptcy (cue sad-trombone noise here). The company was saddled with $2.4 billion in debt and is taking this opportunity for a fresh start. None of the company's 20 parks -- located throughout North America -- will be closed. All Six Flags employees still have jobs, as well, so potential patrons should not feel as though corners are being cut.
Six Flags spokeswoman Sandra Daniels told the press that "This restructuring will have no impact on families who come out to our parks."
Earlier this month on DailyFinance, Bruce Watson wrote about Six Flags as a company on the brink: "Even if the company must declare bankruptcy, CEO Mark Shapiro says its daily operations will not be affected and characterizes a possible reorganization as a 'back-of-the-house issue.' Still, the company is keeping its seat belt fastened for more thrills and chills."
Today the company did file for bankruptcy with a so-called prepackaged filing. The reorganization plan has the unanimous support of the major lenders and the company hopes to re-emerge quickly. There don't appear to be any plans to close parks as a result of the filing.
Six Flags Inc. (NYSE: SIX) disclosed in an SEC filing today that unless it can restructure its debt, it may have to file for bankruptcy.
"Given the current negative conditions in the economy generally and the credit markets in particular, there is substantial uncertainty that we will be able to effect a refinancing of our debt on or prior to maturity or the PIERS prior to their mandatory redemption date," the company said.
This post is part of our Ads Gone Bad series. Share your thoughts and memories of this ad in the comments, and be sure to check out our other posts on marketing gone wrong.
Thanks to our unfortunate history with slavery and the subsequent economic slavery imposed on minority Americans, we as a nation are very sensitive to charges of racism. So sensitive, in fact, that advertisers are often accused of such transgressions for the slightest intimation. Six Flags (NYSE: SIX), the amusement park chain, found this out recently.
The park created what I thought was a clever series of ads contrasting the humdrum routine of ordinary life with the thrills to be found at a Six Flags park. For example, one ad showed a lumpy teen attempting to dance, another a chortling woman teasing her cat with a laser pointer, both compared to gleeful coaster riders at Six Flags.
Investors/readers have probably already heard all of the bad jokes regarding Six Flags.
"Things are so bad at Six Flags, it's now called Three Flags."
"The only thing rising at Six Flags is the rollercoaster."
"A contest offered a vacation prize. First Prize: a day at Six Flags. Second Prize: two days at Six Flags."
O.K., that last one was borrowed from arguably the greatest comedian of all time, Groucho Marx, but you get the point: times are tough for Six Flags (NYSE: SIX).
Six Flags has more than $2.4 billion in debt, hasn't posted a profit in years, and has a big hurdle next summer: a $288 million payment to preferred shareholders, The Wall Street Journal reported (subscription required). Six Flags' stock closed Friday down 10 cents to $1.02.
Attendance, down 3% in Q2, is expected to "decline by at least that percentage, or come in even lower" for the year stock analyst C. Leonard Bauer told BloggingStocks, adding that it's not an elaborate mystery concerning why Six Flags is becoming less of a destination of significance.
With a turn of the calendar page, we drift into the middle portion of the current quarter, but the earnings season rolls on. Among the many companies scheduled to report quarterly results this coming week are Time Warner Inc. (NYSE: TWX), Cisco Systems Inc. (NASDAQ: CSCO), News Corp. (NYSE: NWS), and Whole Foods Market International (NASDAQ: WFMI). Let's take a look at which companies Wall Street analysts are expecting to be among the top earnings gainers and decliners this week.
Analysts surveyed by Thomson Financial expect the following to report strong earnings growth when compared to the same period of the previous year.
The previous quarter was tough for amusement park operator Six Flags Inc. (NYSE: SIX), which reported a narrowed fourth-quarter loss, as well as for Vail Resorts Inc. (NYSE: MTN), the nation's largest ski resort operator, which said that its fiscal second-quarter profits were affected by a lack of snowfall early in the season.
Six Flags reported a fourth-quarter loss of $132.4 million, or $1.39 per share, compared with a loss of $195.2 million, or $2.07 per share, a year earlier, and a loss of 59 cents expected by analysts surveyed by Thomson Financial. However, the results for the prior-year period included an $89.2 million, or 95 cents per share, loss from discontinued operations.
Revenue for the period that ended December 31 rose 8% to $112.1 million, as park attendance edged up 4% to 2.8 million.
Six Flags reported a full-year loss of $275.1 million, or $2.90 per share, compared with a loss of $327.6 million, or $3.48 per share, in the previous year, and a loss of $2.92 expected by analysts. Annual revenue increased 3% to $972.8 million.
Shares of Six Flags dropped 20 cents, or about 12%, to $1.62 in morning trading.
The roller coasters at Six Flags (NASDAQ: SIX) are fun for the theme parks' patrons, but shareholders of Six Flags have experienced a ride more like The Tower of Terror, a simulated freefall thrill ride. The company reported its second quarter results on Friday, losing $41.8 million from continuing operations, compared with a loss of $39.1 million in the second quarter of 2006, as revenue increased 6%. The loss per share of $.50 was nearly double the consensus estimates.
Mark Shapiro, Six Flags President and CEO, commented: "Although our peak business period occurs in the third quarter, we witnessed encouraging results for the first six months, especially when you consider 4% fewer operating days and unprecedented rain in the state of Texas. The fact that in-park spending and guest satisfaction scores are at an all-time high indicates both the return of families to Six Flags and their approval of the makeover. We are in position for the long-term turnaround we envisioned for our shareholders."
But those shareholders apparently aren't buying it, as the shares shed another 16% on Friday to close at $3.90, after trading over $6 as recently as June. In 1999, the stock was above $30.
So is Six Flags a good deal, with its market cap of under $375 million? In many ways, the company is a lot like Trump Entertainment Resorts (NASDAQ: TRMP), whose shares have tanked after the company failed to find a buyer. Saddled with enormous debt loads (1.4 billion for Trump and 2.65 billion for Six Flags), you have to worry that these companies will be unlikely to make the capital investments necessary to stay relevant in competitive industries. The huge debt service requirements make it difficult for these companies to generate cash and while Six Flags does have a $275 million revolving credit facility, that's not that much considering that the company has lost $200 million in the past 6 months.
I would stay away from these stocks for now. The huge debt loads make them too speculative.
Kohlberg Kravis Roberts & Co. is planning an initial public offering, following in the footsteps of arch rival Blackstone Group (NYSE: BX), reported the Wall Street Journal (subscription required).
Archer-Daniel-Midland Company (NYSE: ADM) is expected to enter the sugar cane ethanol business in Brazil, including the possible purchase of Cosan, Brazil's largest ethanol producer, reported the Wall Street Journal.
OTHER PAPERS:
British energy company BP plc (NYSE: BP) will agree to the demands of the Russian government to give up its stake in the $20B Kovykta gas project, reported the U.K. Times.
Document Security Systems Inc (NYSE: DMC) has nine patented technologies to help protect documents and printed products from brand and security fakers, leading Brookhaven Capital Management to believe it will reach $50-a-share over the next two years.
CNN.com reported that a 16-year-old girl had both of her feet severed in an accident on the free-fall ride "Superman Tower of Power" at Six Flags Inc's (NYSE: SIX) Kentucky Kingdom amusement park yesterday.
Daniel Snyder, the super entrepreneur and owner of the Redskins, always thinks big. So, when he took a piece of Six Flags (NYSE: SIX), it was only a matter of time until we saw some big bets.
This week, he did just that. Through his investment firm Red Zone Capital as well as Six Flags, he bought Dick Clark Productions for about $175 million.
OK, this may seem like taking a couple steps back. Isn't Dick Clark kind of passe?
That may be the case but his company has some compelling brands, such as "New Year's Rockin' Eve," The Golden Globe Awards, "So You Think You Can Dance," the American Music Awards and so on.
Basically, Six Flags can leverage these assets in terms of cool events, merchandising, and perhaps even attractions.
And, for $175 million, it does seem like a reasonable bet. Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
Stock futures are lower in early morning indicating to a similar start for the stock market ahead of some key economic data due to be released today.
At 8:30 a.m., before markets open, the Labor Department will report February's consumer price index. Economists forecast a 0.3% increase compared to a 0.2% increase in January. Ex-food and and energy, core CPI is expected to rise 0.2% after gaining 0.3% in the previous month. Investors will be watching this inflationary measure closely as the Fed meets to discuss interest rate policy next week. What's more, yesterday's PPI surprise is causing further concerns inflationary pressures are sill strong.
Despite PPI coming much higher than expected yesterday and other indication about mounting inflation (at the wholesale level) and slower economic growth, markets finished on a positive note. The reason, many speculate, has to do with several options and futures contracts expiring today bringing buyers into the market. Corporate M&A activity also helped strengthened stocks yesterday.
Other economic data will be reported today: February capacity utilization and industrial production figures will be released just before markets open. March consumer confidence is due at 10:00 a.m., after the open, and is expected to show a slight drop.
The dollar dropped to a three-months low against the euro ahead of the coming U.S. economic data that could further point to weakening U.S. economy. The dollar also lost ground against the yen and 12 other currencies. After falling to near $57 a barrel, oil prices rose this morning.
In corporate news:
OMI Corp. (NYSE:OMN), operator of a fleet of oil tankers, may put itself up for sale. The company hired advisers to explore sale and its board is reviewing several strategic alternatives.
Nissan Motor Co. (NASDAQ:NSANY) CEO Carlos Ghosn would give up the duty of overseeing operations in the Americas. The automaker shuffles top management as it heads for its first annual profit decline in seven years.
Six Flags Inc. (NYSE:SIX) and Tektronix Inc. (NYSE:TEK) may see pressure after reporting results yesterday. Both were down in after-hours trading with SIX shares losing 4.3% of their value TEK down 5.6%.
Texas Instruments Incorporated (NYSE:TXN) mid-quarter update conference call at 5pm. Note that Stifel just upgraded Texas Instruments to Buy from Hold as they believe the mid-quarter update will show improving trends.
Tuesday March 13
Goldman Sachs Group Inc. (NYSE:GS) to report Q4 earnings; conference call at 4:30pm.
Qualcomm Incorporated (NASDAQ:QCOM) to hold annual shareholder meeting at 11:30am.
PDUFA Date for GlaxoSmithKline plc ADR's (NYSE:GSK) Tykerb, a breast cancer drug.
Wednesday March 14
Retailers Hot Topic Inc. (NASDAQ:HOTT) and Zumiez Inc (NASDAQ:ZUMZ) to report earnings. Hot Topic's Q4 conference call is at 4:30pm, Zumiez's Q4 conference call is at 5pm.
PDUFA Date for Novartis AG ADS's (NYSE:NVS) Tekturna, a treatment for high blood pressure.
Thursday March 15
Bayer AG ADS (NYSE:BAY) to report Q4 earnings; conference call at 6am.
Six Flags Inc (NYSE:SIX) to report Q4 earnings; conference call at 4pm. Note that earlier this week, Cramer specified Six Flags as a stock he was bullish on during the "Lightning Round" of his Mad Money television show.
Friday March 16
IMAX Corp (NASDAQ:IMAX) to report Q4 earnings; conference call at 8:30am.
AnnTaylor Stores Corporation (NYSE:ANN) to report Q4 earnings; conference call at 8:30am.
Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.
Six Flags (NYSE: SIX) is the top conservative investment idea for 2007 from Chris Mayer, editor of Capital & Crisis. The advisor notes, "Six Flags is a great brand name, and about 34 million people visited its amusement and water parks last year. And they all come and spend money.
"Dan Snyder, the whiz-bang executive who made billions with Snyder Communications, took control of the company last November. He's also the guy who bought the Washington Redskins. In the time he's owned the Redskins, profits have tripled, and it's now the most valuable property in the NFL.
"One of the first things he did was hire Mark Shapiro to run the show at Six Flags. Shapiro was the No. 2 guy at ESPN. So he knows a few things about marketing and building up a media asset. Since he's joined Six Flags, he's brought on a bunch of executives and operators from ESPN and Disney.
Over the weekend, Six Flags Inc. (OTC: SIXF) announced it was filing for Chapter 11 bankruptcy (cue sad-trombone noise here). The company was saddled with $2.4 billion in debt and is taking this opportunity for a fresh start. None of the company's 20 parks -- located throughout North America -- will be closed. All Six Flags employees still have jobs, as well, so potential patrons should not feel as though corners are being cut.
This post is part of our 
With a turn of the calendar page, we drift into the middle portion of the current quarter, but the earnings season rolls on. Among the many companies scheduled to report quarterly results this coming week are 
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Daniel Snyder, the super entrepreneur and owner of the Redskins, always thinks big. So, when he took a piece of 
Stock futures are lower in early morning indicating to a similar start for the stock market ahead of some key economic data due to be released today..gif){kind=logo}
Why is gold making a new high, trading at $1,118.00 per ounce?
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