Six Flags Entertainment Corporation is in for an unexpectedly bumpy ride.
The company, which is relocating its headquarters to Arlington by mid-2020, reported Thursday a net loss of $11 million for the fourth quarter of 2019 and announced its chief financial officer will be retiring.
CFO Marshall Barber, who also serves as an executive vice president, is stepping down from all his roles in the company, effective August 31. He will serve as the chief financial officer through February 24 and will remain wihe company until his retirement date, Six Flags said.
“I am honored to have served Six Flags alongside the talented Six Flags’ team, especially through such an important time in our evolution,” Barber said in a statement. “I am committed to ensuring a smooth transition, and I have all of the confidence in the finance team to continue their excellent work.”
Leonard Russ, Senior Vice President of Strategic Planning and Analysis, will assume the role in interim term until the transition of a new chief financial officer.
The world’s largest regional theme park company, which operates 26 parks across North America, saw a decline in park attendance. Compared to last year, the total number of guests enrolled in the company’s membership program or season pass holders decreased by 3% to 7.7 million guests. According to Six Flags, the numbers were “softer than expected.”
In the fourth quarter of 2018, Six Flags had reported a net income of $79 million – a steep $91 million difference to 2019.
In spite of Six Flags’ weak financial performance, the company CEO and president Mike Spanos remained optimistic.
Our company has difficult to replicate assets that provide a unique experience in themed entertainment, and exciting potential for profitable growth,” Spanos said in a statement. “I also believe that the company has the ability to improve its performance.”
Spanos, who joined Six Flags in October, said the leadership will work to formulate a new strategic plan with a goal of restoring sustainable growth in attendance and profitability.
As part of its expansion plans, Six Flags had already invested about $10 million for new development agreements in China, the company said. However, the China development agreements were terminated and its partners defaulted on its payment obligations.
Although overall attendance at the company’s parks grew by 788,000 in 2019, guest spending per capita and revenue from the base business stagnated. Guest spending per capita dropped 21 cents to $42.37 in 2019.
Following the earnings report on Thursday, the company slashed divided to shareholders by 70%.
Six Flags said: “Soft organic revenue trends, and increasing operating cost headwinds, primarily related to higher minimum and market wages, will be difficult to overcome in 2020.”
The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 11 cents per share.
Six Flag stock was down by more than 18% on Thursday.
Six Flags shares have declined 16% since the beginning of the year. The stock has fallen 32% in the last 12 months.