The rapid spread of the coronavirus across the United States has already forced amusement park operator Six Flags (NYSE:SIX) to close down its parks through mid-May (at least) and slash its dividend by two-thirds.
Today, that dividend went away entirely.
In a press release issued after the close of trading on the NYSE Wednesday, Six Flags recapped the measures it has already taken, or is in the process of taking, to give it "additional liquidity and financial flexibility" to survive the coronavirus pandemic. Among these, Six Flags will:
- Eliminate "nearly all of its seasonal labor costs."
- Cut the salaries of employees and executives by 25%.
- Cease advertising and marketing activities.
- Cut $30 million to $40 million of "additional non-labor operating costs."
Now, the company is taking further measures, which will include deferring $40 million to $50 million worth of capital projects that were scheduled to take place this year, taking on an additional $131 million in debt, and suspending both the payment of dividends and the repurchasing of stock "until the earlier of December 31, 2021, or such time as the company terminates the incremental $131 million of the new revolving credit facility commitments."
Six Flags also preannounced its first-quarter earnings results in its filing, noting that Q1 2020 revenue will be "$25-$30 million lower than the same period in the prior year." Based on data from S&P Global Market Intelligence, this implies Q1 sales of from about $98 million to $103 million -- both numbers significantly below Wall Street's $110 million estimate.
Regardless, Six Flags stock rose 6.6% during ordinary trading hours on Wednesday and climbed a further 5.2% in after-hours trading after the press release was made public.