CEO Mark Shapiro's freshman year at Six Flags (NYSE:SIX) is over. With a number of bright prospects ahead in 2007, let's hope that he doesn't fall into a sophomore slump.

We probably shouldn't put much weight into last night's fourth-quarter report. Most of the parks wrap up operations after Halloween-weekend festivities frighten the last of their seasonal guests, and losses are the norm.

Six Flags' quarterly loss of $1.12 per diluted share from continuing operations roughly matches the $1.20-per-share deficit it recorded a year earlier. Revenue clocked in essentially flat with last year's showing, mostly because of two factors tugging hard in different directions. Attendance dipped by 16%, yet per capita spending soared 19%, to hit $37.95 per guest.

The parks are just starting to open for the critical summer season. Some of the Southern parks began taking guests through the turnstiles this past weekend, while the cooler-weather parks will come online over the next few weeks.

Looking beyond the balance sheet
You don't become a fan of Six Flags by looking at its balance sheet. Its $2.1 billion in debt isn't pretty, even though the recent sale of some of its smaller parks should help reduce that figure. Shareholder equity has deteriorated over the past year.

However, the company's leveraged state and last year's financial disappointments also create an opportunity for risk-tolerant investors. Just about every single move made by Shapiro's team during the off-season points to a robust 2007:

  • Six Flags has been able to double its corporate sponsorships to more than $30 million. That's welcome cash, but it also gives Six Flags new marketing outlets with class acts like Home Depot (NYSE:HD) and Nintendo (OTC BB: NTDOY.PK).

  • New kid-friendly licensed franchises like Thomas the Tank Engine and The Wiggles should bring in even more young families, who are quicker to fork over incremental revenue than cash-strapped teens.

  • Season-pass sales are up 32%.

  • New retail food partners like Sara Lee (NYSE:SLE), ColdStone Creamery, and Papa John's (NASDAQ:PZZA) will upgrade the concessions while promoting Six Flags outside the parks.

  • A new VIP program will cater to affluent guests willing to spend as much as $250 for a personally guided experience. Six Flags has hired a Disney (NYSE:DIS) veteran to watch over the program.

Where are the flaws? I'm a born cynic. I haven't been afraid to bash Six Flags in the past, but I'm willing to give them the benefit of the doubt this time. In fact, I'm so bullish on Six Flags that even though I don't own shares personally, I would recommend trying to time your entry point before the mid-June quarterly update, which will be the first real public peek at how the 2007 season is shaping up.

Another aspect to the upside is that all of the catalysts aren't going into all of the parks at the same time. For instance, Operation SpyGirl is a stunt show that will debut at the company's Chicago-area park in May. It's an original Six Flags property from the creator of the popular series 24. A hit there would translate into high-margin merchandising opportunities in Chicagoland this season, not to mention a franchise that can be rolled out throughout the chain come 2008.

Thomas the Tank Engine and The Wiggles are only going into a few parks this season. Again, that's another reason to get excited about the chain's potential over the next few years. Six Flags is even gradually unlocking the potential in its video arcades.

Arcades at regional parks tend to be drab, dull, and dated. Even Cedar Fair's (NYSE:FUN) flagship Cedar Point park has a massive arcade marred by throwback games and dingy bowling-alley lighting. Six Flags is upgrading four of its arcades this season, transitioning from a coin- or token-based system to the same kind of prepaid swipe card system you find at upscale arcades like GameWorks and Dave & Buster's. In a genius move, every guest entering the park will be given a free card with enough credit for a game or two. This is as close as you can get to the perfection of a Chik-fil-A sample on a toothpick.

Reaching guests sooner
Six Flags will be rolling out a new version of its website later this month. The site will be more engaging, with a wide range of in-park video footage and virtual games. That's important. I've often lamented how the big chains neglect the importance of creating sticky websites. If you're a community-driven park, you may as well begin building that community in cyberspace.

For a company like Six Flags, which attracts nearly 25 million guests through its turnstiles in any given year, it's a shame to see the experience end once folks leave the parking lot. The new website won't change that overnight, but it's clearly a step in the right direction.

In that sense, it's a microcosm of Six Flags itself. The company's getting better with every park upgrade. If you want to hop on this ride, you may want to begin digging into your due diligence while the lines are still short.

Other thrilling Six Flags updates:

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Longtime Fool contributor Rick Munarriz enjoys taking his family on coaster treks over the summer. He did his part by hitting Six Flags Great Adventure and Six Flags Great Escape last year. He does own shares in Disney and units in Cedar Fair. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.