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Six Flags Leisure (NYSE: SIX) disclosed:
The event of the Six Flags-branded parks in China has encountered continued challenges and has not progressed as Six Flags Leisure Company (the “Firm”) had anticipated. The Firm’s accomplice in China, Riverside Funding Group (“Riverside”), continues to face extreme challenges as a result of macroeconomic setting and the declining actual property market in China. This has led Riverside to default on its fee obligations to the Firm and, as such, the Firm has delivered formal notices of default below its agreements. Whereas the Firm continues to work with Riverside and every of Riverside’s governmental companions, the eventual consequence is unknown and will vary from the continuation of a number of initiatives to the termination of all of the Six Flags-branded initiatives in China.
Within the fourth quarter of 2019, the Firm will understand no income from the China worldwide agreements and expects a detrimental $1 million income adjustment associated to the China worldwide agreements that may offset a portion of the income from the Firm’s remaining worldwide agreements. As well as, the Firm expects combination one-time expenses of roughly $10 million associated to the China worldwide agreements and sure unrelated litigation issues within the fourth quarter. For 2020, whereas the Firm doesn’t foresee any vital further one-time prices or bills no matter the end result of the Six Flags-branded initiatives in China, the lack of all of the China initiatives would end in no income for that market if Riverside doesn’t treatment the default and the Firm will not be capable of have interaction different companions to finish any of the initiatives.
Individually, the Firm’s North America parks skilled decrease attendance within the fourth quarter of 2019 versus the identical interval in 2018 on account of softer than anticipated season cross and membership gross sales, primarily throughout the vacation gross sales durations. In consequence, the Firm expects complete income within the fourth quarter of 2019 to be lower than prior yr by $Eight-$10 million.
The Firm will present further particulars in regards to the outcomes for the fourth quarter of 2019 within the Firm’s year-end earnings launch and investor name.
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