From fool.com:

Just as an aside — we were just at Six Flags Great America outside Chicago last week. The Wiggles land attraction scored big points with my kids. If it wasn’t for that, there was very little for them to do there. If Great America wants to attract families, they need to pay attention to dirty restrooms with hand dryers my four year old couldn’t even reach, a lousy parade, landscaping that was hideous and just flat out missing in a lot of spots (i.e. a two foot sticker weed near the restroom — beautiful!) Brunch with Bugs that was mediocre at best, and food throughout the park that is very expensive and very, very non-nutritious. Tried to purchase a piece of cheese pizza for my daughter — all we could find was a $9.00 single piece (the size of half of a greasy pizza) and then they smothered it in fries!!! Yeach. You’ve got a long, long way to go Six Flags. – Dr. Disney

Summers here, and with it has come some extra market attention aimed at Six Flags NYSE: SIX. The regional amusement-park operator posted its second-quarter results yesterday. The current quarter is typically the telltale quarter with the peak July and August months, but the second quarter is still a tasty appetizer to hold industry watchers over.

The company saw revenues climb 6% higher to $344.8 million in the three months that ended in June. Attendance rose by 3% to 8.9 million, despite working off of 4% fewer operating days. Per capita revenue rose by 3% to $38.85 per guest.

The improvement didnt make it all the way to the bottom line. Net loss for the quarter widened to $0.50 per share from continuing operations. Unlike Cedar Fair NYSE: FUN or Disney NYSE: DIS, Six Flags doesnt have the operating margins to offset the heavy burdens of debt. Analysts prefer to evaluate Six Flags on its adjusted EBITDA, not its lack of profitability. On that front, the companys $57.9 million in adjusted EBITDA clocked in slightly below the $58.6 million it generated a year earlier.

In a perfect world, the companys latest quarter — and even the ominously “soft” first three weeks of July — wouldnt matter. This is a company that is barely at the midpoint of its three to four year turnaround plan. It almost feels wrong to sneak a peek beneath the dressing room door.

The companys family-friendly approach is clearly starting to bring money back into the park, yet the high costs of achieving that satisfaction are weighing on the near-term results. Season pass sales are up by 8%, and that is on slightly higher season pass prices.

So where does that leave expectations for the critical third quarter? The company believes that it is too early to tell, though it seems that investors may have to wait until 2008 to see any potential for dramatic EBITDA improvement.

The seeds are already in place. Sponsorships have been a big area of top-line improvement at Six Flags, with corporate sponsors like Home Depot NYSE: HD and Nintendo OTC BB: NTDOY.PK on board. Its no longer all about Coca-Cola NYSE: KO. The company is also cashing in on the popularity of outdoor advertising, and next year will launch Six Flags television and radio in-park networks to give potential advertisers a bigger reason to earmark funds to reach the chains captive audience.

The Dick Clark Productions acquisition — which is accretive given the companys $40 million investment for a 40% stake in a company that is generating $17 million in EBITDA or a multiple of 5.7 on the companys minority stake, nearly half of the Six Flags EBITDA multiple — will start paying off by 2008. Six Flags is in the process of replacing some stage shows with less labor-intensive video shows themed to Dick Clark properties like the history of the American Music Awards.

Im excited about the companys future. Im concerned about the chains near-term results. Thankfully, the stock already has a lot of that pessimism baked in. Opportunistic investors may want to wait before cashing in on the potential 2008 turnaround, especially if were looking at another disappointing quarterly report in three months, but the long-term prognosis is still heavier on the upside at this point.

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