We’re now in the “money” season for Six Flags (Symbol: SIX) and all the indicators point to a possible stock price increase.

As of Wednesday, Six Flags was trading at $6.30 and it’s been in the $6 range for the better part of a year. Management for Six Flags instituted a 3-4 year “fix up” plan for the company and the results are already coming in.

On June 6th, 2007 I listened to the mid-quarter conference call update and CEO Mark Shapiro and CFO Jeff Speed shared some interesting insights.

Finance and Vellejo Option

Speed said the company recently reworked a loan package and will now save roughly $8-$10 million in interest payments annually.

The company is using this as a foundation for their decision to exercise an option on Six Flags Discovery Kingdom, which is located in Vellejo, California, Speed said. In 2006, Six Flags paid the city $7 million. They expect the $52 million option to close end of July 2007, Speed said.

Six Flags Attendance

Attendance for Six Flags is flat. Shapiro blamed that on the fact that Six Flags currently has just over 50 fewer operating days compared to 2006.

There are signs that the new “clean up” policies are working. Repeat attendance (2-5 visits) has increased by 15%. Additionally, season passes have increased by 10% so far in 2007 compared to this time in 2006.

Attendance among adults 25-49 and kids 3-11 has increased, Shapiro said. The company has hired an independent research firm that will be providing daily reports on park activity.

Shapiro called the transformation of the parks “night and day” already.

My Take

I think Six Flags is primed to move upward. They’ve trimmed off dead weight and cleaned up the parks. Their business relies heavily on good weather. Their attendance is flat, but they’ve had two major attendance hits this year.

Texas is the biggest market for Six Flags. This year Dallas had 10 days of flooding and San Antonio had rain—both over Memorial Day weekend.

Despite the trouble, in May Six Flags gained 12k in attendance compared to 2006 and that’s with 18 fewer operating days.

I like the new finance package they’ve put together and the move to exercise the option in Vellejo.

Guests—many who haven’t visited a Six Flag park in years, because of the poor state the park was in—are coming back and commenting on how clean and vibrant the parks feel. Shapiro said that their ride downtime—not factoring weather outages—is just 3% now.

They are also working to shorten wait times of the lines for rides and food.

Six Flags is already getting more sponsorship and in 2008, Thomas the Tank Engine will be launching at Magic Mountain.

Bottom line, we’ve just started “the season” for Six Flags. There’s 85% left in the season and it looks like Six Flags is poised for a better 2007. I like what I heard on the conference call and I like the company objectives. They want to get leaner and more efficient. August is the big month. It accounts for 20% of their business.

Some have speculated that we’ll see this stock go up to $9.