SEAS - Earnings call transcript Q2 2021 | United Parks & Resorts Inc.

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Matthew Stroud

Thank you Matt, and good morning, everyone. Welcome to SeaWorld's second quarter earnings conference call. Today's call is being webcast and recorded. A press release was issued this morning and is available on our Investor Relations website at www.seaworldinvestors.com. Replay information for this call can be found in the press release and will be available on our website following the call.

are Financial Chief Officer morning Elizabeth Officer; this Chief Gulacsy, and me Marc Executive Swanson, and Joining Treasurer. your open This second morning, call will quarter our to the financial results, we and then will questions. review we

section be time forward-looking with Before actual we remind our Federal of different the those website. report the and to today risks in our materially comments will XX-K updated the a Securities risk within uncertainties like results Laws. Form filed Exchange contain reports could statements are obligation of and update everyone and number Risk any forward-looking subject be forward-looking and These to be that that our those will Commission. included quarterly meaning our on statements, annual I with in begin, are identified would available Securities to factors We Factors filings to XX-Q the to cause on SEC These that no time from Form statements undertake statements. may of on from including the

in on such addition, and our comparable adjusted call, and In and statements cash financial filings on website reference non-GAAP our measure the to our reconciliations found GAAP free included with can regarding More forward-looking as flow. information SEC. EBITDA earnings is available financial release other of we measures and most also our non-GAAP measures the metrics may the be in

call Swanson. Marc? Now over our Marc to Officer, I'd to like turn Chief the Executive

Marc Swanson

and second strong revenue, and report that net into record in adjusted to you first momentum us. morning, thank pleased including financial for a COVID-XX second to quarter, Matthew. the from environment, operate Good results, continued the you, Thank and delivered continuing impacted income quarter joining we EBITDA. quarter everyone highly challenging and despite I'm

this the our and extraordinary business commitment to half the and through from financial year, first business. emerge our stronger more even of strong and Our ambassadors our performance profitable underscores environment, the an resilience of

cash flow second During the quarter, already our bolsters we balance further strong that record free generated also sheet.

deliver operating capacity quarter, particularly to We COVID-XX were parks the to our of open XX the or be at All modified the capacity parks second the beginning By were all the limited and financial and quarter. limitations, pleased operations pandemic results, end are we COVID-XX with second during related these impacted operating continued or considering by of without the quarter. quarter limitations.

in and pricing with environment consumer spending, guest strategies, resulting and revenue per to capita the in strong along strong the record demand realized higher continued product total pricing Our drive quarter.

to continued initiatives food, reimagined our more parks, reasons with to quarterly launched venues, also past have our see events expanded which beverage as several helped give We success entertainment or new spend. events, at strategic some and pricing the we few including during as new quarters, or of our well and guests

by these the the On refreshed our our initiatives we guest returning to are offerings contributed been our successes increase other have product have and as These in spending. products over encouraged all months. have and new the the retail improving by adding last merchandise to mix. And few side, parks guests we

up XXXX, to July, attendance versus approximately continued Looking strong approximately with and X% performance our we down to revenue generate XX%.

best was parks very voted Orlando having and for received Mako States. rankings entertainment United voted other as Busch amusement of received Gardens Top and Williamsburg amusement the are SeaWorld best park coaster parks States, coaster roller was of Fyre Orlando States. the United was park in Today United the recently some We in SeaWorld attractions Orlando voted to our readers country. Aquatica proud in The USA at from in best voted the recognition best and roller Celtic have in outdoor XX United attractions States. waterpark the best was the well. at Several

forward And SeaWorld outside SeaWorld United track and that year. thrilled Abu on opening of are of helped Sesame deliver San is parks in Diego, Place ambassadors were in the amazing that out to end to construction Park park look Dhabi, guest of our awards proud and next first complete the on of receive to by build also schedule these States, our the the of We experiences. XXXX. We

nearby We our to potential development closely grow and including other located on continue opportunities additional business the development international locations. existing study to company, hotels parks, or

On and online the our parks, of use and we the the this mobile feedback and and Aquatica will the and check can We have extensive rolled make testing, out front, park, users. the beta year. parks times. And technology purchases, from received guests be later app SeaWorld parks now or SeaWorld remainder the new app did Aquatica schedules food, our positive navigate wait order to in for

as We which expand use our guests visitation, to lead adopt revenue capabilities the with marketing opportunities. significantly business guests, expect beginning we CRM selected expect and complete, and allowing on eventually cost, lead will overall provider reduced analytics spending, to full capabilities. capability which increased CRM and improve, have anticipate Once us will to we Also, the our migrate time to system and increased to are impacts system, this new understand to engage we app. to marketing, anticipate that in-park better our data positive and over our and overall

an lineup fall Looking to months, outstanding few events. we of have the next

Busch at the award daytime will begin at SeaWorld San our all and Orlando time and ever, our first events, Spooktacular SeaWorld our Halloween Next event the month, SeaWorld we our including Howl-O-Scream SeaWorld and including oriented SeaWorld for Parks Gardens family winning Diego. parks, night-time event

this in for several beer for enjoy We about Orlando believe thrill adult of there's and will Diego. at our parks. also having to guests something We San There are our and event seeking this excited festivals everyone craft cultural be fall.

positioned this environment, through company growth profitability. better to worked and have and in hard – parks teams an increased Our operate our revenue extraordinary

the that, quarter, few As we past and the improved turn we the refined results we detail. the for believe I have have the past to significantly company. developed to year we the to throughout With the over along financial with will Elizabeth taken have demonstrated discuss Elizabeth? actions continue in years, more in strategies like lead to results second call over would financial our to

Elizabeth Gulacsy

you, Marc. Thank And good everyone. morning,

you As comparison prior for discuss quarter. in know, we the each results year's quarter typically to the

comparison our and experienced March operating the results we disruption on when provides all the second our trajectory. believe closed on meaningful to quarter of of a parks of Given performance last XXXX. we temporarily year XX, a insight We XXXX our more

to quarter, financial compared like As such, last XXXX. our I'll commentary provide around results

tomorrow. we both well and do plan XXXX our in in versus earnings a XX-Q release, and For provide form XXXX comparison to we we'll our those which interested, so as file

quarter our results the were impacted, mentioned, Marc pandemic. COVID-XX by As second

and However, in to we return management both quarter. work EBITDA revenue income operations initiatives, have record record the cost with more net we through normalized the and a with record the reported total done for of savings along end quarter, our adjusted the revenue,

approximately decline in for the of modified primarily increase of we by attendance also of XX.X%. $XX.X million, events limited or COVID-XX attendance total increase of $XXX.X international of capacity an in limitations quarter. would quarter due operations have primarily is When excluding to record events, XX.X% compared guests parks the to During the declined and/or impacts, Attendance The and decline XXXX. international when quarter by XXXX. increased guests per attendance total including generated revenue an related some second and of our quarter or from X% to to visitation a compared impacted in million, compared at capita quarter to XXXX, second was second of X.X% revenue offset group when revenue the by due partially increase of second group

second offset due and a or quarter expanded XXXX. efforts, in and savings second in with Compared $XX.XX, and occurred quarter quarter the resulting pricing decrease prices $XX.X total net the million these a compared net to net generated in income by We COVID-XX. generated in product from and increased impact improved modified the in mix park of Admission capita an per increase and the operating quarter of costs, XXXX. the decrease increase XXXX. guest record per and by increased impact $XX.XX a per attendance second capita to improvements increase drive product of general the along strategic admissions spending, capita labor related of and EBITDA XXXX, to along of in to limited the our of to combination our both primarily costs, as realization in a spending. strategies, second increased and expenses of $XXX.X demand realized capita in when XX.X% to most a new income compared We of XX.X% per pricing of enhanced to in that in admissions higher $XXX.X with operations expenses, which of by XXXX. as relates spending in the in million of from consumer quarter well fees, impact XX.X% and offerings. of of The of spending, marketing per The products, continues primarily primarily resulting decline revenue to administrative resulting strong of per million, when quarter. the mix in COVID-XX improved per quarter the driven selling, primarily The and of to park the for second compared $XX.XX. in compared of total park in revenue of result the prices of life $XX.X both related improvement record higher capita guest and quarter $XX.XX resulted million, together strong admission adjusted to product as to XXXX, to In-park Our operating or from capita in reduction pricing higher spending, and or the environment EBITDA an increased cost admissions adjusted XX.X% real capita due expenses record second primarily other structural initiatives

X.X period $XX.X $XXX or million EBITDA million $XX.X $XX.X compared revenue results Total X million decrease attendance million, a for the or XXXX, of was of Looking $XXX.X was million, half or of XX.X%. to improvement decrease the and of at X.X%. first was our income adjusted guests, guests a an was for million, Net improvement XX.X%. total $XX.X million XXXX, an of million

balance Now current revenue when million balance of XXXX. turning deferred XX.X%, an end was quarter our the sheet, of of to of the compared second June approximately to $XXX.X increase as our

very pass to our encouraged the continue seeing be trends We we're with base.

compared XXXX. Our approximately the our in up pass July approximately of higher peak was pass the had of of At is base July than between XX%, approximately XXXX. XX%, XX% end and the we pass first XXXX, base quarter to July grew XXXX, and base

pass our as products. holders continue in We of our of value higher are base, our higher seeing benefits also passes the a mix premium and to recognize pass tiered

Additionally, sales, we of on continue to prices pass hold, and XXXX. taking realized pricing versus XXXX see our stronger the strategies impact with our

on spent XXXX. on XX, XXXX, for in As including a million on the available million our for of record of cash of in on flow $XXX.X which and months the record our and XXXX. $XXX sheet, $XX.X of total was or XXXX, it's CapEx the quarter, in was We of was months first credit quarter $X.X Cash million available second Free on the core June million approximately million, second approximately first was projects. liquidity $XX.X from our flow revolving million when balance facility. quarter, operations CapEx cash and six million and and million ROI second $XXX a the cash equivalents million six $XXX.X approximately extension $XXX.X of $XXX.X million $XXX.X

million expenditures. capital XXXX, and plan $XXX we million still approximately on on $XXX spending For between

an Lastly, Together the July $XX second structure of secured we shareholder on capital with XXXX, objective our maximizing we XX, senior company's continually value. with our of notes. X.X% board, million redeemed priority evaluate

Now turn Marc over Marc? back share thoughts. call final the will me let who to some

Marc Swanson

you, Elizabeth. Thank

We welcome proud and protect protocols. animals were quarter, to to operating wildlife. to animal efforts helped your the accordance exceeded the open Before world's their and our over comments. we have our while rescue latest to want XX,XXX in continued guests for of over I we save one questions, XXX with animal are effort rescue health parks company's We of dedication thank In the employee leading we safety the second our rescues And ambassadors has call some organizations. history. and and the closing

take safe are improve our of and there advantage a our additional offer progress continue always, continuing As continue growth believe significant in experience we events guest innovative execution, revenue focused drive providing Despite we on adjusted while special are to and both and guests enjoy new EBITDA. have opportunities creating made, and our to events to clear fun we growth to parks. to the for opportunities meaningful

and improved have confidence our our to will continue that We in operating meaningfully to high lead to for financial term value and strategy increase ability in long results stakeholders. deliver significantly

Now, let's take your questions.

Operator

We come from [Operator will session. and Our ahead. go Michael Truist. Please Swartz, question Instructions] with question answer begin the now will first

Michael Swartz

attendance touch Yes, hey, good maybe Marc you trends morning on quarter. the want everyone. to during

XX%, we first It that XXXX had levels. July, you that during quarter out was think believe April, said And spoke standing the the we over is imply XX%, XXXX levels. last in when a appears to I somewhere attendance around appears I It versus I attendance with down come materially improved quarter. XX%, about XXXX. think of running of X% tenants

correct? the quarter? if those that understand us aren't during And maybe help trended numbers how that So

Marc Swanson

Yeah. think, you you noted, kind of can I trends Hey, I take Marc, look, during the as it's if improved, that question. Michael, the I quarter. mean, will,

to X%. as XX%. were we only July, we And to So June, then of down quarter mentioned as with the ultimately, April we that pleased down, ended May where so and

we're the seeing attendance with pleased we're performance. trends the So in

Michael Swartz

I that mentioned press half Okay, to you're to adding you're, you'd in days release, the think operating a relative number great. XXXX. And of the the year, of back

just the magnitude festivals operating of adding maybe help the understand the you are and special of us there events day half maybe are incremental, increase, So to maybe that and year? back the

Marc Swanson

deal the year, days the year. half Christmas, some it's events incremental also like operating our be days, around I other in our going back things the of a to for that, example. we around, really of experiences, around good but of some most of And some of think, Halloween so drive Yes, around last some through are learned

and opportunities SeaWorld Orlando also in So and about days take and excited the advantage SeaWorld we're the Diego. to San experience, some additional of we're Obviously, nighttime some Halloween those adding to going of drive quarter. Howl-O-Scream

Michael Swartz

Okay, thank you.

Operator

come Our go Steven will question next Stifel, please with Wieczynski from ahead.

Steven Wieczynski

Hey, guys, good morning.

I in posted the Marc, basis a when it's mean, quarter you point moving to improvement XXXX. a, about relative the ask I forward, of – second about So margin opportunity I think X,XXX just the

acceleration now. think we market a should margin, about pressures how with forward? this So, even and I moving gives super the takes and right of mean, is or labor tight

not experience? labor? guest have the how same you While been combat able So, at the to time impacting

Marc Swanson

operating we we guest Yes, very can, part protect hey goal so Steve. We're is efficient What on focus the you've And to experience. we're we're business to manner. have the to as And saw continue in said to the be this I'll we as margin enhancements from we've And to work our park, do combination things very revenue quarter, have witnessed. a do much say we'll going is, good experience the having the a our for of careful, here to our not guest good think our can continue in that especially an committed obviously as also tremendous margin, do efficiencies, has we're per getting that, and in I and of cost that, think, grow we're cost several going to really revenue through second to And margin. obviously, obviously, that. as on some look, you done last And caps, expansion side, quarter. quarters, I a think signed here, the the lot well.

Steven Wieczynski

of it intensifying? the from kind are you better? Or, up in today seeing of labor follow guys Is it perspective, staying to is same? getting So market the is that, labor on a terms what

Marc Swanson

have a control, Having labor, – challenge. we're to here work environment. that, labor labor, hard look, theme working at attract our environment I can and continues Steve, a Hey, fun working companies be to like think a would in talked control to said to about people have we Yes, we park. many say come, We come

doing lot we'll continue have of a focus just so forward. on, we going And that do And that. to

Steven Wieczynski

this Okay, pretty free it can point. are you flow, of quick ask now one, more significant a maybe just, then guys obviously, one amount I cash at if generating have

help uses cash your understand, just you can So this at current us for point?

Marc Swanson

it a is good Yes, question.

flow cash quarter, a record pleased the generation, we're the was you cash flow. certainly So, mentioned. as free in with It

utility items expense venue park. things refreshments, ROI where some some type So some cash in then board list through items parks, our we that. in, working on around also and that can been pleased very, can hitting we'll and we've a some some of upgrades very drive the areas we've, our items we of that that can improvements. with invest And with deploy in And savings we some quick CapEx expenses,

So we've list. to been, deploying that continue and that list review

kind beyond notes Elizabeth as you in the in business, that, investments those of some July. the we heard, we mention, did Anyhow making So will. down of if are you pay also,

that, my M&A find that what certainly And, those see opportunities, for the be certainly the sense evaluate able Beyond prepared a we're position, and along? things to we're We in to come things in I open make should hotels, think thing to us. I right intriguing. mentioned, might that remarks.

kind ways we'll, with way business, we'll are over that, you will, we to certainly continue be to And And investing I frequent on do board in deploy a make over those cash. shareholders. we if opportunistic. have that, deploy you the – is that our the longer the the kind best we'll can of believe sure that best to in term, for So communication of tell

the generation a number – are with ahead is, opportunities the are think us, very I generation flow have, in cash. the uses good of that that of pleased we of news we're we have So general, that compelling cash

Steven Wieczynski

it. Appreciate guys. Thanks, great. Okay,

Operator

Securities. ahead. will with from question go Please Wedbush James come next Our Hardiman

James Hardiman

on morning. Hey, here. And quarter a congrats good great

whether question, inflation it into to Steve's in you piece on any quantify XXXX? incremental be the XXXX? where heading we Or versus dollars how follow-up it of there be, is incremental versus to were labor thought would way Just

Marc Swanson

labor? Yeah, there we're and a business. we are going cost, savings can But to increases is do. the to is efficiencies number, offset companies And I have hey, is obviously, automation the norm, we James, much committed I'm in and as provide our have year, kind inflation when are that inflationary on as to our and additional like business. we think that efforts we goal, in And were this not that's those additional goal as I numbers. efficiencies earlier, said of what above focused obviously, to in attempting with many our of the to

James Hardiman

an some Okay, then, And was it I fair suggest, were, I you secondly, significant those drag least the in at of lastly, of similar And sales And it group month comfortable? had prepared and in July, about, those extent nice numbers, just between pace those the in remarks, would two and how was enough. a feel a drag think order as talked can tease you about of two sales international the piece the piece. maybe and ex-those out international to two? guess, growth the group maybe magnitude Or you you recovery buckets, of guess I Thanks. July. which the of sales

Marc Swanson

Sure.

group So, similar trend, a was July, without in international of there. and have X%, would been to impacts up kind it in regards we

hopefully you as if future. those backdrop, good in the those, a become it's tailwinds will, So, – that

– will events know, back. time. back And some we point, we don't that but attendance optimistic come that know international also come So, we're group will when, at over

to are us. – those be those for be going are tailwinds So going to

attendance and those growing growing. be I those our business, we is think, from you just absent recover. do see just that And is tailwinds they will forward those the recover July, I and on move prepared between our can as about what remarks things whenever commented

James Hardiman

XXXX anyway. is I to there of versus a levels? but think group way that international, Is those in maybe would ahead pacing quantify is there to way about think a that

Marc Swanson

you've you to XX% think our I think is school there. well. of is our that'll, Groups, and XXXX, not attendance, it very groups about attendance about and about talk heard I while And this others as that the of way stuff you international overall gives company little as magnitude expect like there's and some dynamic and traveling. are it camps order in would groups certainly church

gives down that'll been I order But So we in as would said, things up absent well. of magnitude July, between, we return think on I that those low some you kind digits, have single seven, of were that. like

Operator

will come question Brett next Capital from go Markets, ahead. please Our with Instructions] Andress KeyBanc [Operator

Brett Andress

Hey, morning. good

you July, cap I So illustrative think per assumption, I here above the when XX%, you're your XX%. Growth gave think tracking And, it implies XXXX. above through targets, XXXX. was are we

those So, doing you or expect now, just that gave XX% has I you is drive cap think increase Right, macro between like the consumer how around that gap XX% higher specifically, your and roll-off, targets. you that you're evolved guess per the XX%, to do demand us thinking in right targets? factors, would upside, anything

Marc Swanson

think the the our park, redoing and or along with of venues, rebranding been our the have that efforts years, them, revenue of and had last who opened a we've in a in I our number whether and at the pricing, of a kind regular our in we've Brett, let we've I'll of couple basis. a it's than I benefited environment. product of our people menus, that, over has upgrading looking as of said where a the really strong has we lot per recognize new Look, work certainly, things start And area. of they're are And mentioned, things, question. cap kind of demand doing with us, better are with team, Yes, hey, the the position bit? are group on that unpack per little or your start through. beneficial some beverage also mix mix, shining me Having products management merchandise before. much parks. how in doing those I'll food fruits a as cap a of them, of the we well we operating lot we're We're all

parks. to of in parlor a several have of kind number shop, number in-park new cream coffee a from venues new our we ice a venues to of bar So

cap So are, per all clearly are area. the things benefiting in those us we

help system, that more guests, out, us something just, would get feel that's to or at benefit have that's to So XX% always all think our Because more we to And there that something? some we mind, yet. I are events, growth, grow about which don't that, Again, normalization, going which our just than, to and going CRM going them app be to Is good little be keep our parks going going lot we That'll roll able be spending, park to will the is think a of so and forward? spending. allow we lot target in a a to it thing. but is offers more still and than to think continue think targeted a it's expand then get also not type in more when to out. ways even inflationary so. mobile away. or to does rolled in that be But to we I

we visitation So that generally know, are we does, some mention tailwinds, spenders. but those it don't come when point, folks also those at international know when not per we are back, higher to know cap the we'll

So cap feel the about position. per good

per the ahead we're far in you per gave illustration question, cap as alluding were a well assumption that you the that. the, of far of think XXX, I or in Obviously, your we that XXX As to kind as cap illustration. as assumptions

attendance this our in any And is better that it attendance grow collection has goal. than was illustration, we to a guidance, over laid And be out grow we in what do its was not XXXX. did would certainly XXXX attendance expectation we assumes not certainly certainly It done so, of in we our from time, will history. than much illustration. don't parks more And that goal

achieving So, mentioned, then other our outperforming was on committed the as do I've the and goal that of And that, to, to then per more savings. we and business component attendance. the illustrated. And mentioned earlier savings. would be I the efficiencies We're capita driving in obviously cost cost obviously, we're

future want we pretty outlook probably think business. that, as I year, So through good through get And in viewing about point this this at with we're we we the feel obviously. come of move that, how the some a back will to

gives So where stand. that you for of little a flavor things bit

Brett Andress

in you changes Got more I And but a or lot mean, the down there, it Cove seen then the ground maybe any on curious out a market. recent of in I which specifically have days? unique, you a fears if obviously most think maybe anything, booking plus have is just Orlando on there. it's trend visibility time Delta know I And helpful. destination there Florida, also week Discovery real some approach

Marc Swanson

know an to we out that, talking obviously said look, attribute is on having Brett, variant. media Hey, attendance our it in the minds, change there, or we people's trends see Delta it, that has it's been about a don't impact can we the to

Brett Andress

you. Thank

Operator

Marc remarks. to session. for turn conference over closing Swanson, CEO the question-and-answer to any back I our like concludes This would

Marc Swanson

rest and On Elizabeth morning. thank I Entertainment, management you you, to SeaWorld Thank for team of Matt. joining us behalf of at this the the want

believe next are you As and operating stakeholders. our confident long-term speaking look heard in to we today, for and Thank forward we quarter. you with financial results and will you value drive which improved long-term we strategy,

Operator

presentation. now for has conference The attending concluded. you Thank today's

now disconnect You may

United Parks & Resorts (PRKS) 8 Aug 212021 Q2 Earnings call transcript