SEAS - Earnings call transcript Q3 2021 | United Parks & Resorts Inc.

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Operator

Good morning, and welcome the SeaWorld Parks & Entertainment Third Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note that this event is being recorded.

Now I'd like to turn the call over to Mr. Relations. Investor Stroud, Matthew ahead. go Please

Matthew Stroud

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

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

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

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

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

Marc Swanson

thank a operate among COVID-XX and environment. adjusted revenue to of and challenging highest and I'm income reported Good you to pleased for quarter of joining morning, generated financial report In quarter, Thank in record everyone, quarter and another highly another EBITDA. ever we our continuing you, Matthew. strong while third us. the net impacted results,

product and strong drive strong higher continued pricing strategies along Our demand quarter. guest environment the pricing consumer in with realized the to spending and

shift would third have if been days of better group-related for quarter record weather-impacted number quarter. during and not third our guests performance for calendar financial limited the and even Our attendants, an international a unfavorable parks

had of weather-impacted the we third fact, the which XX% a XXXX of in third of days with record XXXX, operating weather In number the record. previous was what quarter days severe quarter more experienced than

decreased Excluding approximately X% international and of by group guests, to quarter when XXXX. third the attendance compared

of to performance and our dedication the months first financial resiliency the our record-breaking and business nine the of is ambassadors. the testament a through of Our year relentless efforts

and increase During meaningfully our financial the to to push go-forward commitments. out quarter, overall revolving our reduce us favorable our from conditions access which our interest and maturities our reduce allowed we refinance took to of market improved debt, debt, expense, performance liquidity advantage

the our resumed growth purchase since of repurchased and shares compared during opportunistically opportunistic an to shares, October totaling XXX,XXX successful in Halloween repurchased be Halloween repurchase use share concluded we award-winning we at also We end quarter. $XX.X the and our cash. October revenue positive to contributed excess activities parks, events our X.XX We million the another shares believe it's featuring to meaningfully Last attendance additional season of XXXX. the of when week, our continue and best and million will quarter which

and events. for will at our SeaWorld, begin popular revenue record Busch Later a Gardens saw we Christmas our this events parks. we fact, our In Halloween week, Sesame

beverage merchandise and food Our for and Christmas in young, old guests, and seasonal entertainment, everyone events exciting unique offerings between. feature

Turning across feature allow as These of our importantly, and app e-commerce new to launched for Quick in-park capabilities mobile ride wait the successfully in-park X.X and that items. including third interactive of parks maps, other and We've quarter. initiatives. of food our apps built Queue the times eight Version and key other end of purchases, beverage,

mobile pleased our feedback, We XXXX. double-digit with has portfolio We percentage we are check by entire size. in restaurants rollout December adoptions the rolled and seeing plan food In complete results. the mobile a increase out, been average ordering apps early of across where of to are

over we across to plan satisfaction purchases next revenue also to add and meaningful which in-park and several to to venues the quarters, continue guest incremental contribute to opportunities. more expect features enable in-app We the app enhanced

increased When We we opportunities. expect to overall towards visitation lead system. complete, analytics anticipate implementing guests, improve, business we allowing progress to continue and our good better capabilities marketing, revenue our to engage increased marketing better understand which overall costs, will CRM that and us and significantly with reduced our targeting and make to

the making also share are in to SeaWorld we will outside on complete by XXXX. construction more remains to progress strategy, Abu end We Park this SeaWorld the track Internationally, on of of hotel quarters. the first Dhabi, States, our have about coming the and United

San Racer and swing Amped upgrades and waterslide Breaker Tidal and attractions, we of the Busch parks. in meaningful Looking at ahead Gardens Busch to believe Aquatica something exciting Pantheon we includes the Diego, at Surge Emperor Gardens Adventure announced at Tampa, events Island Williamsburg, at Orlando, our Philadelphia, Aquazoid Wahoo Country the rollercoaster rollercoaster Gwazi Remix and Riptide lineup the Iron Race Water and at the rollercoaster SeaWorld Ice the SeaWorld Aquatica is XXXX, rollercoaster Bay, rides, waterslide at our what Bird's SeaWorld of USA, Tour ride Reef the including significant This Big Rapids Tampa one at new Bus have at every San waterslides Plunge at most new Orlando; waterslide Texas. at Sesame the Antonio, the screaming Place the

base in look sales forward XXXX, time for education, San Street pass Sesame We of At in guests peak XXXX. of of the XX% level a March been bringing and October base October and base particularly strong, XXXX. our XXXX, up newest open have enchantment is to approximately addition, pass we season to up and our compared In are fun for pass pass of to is year. the Southern Sesame Encouraging higher our we of the XXXX approximately California. excited end park, to Place of was this in at had than XX% record Diego

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

the our labor to presented have wage and reduction leveraging including overall market additional and and cost eliminate in the and opportunities, challenges, continue staffing to levels we investing redundant while in continuing spend optimizing and Finally, technology. conditions cost, unnecessary identify current efficiency

Our better teams and continue increased position and work growth extraordinary to environment company operate for hard profitability. revenue to parks in this our this

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

Elizabeth Gulacsy

our on XXXX. and temporarily to Thank disruption the provide you, meaningful XX, closed We year, compared on quarter, morning our our a Similar to commentary we parks of we and insight good our when our experienced performance around all comparison this March today Marc, everyone. last operating provides due financial I’ll last XXXX. results to believe trajectory. more

release For will those both well and we earnings XXXX in do versus our so as interested, our XX-Q. a Form XXXX provide in comparison and

partially During quarter XX% of revenue compared the increase of is in XXXX. an attendance of the due an offset by decline XX%. per of a third capita in total generated million, quarter, $XXX.X total The revenue increase we million to primarily to $XX.X or revenue increase when of in XX.X%,

As XXXX. when by and Attendance during due was unfavorable and impacted group the quarter compared compared third the reduced X% the international of calendar third shift guests, group quarter. to declined by also unfavorable Marc weather quarter declined XXXX, an international attendance. Including of to primarily attendance mentioned, attendances to approximately and

reduction the to primarily the Admissions both we spending realization a increased strategic and million, environment due in continued to In-park third increased pricing and We the of the new This per $XX.XX of admissions XX.X% compared per spending. second is increased guest of combination offset in along realized the non-recurring an admission improved an net quarter XXXX. spending, in administrative in the quarter increase or total pricing expenses, have million, due and The EBITDA decrease $XX.XX of net and record EBITDA the capita decrease general compared compared net we realized operating of of improvements of $XX.X resulting third higher XXXX, expenses, adjusted higher which resulted million demand certain the in selling, of included and to strategies increase or income when our of in-park primarily in-park expenses, in product of during generated primarily to XXXX compared general driven XX.X% the third third reported of capita XXXX. non-recurring days costs, Our administrative quarter strong events expenses, operating equity projects. an capita per fees, third all is by from by compared when $XX.XX with maintenance per capita in in resulting to from capita and drive per which of to savings net quarter of reported per incremental mix is an of the the generated decline in offsetting prices partially million increase higher product in third income XXXX. $XX of the together, in admission expenses an in a XXXX. increase impact our the revenue capita capita operating increase improvements environment third of third in resulting per per increase efforts, by net a savings product park primarily selling, The admissions an in The impact in-park to to from products operating resulting quarter The We $XX.XX in in the and income to increase quarter $XXX.X and strong from spending, attendance. net to related by and non-cash adjusted demand guest by of primarily along strong a compensation. consumer in revenue expenses other related added quarter costs offerings XX.X% XXXX. consumer and spending the COVID-XX were compared quarter in expanded offset costs partially timing increases and and revenue operating certain and quarter. temporary in highest total $XXX.X These labor improved legal prices cost pricing equity and have associated closures, increase costs due the an quarter enhanced with cost initiatives, in initiatives. total mixed, and partially and liabilities contractual the relates non-cash income structural XX.X%, primarily to the in was compensation to and XXXX, highest ever marketing efficiency to with by reductions capita offset

XXXX. to the improvement record results Net at EBITDA was of an the decrease million $XXX.X attendance million, compared an for declined nine million, of international increase first of or revenue guests, X.X record when Total compared million of Total an and group $XXX.X income of $XX.X of for X%. our first improvement $XXX by million XXXX million was Including attendance a period a million was guests the $XX.X nine adjusted was billion, months and a X% to of XX.X months of guests, XX.X%. year-to-date or XX.X%. Looking or approximately $X.XX XXXX.

our turning balance Now sheet. to

was increase deferred as to XXXX, to an strong of end approximately compared when of due quarter pass the the current XX.X% Our third our part in balance September sales. of of revenue million, $XXX.X

As we trends pass to in and we’re as the very our have discussed earlier be seeing encouraged continue with Marc base. we mentions, this year,

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

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

with financial impact $XX debt. versus notes In XXXX. we to balance stronger with XXXX refinancing quarter of redeem partially due pass refinance senior our on took market billion million of Additionally, second-priority senior conditions, we we we continue in to secured $X.X redeemed along particular, opportunity cash the X.XX% versus repay the of XXXX strategies our August favorable reduce notes debt XXXX. see X.X% of in pricing our and during the second-priority in senior B-X in loans. our July prices and our to the X.X% performance on two Based and million and issuances the remaining of to completed our by of realized sales the issuing And proceeds sheet We our a our in use then on existing and our secured million these $XXX term notes, due improved $XXX term loans.

leaving repurchases $XXX.X also future a buying stock X.XX revolving million. $XXX credit approximately a our cost refinanced increased repurchased under million, available shares during repurchase and authorized common at Also the approximately of quarter to previously for We shares million program. opportunistically facility total $XX.X we of approximately million

XX, ROI $XXX.X on the was nine period. CapEx approximately million and $XXX.X third million months on million spent XXXX and million, $XXX.X which XXXX quarter approximately XXXX cash the in cash the a on of record for credit quarter and our and million million our was was million balance $XX.X nine operations $XX.X quarter was third million $XXX.X As CapEx revolving cash flow of Free core on of for for liquidity available period. including and undrawn. of flow $XXX.X We our September $XXX.X for $XXX.X Cash record from approximately third the million on total the which $XX.X facility, expansion of equivalent XXXX, was sheet a available projects. was month million

For XXXX, capital on – on XXX approximately we between between now expect $XXX million and spending million $XXX expenditures.

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

Marc Swanson

Thank you, Elizabeth.

rescue Before over closing history. we we have rescues call your third the and animal exceeded I animal almost comments. have the In helped XXX open to the some XX,XXX quarter, company’s questions,

efforts We and this efforts are and proud operate are thank we current for take to continue of world’s to of our to significant opportunities continue clear EBITDA. organizations, environment. save we made, parks both one to want opportunities to and dedication wildlife. there in of progress the we meaningful in We our leading improve drive revenue the are ambassadors advantage additional employee continued animal Despite execution, believe growth rescue our protect to their and have adjusted growth and our

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

questions. Now, let’s take your

Operator

you. go question Wieczynski, Please Instructions] comes First Thank Steve [Operator Stifel. ahead. from

Steve Wieczynski

Yes. Hey morning. guys. Good

the I Or more right, So is, guess, like when question a understand and group can help and attendance and you And little international about was then I a down word October, about words, that XXXX us And maybe, of to used if you looked people. here what meaningfully exclude the maybe calendar different in things think lot of you I and more to hear and a us attendance X% you normalized would’ve could help think guests. a calendar weather environment? lot what relative you you perspective. you weather a means the also that bit lost from if think

little So to just what Thanks. looked understand want really more bit October like? a

Marc Swanson

Hey Marc. Yes. can Steve, that it’s question. take I

So weather because the certainly shift meaningful, record the impacted days. the they was and out were calendar weather impacts we weather called

if on think kind mid probably to in. than the up digits be – we revenue up were you what as and been single mid those growth factor can of better say meaningful, there you, would I infer did would’ve I that. I performance, attendance digits probably tell And low can single we you low in attendance as So back there, October far think, to

park. So performance very our pleased across of with Halloween a our number we were

And were so we October, saw the momentum we very in certainly pleased with.

Steve Wieczynski

or And in Delta any attendance, August September fears? material that you see change whether did late around was early

Marc Swanson

attendance that Yes. mentioned was as of impact then, attendance. August. was Steve, July I positive factors and mean, then our so And you. like what obviously more our lot What October there’s saw August can – unpack down of kind we a better was know. to than was than I you September we I certainly

flows So, we know on go down. it and and rise cases ebbs as people’s minds or it’s

for a out. at August The in of impactful. So later with in I’m things, in it’s know, of the news saying I probably we come, look didn’t increased When to have you be appear is see a the now who hard we But we people other sure that attendance. into coming more there’s would there lot to factors were to was say, and momentum a that lot maybe good October hard for us that time like timeframe September. tease

Steve Wieczynski

you. question start now dividend can here. to versus decision the to be shareholders capital that Got back decision maybe buy balancing to would you And going Okay. returning help think us you’re then about And the second stock guess, how I down path?

Marc Swanson

question. Sure. that take I can

we in to So us of Board best do use on look, talk and to continue closely as cash, regular evaluate the the – that past, do and you’ve what's I work we'll our mean, with that. basis, we about heard we a

certainly, way in have quarter we to those are this and return into shareholders. good pursued cash and so were that believe October, And buybacks we to – a something

about. around things so deployments into you our like on We've and talk been cash capital aesthetic to which And with deployed some also Obviously, work that. heard venues and also did opportunistic structure, our a that. some we our new Elizabeth little we parks bit capital updates

things structure, we that. anything and we are would we're at but dividends, sorts capital CapEx would the we're shares, uses best back look pursuing, all things. the not dividend paying debt, we into never to the down that like do So things use a or of Certainly, for for I transactions, of all consider investing highest now, cash. of mentioned, that cash, always like looking say buying But parks consider

Operator

Instructions] [Operator of from Please Michael Our Swartz question SunTrust. ahead. comes next go

Michael Swartz

is more don't Marc, Was from you And days about shifting the operating basis? just a if that mid-single mind, quarter? on operating you of Is I the the fourth said so, just calendar impacted that October. the quarter that that into Maybe number? good third kind Hey, spoke figure attendance that morning. on Or digit quarter. like-for-like day for if third the a up, clarification, think little all-in shift you that

Marc Swanson

there. what me asked Let kind unpack of you

quarter shift especially then of the mentioned third as months the of timing and look, And keep the So the August a quarter. around well. in day-to-date the of September in events on days we really quarter, our within certain is some timing of the around and in we operate mind, those

quarter I the on and think end on know a competitors what of is. September the or on some start ended July Sunday all week we So we our it regardless of X, XX, day I time.

will, tend to shift unpack. of kind we we that I So you issues, think, would more, have if calendar

As add we're positive for pleased and that, when And we far on were there. did month. Howl-O-Scream you even still the Orlando. as the October, for adjust California attendance we with in But attendance in

Michael Swartz

And Okay. that. you been give bookings any the maybe has back how come Great. Can international sense international us looked? since that's the travel announced? business with yesterday. visitation relaxed, some of then I for just maybe you Thank you believe, Are being restrictions of seeing

Marc Swanson

a it's good Yes, question.

have excited We’re opening to international again.

heard our you've tenants us mention, XX% a year. it's on As given about of

that at tailwind us. a – be be will will was that XXXX, it for least So in hopefully

seen that's to the Discovery borders is reopening is trend So people international and a the as that what park been better And on generally the the can that's about I popular do advanced being has and there with one you again. Cove, pretty part gotten get able travel announcements tell bookings we've where guests. we bookings

take up. direction come time, it's to they I opened It things back we're think may don't were at think things than I all better obviously. going obviously certainly, But in pleased that moving are So some once. a before

Michael Swartz

Okay, great. Thank you.

Operator

to closing go Please session. Marc the now [Operator remarks. Swanson Mr. for our question-and-answer back concludes Instructions] over This ahead. call turn We'll

Marc Swanson

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

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

Operator

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

You may now disconnect.

United Parks & Resorts (PRKS) 9 Nov 212021 Q3 Earnings call transcript